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Tendering is an open and fair exercise aiming at achieving best value for money, is also an effective measure to prevent corruption. Most of the property management companies in Hong Kong have already developed well-established purchasing systems with clear guidelines on the tendering procedure. Though there are some cases with special judgments, service contracts in property management industry are normally awarded to the contractor with the lowest bid. Sometimes, the current lowest bid contract awarding system may encourage unreasonably low tender bidding and resulted in cutthroat competition. Property management practitioners have different views on awarding service contract to the lowest bid contractor (the contract award system); both advantages and disadvantages are found in the process of the procurement and to management the performance of the lowest bid contractor. Some people believe the system helps to create a fair, objective and competitive environment. Meanwhile, some practitioners facing difficulties in contract management like lowest bid contractor’s malpractices and supervising their performance and the situation will be even worst if the contractor is awarded to a cutthroat lowest bidder. This paper will examine the pros and cons of the contract award system in terms of cost, management and service quality.
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