Blog Lecture No. 43: Government Procurement

Good morning class! This lecture I give in the real world because this is the only thing I actually learned when I was chief legal of a very large government corporation.

What law governs government procurement in the Philippines?

It is Republic Act No. 9184, otherwise known as the “Government Procurement Reform Act.”

So what is the general rule as regards the way the government procures goods and services.

According to Section 10 of this law, all procurement must be done through competitive bidding, unless exempted also under this law.

What procurement does this law cover?

It covers procurement of goods, consulting services and infrastructure projects.

What is the coverage of goods?

According to this law, goods “refer to all items, supplies, materials and general support services, except consulting services and infrastructure projects, which may be needed in the transaction of public businesses or in the pursuit of any government undertaking, project or activity, whether in the nature of equipment, furniture, stationery, materials for construction, or personal property of any kind, including non-personal or contractual services such as the repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security, and related or analogous services, as well as procurement of materials and supplies provided by the procuring entity for such services.”

Can you break that down?

Sure.

Goods covers:

1. all items,
2. supplies,
3. materials and
4. general support services, except consulting services and infrastructure projects,

which may be needed in the transaction of public businesses or in the pursuit of any government undertaking, project or activity,

This includes:

1. Equipment,
2. Furniture,
3. Stationery,
4. Materials for construction, or
5. Personal property of any kind,
6. Non-personal or contractual services such as the repair and maintenance of equipment and furniture
7. Trucking,
8. Hauling,
9. Janitorial,
10. Security,
11. Related or analogous services,

and procurement of materials and supplies provided by the procuring entity for such services.

What about services?

Of course, the services stated above are still considered goods. But services for this law is concerned with consulting services.

These refer to services for Infrastructure Projects and other types of projects or activities of the Government requiring adequate external technical and professional expertise that are beyond the capability and/or capacity of the government to undertake such as, but not limited to: (i) advisory and review services; (ii) pre-investment or feasibility studies; (iii) design; (iv) construction supervision; (v) management and related services; and (vi) other technical services or special studies.

You can include the US lobby services the Philippines entered into here. This means the procurement of lobbying services should have been bidded out.

What about infrastructure projects?

The law did not define it but made a non-exclusive enumeration.

This 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.

What is competitive bidding?

It refers to a method of procurement which is open to participation by any interested party and which consists of the following processes: advertisement, pre-bid conference, eligibility screening of prospective bidders, receipt and opening of bids, evaluation of bids, post-qualification, and award of contract, subject specific requirements and mechanics under the law and its implementing rules.

Simply, it is bidding conducted and following a process in accordance with law. Please note that it should likewise be open to the public and any interested party could participate in this budding.

Are there penalties for not following this law?

Yes. There are criminal and administrative sanctions for violating this rule, aside from possible sanctions for malversation and plunder, if applicable.

In the case of the lobby contract, a possible plunder case may be filed because the amount involved is One Million US Dollars. It breaches the plunder threshold given the present exchange rate.

Are there exemptions?

Of course there are and they are found in the law. I will not enumerate them here because I don’t want to give free legal advise to Secretary Norberto Gonzales.

Let’s just take a break for now…

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