DBM procurement body bidding P198.8-billion contracts ‘legal’

Aika Rey
DBM procurement body bidding P198.8-billion contracts ‘legal’
Procurement for non-common use items of various government agencies can be done by the Procurement Service, says the Government Procurement Policy Board

MANILA, Philippines – Bidding P198.8-billion worth of contracts for other agencies by the procurement body attached to the Department of Budget and Management (DBM) is “legal,” the Government Procurement Policy Board (GPBB) said after House Majority Leader Rolando Andaya Jr questioned it.

Rowena Candice Ruiz, head of the GPBB Technical Service Office, explained that bidding done by the Procurement Service (PS) was well within its mandate.

“PS is authorized to conduct the procurement for non-common use items of various government agencies, through the [Implementing Rules and Regulations] of Republic Act Number 9184 or the Procurement Law,” Ruiz said.

Ruiz clarified that PS only did the awarding and contracting services, and that projects were “implemented by the agencies themselves as PS is not an implementing agency.” She cited Section 7.3.3 of the Procurement Law:

Section 7.3.3 In order to hasten project implementation, Procuring Entities which may not have the proficiency or capability to undertake a particular procurement, as determined by the Head of the Procuring Entity concerned, may outsource the procurement tasks by:

a) Requesting other Government of the Philippines agencies to undertake such procurement for them, through the execution of a memorandum of agreement containing specific arrangements, stipulations and covenants, in accordance with government budgeting, accounting and auditing rules;

Ruiz also said that planning was done by the implementing agencies, and technical experts from the said agencies are part of the technical working group and the Bids and Awards Committee (BAC) to “ensure full transparency in the bidding process.”

In 2018, P166.5 billion worth of contracts of the total P198.8 billion had been awarded and contracted by the PS, all of which are being implemented by the client agencies.

For his latest attack on the DBM, Andaya slammed Budget Secretary Benjamin Diokno for allowing PS – which he called an office having “totally no expertise on these matters” – to conduct bidding for big-ticket projects. He said that only common goods such as pens and papers should be done by the PS.

The Department of Transportation, PS’ biggest client, told Rappler that it was them who actually approached the procurement agency to conduct the bidding for them.

Independent body? The budget department also denied claims by Andaya that “DBM is a superbidding body.”

PS is an attached agency, and not an office directly under DBM.

“It is an agency separate and distinct from the DBM. By virtue of [Letter of Instruction Number] 755, the PS is merely attached to DBM for purposes of administrative supervision,” PS head Bingle Gutierrez said.

“Hence, the DBM does not interfere with the day-to-day operations of the PS, especially in the conduct of bidding,” she added.

PS also clarified that procuring non-common goods and projects has been a practice for several years, “including the time when Andaya was DBM Secretary.” Andaya was the DBM chief under the Arroyo administration.

“PS records also show that during the time of Congressman Andaya as DBM Secretary, the PS procured for the Department of National Defense non-common goods such as combat boots, individual load bearing equipment, and battle dress attire,” the statement said.

In those years, the PS did “end-to-end” service where awarding, contracting, and implementation of projects were done. This practice only ended in mid-2017 due to reforms.

Because of the changes, the government saved P18.25 billion in procurement savings for all its bidding activities in 2018, the DBM said.

‘Alarming’ practice? In a statement on Thursday, Andaya said a 2017 Commission on Audit report noted the “lack of transparency activities” by the PS.

According to the COA report, the BAC in PS “did not prepare” the procurement monitoring reports, and as a result, were not posted on government websites, as required by the law.

“Hindi natin alam kung bakit itinatago ng PS ang kanilang mga [PMR]. (We don’t know why PS does not publish the PMRs.) It is the duty of Secretary Diokno to ensure that these reports are published in the government website as required by law,” Andaya said.

COA recommended that the PS publish the PMR in its website and sanction BAC members who refuse to prepare and publish the report. – Rappler.com

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Aika Rey

Aika Rey is a business reporter for Rappler. She covered the Senate of the Philippines before fully diving into numbers and companies. Got tips? Find her on Twitter at @reyaika or shoot her an email at aika.rey@rappler.com.