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Model Procurement System in IGaCoS

Study Analysis 2002
Percenito O. Bustamante, MPA
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Chapter 1

INTRODUCTION

Background of the Study

Over time, public procurement had been the subject of discussion among policy

makers and administrators of government institutions, supervisors and rank-and-file

employees, personalities in the private sector and ultimately the general public. Their

main concern is focused on graft and corruption that somehow, since time immemorial,

seems to have dictated its processes and is perceived to have been transformed already

into a culture.

From the global point of view, public procurement embodies a wide range of effects

upon its intended purpose that is geared towards satisfying public needs. It covers

diverse forms of goods and services. In effect, it had been seen as of paramount

significant into the day-to-day activities of the people. Hence, in times when its

processes are bereft of accountability, the public will have to endure the effects of

deficient public services.

In fact, in the World Bank had identified public procurement process as

significant in public management reform. This is so acknowledged as critical

considering that the institution’s role in development can be felt in its extension of

financial assistance to relatively poor countries. With this, it has supported them in the

different regions throughout the world in the field of procurement and in various forms
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and approaches. This commitment from the World Bank was triggered by the realities of

weak procurement process during those times among the institution’s beneficiaries.

In the Philippine context, public procurement is viewed from the perspective of

incurring expenditures, which are focused on poverty alleviation, maintenance of peace

and order and providing basic government services for the people to live productive

lives. Given this premise, concerned government Offices at the national level are

initiating efforts to introduce measures to maximize the use of limited financial

resources.

Relative hereof, a remarkable effort is presently emerging in both houses of

Congress. This has reference to the proposed procurement reform bill, known as “The

Government Procurement Reform Act of 2002”. Though still subject for consolidation,

yet, with this initiative, it implies that our legislators are cognizant of the public

procurement process in this country. In essence, the principles governing the bill include

transparency, competitiveness, streamlined process and accountability.

Amid these efforts of the government, a similar initiative is being pursued by

non-government organizations which is aimed complementing the same. Notable among

these is the Procurement Watch, Inc. (PWI) which is involved in combating graft and

corruption in government by initiating procurement reforms through partnerships,

research, training and advocacy like pursuing a Government Electronic Procurement

System.

In the Island Garden City of Samal, the current public procurement has developed

a sense of realization that acquiring goods and services is meant for addressing the needs
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of the citizenry and which involve two (2) conditions. One is direct provision of goods

and services to the clients being the immediate beneficiaries of government development

efforts. On the other hand, the other situation calls for the provision of logistics or

supplies and materials as the case maybe, to the various local government offices to

strengthen their capabilities for them to be effective and efficient service providers to the

people. These local institutions include among others such public establishments as the

police, public works offices, social, economic and environmental services departments,

administrative support offices and other government functionaries.

While undertaking its procurement system, one cannot yet exactly determine

whether or not the City has already attained a very responsive level as a vital component

in its service delivery efforts. In this regard. there’s an urgency for a thorough

investigation on the current state of public procurement system in the City in order to

get a clear view of it.. Thus, the need to conduct this study.

Statement of the Problems

The study is aimed to assess the public procurement system in the Island Garden

City of Samal. In this regard, it seeks to answer the following:

1. What is the current state of the public procurement system in the Island Garden City

of Samal in terms of:

a. Pre-Procurement Phase

b. Procurement Phase

c. Post Procurement Phase

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2. How do the various groups of respondents perceive the public procurement system

in the Island Garden City of Samal with reference to:

a. Responsiveness of the public procurement system in the three (3) phases

b. Timeliness in responding to the different procurement processes in the three (3)

phases and its significance to the operations of the concerned offices and

establishments; and

c. Adequacy of systems and mechanisms and their effectiveness to the procurement t

processes.

3. Is there a significant difference in the perceptions on the responsiveness of the

procurement system in the (3) phases between the Local Government and National

Agencies personnel?

4. What model of public procurement system is appropriate in the Island Garden City of

Samal?

Objectives of the Study

In the conduct of the study, the following objectives had been formulated:

1. To assess the current state of the public procurement system in the Island Garden

City of Samal;

2. To find out how the various respondents perceive the City’s public procurement

system;

3. To find out if there is a significant difference in the perceptions on the responsiveness

of the public procurement system in the three (3) phases in the Island Garden City of
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Samal between the Local Government and National Government Agencies

personnel; and

4. To develop a model that shall set the direction of the City’s Public Procurement

System.

Significance of the Study

The study is significant in the sense that the findings will be considered as the

basis in the development of a conceptual model to set in place the City’s public

procurement process. In so doing, it is further ensured that the utilization of financial

resources for the purpose of service delivery will not be vulnerable to being misused.

Likewise from the study, the concept of local governance will be thoroughly

understood in the context of Local Fiscal Administration, which entails fund generation,

allocation, and utilization upon which the procurement process for goods and services

are anchored. On top of these, is fund control, which shall be dictated by the accounting

rules and regulations and standard operating procedures that the City Government opts

to adopt to maintain a system that is mainly characterized by transparency and

accountability . By this manifestation, the concept that can be generated will further

strengthen the process of Local Fiscal Administration being the heart of governance that

gives life to service delivery.

As soon as the model for public procurement system is developed and applied in

the Island Garden City of Samal, chances are, there will be efforts for other government

institutions to take a second look at their operations and do their own share of evaluation
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of their spending patterns and likewise establish systems and mechanisms that will

constitute into models which are workable in their levels.

Scope and Limitation of the Study

The study covers only one aspect of supply and property management, which is

the acquisition process. Hence, it is understood that the other components like planning,

custodianship, issuance and utilization, accounting and disposal shall not be tackled.

This is for obvious reason that what are going to be delved into are the circumstances

that take place when acquiring the goods and services which is undertaken through the

procurement process.

The procurement process in regards to the study encompasses three (3) major

components with varying tasks to be accomplished. These are the pre-procurement,

procurement and post-procurement phases. The configuration of these activities into the

different stages is for the purpose of manifesting the significance of the actions taken by

the responsible officials or personnel as the case maybe to the series of tasks that

constitute a particular phase. In effect, these have to be undertaken through concerted

efforts before the succeeding stages take place that indicate the completion of the

process. This will bring about total understanding as to who are responsible and

accountable in carrying out these tasks.

As far as respondents are concerned, these are limited to the clients who transact

business in the City Government concerning the procurement of goods and services.

They are the different Local Government Department Heads and their Designated

Supply Officers, Procurement Processing Personnel based in the City General Services
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Office and the accredited suppliers who frequently do business with the City

Government. In this regard, they must have consummated at least five (5) transactions

with the City Government. Those who are not accredited amid the fact that the City is

having transactions with them are not included as respondents since these are only on

occasional basis.

On the other hand, since the City Government is extending financial support to

National Government Agencies operating in the locality which are intended for their

supplies and materials requirements, their representatives are likewise considered as

among the foregoing respondents. Further, considering that the Department of Education

(DepEd) has three (3) Schools Districts in the City, the same number of representatives

are considered since they separately prepare their Purchase Requests. The rest of the

National Government Agencies (NGAs) in the locality will have only one (1)

respondent.

Similarly, since the involvement of the Barangay Captains in the procurement

process is more on monitoring as to the status of the project implementation in their area,

they are not included as respondents. At any rate, the City Engineering Office ably

addresses these, an organic Department in the City Government, which is directly,

involved in the procurement tasks relative to these concerns.

Finally, since the study is limited only to the Island Garden City of Samal its

applicability may not be useful in other government institutions since it is apparent that

there will be differences in terms of interpretation and application of rules and

regulations. As Tapales, Padilla, Joaquin and Santiago (1996) pointed out, Local
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Government Units vary as to their approach in terms of effecting the procurement

process.

In general terms, while the study is delimited, it is ensured that there will be

obtained a clear view on the operations of the City’s procurement system to arrive at

viable, workable and realistic outputs that shall be the basis in developing a model

thereof. Hence, it follows that such delimitation will not in any manner compromise the

output of the study. On the contrary, it can be expected that there would be an in-depth

analyses of the said output considering that there will be focus on the variables, which

are the subject of the investigation.

Definition of Terms

In the conduct of the study, there are various terms, which have bearing hereof

that have to be understood not only in their conceptual terms but also in their operational

context. These are as follows:

Abstract of Quotations - This contains the list of goods and services which are the

subject of canvass or bidding with the complete specifications and the quotations being

tendered by the suppliers, at least three (3) for canvass and two (2) for bidding.

Accredited Suppliers - Establishments who transact business with the City Government

and who are accredited for complying to the various requirements set forth to ensure that

they can deliver timely quality goods and services as specified in the procurement

documents.

Canvass and Bid Forms - These forms contain the list of goods and services being

requested for procurement including the specifications thereof. Committee on Awards -

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For Cities, it is a body composed of the City Mayor as the Chairman and the City

Budget Officer, City Treasurer, City Accountant and City General Services Officer as

members and who shall exercise exclusive jurisdiction to decide the winning bids and

questions of awards on procurement and disposal of supplies and property.

Goods and Services - These refer to all forms of public purchases, which directly or

indirectly benefit the general public.

Lowest Complying Supplier or Bidder - In regards to the study, this refers to any

supplier, accredited or otherwise as the case maybe who meets all the technical

specifications and requirements of the supplies and property desired during the conduct

of canvass or bidding.

Pre-Canvassing - The process of going through various suppliers, local or out-of-town,

by the Requesting Office for the purpose of noting down the quality and price levels of

desired goods and services prior to the preparation of the Purchase Request.

Public Procurement - This refers to the purchases made by the government for goods and

services for the purpose of service delivery, directly or indirectly.

Purchase Order - This serves as a contract between the supplier and the local

government. It contains the list of goods and services to be procured including the

specifications, the prices based on the winning quotations and the period of delivery, the

minimum of which is seven (7) days upon receipt of the subject document.

Purchase Requests - It contains the goods and services, which are the subject of request

for procurement including the specifications, estimated cost, purpose and place of

delivery.
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Requesting Offices - Those who cause the request for the procurement of goods and

services necessary for their respective operations as they deliver services to the public.