Philippine e-Legal Forum

The procurement (acquisition of goods, services and contracting for infrastructure project) law was enacted to lay down rules and regulations and to modernize, standardize, and regulate the procurement activities of the government. It is a response to the clamor of the citizenry to provide value for taxpayer money (P147.662 billion capital outlay in the P1.227 trillion national budget this year) and show Government commitment to good governance, transparency, accountability, equity, efficiency, and economy in the procurement process. In short, the law wants to deter corruption.

To comply fully with RA 9184, every branch or agency of the government through the head of a procurement entity (HOPE) forms a bids and awards committee (BAC) to conduct competitive and transparent purchases by means of public bidding. The threshold amount required for public bidding is more than P250,000.00. Splitting of contract is not allowed. An Approved Budget for the Contract (ABC) is indicated as the ceiling or upper limit for bid prices that must be within the approved Annual Procurement Plan (APP). In the preliminary examination of bids, the BAC uses non-discretionary pass/fail criteria.

Alternative ways to make purchases may be resorted to at exceptional times. Thus, limited source bidding, direct contracting, and negotiated procurement are justified only in the acquisition of sophisticated defense equipment or critical plant components; in cases when there is imminent danger to life and property as in man-made or natural calamity; or after 2 failed biddings. Shopping, on the other hand is good only for procurements not exceeding P250,000.00, while repeat orders are done within 6 months from notice to proceed and are not to exceed 25% of the quantity of each item in the original contract.

Other policy considerations in procurement are openness and predictability in the process. RA 9184 prescribes generic procurement manuals, standard bidding documents and tendering forms. No bidder who is related to the HOPE or any member of the BAC up to the 3rd civil degree can participate in the tendering process and procurement by brand name is prohibited. Non-government organizations maybe invited as observers.

The law uses technology to promote transparency and efficiency by having a single portal called the Government Electronic Procurement System (G-EPS) as the primary and definitive source of information on government procurement. Advertising and posting in a newspaper of general circulation, with the G-EPS including posting of invitations to bid in the premises of the procuring agency for 14 days are required. A contract award that violates the applicable minimum time for posting is void.

For violations of the law, an imprisonment in the maximum period of 15 years maybe imposed without prejudice to any warranted administrative sanctions and civil liability in the form of damages.

Is anyone complaining? Lately, legislators have introduced bills to amend RA 9184: first, to place under its coverage procurements funded by foreign loans or credit under RA No. 8182 or the Official Development Act (ODA), as amended; secondly, to strengthen transparency by posting the criteria, ratings and calculations of bids used by the BAC on the procuring agency’s website or that of the Government Procurement Policy Board (GPPB) and lastly, to lessen the discretion of a procuring agency in the consideration of single calculated/rated and responsive bid submissions.

Conversely, studies show that the law tends to compromise quality of goods and services in favor of complex bid procedures. Hence, some government agencies have low satisfaction with the worth of procured products and services. Among the reasons are: lack of organic procurement body in the agency, low vendor turnout because regularly bided contracts are not posted ahead of time, and absence of contract administration mechanism within the solicitation system itself. Besides, a procurement system that is slow and inefficient sends a strong signal to the business community that the government is unable or unwilling to compete in today’s fast-paced economy. As some affected agencies observe, without spending, crucial infrastructures are not built and basic services are not delivered.

A procurement system that dwells on checks and balances to safeguard fairness and promote full competition so that goods and services are obtained at the lowest possible price- without a doubt, ensures that a public procurement system has equity and integrity, but it can be very slow. Moreover, the long-drawn-out bidding process on the average 6 months even for a simple, low-budgeted contract including turn-around time for vendors to comply with overly detailed terms of reference and for procurement agencies to process voluminous bid documents, hampers the performance of government functions. To court users, it simply means: justice delayed is justice denied.

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*Assistant Court Administrator Nimfa Cuesta Vilches is Chairperson of the Bids and Awards Committee (BAC) for Goods and Services, Supreme Court of the Philippines and BAC Office Uniforms for Lower Courts, Office of the Court Administrator (OCA), Supreme Court.