Addressing the gaps on gov’t procurement

MORE than 20 years have passed since Republic Act 9184 or the Government Procurement Reform Act (GPRA) was enacted into law. Introduced by my father, the former Senate President Edgardo Angara, the GPRA was considered a world-class, landmark law for putting in place strong mechanisms to curb corruption in government procurement.

In his sponsorship speech on the measure, my father described corruption as “a widespread cancer, entrenched and institutionalized t hroughout t he bureaucracy, attending official transactions, big and small.”

The World Bank estimated that between 1982 and 2002, the Philippines lost up to $48 billion to official corruption, an amount that could have covered the country’s budget deficit at the time and even provided a considerable surplus in return.

While the GPRA was able to make it hard for the unscrupulous to continue exploiting the system, over time they managed to find loopholes and found new ways to dip their hands into government contracts. In recent years we saw the conduct of investigations into overpriced facemasks and PPEs, as well as laptops for teachers.

Corruption is not the only problem hounding the GPRA. A significant amount of funds are also wasted due to inefficiency, a lack of competition among bidders and limitations in the capacity of government agencies to undertake procurement activities.

A study conducted by t he Government Procurement Policy Board, using 2012 data, showed that around 50 percent of failed biddings among the state agencies are due to poor planning. This includes poor cost estimates, problems with technical specifications or the terms of reference, and the late submission by the agencies of their purchase requests.

Again, the World Bank was able to quantify the losses incurred by the government as a result of its weak procurement policy. In its 2019 report, the World Bank said the Philippines could have saved as much as 29 percent of its total procurement spend if only it had employed better procurement policies and strategies.

After three public hearings and 10 technical working group meetings, the committee on finance, which we head, has come up with our committee report on Senate Bill No. 2593 or the measure that introduces amendments to the GPRA. The bill is being backed by no less than President Ferdinand Marcos Jr., who mentioned in his last State of the Nation Address that amendments to the GPRA are needed to make public procurement more attuned to the changing times, in a bid for government “not only to become more effective, but more, to become truly transformative.” It is also among the priority measures identified by t he Legislative- Executive Development Advisory Council.

The amendments to the GPRA include the introduction of new modes of procurement in order to provide the procuring entities with greater flexibility to choose the best mode for their needs. RA 9184 mandates that all government procurement be done via competitive bidding, save for certain exceptions where alternative modes are available.

A provision on the Most Economically Advantageous Responsive Bid (MEARB) was also introduced in the bill to address the issues encountered with the award criterion under RA 9184 of the Lowest Calculated Bid or simply put, awarding the contract to the least expensive bid. Based on feedback from the different agencies, this has resulted in the procurement of subpar or lowquality goods. With the MEARB, the awarding of bids will factor in quality, alongside cost.

The Department of Budget and Management would be tasked to create procurement positions for the different government agencies. This will ensure the professionalization of government procurement practitioners, who will have the qualifications needed to effectively fulfill their mandates.

Agencies, particularly those that have trouble with the procurement process, will also be allowed to tap the services of a procurement agent to help them in completing their purchases.

We also introduced steps to enhance competition by encouraging more suppliers to participate in the government procurement process. It has l ong been a complaint by newer, smaller players or the microenterprises and startups that they have trouble qualifying in government procurement contracts because of the stringent rules on eligibility such as the track record and largest government contract. The procuring entities and the GPPB will be mandated to implement policies and programs that will pave the way for greater participation of these suppliers.

There will be an emphasis on domestic preference in the supply of goods and services. This will not only broaden the options of government in sourcing their requirements, but will also help domestic industries grow and become more competitive. This is consistent with our Tatak Pinoy or Proudly Filipino advocacy, which is now a law. Debates on the measure will commence in the coming weeks and hopefully this measure will become a law within the year.

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Sen. Sonny Angara has been in public service for 19 years—9 years as Representative of the Lone District of Aurora, and 10 as Senator. He has authored, co-authored, and sponsored more than 330 laws. He is currently serving his second term in the Senate.