DA to proceed with fertilizer procurement plan

The Department of Agriculture (DA) on Thursday said it would continue the procurement of fertilizers under its rice resiliency program despite allegations of over pricing involving the initial contracts.

In a statement, the agency said they were evaluating three suppliers for the bidding of eight of the remaining 26 lots, involving the purchase of some P1.28 billion worth of urea fertilizers.

In question are the contracts for the initial procurement of P1.8 billion worth of fertilizers, which industry groups and lawmakers said might be overpriced by at least P271.66 million.

This prompted the Makabayan bloc in the House of Representatives to issue a resolution calling for an investigation of the agency’s fertilizer program, while also calling on the agency to postpone the bidding process for the remaining lots until the allegations were cleared.

“The DA must have the sense to put on hold the succeeding bidding until the questionable bidding and procurement of the P1.8-billion fertilizer is given clarity,” the lawmakers said.

Despite these, the DA maintained that its bidding process was “above board, transparent and had favorably influenced the retail prices of urea to go down.” It noted that prevailing retail prices went down to less than P1,000 per 50-kilogram bag (LKg) from more than P1,100 per LKg previously

“The downward trend in the prices of urea shows that we are on the right track in centralizing the bidding process, thus providing our farmers nationwide with affordable and reasonably priced fertilizers,” Agriculture Secretary William Dar said.

Prices presented by Samahang Industriya ng Agrikultura to members of the press showed that retail prices of urea, particularly in Central Luzon, were only between P800 and P900 per LKg.

The group added that the DA should have been able to negotiate a lower contract price since it was buying fertilizers in bulk, and was procuring the supply directly from importers.

Nonetheless, the agency made clear that the bidding would continue.

For the eight lots, three companies passed the initial process. These are Goldman’s Supply Corp. for North Cotabato; First Planters Agri Solution for the distribution in La Union, Ilocos Sur and Pangasinan; and Universal Harvester Inc. for the provinces of Cagayan, Isabela, Nueva Vizcaya and Quirino.

Bid proposals from the three companies were priced between P975 and P985 per bag, according to Agriculture Undersecretary Noel Reyes.

“The DA-BAC (bids and awards committee) expects to complete the evaluation of the three bidders and declare the winners by July 9. The winners must deliver 50 percent of the urea fertilizers per lot, not later than July 15, and the rest, not later than July 31,” the agency said.

It noted that 14 prospective suppliers attended the prebid conference on June 5, but only four submitted their respective proposals.

Of the four bidders, only three were considered given that the fourth bidder was disqualified due to incomplete requirements.

Once the bidding is successful, there would still be 18 lots up for bidding with an estimated remaining budget of P2.61 billion.

The DA also clarified reports of companies that offered lower prices but were disqualified from the bidding process, saying that these companies “were not able to show that they had the technical, legal and financial capability to deliver the goods, execute the works and perform the services to address the emergency procurement of fertilizers.”

The agency’s fertilizer program falls under its rice resiliency program, which aims to increase the country’s rice self-sufficiency rate to 93 percent from 87 percent before the end of President Duterte’s term in 2020.