PROCUREMENT REFORM IN THE PHILIPPINES

1
PROCUREMENT REFORM IN THE PHILIPPINES

• Changing the Rulesof the Game

2
OUTLINE
Part I Getting Started (Ed Campos)
Part II Coalition Building (Tina Pimentel)
Part III The Role of ICT (Jacinto Gavino)
3
Why Procurement Reforms?
Survey Findings
Legal Foundations a Mess

• Government procurement
• and tax collection are
• perceived to be the major
• sources of corruption
• 4 of the top 5 most corrupt
• agencies featured prominently in
• government contracting
• approximately 20 of government
• contracts go to
• kickbacks/commissions
• equivalent to P21 B in 2001 just
• for the national government much
• larger if BOT transactions and local
• government are included

• Over 100 laws,
• regulations,
• executive orders etc.
• governing
• public procurement

4
PART I Getting Started

• Building Ownership Within the Executive Branch

5
Technical Analysis MattersBUT . . . .

• An initial failed attempt (1999) The PAAT

• comprehensive, thorough analysis of the problems
• translated into a lengthy (100 page) proposed
  procurement code
• no buy in from executive top down approach

6
Technical Analysis MattersRound Two (2000)

• procurement experts in Government prepare their
  own draft bill
• workshops
• produce draft bill
• the PAAT used as Target
• build camaraderie/ support group (TWG)
• sequencing
• first, administrative reforms (EO 40)
• then, legislation (draft GPRA)

7
Desired Principles Governing Each Stage
Stages of the Procurement Process (T) Transparency (A) Accountability (P) Predictability (C) Contestability (E) Efficiency
Procurement Planning X X
Preparation of Tender Documents X X
Invitation to Bid X X
Pre-qualification X X X
Bid Evaluation X X X
Awarding of Contract X X
Implementation X X X
8
Analytical Framework
Corruption
Opportunities
A
Tolerance
GDP
9
Analytical Framework
Corruption
Opportunities
A
B
Tolerance
GDP
10
PART IICOALITION BUILDING

• Getting the Legislature on Board

11
The Role of PWI

• Reducing Corruption in
• public procurement is a
• public good

12
PWI became the cog that linked together different
interested parties in the effort to secure the
passage of the Procurement Reform Bill
Local governments
Media
civil society
legislators
church
Government officials
13
What is PWI?

• PWI is a non-government organization established
  in February 2001
• Objective to combat corruption in public
  procurement
• Founders seasoned academics, reputable retired
  government officials, progressive lawyers, and
  concerned private sector executives

14
What PWI is and what it is not.

• Partners with
• reform minded
• officials
• in government.
• Corruption,
• not Government
• is the enemy

• Adopts a systemic
• approach to
• combating corruption
• in public procurement.
• Witch hunting is not
• our business

15
Our Approach
16
The Strategy Bridging the Executive and the
Legislature
Linked with and assisted the government
officials crafting the proposed bill

• offered technical and legal advice
• facilitated and provided
• logistical support for
• workshops

17
The Strategy Bridging the Executive and the
Legislature
Identified possible champions in the Lower House
and Senate and gained their confidence and
trust

• worked with both administration and opposition
  legislators to create
• bipartisan support
• helped facilitate the achievement of their
  personal goals
• provided technical assistance to their staffs
  in the preparation of
• various versions of the bill for hearings
• provided logistical and technical support
  during hearings

18
The Strategy Mobilizing Public Support

• Drew other civil society groups
• into the advocacy efforts and
• coordinated the activities

19
The Strategy Mobilizing Public Support
Linked up with a media communications group to
launch an aggressive advocacy and information
dissemination campaign in both private and public
sectors

• Participated in media
• interviews and helped
• arrange such interviews
• for key legislators and
• public officials
• AM radio critical
• Leading TV network
• produced
• TV documentary

Developed and distributed primers, streamers,
posters, T-shirts etc.

• Solicited support
• from local governments
• League of Provinces
• League of Municipalities

20
The Outcome

• October 28, 2002 Passage in the Lower House
• December 9, 2002 Passage in the Senate
• December 17, 2002 - Passage in the Bi-cameral
  Conference
• January 10, 2003 President signed the Bill into
  Law

21
Key Provision of Bill
Institutionalize the participation of civil
society
Article V, Sec. 13 To enhance the transparency
of the process, the BAC shall, in all stages of
the procurement process, invite, in addition To
the COA representative, at least 2 observers to
sit in its proceedings, 1 per from a duly
recognized private group in a sector or
discipline relevant to the procurement at hand,
and the other from a non-government
organization..
22
Round Three Enforcement

• PWI is currently involved in the crafting of the
  Laws Implementing Rules and Regulations
• Provide intensive training to civil society
  groups for monitoring of proper implementation of
  the new law
• Expand its knowledge and information hub on
  activities related to public procurement

23
Part III The Role of ICT

• The Icing on the Cake -- GEPS

24
Strategic Importance of e-Procurement
The President key legislators where
enthusiastic about using ICT
With e-procurement could produce positive
results quickly
25
The GPRA e-Procurement
GPRA 9184, Article III Sec. 8. Procurement by
Electronic Means

• G-EPS as the single portal
• Primary information source
• Procurement of common supplies
• G P P B
• rules and procedures
• changes due to technology
• other service providers for non common use
• items

Sec. 9. Security, Integrity Confidentiality
26
Status Report On The Government Electronic
Procurement System (G-EPS)
As of April 2003
2001 2002 2003 TOTAL
Agencies Registered 1,342 566 85 1,993
Suppliers Registered 854 1,894 631 3,379
Agencies that Posted 261 714 557 1,532
Notices Posted 2,064 10,016 5,775 17,855
Awards Posted 121 2,553 1,036 3,710
Suppliers that Downloaded Notices 401 1,376 774 2,551
Notices Downloaded by Suppliers 351 2,195 1,573 4,119
27
Summary of Bid Notices
Number of Agencies Total Notices Posted Total Minimum Estimated Value (Pesos) Total Maximum Estimated Value (Pesos)
2002 714 10,016 28.8 B 61.7 B
2001 261 2,064 10.2 B 29 B
28
Estimated Savings After Posting on G-EPS
Third Fourth Quarter Third Fourth Quarter Third Fourth Quarter
Agencies Savings Specific Savings on
DOH 53 Various drugs / medicines
PNOC 43 Equipment for electrification projects
TCCP 42 Printing of letterheads
NIA 33 IT equipment supply/delivery of construction materials
DENR 25 Supplies/Material and Services
LRTA 19 Construction supplies, IT equipment
NPC 17 Electrical/mechanical supplies equip.
PICC 15 Various office supplies/equipment
PCSO 15 Office supplies/materials
DPWH 11 Vehicles supplies/materials
PTA 3 Civil works
PTA 3 Civil works (construction renovations)
SEI 1 Office supplies/equipment other services
LBP 1 Various items
29
Potential Savings on Newspaper Advertisement Cost
of Notices Advertised in Newspapers 2 consecutive issues 3 newspapers (Pesos)
2001 1,443 Pesos 79.6 M
2002 2,235 Pesos 151.8 M
2003 769 Pesos 59.4 M
30
Total Number of Agencies vs. Number Registered
with the G-EPS
TOTAL REGISTERED
NGA 1,223 741
GOCC 979 266
LGU 1,597 196
SUC 124 113
TOTAL 3,923 1,314
31
G-EPS Challenges
Low PC and Internet Penetration
Resistance to change
32
Change Management

• Rationale for Change
• Recognizing the Resistance to Change
• Coalition of Allies
• Change Champions
• Segment the Market
• Look for Small Victories
• Objective Analysis Monitoring

33
Epilogue

• Food for Thought . . . .

34
Timeline
1999 Round One (PAAT), August
2000 Round Two
EO 262 for Goods, July 5
PD 1594 (amended IRRs) for infra, Aug. 12
Administrative
EO 322 on GEPS, November 22
2001 EO 40 on Consolidation, October 8
2002 Passage of the Law
House Bill No.4809, October 28
Senate Bill No. 2248, December 9
Legislative
Bicameral Conference Bill, December 17
2003 GPRA signed into law, January 10
35
The Role of Donors
Supported the efforts but did not drive it
36
Civil Societys Role
ollaborate
C
atalyze
oordinate
37
THE END . . . THANK YOU
www.procurementwatch.org.ph