DBM cancels P727.5-M deal for PPES on delay in service

THE Department of Budget and Management-procurement Service (DBM-PS) has cancelled the P727.5-million contract it awarded to a firm to supply 500,000 personal protective equipment sets (PPES), citing delays in service.

Budget Undersecretary Lloyd Christopher A. Lao, who supervises DBM-PS, also told senators at a hearing that the cancellation of the contract with Ferjan Healthlink Philippines Inc. last Friday will now also pave the way for them to buy PPES at a cheaper price.

Interestingly, Ferjan Healthlink Philippines Inc. was created by a blacklisted sole proprietor Ferjan Healthlink Enterprises, according to the Government Procurement Policy Board-technical Support Office (GPPB-TSO).

Lao added that data from the Securities and Exchange Commission (SEC) showed one stockholder of the winning bidder Ferjan Healthlink Inc. was also the owner of the blacklisted sole proprietor.

However, Lao said there is “no legal basis” for them to cancel the contract for this reason as this case is not covered by blacklisting rules of the GPPB.

“Considering there is a delay in delivery, it would be wiser for the government to purchase again with a new supplier given the new market prices, so we cancelled that on that ground based on their delay,” Lao said during the Senate Committee on Finance hearing on the proposed 2021 budget of DBM. “But legally, there is no basis to cancel the contract with them since it is not included in the GPPB rules that a sole proprietorship company that has been blacklisted will be a ground for cancellation for another corporation,” he said.

Lao assured senators that no advance payment was made for the procurement of PPES even prior to the cancellation of the awarded contract to Ferjan.

Responding to Lao’s revelation, Senate Minority Leader Franklin Drilon said blacklisting rules must be amended so that entities would “not be able to hide behind the corporate structure to skirt their disqualification” whether as an individual, joint partnership or joint venture, among others.

“We all know that a corporation can only act through its stockholders and in this particular case, with what appears to be common stockholders, they should be covered by the rule,” Drilon.

Nonetheless, GPPB-TSO Executive Director Rowena Candice M. Ruiz said they are already looking into “refining the existing rules to make sure no gray area will be left in terms of blacklisting is concerned.”

As for two other blacklisted firms which were awarded contracts, Cebu Business Materials Trading Co. Inc. and Jozeth Trading, Lao said DBM-PS is not the one that made the procurement for these medical supplies.