The recently concluded Senate investigation into DepEd’s alleged procurement of overpriced laptops has opened the right legislative opportunity to review an almost 20-year-old procurement law.

It was evident from the recent Senate hearings that, at the height of the pandemic, Congress, through the Bayanihan to Recover as One Act (Bayanihan 2) has given DepEd P4 billion to implement its Digital Education, Information Technology, and Digital Infrastructures and Alternative Learning Modalities program. 

DepEd then tapped the Department of Budget and Management (DBM) to execute the procurement of laptops for teachers, focused as it was on the core mandate of providing quality education, even more so in the face of the unprecedented challenge of delivering academic services remotely via the internet. And here is where the conundrum started. 

RA 9184 or the Government Procurement Reform Act is silent on the outsourcing of procurement tasks by one executive department to another. Such an outsourcing arrangement could not have been contemplated by Letter of Instructions No. 755 and Executive Order No. 359, Series of 1989 mandating government agencies to rely on the DBM for the procurement of commonly used goods by the government. 

Section 7.3.3 however of the Implementing Rules and Regulations (IRR) RA 9184 permits a government agency, department, or office to request another governmental entity (or even private procurement agents) to undertake for its benefit the actual procurement process. Parenthetically, has the IRR risen beyond its source?

Be it noted that the Supreme Court in MCC Industrial Sales Corporation v Ssangyong Corporation, and in a long line of cases, declares that the implementing rules and regulations of a law cannot extend the law or expand its coverage. The power to amend or repeal a statute only vests, indeed, in Congress.

It was by authority of the said IRR that DepEd entered into a memorandum of agreement (MOA) with DBM for the latter to carry out the task of procuring the needed laptops. Interestingly, RA 9184 vests in the head of the procuring entity the ultimate responsibility to duly undertake the entire procurement process, including the approval of the budget therefore, which, in this instance is the cost of the laptops. 

When the actual procurement is being carried out by a department or agency for the benefit of another by virtue of an executive rule-making fiat, which then is considered as the “procuring entity?” 

The Senate hearings clearly bring to the fore the fact that DepEd and DBM have been pointing fingers at each other. This quandary could have been nipped in the bud had the law or the regulation been clear on this point. 

At any rate, the MOA has to be examined and construed in its totality to ascertain which of these departments took the role of the “procuring entity.”

The inherent limitation of the procurement law is that it falls short in responding to the difficult situations brought by the COVID-19 pandemic. When the world stood still as a result of mandatory lockdowns, and when movement restrictions suddenly broke supply chains and left the world scrambling for even the basic goods for survival, the competitive bidding ideal under the procurement law proved to have paralyzed various government instrumentalities to expeditiously acquire their inputs and deliver services according to their mandate. 

In fact, even the alternative modes of procurement under the law could not have been contemplated by the concerned debarments even in the practical context of the pandemic.

The procurement law is short-sighted. Myopic, even. 

Borne further in the Senate hearings, the procurement law does not take into consideration prevailing market and business conditions. Neither does it consider relevant non-financial costs and benefits, or even whole-of-life costs. 

While other governments are already considering procurement outcomes under the lens of “value for money,” ours still focuses on the “most advantageous prevailing price for the Government.” The cheapest price may indeed be favorable on a tight budget, but then again, as the adage goes, “You get what you pay for.”

Verily, Bayanihan 2 recognized this inherent limitation of the procurement law when it exempted from its operation the procurement of, among others, medical and health-related goods required by the Department of Health. Parenthetically, Bayanihan 2 provides for horizontal accountability with the monthly reportorial requirements (to Congress and to the Commission on Audit) imposed on the executive branch on all acts carried out under the Act: this, in addition to the creation of a Joint Congressional Oversight Committee. 

It begs the question: with the laptops procurement issue, and other procurement issues during the pandemic, has horizontal accountability been effective?

While the stringent requirements of the procurement law are laudable, given its aim to ensure transparency and thereby curbing corruption in government, an assessment of and objective inquiry into its effectiveness – and timeliness – is long overdue. 

Without prejudging the outcome of the investigation, the Senate has indeed unearthed issues in our laws, especially the procurement law, that can be well addressed only by law reform. – Rappler.com

Pelagio Palma Jr. is a lawyer in the Philippines and in Australia. He has clerked for two justices of the Supreme Court, and is now in the private sector and in the academe.