PROCUREMENT

REFORM
IN THE PHILIPPINES
Changing the Rules
of the Game
 OUTLINE:

Part I
Part II
Getting Started
Coalition Building
(Ed Campos)
(Tina Pimentel)

Part III
The Role of ICT
(Jacinto Gavino)
 Why Procurement Reforms?
Legal Foundations
Survey Findings a Mess

Government procurement
and tax collection are
perceived to be the major
sources of corruption: Over 100 laws,
 4 of the top 5 most corrupt
regulations,
agencies featured prominently in executive orders etc.
government contracting
 approximately 20% of government
governing
contracts go to public procurement
kickbacks/commissions
 equivalent to P21 B in 2001 just
for the national government; much
larger if BOT transactions and local
government are included
PART I: Getting Started

Building Ownership
Within the Executive
Branch
Technical Analysis Matters
BUT . . . .
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
Technical Analysis Matters:
Round 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)
Desired Principles Governing Each Stage
Stages of
the (T) (A) (P) (C) (E)
Procureme Transparency Accountability Predictability Contestability Efficiency

nt Process
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
Analytical Framework
Corruption

Opportunities

Tolerance

GDP
 Analytical Framework
Corruption

Opportunities

A
B

Tolerance

GDP
PART II
COALITION BUILDING
Getting the Legislature
on Board
 The Role of PWI
“Reducing Corruption” in
public procurement is a PWI was born out
public good of the need to
address this problem:

it would bear most of the costs

Problem of
collective action:
many would like to see this
happen but few are willing
to put the time and effort
(time, effort, personnel,
funding) of organizing people
and groups to advocate for the
passage and proper
enforcement of a landmark
procurement reform bill
PWI became the cog that linked
together different interested parties in
the effort to secure the passage of the
Procurement Reform Bill
Local governments

civil society Media

church legislators

Government officials
 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
 What PWI is and what it is
not….

Adopts a systemic
Partners with
approach to
reform minded
combating corruption
officials
in public procurement.
in government.
“Witch hunting” is not
Corruption, our business
not Government
is the enemy
 Our Approach

Training
Research
Networking
REFORM
Monitoring Advocacy
Consultancy
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
 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
The Strategy:
Mobilizing Public Support
Transparency and Accountability Walang Ku-Corrupt Movement
Network (20+ member groups) (university student councils)

PAGBA &
AGAP Drew other civil society groups CBCP
(w/in into the advocacy efforts and (Church)
Gov’t) coordinated the activities

Local chambers of Commerce Philippine Contractors

Association
 The Strategy:
Mobilizing Public Support

Linked up with a Participated in media

media communications interviews and helped
group to launch an arrange such interviews
aggressive advocacy and
for key legislators and
information dissemination
public officials:
campaign in both private
and public sectors
 AM radio critical
 Leading TV network
produced
TV documentary
Developed and distributed
primers, streamers, Solicited support
posters, T-shirts etc. from local governments:
 League of Provinces
 League of Municipalities
 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
 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…..
Round Three:
Enforcement
 PWI is currently involved in the
crafting of the Law’s 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
Part III: The Role of ICT
The Icing on the Cake -- GEPS
 Strategic Importance of
e-Procurement

The President & With e-procurement

key legislators could produce
where enthusiastic positive results
about using ICT quickly

Enhanced
attractiveness
of a new law
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
GPPB
- rules and procedures
- changes due to technology
- other service providers for non common use
items

Sec. 9. Security, Integrity & Confidentiality

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 401 1,376 774 2,551
Downloaded Notices
Notices Downloaded by 351 2,195 1,573 4,119
Suppliers
 Summary of Bid Notices

Number Total Total Total

of Notices Minimum Maximum
Agencies Posted Estimated Estimated
Value Value
(Pesos) (Pesos)
2002 714 10,016 28.8 B 61.7 B

2001 261 2,064 10.2 B 29 B

 Estimated Savings After Posting on G-EPS
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
Potential Savings on Newspaper Advertisement Cost

# of Notices 2 consecutive
Advertised in issues
Newspapers 3 newspapers
(Pesos)
2001 1,443 Pesos 79.6 M

2002 2,235 Pesos 151.8 M

2003 769 Pesos 59.4 M

 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
G-EPS Challenges

Low PC and Internet Penetration

Need for Training

Resistance to change
 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
Epilogue
Food for Thought . . . .
 Timeline
1999: Round One (PAAT), August
2000: Round Two
Administrative

EO 262 for Goods, July 5

PD 1594 (amended IRRs) for infra, Aug. 12
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
Bicameral Conference Bill, December 17
2003: GPRA signed into law, January 10
 The Role of Donors
Supported the efforts but did not drive it

Preparation of technical
USAID papers and the law

World Bank
CIDA
Civil Society Advocacy
ADB And Media Campaign

Asia
Foundation
Technical Specifications,
UNDP TORs, and Bidding of the
GEPS
EU
Civil Society’s Role

C atalyze
THE END . . . THANK YOU

www.procurementwatch.org.ph