PROCUREMENT
REFORM
IN THE PHILIPPINES
Changing the Rules
of the Game
OUTLINE:
Part I
Part II
Getting Started
(Ed Campos)
Coalition Building
(Tina Pimentel)
Part III
The Role of ICT
(Jacinto Gavino)
Why Procurement Reforms?
Survey Findings
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
Legal Foundations
a Mess
Over 100 laws,
regulations,
executive orders etc.
governing
public procurement
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
Procureme
nt Process
(T)
(A)
(P)
(C)
Transparency
Accountability
Predictability
Contestability
(E)
Efficiency
Procurement
Planning
X
Preparation of
Tender
Documents
X
X
Invitation to
Bid
X
X
Prequalification
X
X
X
X
X
X
Bid Evaluation
X
Awarding of
Contract
X
X
Implementation
X
X
X
Analytical Framework
Corruption
Opportunities
A
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
public good
Problem of
collective action:
many would like to see this
happen but few are willing
to put the time and effort
PWI was born out
of the need to
address this problem:
it would bear most of the costs
(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
church
Government officials
Media
legislators
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….
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
Our Approach
Training
Research
Networking
Monitoring
Advocacy
Consultancy
REFORM
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
Network (20+ member groups)
PAGBA &
AGAP
(w/in
Gov’t)
Walang Ku-Corrupt Movement
(university student councils)
Drew other civil society groups
into the advocacy efforts and
coordinated the activities
Local chambers of Commerce
CBCP
(Church)
Philippine Contractors
Association
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
Developed and distributed
primers, streamers,
posters, T-shirts etc.
produced
TV documentary
Solicited support
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 &
key legislators
where enthusiastic
about using ICT
With e-procurement
could produce
positive results
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
Downloaded Notices
401
1,376
774
2,551
Notices Downloaded by
Suppliers
351
2,195
1,573
4,119
Summary of Bid Notices
Number
Total
of
Notices
Agencies Posted
2002
2001
714
261
Total
Minimum
Estimated
Value
(Pesos)
Total
Maximum
Estimated
Value
(Pesos)
10,016
28.8 B
61.7 B
2,064
10.2 B
29 B
Estimated Savings After Posting on G-EPS
Third & Fourth Quarter
Agencies
Specific Savings on…
Savings
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
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
Total Number of Agencies vs.
Number Registered with the G-EPS
TOTAL
NGA
REGISTERED
1,223
741
979
266
LGU
1,597
196
SUC
124
113
3,923
1,314
GOCC
TOTAL
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
Administrative
1999: Round One (PAAT), August
2000: Round Two
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
USAID
Preparation of technical
papers and the law
World Bank
CIDA
ADB
Asia
Foundation
UNDP
EU
Civil Society Advocacy
And Media Campaign
Technical Specifications,
TORs, and Bidding of the
GEPS
Civil Society’s Role
C
atalyze
THE END . . . THANK YOU
www.procurementwatch.org.ph