The purchase of 26 foldable Brompton bikes by the National Parks Board (NParks) has been reported to the Corrupt Practices Investigation Bureau (CPIB).
The Straits Times reported that the Ministry of National Development (MND) confirmed to the paper that it reported the matter to the CPIB.
The officer in charge of the deal, assistant director of the Park Connector Network Mr Bernard Lim, has been suspended until further notice.
The ministry also said Mr Khaw Boon Wan had told a ministry internal audit team to work with NParks to review the purchase of the bicycles.
The amount spent of the purchase raised some eyebrows, with many Singaporeans questioning if the Brompton bikes, costing $2,200 each, were too expensive.
NParks had bought the foldable British-brand bikes for its officers to use on patrols.
Minister for National Development Khaw Boon Wan had earlier defended the purchase of the bicycles but called for an audit to be carried out last month to review the purchase to ascertain NParks' justification and to see if its procurement process could be improved.
The audit found that "the reasons for purchasing the foldable bikes to enhance work productivity of NParks field staff were valid", but "it had also uncovered some discrepancies which, although inconclusive by themselves, suggested the possibility of bias in the procurement."