Advantages of Public Procurement:

Creating greater transparency.

Creating a level playing field for bidders.

Giving a project greater legitimacy (particularly if there is a change of

government and allegations are made of cronyism in awarding the contract).

Setting out clearly the qualities and experience (and financial strength) that
each bidder needs to have before it can bid.

Assisting the government to achieve better value for money through market
testing.

In some countries, many business people talk openly about the worsening of
corruption and the lack of transparency in tender processes, be these tender rules
that have been framed to favour a particular bidder, tenders published in places
where outsiders could not possibly have been expected to have been able to view
the tender notice, or simply where demands for bribes have been made. It is worth
spending some time thinking practically about what steps can be taken to reduce
this worrying trend.
RA 9184 was designed to cover everything government needs to buy, construct or
provide. It set down that procurement along with the rules and regulations around it
covered the following:

1. Acquisition of goods which includes all items, supplies, materials, and general
support services, whether in the nature of equipment, furniture, stationery,
materials for constructions, or personal property of any kind, including nonpersonal or contractual services, such as the repair and maintenance of
equipment, and furniture, as well as trucking, hauling, janitorial, security, and
related services
2. Consulting services which cover services for infrastructure projects and other
types of project by the government requiring adequate external, technical,
and professional expertise that are beyond the capacity and capability of the
government to undertake such as, but not limited to: (a) advisory and review
services; (b) pre-investment or feasibility studies; (c) design; (d) construction
supervision; (e) management and related services; and (f) other technical
services or special studies.
3. Infrastructure projects which include the construction, improvement,
rehabilitation, demolition, repair, restoration or maintenance of roads and

bridges, railways, airports, seaports, communication facilities, civil works

components of information technology projects, irrigation, flood control and
drainage, water supply, sanitation, sewerage and solid waste management
systems, shore protection, energy/power and electrification facilities, national
buildings, school buildings, hospital buildings, and other related construction
projects of the government
The basic tenet is that there must be competitive bidding for the above regardless
of the source of funds, whether local of foreign, by all branches and
instrumentalities of government, its departments, offices and agencies, including
government-owned and/or-controlled corporations and local government units.
There are, however exceptions as provided in its revised implementing rules and
regulations. These are:

1. Procurement for goods, infrastructure projects, and consulting services

funded from Foreign Grants covered by RA 8182, as amended by RA 85553;
2. Acquisition of real property which shall be governed by RA 89744 and other
applicable laws; and
3. Public-private sector infrastructure or development projects and other
procurement covered by RA 69575 provided, however, that for the portions
financed by the Philippine government, regardless of source of funds,
whether local or foreign, the provisions of the implementing rules and
regulations of RA 91894 shall apply.

The law stipulated how public bidding should proceed beginning with posting a
notice on the Philippine Government Electronic Procurement System or PhilGEPS,
the new and still developing portal of the GPPB, where all government procurement
opportunities, notices, results of biddings, awards and reasons for the award must
be published. All interested parties are invited to participate with the government
agency involved obliged to hold a pre-bid conference, where it discusses the
requirements and details of the project to the interested bidders, as well as
entertaining questions from them.
As seen recently and very publicly with the bids to provide automated election
counting machines, bidders must comply with the requirements of the procuring
entity and submit all these at the date and place scheduled, together with their
bids. Eligibility is to be authenticated prior to opening bids with the one submitting
the lowest figure declared the winner. However, even then the bidder still has to
pass the post-qualification stage where the accuracy of the documents submitted
will be checked and where necessary they undergo an inspection of their office,
workplace or factory.

That at least is what the law lays down and in very high profile cases such as
procurement for the countrys first ever automated polling system where
international scrutiny was understandably high and where several international
companies were competing, there appears to be proper observance of it.

The Procurement Law adopted the following general principles in the ideal pursuit of
good governance:

1. Transparency in the procurement process and in the implementation of

procurement contracts
2. Competitiveness by extending equal opportunity to enable private
contracting parties who are eligible and qualified to participate in public
bidding
3. Streamlined procurement process that will uniformly apply to all government
procurement. The procurement process shall be simple and made adaptable
to advances in modern technology in order to ensure an effective and
efficient method.
4. System of accountability where both the public officials directly or indirectly
involved in the procurement process as well as in the implementation of
procurement contracts and the private parties that deal with government are,
when warranted by circumstances, investigated and held liable for their
actions relative thereto.
5. Public monitoring of the procurement process and the implementation of
awarded contracts with the end in view of guaranteeing that these contracts
are awarded pursuant to the provisions of the Procurement Law and its
implementing rules and regulations, and that all these contracts are
performed strictly according to specifications.
The law clearly prohibits collusion and other attempts to subvert the public bidding
process. Specifically, RA 9184 prescribes the following:

When two or more bidders agree and submit different bids as if they were bona fide,
when they knew that one or more of them was so much higher than the other that it
could not be honestly accepted and that the contract will surely be awarded to the
pre-arranged lowest bid.
When a bidder maliciously submits different bids through two or more persons,
corporations, partnerships or any other business entity of which he has an interest

in, to create the appearance of competition that does not in fact exist so as to be
adjudged as the winning bidder.
When two or more bidders enter into an agreement which call upon one to refrain
from bidding for procurement contracts, or which call for withdrawal of bids already
submitted, or which are otherwise intended to secure an undue advantage on any
one of them.
When a bidder employ schemes which operates to suppress competition and thus
produce a result disadvantageous to the public.
Submit eligibility requirements of whatever kind and nature that contain false
information or falsified documents or conceal such information in the eligibility
requirements when the information will lead to a declaration of ineligibility from
participating in public bidding.
Submit bidding documents of whatever kind and nature that contain false
information or falsified documents or conceal such information in the bidding
documents.
Participate in a public bidding using the name of another or allow another to use
one's name for the purpose of participating in a public bidding.
Withdraw a bid after it shall have qualified as the Lowest Calculated Bid/Highest
Rated Bid. This shall include the non-submission of requirements such as, but not
limited to, performance security, preparatory to the final award of the contract.

Even so, public procurement encompasses much more than the bidding process. To
effectively route out corruption in procurement we need equally to address and
monitor how priorities and terms of reference for processes are actually set. For
example, who determines the scope and reference of a project? Who determines the
criteria that bidders then need to compete on? Who determines that a bridge that
serves a very isolated and very little-used road becomes more of a priority than a
new school or hospital? A Commission on Audit Report on performance of the DPWH
cites occasions where substantial two lane bridges have been built in places where
there appear to be no pressing need for one.
The framers of the Procurement Law, aware of all the problems that have plagued
the procurement process, incorporated possible offenses that may be committed by
a public officer or members of the Bids and Awards Committee (BAC). These include
the following:

1. Opening any sealed bid prior to the appointed time for the public opening of
bids or other documents
2. Delaying, without justifiable cause, the screening for eligibility, opening of
bids, evaluation and post evaluation of bids, and awarding of contracts
beyond the prescribed periods of bids or other documents
3. Unduly influencing any member of the BAC or any officer or employee of the
procuring entity to take a particular bidder
4. Splitting of contracts which exceed procedural purchase limits and
competitive bidding
5. When the head of the agency abuses the exercise of his power to reject any
and all bids with manifest preference to any bidder who is closely related to
him
With all the irregularities that have attended procurement in various levels of
government, the Procurement Law embodies what transparency should be. Yet
unfortunately, despite the law, in practice, it seems there is much less public
participation in the procurement process than intended.

There are other provisions in RA 9184 that promote transparency in the

procurement process:

1. The BAC shall invite a representative of the Commission on Audit.18

2. All invitations to bid contracts under competitive bidding shall be advertised
by the procuring entity in its premises, its website, newspapers of general
circulation, and the PhilGEPS. The BAC shall publicly open all bids at the time,
date and place specified in the bidding documents.
3. The minutes of the bid opening shall be made available to the public upon
written request and payment of a specified fee.
4. The bidder shall submit a sworn affidavit that he or she or any officer of the
corporation is not related to the head of the procuring entity by consanguinity
or affinity up to the third civil degree.

Apart from limitations like lack of public representation in bidding and awards
committees, RA 9184 still remains unfamiliar to the general public, and,
unfortunately, even to government. GPPB arrived at this conclusion in February

2009 after its consultations on the Implementing Rules and Regulations of the law
with different local government units across the country. It later came out with a
summary of recommendations to address this issue, including these:

1. Politicians and local chief executives should be given an orientation on the

Procurement Law and should be enlightened on the effects of their
interference on the implementation of the law.
2. Local chief executives must undergo mandatory training on the law; create
proper information drive.
3. nvite the politicians for a seminar to apprise them of the law.
4. GPPB should consistently conduct seminars/trainings for procurement
professionals, including all elected officials.
5. It is suggested that the local chief executives and other local officials shall be
oriented on the law, otherwise no Internal Revenue Allotments

The discussion above has shown us how the government procurement process
works in the Philippines. We have seen its strengths, its flaws, how private
individuals, corporate entities, and even people in government have manipulated it
to suit their own interests, with not a care about the repercussions to the nations
coffers, and the peoples protracted struggle for clean and good governance.

The battle is not lost. The Philippines has the Supreme Court where it can turn to
when there is a palpable violation of RA 9184. The Court has once and again
decided cases confirming the force and validity of the Procurement Law.

In a 2008 case20, the Supreme Court struck down as void the Manila International
Airport Authoritys authority to enter into negotiated contracts for its janitorial and
maintenance services without holding a public bidding.21 It said:

The rationale behind the requirement of a public bidding, as a mode of awarding

government contracts, is to ensure that the people get maximum benefits and
quality services from the contracts. More significantly, the strict compliance with the
requirements of a public bidding echoes the call for transparency in government
transactions and accountability of public officers. Public biddings are intended to

minimize occasions for corruption and temptations to abuse of discretion on the

part of government authorities in awarding contracts.

In the highly publicized NBN-ZTE scandal, the Supreme Court dismissed22 the
petitions to declare the project null and void for mootness23 and because their
resolution requires the reception of evidence which cannot be done in an original
petition brought before it. However, Justice Antonio T. Carpio, in his strongly-worded
dissent, declared the nullity of the said project for violating the Constitution, the
Administrative Code of 1987, the Government Auditing Code of the Philippines and
the Government Procurement Reform Act. He said foreign-funded projects are not
exempt from public bidding like the ZTE Supply Contract as the need to safeguard
public interest against anomalies exists in all government procurement contracts.

The conclusion Justice Carpio wrote in his dissent best captured the current
sentiment of the public against the seemingly brazen acts of corruption in
government procurement:

It is time to put an end to government procurement contracts, amounting to tens

of billions of pesos, exceeding even the annual budget of the Judiciary, that are
awarded and signed without an appropriation from Congress, and without the
required public bidding.