Open Contracting in Philippine Government Procurementmddb.apec.org/Documents/2015/FMP/WKSP1/15_fmp_wksp1_014.pdf · Open Contracting in Philippine Government Procurement ... Open

___________________________________________________________________________

2015/FMP/WKSP1/014 Session: 4

Open Contracting in Philippine Government Procurement

Submitted by: Philippines

Workshop on Fiscal Management Through Transparency and Reforms

Bagac, Philippines9-10 June 2015

Open Contracting in

Philippine Government Procurement

Fragmented Laws and

Rules (100++)

• Presidential Decree 1594

(Works)

• Executive Order 262

(Goods)

• Executive Order 164

(Consulting Services)

• Executive Order No. 40

• Republic Act 7160 - Local

Government Code

(Procurement Provisions)

No Standardized

Procurement

Documents

Absence of a single

agency with a mandate to

formulate procurement

policy, rules and

procedures.

Procurement Environment

Prior to Government Procurement Reform Act

(GPRA)

Existence of Conflict of

Interest in Government

Contracting (approving

authority, bidders,

observers)

Lack of Transparency

in Procurement Information

Dissemination

Accountability of

Persons Involved in

Procurement activities

Weak opportunity for

Public Monitoring of

Procurement Activities

Procurement Environment

Prior to GPRA

2002 CPAR

From the overall findings of the CPAR, thepublic procurement system in the Philippines

is dysfunctional. It is characterized bymultiple laws, rules and regulations whichwhile adhering to the principles ofcompetition and transparency, are

inefficient and prone to abuse. Italso contributes to lowering public funds’value for money.

Effect to Public Procurement

• Information Asymmetry

– Withholding information

– Exploitation of information

• Conflict of Interest of Public Officials

– Financial Interest

– Family Relationship

– Post Employment

Effect to Public Procurement

• Contacts, Informal Networks and Collusion

• Lack of Accountability

– Fertile Ground for Malpractices and Corruption

2002 CPAR

When formal institutions are weak,

informal institutions are often strong…

2002 CPAR

A conducive breeding space for graft and corruption…

“An Act Providing for the

Modernization, Standardization and Regulation of the Procurement Activities of the

Government and for Other Purposes”

Republic Act No. 9184Government Procurement Reform

Act (GPRA)

Government Procurement Reform Act (GPRA)

Governing Principles

GPRA

GPRA Key Reform Principles

Accountability

Competition

Openness/Public Monitoring

Disclosure/Transparency

Key Reform Measures

Key Reform Measures

• Competitive Bidding asPrimary Mode of Procurement.

• Allowance of Centralized orDecentralized Procurement.

• Use of Non-DiscretionaryPass/Fail Criterion.

Key Reform Measures

• Shift from Pre-Qualification Regime toSimplified Eligibility Checking.

• Use of the Approved Budget for the Contract(ABC) as Ceiling for Bid Prices.

• Creation of a procurement policy oversightbody – Government Procurement PolicyBoard.

Key Reform Measures• Introduction of a Protest Mechanism

• Participation of Observers in all stages ofprocurement process.

• Issuance of the Standardized Philippine BiddingDocuments (PBDs), Generic Procurement Manuals(GPMs) and Local Government Procurement Manuals(LGPMs)

• Establishment of civil, administrative and criminalsanctions

Key Reform Measures

• Establishment of a National Procurement TrainingProgram to ensure the conduct of regular procurementtrainings for procurement capacity development ofgovernment procurement practitioners.

• Development of the Procurement ProfessionalizationProgram currently being pilot-tested to professionalizegovernment procurement practitioners.

• Regular conduct of training activities and seminars forprospective bidders - suppliers, contractors, andconsultants.

Open Contracting Linkage

vis

The GPRA

The GPRA procurement principles embrace core values of OCP, i.e.

transparency/disclosure, participation/monitoring and

accountability

• What is OCP?

• Open contracting refers to norms and practices for increased

disclosure and participation in public contractingincluding tendering, performance and completion. It includes the varietyof contract types, from more basic contracts for the procurement ofgoods, to complex contracts, joint venture agreements, licenses andproduction sharing agreements. Open contracting encompasses all publiccontracting, including contracts funded by combinations of public, privateand donor sources.

• Spearheaded by the World Bank together with GIZ, CoST, TI and otherinternational institutions, Governments (Colombia and the Philippines)and Civil Society Organizations.

19

What is OCP? (Cont’d)

• At the GLOBAL LEVEL, OCP created global principles thatgovernments and standards setting bodies may draw uponin redefining contracting norms in favor of greatertransparency and accountability.

• At COUNTRY LEVEL, OCP shall reinforce good practice onthe ground and further enhance disclosure and effectivemonitoring, including through citizen engagement arounduse of public resources.

20

1. Posting of all procurement opportunities, Invitation to Bid (IB)/Request for Expression of Interest (REI), Notices of Award, Notice to Proceed, the Approved Contract itself at the PhilGEPS and the website of the procuring entity, if available; and, at any conspicuous place reserved in the premises of the procuring entity.

2. Advertisement of the IB/REI in a Newspaper of General Nationwide Circulation, if Approved Budget for the Contract is above 2M for Goods; 5M for Works, and, 1M for Consulting Services.

3. The procuring entity shall also post the Bidding Documents at its website and at the PhilGEPS website from the time that the Invitation to Bid/Request for Expression of Interest is advertised. Prospective bidders may download the Bidding Documents from any of the said websites.

21

GPRA Open Contracting Practices


4. Any Supplemental/Bid Bulletin issued by the BAC shall also be posted on the PhilGEPS and the website of the procuring entity concerned, if available;

5. Submission to the GPPB and Posting in the procuring entity's website of its Annual Procurement Plan;

6. Submission to the GPPB and posting in the procuring entity's website of its approved Procurement Monitoring Report every semester;

7. Submission to the GPPB of a copy of Protest Resolutions (Section 56 of the IRR of RA 9184) and Court Cases/Certiorari;

8. Submission to the GPPB of all Blacklisting and Delisting Orders against Suppliers, Constructors, and Consultants;

9. Informing the GPPB of contract extension beyond six months, if any, as per Guidelines on the Extension of Contract for General Support Services;

10. Submission and Update to the GPPB of the List of Pre-selected Suppliers;

23



11. Submission to the GPPB and posting in the procuring entity's website of the latter's List of Non-Governmental Organizations (NGOs), Civil Society Organizations (CSOs), or Professional Associations invited as Observers; (Section 1.1.3 and 1.2.6 of the IRR of EO 662)

12. Administrative Order No. 17, s. 2011 Mandates all government procuring entities to use the PhilGEPS in its procurement activities, and shall post all opportunities, notices, awards, and contracts in it as the central portal of government procurement transactions in accordance with R.A. 9184 and its IRRs.


• Observers – SAI, Private Sector, NGO/CSO shall be allowed observe all stages of the procurement process

• Observers allowed access to the following documents upon their request:

(a) minutes of BAC meetings;

(b) abstract of Bids;

(c) post-qualification summary report;

(d) APP and related PPMP; and

(e) opened proposals.

Open Data Philippines




Impact of Reform Measures

Sources of Information

Experiences from the

GroundFeedback from

various stakeholders

The 2012 Country

Procurement

Assessment Report

Government Procurement Reform Act

IMPACT OF REFORM MEASURES

Impact of Reform Measures• Use of PhilGEPS vis newspaper advertisement generated savings

equivalent to PhP 1.048 Billion from 2001 – 2014.

• As of 2006, the DepED had realized a total of Php2.6 billion in savings, with an average reduction of 50% in the price of textbooks that allowed achievement of a textbook-to-student ratio of 1:1.

• One textbook that was being purchased for an average of PhP 100.00came down to PhP45.00 in competitive bidding.

• DOH reported an average reduction of 27% in the prices of pharmaceuticals due to increased competition.

• DPWH reported an average reduction of 15% to 20% of contract cost when compared with budget estimates.

Source: 2008 CPAR

Impact of Reform Measures(World Bank Confidence in Country System)

WB NCB Threshold

2008 2013

Goods USD 1 Million USD 3 Million

Works USD 5 Million USD 15 Million

Consulting USD 200K USD 500K

Transparency InternationalCorruption Perception Index (CPI)

Year Rank CPI Score No. of Countries

2000 69 2.8 90

2001 65 2.9 91

2002 77 2.6 102

2003 92 2.5 133

2004 102 2.6 146

2005 117 2.5 159

2006 121 2.5 163

2007 131 2.5 180

2008 141 2.3 180

2009 139 2.4 180

2010 134 2.4 178

2011 129 2.6 183

2012 105 34 176

2013 94 36 177

2014 85 38 175

Thank You…

Dennis S. SantiagoExecutive Director V

Government Procurement Policy Board – Technical Support Office