Advertising fraternity body, 4As, challenges TM over its AD agencies procurement policy

• Calls Tender Document Fee and Tender Deposit as unjustifiable & behind times
• TM’s existing internal screening process makes 2 tender conditions redundant

The Association of Accredited Advertising Agents Malaysia (4As) is challenging Telekom Malaysia (TM) on its current procurement policy for shortlisting of advertising agencies, calling attention to TM’s unjustifiable Tender Document Fee and Tender Deposit.

TM is currently conducting three separate tenders for the appointment of panel agencies for their “Creative Partner,” “Digital Partner” and “Below The Line Partner”.

The latest point of contention involves TM’s condition where a non-refundable Tender Document Fee of up to US$1054 (RM5,000) and a refundable Tender Deposit of up to US$4,213 (RM20,000) per tender is part of its tender requirement.

The 4As finds it odd that agencies today have to pay a Tender Document Fee of between RM1,000 to RM 5,000 for the first phase of the tender process in order to be allowed to send agency information covering commercial and technical requirements such as its organization details, case studies, conflict mitigation protocol, ethics compliance and financial documents to TM.

[RM1 = US$0.21]

Tender document fees are historically a token charge from the advertiser to recover photocopying costs of documents containing detailed tender specifications and information required from the tenderer. This was in the era before the use of digitally transmitted documents.

All agencies who choose to submit tender documents in the first phase must also submit a refundable Tender Deposit to TM of between RM5,000 to RM20,000. Thereafter, shortlisted agencies will be invited to pick up the Request For Proposal (RFP) and will then need to submit their customized strategy, creative work and financial proposals.

TM, when asked by agencies as to the need of the two tender conditions, replied that “these are to ensure that only Agencies of ‘acceptable standards’ will be shortlisted and not waste the time of their evaluation panel.”

In written appeals, the 4As have highlighted that TM in the first phase has already in place a meticulous internal screening process led by their own eminently qualified and experienced marketers entrusted to shortlist potential agencies with a proven effectiveness and creativity track record.

These two tender conditions are therefore redundant. They might have been acceptable only if TM did not have a mandatory screening process.

The 4As is of the opinion that this aspect of TM’s procurement policy is flawed. The 4As is surprised and disappointed that despite two written appeals and the sound reasoning provided, TM has chosen to maintain the two conditions citing that these are “part of TM’s procurement policy.” No counter arguments to the 4As rationales were offered.

The 4As has sent a third appeal repeating its rationales for the two conditions to be removed for all three tenders involving advertising agencies now and in the future.

The 4As looks forward to the elimination of unreasonable procurement policies placed on agencies and is always ready to provide assistance and best practice guidance to agencies and marketers.

Khairudin Rahim is CEO of the 4As (Association of Accredited Advertising Agents Malaysia), formed in 1971, as the advertising industry’s foremost body engaged in promoting the value of advertising agencies in the Marketing Communications industry to advertisers, media, suppliers, government and the public.