Smart Tips from iSir – Corruption Preventive Measures for Building Maintenance

Building maintenance projects are complicated in nature and involve different stakeholders during the process. The risks of corruption also exist in different stages, such as the appointment of consultants and contractors, evaluation of tenders, supervision of works and contract administration. The ICAC encourages participants of the building rehabilitation assistance schemes under the Urban Renewal Authority (URA) to comply with the schemes’ requirements and adopt corruption preventive measures. These could also help to ensure the maintenance projects are conducted in a fair, impartial and competitive manner, avoiding possible risks of corruption and malpractice.

The URA requires all the buildings participating in Operation Building Bright (OBB) 2.0 and Fire Safety Improvement Works Subsidy Scheme (FSWS) to join the “Smart Tender” Building Rehabilitation Facilitating Services for procurement of consultancy agreements and works contracts to obtain professional advice and technical support from the URA, including the electronic tendering platform and engagement of independent consultants to offer cost estimation of works for reference. For details, please refer to the URA’s website.


Probity Requirements

The Home Affairs Department issued the revised “Code of Practice on Procurement of Supplies, Goods and Services” (Code of Practice) under the Building Management Ordinance (BMO) (Cap 344) in September 2018. The following sessions briefly introduce the probity requirements for members of the Management Committee and its Agents (such as employees or contractors employed by OC) in respect of the Code of Practice. For details, please refer to the website of the Home Affairs Department.

Members of the Management Committee (MC) of OC
  • In the exercise of his powers and the performance of his duties, a member of the MC shall not solicit or accept any advantage from any supplier or contractor in relation to the tender.
  • A member of the MC shall disclose in writing to the MC any personal, business or pecuniary interest or any other relationship that he may have with the DMC manager, property management company, consultants or professional service providers for the OC, or in any of the tenders to be considered by the MC or the OC. An MC member who has indicated a personal, business or pecuniary interest in the tender shall withdraw from the meeting during the discussion concerned and abstain from voting on the selection of such tender at an MC meeting.
  • Any declaration by a member of an MC should be recorded in the minutes of relevant MC meetings or as part of the tender documents and should be kept for at least six years.
Conflict of Interest

A conflict of interest situation arises when the financial or personal interests of an MC member or agent (such as employee or contractor) who acts on behalf of the OC in carrying out any business relating to the building competes with or is in conflict with the interest of the OC. The OC should formulate clear guidelines for MC members or agents to properly manage actual, perceived or potential conflict of interest and minimise the risks of corruption. Here are some examples of conflict of interest:

  • An MC member takes part in the selection of consultant/contractor, and one of the tenderers is owned by his family member, relative or close personal friend.
  • The chairman of an OC overseeing the maintenance project of his building accepts lavish and frequent entertainment offered by the contractor.
  • The secretary of an OC recommends property owners to include in tender invitation a contractor in which he has financial interest.
  • The project consultant and contractor belong to the same company or hold the shares of each other’s company.
An Agent (including its employees) of an OC
  • An agent (including its employees) or employee of an OC is prohibited from soliciting or accepting any advantage arising from his performance of his duties. An agent or employee of an OC shall declare in writing any actual or potential conflict of interest arising from his performance of his duties in accordance with the guidelines of “Building Management Toolkit” published by the ICAC.
  • An agent (including its employees) or employee of an OC should declare in writing whether he has any actual, potential or perceived conflict of interest at the start of preparation or deliberation of tender documents or as soon as he becomes aware of it.
  • An agent (including its employees) or employee of an OC should take steps to avoid any conflict of interest with any prospective tenderer or tenderer by not putting himself in a position of obligation towards any of them, for example, by not accepting any favour or lavish or excessive entertainment, and not over-socialising with any of them.
  • The DMC manager or property management company (if any) and its employees shall be required to disclose in writing to the MC any personal, business or pecuniary interest that he may have with any MC members, consultants or professional service providers for the OC, or in any of the tenders to be considered by the MC or the OC. The DMC manager or the property management company (if any) and its employees who have indicated a personal, business or pecuniary interest in the tender shall refrain from participating in any tender assessment or negotiation.
  • Any declaration by an agent (including its employees) or employee of an OC should be recorded in the minutes of relevant MC meetings or as part of the tender documents and should be kept for at least six years.

To mitigate the risks of corruption in the building maintenance projects and enhance the awareness of corruption prevention when awarding building maintenance contracts and supervising projects, flat owners and OC members could refer to “Building Maintenance Toolkit” and “Building Maintenance Corruption Prevention Red Flag” published by the ICAC when carrying out their projects. The major corruption preventive advice is as follows:


Appointing Consultants and Contractors

Drawing up Scope of Consultancy Services/Maintenance Works and Inviting Tenders
  • Clearly specify in the tender documents and service contracts the scope of consultancy services and maintenance works.
  • Adopt open tendering to minimise the risks of tender collusion, and include probity and anti-collusion clauses in the tender invitation documents (could make reference to the ICAC sample document on “Probity and Anti-collusion Clauses”).
Evaluating Tenders and Conducting Tender Negotiation
  • Lay down the tender evaluation criteria before tender opening, justify and document the reasons if the best offer is not recommended.
  • Avoid conducting tender negotiation to minimise the risks of corruption on malpractices.

Supervising Maintenance Works and Managing Contracts

Progress Monitoring and Quality Checks
  • Require the consultant to submit site supervision plan and report on a regular basis on the progress and quality of work done.
  • Require the contractor to submit measurement records and site photos for hidden works.
Additional Works
  • Require the consultant to justify the need for providing cost estimation of any variations requested, and to seek the flat owners’ consent if the contract variations are substantial.
  • For major/costly contract variations, consider engaging an independent consultant to provide cost advice.
Contract Payments
  • Require the contractor to submit invoices with photos and details on the actual quantities of work done in its payment claims.
  • Require the consultant to inspect and certify the work done before processing payment and issuing certificate of works completion.

Knocking on the Right Door

Knowing the scope of services and technical support provided by various government departments and public organizations, so as to seek direct assistance and timely advice from them for better managing the projects and preventing corruption or malpractices. For details, please read “Building Maintenance Toolkit”.

ICAC 24-hour Report Corruption Hotline: 25 266 366
Integrity Building Management Enquiry Hotline: 2929 4555
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