MANILA, Philippines – President Rodrigo Duterte’s longtime pet peeve, the awarding of government projects to the lowest-bidding contractors, was discussed during the 42nd Cabinet meeting on Friday, October 11.
This time, Duterte had a more solid proposal for moving forward on the issue, which he has been complaining about since the first year of his presidency.
The President wants the Government Procurement Reform Act (Republic Act No. 9184) amended so that it’s contractors with the “most response” and most “advantageous” bid that get the government projects.
“The President wanted to initiate a move to introduce an amendment to Republic Act No. 9184 or the Government Procurement Act from ‘lowest calculated responsive bid’ to ‘most responsive and advantageous bid,'” Presidential Spokesman Salvador Panelo said in a statement on Saturday, October 12.
Why does this matter? Duterte has blamed the procurement law’s requirement of awarding government projects to the lowest bidder, for substandard infrastructure and corrupt practices in procurement.
Since 2016, he has claimed that this causes contractors to make their bid as low as possible so that they can beat their competition, but at the cost of the project’s quality.
Article X of the procurement law states that all goods and infrastructure projects “shall be awarded only to the bidder with the Lowest Calculated Responsive Bid.”
What’s the impact of the proposed amendment? The lowest bid requirement was designed so that the government could save money.
To ensure quality in the project’s implementation, the procurement law states the bid must be “responsive” and “qualified,” apart from being the cheapest.
This means the winning bid, while still the lowest, must have fulfilled all the quality requirements listed down by the government entity bidding out the project.
With Duterte’s proposed amendment, government entities will not be bound to pick the cheapest bid. The only guiding principle would be if it is “responsive” and “advantageous” to the government.
What other factors lead to substandard government projects? Corruption that leads to low-quality projects like roads, bridges, or housing is often not the “lowest bid” requirement but abuses of the procurement process.
A common modus is when the winning contractor takes the funding released by the government for the project but scrimps on materials or shortcuts construction methods so that they spend lower than the agreed-upon cost of the project.
Some contractors would also engage the services of a subcontractor and ask it to implement the project for a smaller fee, even if the subcontractor does not have the capability to properly implement the project.
During the Cabinet meeting, Acting Budget Secretary Wendel Avisado and Government Procurement Policy Board Executive Director Rowena Ruiz reported to Duterte what was being done to ensure “efficient, effective, and responsive government procurement,” said Panelo. – Rappler.com