(Delivered on 2 March 2020)
Security Landscape – Sylvia Lim
East Asia is again becoming a site for more intense major power contestation, particularly in the South China Sea. Worryingly, some of this competition is taking on more militarised characteristics region-wide. Such developments have the unfortunate consequence of prompting other regional actors to adopt more militarised stances. They include arms acquisitions and more muscular positions over disputes. These developments challenge stability and freedom of access, even if they do not directly involve Singapore.
Could the Minister for Defence update the House on the government’s strategy for navigating this increasingly complicated security landscape? Deterrence alone cannot fully address these concerns, and defence spending needs to be within prudent limits. In particular, what role should be played by the SAF on a routine basis and during contingencies, and how is the SAF working towards these objectives?
Value for Money – Sylvia Lim
MINDEF previously informed Parliament how it attempts to maximize Singapore’s defence dollars, through the purchase of only items it needs, retrofitting existing assets and so on. Could Minister for Defence elaborate also on its acquisition decisions – how MINDEF assesses the reasonableness of the prices quoted by vendors and ensures that it receives fair value for money on its purchases. At stake in these decisions is hundreds of millions or even billions of dollars. More importantly, they involve the lives and safety of our men and women in uniform and, ultimately, Singapore’s security.
A key issue is that unlike other products and services involved in government procurement, defence articles may not be freely market-tested due to the confidentiality of specifications or dependence on specialist vendors. Systems sold at a certain price point may be subject to expensive after-sales maintenance and upgrade packages with proprietary and protected information. After all, contemporary defence platforms can be highly tailored and involve the integration of multiple systems overseen by large numbers of vendors and sub-contractors.
An example is the US F-35 programme. As of January, Singapore’s purchase of up to 12 aircraft for an estimated US$2.75 billion was undergoing the US Congressional approval process. However, the programme has been dogged by cost overruns and questions about reliability; there were also issues regarding the leak of confidential data that required costly redesigns and retrofits from various vendors and subcontractors. This is just one well-known example about a single program.
My question is broader. Can MINDEF elaborate on how it injects rigour into its procurement decisions to ensure value for money?