Description
Description
In the current public procurement set-up, the Philippine Government, particularly Procuring Entities (PEs), face challenges in ensuring efficiency and transparency, as well as eliminating corruption. Lingering perspective toward PEs revolve on unethical actions such as unwillingness to provide procurement data access to the public which hinders scrutiny of how public funds are managed. As the processes in public procurement are oftentimes vulnerable to mismanagement and corruption, the challenge for the government to enforce measures on transparency and anti-corruption is pressing. While Republic Act (RA) No. 9184 or the Government Procurement Reform Act injected the principles of transparency and accountability in government procurement, certain gaps that opened the procurement arena to public criticisms have been inevitable.
With RA No. 12009 or the New Government Procurement Act in place, the Procurement Service – Department of Budget and Management (PS-DBM) commits to be a stalwart advocate of a corrupt-free environment on public procurement. One of the crucial strategies in this commitment is the continuous modernization of the Philippine Government Electronic Procurement System (PhilGEPS), which serves as the central platform for government procurement activities. By leveraging this technology, the PS-DBM aims to establish a robust Open Data framework that integrates open contracting standards, which will allow for the seamless exchange of procurement data across various platforms and provide a more transparent system on public procurement that is needed more than ever.
The commitment to utilize open data standards by the PS-DBM and proactive disclosure through its Open Data feature and Statistical Bulletin, which need to be enhanced in the current PhilGEPS platform, will indeed empower relevant stakeholders — government agencies, civil society, researchers, and the public – to actively monitor and analyze procurement activities. Likewise, interoperability of relevant procurement data will be ensured. Moreover, the implementation of the modernized features of PhilGEPS, as enumerated under the NGPA, such as the e-Bidding Facility, the eMarketplace, and the eReverse Auction will not only bring efficiency to the public procurement practitioners by automating the manual procedures, but will also reduce opportunity for human intervention in the conduct and receipt of bids or offers.
Problem
The specific problems that we need to address are the following:
1. The public perception that public procurement is hounded by rampant corruption; that public deals are rigged and no bidding activities are actually conducted. This perception emanates from the non-observance of certain PEs of the timely posting of procurement opportunities and award notices. More often than not, this perception is ordinary when PEs refuse to make the bidding documents and procurement opportunity information available to the public. While these acts are definitely sanctioned under the previous procurement law – RA 9184, the manual process of doing public procurement, especially if no Observers are present, is prone to manipulation;
2. The persistent public criticisms in view of alleged involvement of PEs in corruption and inefficient spending of public funds. For instance, the allegations of corruption against PS-DBM, from the highly controversial procurement of medical supplies to combat the COVID-19 pandemic to the procurement of the alleged overpriced laptops for learning institutions. These issues took place in the past years which put the agency in the spotlight of attacks during legislative hearings;
3. In the conduct of similar hearings whether for investigation or in aid of legislation, the availability of data such as information on who ultimately owns or has effective control over a juridical entity – bidder/merchant, proved to be of great use. This pertains to beneficial ownership information (BOI);
4. More than availability of reliable procurement data, is data interconnectivity and interoperability. It is important to have a single portal that is able to interconnect the relevant procurement and suppliers’ information from different online sources and databases. For example, the Official Merchants Registry of PhilGEPS which houses the list of PhilGEPS registered suppliers along with their eligibility documents is expected to be interconnected with the databases of certain government licensing agencies such as the Securities and Exchange Commission (SEC), the Department of Trade and Industry (DTI), among others, for easier verification of the licenses and permits that form part of the legal eligibility documents of the bidders;
5. The PS-DBM’s PhilGEPS as the main source of procurement information has been efficient in registering a significant amount of procurement data, including procurement opportunities and awards, information on procurement planning and budgeting, supplier and user management, supplier trends and analytics, agency information and trends, procurement statistics and reports, etc; furthermore, the details pertaining to the result of procurement, such as number of bids received, reasons for failed bidding, among others, while available in the existing e-Bidding facility, are not readily accessible.
Proposed Reform
The problem of corruption in public procurement persisted since time immemorial. PS-DBM’s reformatory actions outlined below are crucial steps in addressing the pervasive issue on the lack of transparency in public procurement and significantly represent the steps towards addressing the public problem of corruption in government procurement, to wit:
i. Interoperability and interconnectivity of data between PhiGEPS and databases of government licensing agencies – PhiGEPS will be equipped with the capacity to determine whether bidder’s submissions are up-to-date and valid through automatic cross-checking with the databases from agencies, such as Securities and Exchange Commission, Bureau of Internal Revenue, Department of Trade and Industry, among others. Eliminating the manual verification by procurement officers will reduce the likelihood of errors or corrupt practices, and interoperating government registry platforms promotes better service delivery for the public, CSOs, and key stakeholders.
ii. Integration of Open Contracting Data Standards (OCDS) and enhancement of PHilGEPS’ open data features – The PS-DBM intends to improve its collection of procurement information, data analytics, and open access for research vital for policy-making. This necessitates a transformative effect on the system through enhancing its modernized PhilGEPS’ open data features and by using OCDS that can provide standardized data on procurement processes – from bid submission to contract implementation, in formats that are easy to analyze, making procurement-related information—such as contracts, tenders, bid results, supplier performance, readily accessible and available in a format that is easy to access, analyze, and utilize by CSO, PEs, stakeholders, and other state actors;
iii. System-level oversight – To ensure that the pressing need for a more inclusive approach that incorporates feedback from a wider array of users will be addressed, a comprehensive, system-level involvement of key stakeholders through a feedback mechanism in the procurement process will be implemented. The intended shift from individual bid-level engagement to system-level oversight represents a significant transformation in how CSOs, stakeholders, and the public can flag high-risk areas and better influence public procurement processes; and
iv. Registry of Beneficial Ownership Information (BOI) – Before the enactment of the NGPA, one of the major gaps observed during the procurement process is the lack of a requirement for bidders to disclose information on who has ultimate and effective control of their companies. With the NGPA in place, the PS-DBM will maintain a registry of BOI through its PhilGEPS and share requested information to PEs, CSOs, other stakeholders, and the public to better equip them and prevent potential conflicts of interest, ensuring a more fair and competitive bidding process.
Relevance to OGP
This action is part of the New Government Procurement Act (NGPA) implementation, which aims to advance open government principles. Under Section 3 of the NGPA, the governing principles on government procurement include, among others, the following:
i. Transparency in the procurement process by providing access to all related information in accordance with open contracting practice that enables the disclosure of data and facilitates information sharing related to all stages of procurement; and
ii. Participatory procurement through public monitoring of the procurement process and the implementation of contracts.
In ensuring transparency, the PS-DBM, through its PhilGEPS will make the relevant procurement data available and accessible in the platform, serving not only as the main source of procurement information but also as the primary channel in the conduct of procurement activities. Further modernization of PhilGEPS to enhance its features on open data will make the relevant information on public accountability accessible.
On the other hand, to advocate Participatory Procurement, PS-DBM, through multi-stakeholder engagements with relevant sectors including the general public, will take part in collaborative and consultative work to build trust and foster partnership with relevant stakeholders.
By prioritizing not only availability of information but also the accessibility to procurement data, storing and presenting them in machine-readable and user-friendly formats, real-time monitoring of government spending is made possible. Civil society organizations, researchers, Procuring Entities, the public, and other stakeholders can track and evaluate public procurement activities, such as identifying patterns in bidding, analyzing competition, and evaluating performance in the awarded contracts.
Ambition
The PS-DBM has firmly outlined its 12-Point Agenda aimed at implementing transformative procurement processes and policy reforms establishing a fair, transparent, and competitive environment in public procurement to realize the agency’s vision of becoming the trusted and preferred partner of both public and private sectors in the country. In 2023, the agency openly expressed its initiative to operationalize corrupt-free public procurement processes which shall be conducted with the highest standards of professionalism and public trust. The initiative covers public procurement digitization of the procurement process through the modernization of the PhilGEPS platform.
The recent enactment of NGPA in 2024, which effectively amended the long-standing procurement law (RA 9184) has paved the way towards the institutionalization of reforms in public procurement. The NGPA not only presented a steadfast legal and regulatory framework in Philippine procurement, but also fortified PS-DBM’s 12-Point Agenda – a vital blueprint for the agency’s future ambition to efficiently come into fruition.
To speak with, PS-DBM’s future ambitions of the reforms under the Challenge covers – (i) recognition of PhilGEPS, in local and international setting, as the central source of procurement data on public procurement in the Philippines, with global standards and cutting-edge technology serving as effective tools that eliminate red flags in public procurement. The initial step for this ambition is the continuous modernization of PhilGEPS which shall enter into its more advanced phase (version 2) before the end of 2025; and (ii) for the PS-DBM to be recognized as a paragon for open contracting, locally and globally, with established process in the procurement of common-use supplies and equipment that adheres to the principles of transparency, accountability, and inclusive engagement, and to be a catalyst for change in the field of public procurement.
Baseline
The following illustrate our baseline –
1. The rule that the Beneficial Ownership Information must be disclosed by the bidder and that interconnectivity of databases (PhilGEPS Registry of Merchants with the other databases and systems of licensing agencies) must be established, are already mandated under the New Government Procurement Act (NGPA). However, the Implementing Rules and Regulations (IRRs) or specific guidelines to implement these NGPA requirements are not yet issued. Currently, BOI is already part of the General Information Sheet that the corporations submit to the SEC, however this information is not automatically shared with other government systems/ databases and is not yet accessible to the public.
2. The use of the e-Bidding Facility in the modernized PhilGEPS (mPhilGEPS) by all government procuring agencies is not being maximized, considering that only about Fifty One (51) user-agencies are utilizing the said platform in 2024.
3. The Virtual Store and e-Bidding Facility under the mPhilGEPS are already developed but the 2nd Phase/ enhancement needs to be done to update these features and align them with the process and requirements under the NGPA. Additional features mentioned in the NGPA have yet to be developed, such as the eReverse Auction and e-small value procurement. The recently launched eMarketplace, likewise, needs to be worked up to fully automate the entire process from ordering up to delivery and acceptance of the CSE.
4. PhilGEPS offers a comprehensive set of reports and statistics across three main categories: Merchants, Agencies, and Tender and Bids. At present, the Open Data feature – Data Analytics Tab presents information about the following: Regarding Merchants, (i) the Merchants’ general information, (ii) registered suppliers trend, (iii) growth of registered suppliers per year, (iv) registered suppliers per form of organization per year, among others; As for Agencies, (i) the Agencies’ general information, (ii) Gender related report, (iii) growth of registered agencies per year, (iv) performance-based bonus agency report, (v) registered agencies by province and city, among others; and For Tenders and Bids, (i) yearly tender summary, (ii) bid notice result per month, (iii) bid notice distribution report, (iv) top agencies posting public bid notices, among others. To view the Open Data – Data Analytics tab, here is the link https://open.philgeps.gov.ph/analytics/tab. The foregoing information, although accessible by the public, are not yet machine-readable.
5. As to CSO participation, the NGPA requires the PEs to be invited to observe in all stages of the procurement process. However the presence of CSO monitors during the procurement process has declined over the years. Currently also, there is no active partnership between the GPPB or PS-DBM with the CSOs on research or monitoring agenda with respect to the implementation of procurement law and policies, or use of the PhilGEPS and its features.
Intended Results
With the end goal of reducing the risks of corruption and promoting the values of transparency, accountability, and value for money, PS-DBM champions open contracting practices and public monitoring reforms, primarily through electronic means, to achieve the following intended outcomes:
i. Improved data availability and accessibility: Procurement data is proactively disclosed and made publicly available, in machine readable format through the improved version of its Open Data and Statistical Bulletin. This includes disclosure of information on procurement planning, tendering/bidding, registry of merchants, and contract award and execution, and post-award performance, as well as other data fields that may be identified as relevant in the implementation of the new features, processes and requirements under the NGPA;
ii. Established data interconnection and interoperability: Beyond availability and accessibility of information, users must also be able to exchange and make use of procurement data across various systems in compliance with Open Contracting Data Standard (OCDS) and Data Sharing Agreements (DSA) with other entities such as that with the Securities Exchange Commission on beneficial ownership information;
iii. Increased awareness and collaboration/participation of stakeholders: With improved data availability and accessibility, and established interconnectivity and interoperability, more multi-stakeholder engagement activities, consultations, and orientations can be initiated to increase awareness and ability among non-government stakeholders on using procurement data for research, monitoring and analysis; and
iv. Better research, analysis, decision making and management: Public, CSOs, and PEs can make data-driven decisions that will improve public procurement practices. Through the mPhilGEPS enhancement, identification of patterns, trends, and potential bottlenecks in procurement processes will be less challenging and will lead to better-informed policy reforms. This data-driven approach which is achievable through the system can enhance the efficiency and effectiveness of public procurement in the Philippines.
Milestones
PS-DBM seeks to effectively address corruption in public procurement through attaining the following key milestones –
Milestone no. 1: Data Sharing Agreement (DSA) – establishment of a data sharing mechanism involving Beneficial Ownership Information between PS-DBM and Securities and Exchange Commission through forging a DSA within the 1st quarter of 2025. DSAs with other licensing agencies for the purpose of verifying the legal eligibility documents of the PhilGEPS’ Platinum registered merchants are also expected to be forged within the next two years.
Milestone no. 2: Issuance of the Implementing Rules and Regulations (IRRs) of RA 12009 within the 1st quarter of 2025 by the Government Procurement Policy Board (PS-DBM is a member of the GPPB, and the GPPB is chaired by the DBM Secretary), that include a provision on the establishment of an Open Data platform in the PhilGEPS allowing publication of relevant procurement information.
Milestone no. 3: Multi-stakeholder engagements – Consultations with stakeholders and CSOs will be conducted to gather inputs on the intended enhancement of the mPhilGEPS particularly in improving its Open Data feature and making procurement information readily accessible, machine readable and user friendly. Orientations and trainings among CSOs and auditors will likewise be conducted to walk them through the features of mPhilGEPS and the available data and information in the system, which can be targeted to commence by the 2nd semester of 2025. Further, conduct of focus-group discussions and peer learning engagements – whether local or international to learn and facilitate exchanges of best practices on the framework and systems of public procurement and the necessary tools to promote transparency and advocate openness in the public procurement process – are intended to materialize throughout the implementation of the Challenge.
Milestone no. 4: Enhanced Guidelines – refine and enhance the existing price-setting guidelines by integrating evidence-based practices in collaboration with key partner-CSOs before the end of 2025.
Milestone no. 5: Establishment of a Partnership with CSOs for research and monitoring agenda – particularly to research, monitor, and evaluate the efficiency of the PS-DBM’s centralized procurement and the use of PhilGEPS, including the efficiency and effectiveness of the new rules and policies under the NGPA.
Milestone no. 6: mPhilGEPS version 2 – enhancement of the system – Open Data portal and periodic publication of a Statistical Bulletin, as well as interconnecting the PhilGEPS Official Merchants Registry System with the databases or systems of the other licensing agencies mentioned in the NGPA by February 2028 for the efficient verification of the bidder’s legal eligibility.