Description
Reform Description
In the current public procurement set-up, the Philippine Government, particularly Procuring Entities (PE), 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 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 Republic Act No. 12009 or the New Government Procurement Act (NGPA) 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 under the NGPA, not only serves as the primary source of information on government procurement but the primary channel in the conduct of all procurement activities of the government. 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 — oversight agencies, government procuring entities, 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 Virtual Store and the eMarketplace, among others, 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(s) Addressed by Reform
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.
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 corruption in government procurement, to wit:
i. Interoperability and interconnectivity of data between PhilGEPS and databases of government licensing agencies – the PhilGEPS will be useful in determining whether the bidders’ submitted legal eligibility documents are up-to-date and genuine through automatic cross-checking with the databases of the issuing agencies, such as SEC, DTI, Bureau of Internal Revenue, 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. Automating the process of verification will also ensure efficiency and reduce the workload of procurement officers involved in the evaluation and post qualifications of eligibility documents.
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 and analyze by CSO, PEs, and other stakeholders;
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 Values
This action is part of the 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 – through the procuring entities’ use of the PhilGEPS features, such as the eBidding facility, the Virtual Store and the eMarketplace. 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, will take part in collaborative and consultative work to build trust and foster partnership with relevant stakeholders. Orientations and trainings on the use of the PhilGEPS features will be done for all its users – the procuring entities, the merchants, the civil society partners and monitors, as well as the oversight agencies, to advocate the mandatory use of the PhilGEPS features and maximize the same as a medium in curbing corruption.
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, PEs, 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.
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 periodic publication of a Statistical Bulletin on consolidated procurement data and information. 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 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 BOI between PS-DBM and SEC 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. This milestone also includes the necessary roll-out of the features of the modernized PhilGEPS to PEs nationwide. 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 Partnership with CSOs for research and monitoring agenda, as well as in implementing OCDS – 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; as well as support PS-DBM in implementing OCDS in the enhancement of the PhilGEPS features.
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.
Is Civil Society Involved?
At present, the PS-DBM works hand in hand with two key partners – WeSolve Foundation Inc – a civil society organization that equips the public and state actors with the skills and knowledge to identify problems and provide thorough recommendations, aswell as the Open Contracting Partnership – a non-profit organization that helps shape and reform procurement across several countries by introducing open contracting practices in the process. Both organizations are involved in shaping PS-DBM’s bold reforms toward procurement processes and fruitful discussions on transforming procurement processes through the Theory of Change framework utilized in the tripartite engagement under the Open Contracting “Lift” Program.
Further to these ongoing collaborations, PS-DBM is taking further steps to engage other CSOs in the design and implementation of procurement reforms. There will be multi-stakeholder consultations that will be organized in 2025 and succeeding years, to institute a platform for CSOs to actively participate in shaping these reforms. Enhanced feedback mechanism will also be put in place during the implementation phase of the reforms, for efficient monitoring by CSOs of PS-DBM’s committed actions – such as integration of OCDS in the open data platform, data sharing for BOI, interoperability of data between government licensing databases and the Official Merchants Registry System of PhilGEPS, improved price setting guidelines, and strengthened anti-corruption measures. CSOs, including PS-DBM’s existing key partners, will play a crucial role in spreading awareness and educating the public and other stakeholders about the reforms introduced by PS-DBM, say for instance, CSOs can help promote the utilization of the PhilGEPS platform, ensuring that the mandatory utilization of the system for all governmental bodies, and leveraging the positive impacts of PS-DBM’s reforms to the public and other state actors. The involved multi-stakeholders, including civil society engagements will bring in more transparency and accountability, as more state actors can readily access and utilize procurement data to monitor and evaluate public spending.