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 EnvironmentPrior to GPRA
Existence of Conflict of Interest in Government Contracting (approving authority, bidders, observers)
Lack of Transparency in Procurement Information Dissemination
Unclear 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, the public procurement system in the Philippines
is dysfunctional. It is characterized by multiple laws, rules and regulations which while adhering to the principles of competition and transparency, are
inefficient and prone to abuse. It also contributes to lowering public funds’ value for money.
“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 (2003)
Government Procurement Reform Act (GPRA)
Governing Principles
TR
AN
SPA
REN
CY
GPRA
ACCOUNTABILITY
PUBLIC MONITORINGACCOUNTA
BILITY
CO
MPE
TITION
STREAMLINED PROCESS
Key Reform Measures
• Competitive Bidding as Primary Mode of Procurement.
• Allowance of Centralized or Decentralized Procurement.
• Use of Non-Discretionary Pass/Fail Criterion.
Key Reform Measures
• Shift from Pre-Qualification Regime to Simplified Eligibility Checking.
• Use of the Approved Budget for the Contract (ABC) as Ceiling for Bid Prices.
• Creation of a procurement policy oversight body – Government Procurement Policy Board.
Key Reform Measures• Introduction of a Protest Mechanism
• Participation of Observers in all stages of procurement process.
• Issuance of the Standardized Philippine Bidding Documents (PBDs), Generic Procurement Manuals (GPMs) and Local Government Procurement Manuals (LGPMs)
• Establishment of civil, administrative and criminal sanctions
Key Reform Measures• Establishment of a National Procurement Training
Program to ensure the conduct of regular procurement trainings for procurement capacity development of government procurement practitioners.
• Development of the Procurement Professionalization Program currently being pilot tested to professionalize government procurement practitioners.
• Regular conduct of training activities and seminars for prospective bidders - suppliers, contractors, and consultants.
Sources of Information
Experiences from the Ground Feedback from
various stakeholders
The 2012 Country Procurement Assessment
Report
Government Procurement Reform Act
IMPACT OF REFORM MEASURES
Impact of Reform Measures
• 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 100.00 came 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
• Bidding time has been cut in half, and transparency is attained through compliance with the requirement of posting of advertisement, Notice of Award, Actual Contract and Notice to Proceed in the PhilGEPS.
• Alignment with international practice improved, and the national procurement system became more widely used following the increase in the National Competitive Bidding (NCB) thresholds to US$ 1 Million for goods and US$ 5 Million for works.
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
2007 2008 2009 2012 20130%
10%
20%
30%
40%
50%
60%
70%
23%26% 26%
16% 9%
21%16%
19%
22%
37%
54%57%
53%
60%
53%
Disagree
Undecided
Agree
2013 SWS Survey of Enterprises on Corruption
- 53% say it is easier to get information for bidding on gov’t contract.
- Compared to about 5 years ago, it is now easier for anyone who wants to bid on a government contract to get information about the bidding.
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
Total APP vs. Awarded Contracts(in terms of amount, NGAs)
75.80%
Awarded
24.20%
2011APP = PhP 137.91 B
Awarded = PhP 30.19 B
2012APP = PhP 131.17 B
Awarded = PhP 31.74 B
Awarded
21.89%
78.11%
Failed Biddings(Total Contracts Awarded vis-à-vis Number of Procurement
Activities)
2011
Procurement Activities = 8,731Contracts Awarded = 8,058
Difference = 673
2012
Procurement Activities = 11,450Contracts Awarded = 9,555
Difference = 1,895
Not Award
ed16.55
%
Awarded
83.45%
Awarded92.29%
Not Awarded7.71%
Approval Process/Review Process
14%
Late Release of SARO 5%
Low Number of Bidders
22%
Inadequate Training/Vary-ing Interpretation of Rules
3%
Lack of Manpower6%
Problems on Technical Specifications/TOR (Pref-erence; Highly complex
technical specifications or specialized goods )
17%
End users' late submission of the PR
22%
Poor Cost Estimates11%
PRIMARY CAUSES OF DELAYS AND FAILURES OF BIDDING
(Based on APCPI Confirmation Result of Participating Agencies)
• Sharing the Lessons Learned:Country Effectivity of Procurement Legal
FrameworkCambodia 2012
LAO PDR 2007
Mongolia 2005 (Amended 2011)
Timor Leste 2005 (Amended 2010)
Vietnam 2013 (repealed Bidding Law of 2005
• How do we keep our system attune with modern procurement approaches and strategies?
– Principles Based vs. Rules Based approach – Professionalization / Competency Framework– Framework Agreement– SPP/GPP– WTO-GPA – Observer Status – Electronic Bidding / Electronic Reverse Auction– Open Contracting / Open Data Standards
• Stakeholders’ participation in government procurement.– Public procurement practitioners – competition v. negotiation– Market Operators – Policing their ranks / Integrity Pledge– How do we incentivize procurement opportunities and make it attractive to bidders?– CSO Participation / Sustaining Participation / Social Benefit Fund– SAIs, the impact of their function in decision making.– Innovative mechanisms to combat graft and corruption in procurement– Developing capacity of procurement investigators.
• Measuring results in public procurement?– OECD-DAC MAPS / APCPI – Compliance vs. performance– Peer Review Process– What are other available tools out there?
• What are the necessary steps to make procurement reform sustainable and irreversible?