The WHYs of Government Procurement

One of the most challenging jobs in the government is the one that involves in procurement.  Procurement or simply, to purchase refers to the whole process of acquisition from third parties and covers goods, services, and infrastructure projects. My journey with the Bids and Awards Committee (BAC) is no ordinary experience.  One has to study the Procurement Law by heart. He has to be very keen on the procedure and the timelines of the procurement activities. All members of the BAC shall be on a “jury duty” type of assignment in order to complete the entire procurement process at the earliest possible time.  “Jury duty” means a state by which the members give utmost priority to BAC assignment over all the other duties and responsibilities until the requirements for the said assignments at hand are completed.

Why is the procurement process in the government takes so long? What are the methods of procurement? Why do the specifications are wrong? Why are there failed biddings?  These are some of the most common questions asked on procurement.  The Republic Act No. 9184, otherwise known as the Government Procurement Reform Act and its Implementing Rules and Regulations is the answer to all procurement problems.  The Act which took effect on January 26, 2003, provides for modernization, standardization and regulation of the procurement activities of the government and for other purposes. Its Implementing Rules and Regulations (IRR) took effect on October 23, 2003 which has been revised twice with its latest revision effective October 28, 2016.

The provisions of the IRR are in line with the commitment of the Government of the Philippines (GoP) to promote good governance and its efforts to adhere to the principles of transparency, accountability, equity, efficiency, and economy in its procurement process. It is the policy of the GoP that procurement of Goods, Infrastructure Projects and Consulting Services shall be competitive and transparent, and therefore shall undergo competitive bidding except as provided in Rule XVI of the IRR (sec 2, 2016 Revised IRR).  Competitive Bidding is a method of procurement which is open to participation by any interested party and which consists of the following processes: advertisement, pre-bid conference, eligibility screening of prospective bidders, receipt and opening of bids, evaluation of bids, post-qualification, and award of contract.

This IRR shall apply to all procurement of any branch, agency, department, bureau, office, or instrumentality of the GoP, including government-owned and/or -controlled corporations (GOCCs), government financial institutions (GFIs), state universities and colleges (SUCs), and local government units (LGUs) (sec 4.1, 2016 Revised IRR). Rule II, section 7 of the IRR states that all procurement shall be within the approved budget of the Procuring Entity and should be meticulously and judiciously planned by the Procuring Entity. Consistent with government fiscal discipline measures, only those considered crucial to the efficient discharge of governmental functions shall be included in the Annual Procurement Plan (APP).  No procurement shall be undertaken unless it is in accordance with the approved APP, including approved changes thereto. The APP must be consistent with the duly approved yearly budget of the Procuring Entity and shall bear the approval of the Head of Procuring Entity (HoPE) or second-ranking official designated by the HoPE to act on his behalf. In the preparation of the indicative APP, the end-user or implementing units of the Procuring Entity shall formulate their respective Project Procurement Management Plans (PPMPs) for their different programs, activities, and projects (PAPs).

To promote transparency and efficiency, information and communications technology shall be utilized in the conduct of procurement procedures. The single portal that serves as the primary source of information on all government procurement is PhilGEPS or the Philippine Government Electronic Procurement System.  The PhilGEPS features an electronic bulletin board for posting procurement opportunities, notices, awards and reasons for the award; centralized electronic database of all manufacturers, suppliers, distributors, contractors, and consultants registered under the system; a centralized electronic and a catalog of common and non-common use goods, supplies, materials and equipment.  All Procuring Entities are mandated to fully use the PhilGEPS in accordance with the policies, rules, regulations, and procedures adopted by the Government Procurement Policy Board (GPPB) and embodied in the IRR (Rule III, section 8 of the IRR). The GPPB is created to protect national interest in all matters affecting public procurement; formulate and amend public procurement policies, rules and regulations; prepare a generic procurement manual and the standard bidding forms for procurement; ensure the proper implementation by Procuring Entities of the Act, its IRR and all other relevant rules and regulations pertaining to public procurement; establish a sustainable training program to develop the capacity of Government procurement officers and employees; and conduct an annual review of the effectiveness of the Act and recommend any amendments thereto, as may be necessary (Rule XX, Section 63 of the IRR).

Each Procuring Entity shall establish in its head office a single Bids and Awards Committee (BAC) to undertake the procurement functions in order to facilitate professionalization and harmonization of procedures and standards.  The Head of Procuring Entity (HoPE) shall designate at least five (5) but not more than seven (7) members to the BAC of unquestionable integrity and procurement proficiency.  The BAC is composed of a Chairperson, who is at least a third (3rd) ranking permanent official of the Procuring Entity and members, who are at least fifth (5th) ranking permanent officials, or if not available, officers of the next lower rank with knowledge, experience and/or expertise in procurement.  The members of the BAC shall have a fixed term of one (1) year reckoned from the date of appointment, renewable at the discretion of the HoPE (Rule V, Section 11 of the IRR). 

The BAC’s function include the following: (a) advertise and/or post the invitation to bid/request for expressions of interest; (b) conduct pre-procurement and pre-bid conferences; (c) determine the eligibility of prospective bidders; (d) receive and open bids; (e) conduct the evaluation of bids; (f) undertake post-qualification proceedings; (g) resolve requests for reconsideration; (h) recommend the award of contracts to the HoPE or his duly authorized representative: (i) recommend the imposition of sanctions in accordance with Rule XXIII; (j) recommend to the HoPE the use of Alternative Methods of Procurement as provided in Rule XVI hereof; k) conduct any of the Alternative Methods of Procurement; l) conduct periodic assessment of the procurement processes and procedures to streamline procurement activities pursuant to Section 3(c) of this IRR; and m) perform such other related functions as may be necessary, including the creation of a Technical Working Group (TWG) from a pool of technical, financial, and/or legal experts (Rule V, Section 12). The BAC is responsible for ensuring that the Procuring Entity abides by the standards set forth by the Act and its IRR, and it shall prepare a Procurement Monitoring Report (PMR) in the form prescribed by the GPPB. 

The TWG on the other hand assists in the review of the technical specifications, scopes of work, and terms of reference; review in the bidding documents; shortlisting of consultants; eligibility screening; evaluation of bids; post-qualification; and resolution of request for reconsideration (Rule V, Section 13 of the IRR).

To enhance the transparency of the process, the BAC shall invite observers during all the procurement processes.  The observers consist of one (1) representative from the Commission on Audit, one (1) from a relevant private sector and other one from a non-government organization (NGO).  Observers shall be allowed access to or be provided with some documents like the minutes of BAC meetings free of charge upon their request (Rule V, Section 13 of the IRR). 

The HoPE shall also create a Secretariat which will serve as the main support unit of the BAC.  An existing organic office within the Procuring Entity may also be designated to serve as Secretariat. To strengthen and promote the professionalization of the organizations’ procuring unit, the HoPE may create procurement units that may serve concurrently as BAC Secretariat in accordance with the guidelines issued by DBM. The Secretariat shall have the following functions and responsibilities as provided under Rule V, section 14 of the IRR: a) Provide administrative support to the BAC and the TWG; b) Organize and make all necessary arrangements for BAC and the TWG meetings and conferences; c) Prepare minutes of meetings and resolutions of the BAC; d) Take custody of procurement documents and other records and ensure that all procurements undertaken by the Procuring Entity are properly documented;  e) Manage the sale and distribution of Bidding Documents to interested bidders; f) Advertise and/or post bidding opportunities, including Bidding Documents, and notices of awards; g) Assist in managing the procurement processes; h) Monitor procurement activities and milestones for proper reporting to relevant agencies when required; i) Consolidate PPMPs from various units of the Procuring Entity and prepare the APP; and j) Act as the central channel of communications for the BAC with end-user or implementing units, other units of the line agency, other government agencies, providers of goods, infrastructure projects, and consulting services, observers, and the general public.

The Procuring Entity may grant payment of honoraria to the BAC members in an amount not to exceed twenty-five percent (25%) of their respective basic monthly salary subject to availability of funds. The Procuring Entity may also grant payment of honoraria to the BAC Secretariat and the TWG members, subject to the relevant rules of the DBM (Rule V, section 15 of the IRR). The GPPB shall establish a sustained training program to develop the capability of the BACs, BAC Secretariats, TWGs, and the Procurement Units of Procuring Entities, and professionalize the same (Rule V, section 16 of the IRR).

Every member of the BAC, TWG, and Secretariat should learn the rules by heart and live by it.  Only then that he can truly appreciate his role as caretakers of public funds by ensuring that the peoples’ money is spent lawfully. 

      Administrative Officer IV