Reforming the Philippine procurement system

Enhancing strategic public procurement has been one of the main initiatives of the Department of Budget and Management (DBM) in the Philippines. Following the enactment of Republic Act No. 12009, or New Government Procurement Act (NGPA), aimed at enhancing transparency, competition, efficiency, professionalism, accountability and sustainability in government procurement, long-overdue reforms are being undertaken to remove deep-rooted high risk of corruption, insertions, amendments and inefficiencies in public procurement.

DBM, tasked to spearhead the transition, assured the public that the rules and regulations for new procurement alternatives, including the e-marketplace, are currently being developed. Part of this was leveraging blockchain technology and launching Project Marissa to fortify budget document security—promoting further transparency across all government agencies.

Transforming the procurement process

DBM is preparing the implementing rules and regulations (IRR) of the NGPA to attune this to the ever-changing needs of the Filipino people. The significant key features of this act likewise embed digital transformation, transparency, inclusivity and sustainability into the procurement system.

Once the General Appropriations Act has been passed, the DBM prioritizes the utilization and implementation of projects determined by Congress and the department heads. To plug leakages arising from this process, DBM introduced citizen participation through the Open Government Partnership where major stakeholders and civil society organizations (CSOs) are invited as observers and be a part of every proceeding, procurement process and contract implementation.

In the bidding of products, DBM also introduced an alternative mode in the procurement process—the Most Economically Advantageous Responsive Bid (MEARB) alongside the Lowest Calculated Responsive Bid (LCRB). This is to prevent contractors from tendering lower bids and offsetting this by using or offering inferior products or infrastructure just to get the government contract. The MEARB combined with LCRB is a one-selection criterion evaluating offers or bids that ensure that high-quality outcomes are present at a reasonable cost to procuring entities.

DBM likewise modernizes the Philippine Government Electronic Procurement (PhilGEPS) so that payments and government database interconnection can now be done electronically. It also instituted safeguards against misuse of the process by improving competitive bidding and identifying which modalities will define legal, technical and financial aspects.

Inclusivity and sustainability

To make the system inclusive and sustainable, gender-responsive procurement strategies are being incorporated into the process of government transactions through the inclusive procurement program. It also empowers micro, small, and medium enterprises (MSMEs) while enabling meaningful competition among suppliers, including women-led businesses.

These innovative provisions also give importance to green procurement for sustainability. It will encourage agencies to procure common-use supplies with green specifications, thus promoting environment-friendly procurement practices.

Challenges

The transition toward the NGPA and getting the IRR into the mainstream are not without challenges for the DBM. The most taxing and difficult barrier to surmount is the lack of professionals who can help and support adherence to procurement practices. There is an urgent need for competent technical experts and professionals to be part of the transition in a procurement process whose proper implementation can make a huge difference through its potential contribution to the gross domestic product of the country.

Another challenge is the sustainability goal because there are limited suppliers that can provide green and environment-friendly products. At its early stage, the price differences are still substantial compared to the present ones being utilized. How to incentivize manufacturers and providers to shift and become price-competitive will need intensified government support.

As the IRR is being prepared, inputs from stakeholders are solicited to ensure that its provisions will be responsive, flexible and solutions-oriented. Collaboration and consultations with private partners that include the business sector and MSME representatives can go a long way in ensuring fair, transparent and equitable provisions that benefit Filipinos.

IRR

The MAP in partnership with DBM was the result of the BDB Law­—Management Association of the Philippines (MAP) Breakfast Dialogue, a series of discussions among government officials and business leaders, which was held last Nov. 27. The discussions centered on pressing policy issues and transformative strategies. The collaboration between MAP and DBM emphasizes commitment to transparency, particularly in the management of confidential funds and the prevention of financial abuse.

As part of this initiative, MAP was invited to provide inputs on key aspects of the Commission on Audit (COA) Law, particularly to ensure that Common-use Supply Equipment is included in the electronic catalog of Procurement Service-DBM. Strengthening the role of COA as a mandated observer and ensuring the timely submission of reports under the participatory procurement framework outlined by the law are critical priorities. Fortunately, the Procurement Observers Portal simplifies this process by enabling COA to register and ensure compliance with procurement reporting requirements.

MAP will form a technical team with cross-committee engagement and meet again with DBM for the proposed IRR. The target date to finalize and complete the IRR is within the year, along with efforts to help move the needle faster for awareness and information dissemination on this very important law. The US-Asean Business Council offered to assist mainly in information, communication and technology, while MAP will lend its support to the finance and banking sectors. MAP will also provide a backup process to help address professionalization through management and quality checking.

MAP strongly supports the reform agenda that the DBM is undertaking through the NGPA and for that matter, all the efforts being made by the government to improve operational efficiency and the creation of professional jobs for Filipinos. The public and private sectors should join hands in creating a progressive Philippines by ensuring that public service delivers to achieve inclusive and sustainable economic prosperity and growth. INQ

The author is the immediate past president of the MAP and the founding partner and CEO of Du-Baladad and Associates or BDB Law. Feedback at [email protected] and [email protected].