Implementation and Effectiveness of RA 9184 or The Government Procurement Reform

Act: A Case Study of Department of Public Works and Highways (DPWH) Northern Samar
First Engineering District

Gallano, Dave E.
2017-170964
University of Eastern Philippines

Introduction and Background

The Philippine government secured an established procurement process in achieving

organizational goals and objectives. Over the years, the role of procurement had changed due
to some developmental factors that made it crucial as to the complexities and intricacies of
procedures and characteristics. Developed countries in the world were the forerunners in
making the procurement useful through bringing in increased sophistications in their
procurement practices. The developing countries have undertaken various paths in developing
their procurement infrastructure. Philippines as one of the developing country had realized the
importance of reforming procurement structure to address economic development and eliminate
graft and corruption in procurement process.

Competitive public bidding for government procurement in the Philippines began more
than a century ago when the United States Philippine Commission introduced the American
practice of public bidding through Act No. 22, passed on October 15, 1900 and requiring
competitive bidding for the purchase of materials and lands needed for the construction of
highways and bridges. Several more laws were subsequently passed requiring competitive
public bidding when buying government supplies as well as in contracts for public works.

President Manuel L. Quezon and President Diosdado Macapagal subsequently issued

executive orders (EOs) during their terms reiterating the need for public bidding for government
contracts, equipment and services. President Ferdinand Marcos continued this when he issued
Presidential Decree No. 1494 prescribing guidelines for government infrastructure projects.
Presidents Corazon Aquino, Fidel Ramos, and Joseph Estrada all followed suit with their own
EOs relating to procurement.

But the biggest legal shake up of the procurement process began on October 8, 2001
when President Gloria Macapagal-Arroyo issued EO 40 which consolidated procurement rules
and procedures for all national government agencies.

To promote the ideals of good governance in all its branches, departments, agencies,
subdivisions, and instrumentalities, including government-owned and/or controlled corporations
and local government units RA 9184 or the Government Procurement Reform Act was created.
This law governed by the following principles: transparency in the procurement process and in
the implementation of procurement contracts; competitiveness by extending equal opportunity to
enable private contracting parties who are eligible and qualified to participate in public bidding;
streamlined procurement process that will uniformly apply to all government procurement;
system of accountability where both the public officials directly or indirectly involved in the
procurement process as well as in the implementation of procurement contracts and the private
parties that deal with government are, when warranted by circumstances, investigated and held
liable for their actions relative thereto; and public monitoring of the procurement process and the
implementation of awarded contracts with the end in view of guaranteeing that these contracts
are awarded pursuant to the provisions of this act performed strictly according to specifications.
 This Act shall apply to the procurement of infrastructure projects, goods and consulting
services, regardless of source of funds, whether local or foreign, by all branches and
instrumentalities of government, subject to the provisions of Commonwealth Act No. 138.
Purposely this act emancipated the modernization, standardization, and regulation of the
procurement activities of the Government of the Philippines for the necessary rules and
regulations. The procurement process shall be simple and made adaptable to advances of
modern technology in order to ensure an effective and efficient method.

Structure of Bids and Awards Committee (BAC)

The Department of Public Works and Highways (DPWH) Northern Samar First
Engineering District Bids and Awards Committee (BAC) was created pursuant to Republic Act
9184. By virtue of Memorandum with Transaction Code PR-CO-201703-04427 dated March 8,
2017 of the DPWH Central Office approved by Undersecretary for Support Services, Engr.
Medenilla the reconstitution of the BAC of the said office to perform duties of procurement.

According to Article V of RA 9184, BAC shall have at least five (5) members, but not
more than seven (7) members. In the case of DPWH NSFED, there are five members chaired
by Engr. Ruel V. Umali, Assistant District Engineer and a number of observers one from each of
the following – Commission on Audit (COA), PCA/NACAP/PICE, PCCI, and NGO. Upon the
inception of BAC, a Secretariat is generally created to provide administrative support to the
BAC, headed by Engr. Maritess F. Lucinario, Engineer III. Congruent to the creation of BAC
Secretariat a Technical Working Group (TWG) was formed to supervise particularly in the
eligibility screening, evaluation of bids, and post qualification – an army of technical consultant,
finance professional, and legal expert composed the TWG, in the case of DPWH NSFED five
(5) were appointed as members headed by Engr. Lani G. Aticaldo, Engineer II and approved by
District Engineer, Engr. Mario G. Soriano.

Bidding Process

The bidding process starts with the release of Call for or Invitation to Bid to qualified
contractors, suppliers, or service providers. The invitation to bid is advertised in the newspapers
with general circulation within 10 days before opening of the bid and posted in conspicuous
places. As prescribed by IRR of RA 9184, Invitation to Bid contained: terms and conditions of
the contract, specifications, right to accept and reject the bid or to waive any defect, period
within which may accept or reject the bid, period of time and time and date of submission of
bids. A Pre-Bid Conference is conducted when necessity permits.

After the period of publication, the BAC and all interested bidders meet on a set date,
time and place for the opening of the bids and awarding of contract. Whoever is the lowest
bidder, generally wins the bid. There are things to consider in awarding the bid: conformity with
specification; reasonableness of the prices quoted; time of delivery considering the necessity of
the service; all things being equal; and reliability of the bidder.

A preliminary examination of bids is performed to determine if the bidders had passed or

failed to submit documentary requirements for the bid. Upon identifying the possible winning
bidder (or with the lowest calculated bid) a post-qualification is conducted to verify and validate
whether the bidder passed all the requirements and conditions as specified in the bidding
documents and of the law. A Notice of Award (NOA) is given immediately or within a period not
exceeding fifteen (15) calendar days to the winning bidder. On the date the winning bidder
received the NOA, the winning bidder shall formally enter into contract (10 days maximum grace
period is required by law). Within seven (7) days BAC will now issue a Notice to Proceed (NTP)
to winning bidder from the time the contract is approved.

Procurement Findings

Technically, procurement process in the DPWH NSFED conforms to what the law
mandated them to do. From invitation to bid to (pre-bid conference, if any) meeting interested
bidders. From determination of the lowest bidder which is generally the winning bidder to
awarding of the bid and issuance of NTP.

At some point on the post-qualification process (Sec. 34 and Part IV of IRR of RA 9184)
comes a glitch of irregularities, BAC and its TWG should validate and verify previous project
performance or technical requirements (on the quality and on time accomplishment of the
projects) of interested bidders which they failed to do so. In support to this claim, a DPWH CY
2015 Infrastructure Program dated December 31, 2015 provided that B.C Cuerpo Construction
Corporation had a slippage of -14.8% for Road Upgrading of Poblacion-Brgy. Trujillo Road,
K0739+740-K0741+411, K0741+850-K0741+1419, Bobon, Northern Samar and a slippage of -
14.9% for Road Upgrading of Poblacion-Gengarog-Tubigdanao-San Lorenzo-Bonglas-
Mandugang Road, K0729+462-K0731+348, San Jose, Northern Samar and still a number of
2016 projects were awarded to the same construction company of the DPWH NSFED.

Same situation happened to Steven Construction & Supply with a slippage of -20% for
Construction/Concreting of Poblacion (Ward 3) to San Antonio Circumferential Road, San
Antonio, Northern Samar; -20% slippage were recorded by UBAS Construction for
Construction/Concreting of Lagbangan Lake Circumferential Road, San Antonio, Northern
Samar; CTC Construction documented a two -10% slippage for LIP – Construction of Multi-
Purpose Building, Dao, San Jose, Northern Samar and LIP - Construction of Multi-Purpose
Building, Poblacion Sur, San Isidro, Northern Samar and many others (those included in this
study were big player constructors).

A finding of conspiracy or collusion (Sec. 8 of IRR) is being manifested by the agency’s

record. Accomplishment report of projects of DPWH NSFED reported through their website
(http://www.dpwh.gov.ph/dpwh/projects/infrastructure) a 100% completion under B.C Cuerpo
Construction Corporatio of Construction/Repair/Rehabilitation/Improvement of Various
Infrastructure including Local Projects - Construction of San Isidro-Lope De Vega Road,
Northern Samar (Project ID 0806-15-H00077) on February 12, 2016 and
Construction/Repair/Rehabilitation/Improvement of Various Infrastructure including Local
Projects - Construction of Polangi-Quezon-Mabini Road, Northern Samar on April 10, 2016. A
police blotter dated April 18, 2017 from San Isidro Municipal Police Station stated that a group
of validation team headed by Engr. Rodolfo G. Asuero, Municipal Engineer, LGU San Isidro,
Northern Samar surveyed Project ID 0806-15-H00077 with only one lane uncemented road
measuring more or less 300 meters towards kilometer 13, more or less 80 meters to the box
culvert of uncemented road, unfinished canals within kilometer 11 to 14, a newly dump
aggregates was seen in kilometer 11, and scaling pavements along kilometer 11 to 14. Clearly,
that the District and Project Engineers had the intention to deceive the public by reporting the
projects are completed when in fact it is not yet finish.

On March 23, 2017 a letter addressed to Dir. Edgar B. Tabacon, Regional Director,
DPWH Region VIII from Hon. Raul A. Daza, Representative, First District, Northern Samar
noticed that District Engineer Mario Soriano illegally reconstituted the BAC without the
knowledge of the Regional Director. This is supported by Rep. Daza’s letter to Engr. Soriano
dated March 22, 2017 wherein the office of Rep. Daza received a letter of the same date from
DPWH NSFED informing his office of the reconstitution of the BAC. In his letter he argues that
the Memorandum is addressed to Dir. Tabacon and was received by Engr. Soriano’s office on
March 21, 2017 without informing Dir. Tabacon who is the recipient of the Memorandum which
Dir. Tabacon informed Rep. Daza that he has not yet seen nor received the Memorandum.
Engr. Soriano in his capacity as District Engineer already constituted the BAC without official
action/endorsement of Regional Dir. Tabacon. Moreover, the day Engr. Soriano received the
Memorandum he immediately ordered/instructed the BAC to conduct biddings of projects. This,
inspite of the absence of the designated Chairperson, ADE Ruel V. Umali, who is on official
travel, by ordering/instructing Engr. Rudelito L. Coloma, designated Vice Chairperson to act as
chairman.

Rep. Daza believed that it is obvious that Engr. Soriano committed usurpation of
authority and functions of Regional Dir. Tabacon and also committed grave misconduct by
acting with undue haste to reconstitute the BAC and for it to conduct biddings.

These are some of the few findings of this study on the implementation and
effectiveness of RA 9184 in the DPWH NSFED. Even so, public procurement encompasses
much more than the bidding process. To effectively route out corruption in procurement we
need equally to address and monitor how priorities and terms of reference for processes are
actually set.

The discussion above has shown us how the government procurement process works in
the Philippines. We have seen its strengths, its flaws, how private individuals, corporate entities,
and even people in government have manipulated it to suit their own interests, with not a care
about the repercussions to the nation’s coffers, and the people’s protracted struggle for clean
and good governance.

The battle is not lost. The Philippines has the Supreme Court where it can turn to when
there is a palpable violation of RA 9184. The Court has once and again decided cases
confirming the force and validity of the Procurement Law.

Conclusion

The author expects that the case study presented here has communicated some of the
issues and concerns associated with the implementation and effectiveness of RA 9184 or the
Government Procurement Reform Act. The author also expects to illustrate the detrimental
results of graft and corruption in government procurement activities when public tried to be
complaisant and lacks of noticing problems and signs of danger.

The result shows that in some areas of the Government Procurement Reform Act
constitutes resolution to address procurement problems. It acknowledges that the Procurement
Law is a step in the right direction. Its provisions requiring at least two observers from a
recognized private group sector and a non-government organization, to sit in bidding
committees in all stages of the procurement process, certainly enhances transparency.

The implementing rules and regulations of the Procurement Law likewise gave these
observers more clout when it provided that the absence of observers will not nullify the
proceedings provided that they have been duly invited in writing. This essentially means that the
procuring entity has the obligation to send out such invitations. Failure on the government’s part
to do so could lead to the nullification of the bidding process.

Yet unfortunately, despite the law, in practice, it seems there is much less public
participation in the procurement process than intended. Representation of the public in the BAC
is very low because there is little incentive or support for them to do so. On the one hand it
would be good to pay them – but on the other, people quite rightly would be suspicious about
that.

Apart from limitations like lack of public representation in bidding and awards
committees, RA 9184 still remains unfamiliar to the general public, and, unfortunately, even to
government. GPPB arrived at this conclusion in February 2009 after its consultations on the
Implementing Rules and Regulations of the law with different local government units across the
country. It later came out with a summary of recommendations to address this issue, including
these: (1) politicians and local chief executives should be given an orientation on the
Procurement Law and should be enlightened on the effects of their interference on the
implementation of the law; (2) local chief executives must undergo mandatory training
on the law; create proper information drive; (3) invite the politicians for a seminar to
apprise them of the law; (4) GPPB should consistently conduct seminars/trainings for
procurement professionals, including all elected officials; and (5) it is suggested that the
local chief executives and other local officials shall be oriented on the law, otherwise no
Internal Revenue Allotments.

Reference:

The 2016 Implementing Rules and Regulations of Republic Act 9184. Retrieved from
http://www.gppb.gov.ph/laws/laws/RevisedIRR.RA9184.pdf

Republic Act 9184. Government Procurement Reform Act. Retrieved from

http://www.gppb.gov.ph/laws/laws/RA_9184.pdf.

Cuaresma. J.C.; Lizada J.C. (2001). PM 230 Financial Management in Government. UP Open
University.

Padre-Isip, R. 2010. The Public Procurement Process: Good Law, Poor Reality. Philippine
Public Transparency Reporting Project. Retrieved from
http://peranatinito.net/index.php?option=com_content&view=article&id=63:the-public-
procurement-process-good-law-poor-reality&catid=51:procurement-watch&Itemid=76.

Medenilla. March 8, 2017. Memorandum Reconstitution of the Bids and Awards Committee
(BAC) of Northern Samar 1st Engineering District Office. DPWH Central Office.

Soriano, M. April 3, 2017. Memorandum 042 Reconstitution of District BAC Secretariat &
Technical Working Group, CY 2017-2018 (April 3, 2017 – March 31, 2017). DPWH
NSFED.

http://www.dpwh.gov.ph/dpwh/projects/infrastructure