DBM issues guidelines for early procurement

The Department of Budget and Management (DBM) recently issued guidelines on the conduct of early procurement activities for fiscal year 2019 in preparation for the government’s shift to a cash-based budget next year.

Signed by Budget Secretary Benjamin Diokno, DBM Circular Letter 8-2018 states that all covered government entities will undertake early procurement activities from October to December, upon the submission of the FY 2019 National Expenditure Program (NEP) to Congress.

The DBM said this was in line with the shift to the annual cash-based appropriations from the two-year obligation based budgeting system.

Under this scheme, contracts should be fully delivered within the year. This means the annual appropriations for 2019 onward will be limited to the requirements for payments of goods delivered, services rendered, and infrastructure projects completed by the end of a fiscal year.

As such, the DBM said there is a need for agencies to undertake early procurement planning and procurement activities for the timely completion of projects.

“As we are entering a cashbased budgeting regime, we are encouraging our agencies to undertake timely procurement planning and early procurement activities to ensure efficient implementation of programs, activities, and projects,” Diokno said.

Early procurement activities include the pre-procurement conference, advertisement of opportunity to bid, opening of bids, bid evaluation, post-qualification, and recommendation by the Bids and Awards Committee to award the contract to the winning bidder.

“An agency should ensure that at least 50 percent of the volume or number of the planned procurement for fiscal year 2019 should undergo early procurement, after strategizing those activities and projects it needs to implement in the first semester and those procurement activities it seems difficult or risky,” the circular read.

The award and notice to proceed will be signed after the President signs into law the General Appropriations Act (GAA), the DBM said.

The proposed 2019 budget, which amounts to P3.757 trillion, was equivalent to 19.3 percent of the country’s gross domestic product and was the first cash-based budget of the Duterte administration.

According to Diokno, this shift would speed up the implementation and completion of the priority projects of the government, as it would impose fiscal discipline among state agencies.

The budget chief earlier said education and infrastructure agencies would continue to get the highest budget allocations in 2019 in line with the administration’s priorities.

All education-related agencies will receive the highest allocation next year amounting to P659.3 billion, while the Department of Public Works And Highways will be given P555.7 billion.

“We are sticking to our plan of focusing on Build Build Build and social services. These are the priorities we identified as early as the beginning of our term, and we will see to it that investments on these sectors are sustained,” Diokno said.