FMM In The News: NEW STRAITS TIMES, May 21, 2026


KUALA LUMPUR: The Federation of Malaysian Manufacturing (FMM) has called for the immediate enforcement of the Government Procurement Act (GPA) 2025, citing global supply chain disruptions and rising cost pressures linked to geopolitical tensions in the Middle East.

FMM president Jacob Lee said the Act, which was passed by the Dewan Rakyat on Aug 28, 2025 and subsequently by the Dewan Negara in September 2025, should be gazetted without further delay.

He said the GPA 2025 represents Malaysia's first dedicated legislation governing public procurement, with implementation currently pending the appointment of a commencement date by the Finance Minister through a Federal Gazette notification.

Under Section 1(2), the Act's enforcement is contingent on the gazetting of its commencement date. However, no date has been announced to date.

Lee said FMM had long advocated for a single procurement law to consolidate various treasury instructions, circulars and financial regulations that previously governed public procurement, which lacked consistent statutory enforcement.

"Government procurement, as one of the largest areas of public expenditure, plays a critical role in infrastructure development, public services and national competitiveness.

"A statutory framework mandating open and competitive tendering as the primary procurement method, with documented justification for every award decision, raises the baseline for governance across ministries, agencies and government-linked companies (GLCs)," he said.

He added that a transparent procurement system would strengthen investor confidence, reduce risks of rent-seeking, and enhance Malaysia's position as a credible investment destination.

Lee also called for clarity on subsidiary regulations, including approval thresholds, the transition plan for agencies currently operating under existing treasury instructions, and the readiness of the Government Procurement Appeal Tribunal (GPAT).

He said the current global environment has made reforms more urgent, pointing to disruptions in shipping routes, higher freight and insurance costs, and increased trade diversion risks.

"These pressures have direct cost implications for Malaysian manufacturers dependent on imported inputs."

Lee added that robust verification mechanisms under the GPA framework were essential to protect the integrity of the Buy Malaysian policy.

He also proposed that Clause 29 of the Act include a mandatory Buy Made-in-Malaysia requirement across all ministries, agencies and state governments, with annual public reporting on contract allocations to local manufacturers.

"Tender specifications must remain neutral and must not be designed to exclude qualified local suppliers," he said, calling for a mandatory specification review process overseen by the Procurement Board.

To address trade diversion risks, Lee proposed closer coordination between the Registrar of Government Procurement, the Customs Department and the Investment, Trade and Industry Ministry, including a centralised Malaysian manufacturer database linked to e-Perolehan.

"For SMEs, we recommend a single-window supplier registration system, the breakdown of large tenders into smaller lots where feasible, and stricter payment timelines of 30 to 45 days with automatic interest penalties for delays."

He also called for government-linked companies (GLCs) receiving public funds to be subjected to the same standards as government agencies, including annual disclosure of supplier nationality and contract values.

He said consistent application across GLCs was essential to ensure a level playing field under the Act.

"FMM remains ready to engage with the government and the Finance Ministry on implementation and urges all agencies to expedite the Act's enforcement."