Transparency in Public Procurement (COT0003)

Thematic Area: Open Contracting
Enhancing Efficiency and Transparency of the Public Procurement Process
31 August 2018 – 31 August 2020
Lead implementing Agency/ Actor
Provincial Government of South Cotabato – Bids and Awards Committee
Commitment Description
What is the public problem that the commitment will address?
In 2017, the provincial government was able to complete only 4.10% or 5 out of 122 development projects funded under the 20% Local Development Fund at the end of the budget year as reported in the Audit Observation Memorandum issued by the Commission of Audit in 2018. Most of the projects that are still on-going or not started are infrastructure projects. Among others, the delayed completion of infrastructure projects (slippages) may be attributed to issues on the procurement process such as limited number of suppliers/contractors participating in bids and delayed delivery of services related to contractors. While the provincial government has disclosed 100% of the bidding documents required by law through the Philippine Government Electronic System (PHILGEPS), its website and in three conspicuous places, these, however, cannot be accessed in machine-readable or editable formats by the public. These technical documents are also not presented in a manner that would be interesting or easier for the general public to understand. Hence, the limited transparency of procurement documents further contributes to the identified procurement issues. There is also a limited number of capacitated CSO and business sector representatives who are engaged in observing the bidding process and monitoring the implementation of contracts. If not addressed, these delays will continue to hinder the timely achievement of expected results for the intended beneficiaries such as increased mobility of people and goods, improved access to basic social services, and strengthened rural-urban integration.
What is the commitment?
The commitment aims to make the public procurement process more efficient and transparent through the development of online and offline open contracting mechanisms, such as: tracking system to be made available to the public; conduct regular market survey; integrated internal process from planning to implementation; expansion of accredited CSOs as observers; proactive capacity building of CSOs as observers; submission of observer’s report; improvement in publication of procurement documents; and feedback desk.
How will the commitment contribute to solve the public problem?
Making the procurement process more open and efficient will enhance the capacity of the provincial government to implement quality infrastructure projects as scheduled, and consequently, deliver effective and efficient services to the public. The improved quality of procured goods and services will increase local competitiveness and accelerate local economic growth. The improved procurement process will enhance the quality of infrastructure projects and ensure the timely implementation of these projects for socioeconomic growth, hence, contribute in the achievement of all SDGs, particularly goals number 1 (No poverty), 9 (Industry, Innovation and Infrastructure) and 17 (Partnerships for the Goals).
Why is this commitment relevant to OGP values?
CSO participation and disclosure of documents (transparency) will enhance the integrity of the procurement process. Technology will be used as a medium to enhance transparency & promote efficiency in procurement. The commitment will encourage the public to provide feedback & participate in the government procurement processes. It will increase and enhance government response to citizens’ feedback. Gender-smart procurement will also be advanced by tagging women-owned businesses participating and getting contracts in the procurement process.
Additional information
The Province of South Cotabato with the support of the European Chamber of Commerce of the Philippines (ECCP) conducted a series of consultation and focus group discussions with the contractors, Bids and Awards Committee, business sector and CSOs on how to improve the procurement process of the Province last June 2018. Among the major results are the need to improve its efficiency and transparency. The commitment will be implemented by the provincial government, in partnership with the European Chamber of Commerce in the Philippines (ECCP) (funded by Hivos Philippines) and the South Cotabato Integrity Circle (SCIC), formalized through a signed Memorandum of Understanding. Under the Open Contracting project of the ECCP in South Cotabato, the ECCP shall assist in the co-creation process and implementation of the integrity commitment under the Open Procurement Framework as well as design the monitoring and feedback system for the full and effective implementation of the open procurement commitment.
Milestone Activity with a verifiable deliverable
Conduct capability-building on RA 9184 and consultations with BAC Members, BAC-TWG and CSOs.
ECCP
Source of Fund: ECCP/Hivos
May 2018 – June 2018
Develop an internal policy that will be an input to the Provincial Procurement Manual to enhance efficiency and transparency in the procurement process.
ECCP / BAC
Source of Fund: ECCP/Hivos
September 2018 – March 2019
Increase number of CSOs and business sector monitoring the procurement process from planning to implementation
ECCP
Source of Fund: ECCP/Hivos
February 2019 – NA
Upload procurement documents from planning to implementation in machine readable format.
ECCP
Source of Fund: ECCP/Hivos
February 2019 - NA

Upload procurement documents from planning to implementation in machine readable format.
Includes gender-tagging of women-owned businesses joining biddings or awarded with contracts

Implementing Actors
Lead Implementing Office/ Agency/ Organization
Provincial Government of South Cotabato – Bids and Awards Committee (BAC) Mr. John Magbanua +63832289951
Other Actors Involved
Provincial Administrator’s Office, PBO, PEO, PACCO, PTO, PGSO, PPDO
ECCP, Hivos, SC Chamber of Commerce, SC Contractors Association, SCIC Ms. Zyra Fastidio zyra.fastifio@eccp.com

Theme 3: Open Contracting

3. Enhancing Efficiency and Transparency of the Public Procurement Process

Language of the commitment as it appears in the action plan:

The commitment aims to make the public procurement process more efficient and transparent through the development of online and offline open contracting mechanisms, such as:

• tracking system to be made available to the public;
• conduct regular market survey;
• integrated internal process from planning to implementation;
• expansion of accredited CSOs as observers;
• proactive capacity building of CSOs as observers;
• submission of observer’s report;
• improvement in publication of procurement documents; and
• feedback desk.

Milestones:

1. Conduct capability-building on RA 9184 and consultations with Bids and Awards Committee (BAC) Members, BAC-Technical Working Group (TWG) and CSOs.
2. Develop an internal policy through an Administrative Order that will be an input to the Provincial Procurement Manual to enhance efficiency and transparency in the procurement process.
3. Increase number of CSOs and business sector monitoring the procurement process from planning to implementation.
4. Upload procurement documents from planning to implementation in machine readable format.

Start Date: 31 August 2018                                                             End Date: 31 August 2020

Context and Objectives

This commitment aims to make South Cotabato’s public procurement process more efficient and transparent by introducing open contract mechanisms. These include building capacity to implement procurement legislation, developing internal policies, increasing civil society participation in procurement processes, and improving the availability of procurement information.

Public procurement, especially at the local level, frequently suffers a lack of transparency. [12] Prior to this commitment, South Cotabato completed less than 5% of proposed development projects, the majority of which are still ongoing or yet to be started. The local government receives an Internal Revenue Allotment (IRA) from the central government, of which 20% must be used to fund development projects. [13] The lack of transparency surrounding such projects is a key barrier to improving the efficiency and quality of service delivery, as it inhibits public scrutiny and hampers potential users (e.g., academics, NGOs, investors, journalists) from extracting and analyzing data. This is also critical because procurement data can be used to detect contractor misconduct and inefficiencies. [14]

A lack of transparency in procurement processes impacts project completion. Procurement opacity often discourages participation by the best suppliers and contractors in public bidding, which results in poor or delayed work by subpar contractors. [15] The South Cotabato government complies with the Government Procurement Reform Act (RA 9184) and discloses all bidding documents through its website; three conspicuous physical venues for hard copies of documents; and on the Philippine Government Electronic System. [16] However, the online data is not accessible in machine-readable or editable formats.

As indicated in the action plan, the technical documents (e.g., bid calls or manuals) are not presented so that they are engaging or easily comprehensible by the general public. While government stakeholders could not confirm exact figures, the researcher can confirm that  only a small number of CSOs and business sector representatives are actively observing the bidding process and monitoring implementation of awarded contracts. [17]

The Bids and Awards Committee (BAC) conducts half-day seminars on RA 9184 for suppliers and bidders. [18] While only one CSO observer has consistently attended the LGU bidding activities, the BAC Secretariat provides this observer all the documents that are required to follow the process, in accordance with the Agency Procurement Compliance and Performance Indicator (APCPI) checklist. [19] As outlined in this commitment, the BAC plans to extend engagement with CSO observers and provide orientation on the procurement law.

This commitment is generally specific enough to be verifiable. However, a number of milestones do not provide adequate detail, preventing a full appraisal of the commitment’s scope. For instance, the commitment proposes an internal policy to enhance efficiency and transparency in procurement but does not detail what specific measures this policy will entail, or through which entities and mechanisms it will be operationalized. Similarly, the commitment proposes uploading procurement documents in machine-readable formats but fails to specify the extent of information that will be made available, who will be able to access it, or the precise platform that will be used. The general commitment text also refers to a number of offline and online mechanisms, such as a tracking system and a feedback desk, that are not reflected in the commitment’s milestones.

This commitment is relevant to the OGP values of access to information, civic participation, and technology for transparency. The capacity building programs of RA 9184 and, if made publicly accessible, the uploading of procurement documents in machine-readable formats, should increase public access to government-help information by utilizing technology. Similarly, although opportunities to influence decision-making are unclear, the involvement of an increased number of CSOs and the business sector in procurement monitoring will provide better opportunities for civic participation.

Procurement practice continues to rely on complying with existing procurement law. While this has burdened the BAC secretariat with a range of responsibilities, the same legal framework fails to allow for more ambitious and technology-enabled system innovation. [20] Although this commitment stands to improve BAC engagement with CSOs and encourage their review of compliance with the APCPI checklist, the BAC, bidders, their representatives, and CSO observers will still be limited to physically convening for bidding activities at the provincial capital and handling related documents manually. [21]   

This commitment has a minor, but positive, potential impact to increase efficiency and transparency in public procurement. The commitment encourages citizens to provide feedback and participate in government procurement processes, and enhances the government’s ability to respond to citizen feedback. However, as the milestones lack sufficient detail to describe how the intended impacts will be achieved, it is difficult to appraise the scope of this commitment. For example, in addition to the aforementioned lack of clarity, capacity-building activities from the national procurement law do directly improve civic participation as only accredited CSOs will be able to observe and access procurement data. Also, uploading procurement documents in a machine-readable format [22] will not improve public utilization if the public is not educated on the value and potential of such information.

Next Steps

• Complement capacity-building activities of CSOs and business associations with education on current and future procurement reforms and good governance initiatives that allow citizens to help the government achieve its objectives.

• Machine-readable data from procurement documents can also be demonstrated to other provincial government departments within South Cotabato as well as other regional offices to encourage shifts in data creation and analysis to a more shareable format (both internally and externally).

• Use Constructor’s Performance Evaluation System results from the BAC secretariat as criteria for bid eligibility, and consider publishing the results in a machine-readable format. Also consider utilizing the Provincial Engineer’s Office Document Tracking System.