1. “ Procurement Reform in the Philippines: Achievements and Remaining Challenges ”

2.  Fragmented Laws and Rules (100++) Presidential Decree 1594 (Works) Executive Order 262 (Goods) Executive Order 164 (Consulting Services) Executive Order No. 40 Republic Act 7160 - Local Government Code (Procurement Provisions)  No Standardized Procurement Documents  Absence of a single agency with a mandate to formulate procurement policy, rules and procedures. Procurement Environment Prior to GPRA

3.  Existence of Conflict of Interest in Government Contracting (approving authority, bidders, observers)  Lack of Transparency in Procurement Information Dissemination  Unclear Accountability of Persons Involved in Procurement activities  Weak opportunity for Public Monitoring of Procurement Activities Procurement Environment Prior to GPRA

4. 2002 CPAR From the overall findings of the CPAR, the public procurement system in the Philippines is dysfunctional. It is characterized by multiple laws, rules and regulations which while adhering to the principles of competition and transparency, are inefficient and prone to abuse. It also contributes to lowering public funds’ value for money.

5. A conducive breeding space for graft and corruption…

6. “An Act Providing for the Modernization, Standardization and Regulation of the Procurement Activities of the Government and for Other Purposes” Republic Act No. 9184 Government Procurement Reform Act (2003)

7. Government Procurement Reform Act (GPRA) Governing Principles TRANSPARENCY GPRA ACCOUNTABI LITY PUBLIC MONITORING ACCOUNTABILITY COMPETITION STREAMLINED PROCESS

8. Key Reform Measures

9. Competitive Bidding as Primary Mode of Procurement. Allowance of Centralized or Decentralized Procurement. Use of Non-Discretionary Pass/Fail Criterion.

10. Key Reform Measures Shift from Pre-Qualification Regime to Simplified Eligibility Checking. Use of the Approved Budget for the Contract (ABC) as Ceiling for Bid Prices. Creation of a procurement policy oversight body – Government Procurement Policy Board.

11. Key Reform Measures Introduction of a Protest Mechanism Participation of Observers in all stages of procurement process. Issuance of the Standardized Philippine Bidding Documents (PBDs), Generic Procurement Manuals (GPMs) and Local Government Procurement Manuals (LGPMs) Establishment of civil, administrative and criminal sanctions

12. Key Reform Measures Establishment of a National Procurement Training Program to ensure the conduct of regular procurement trainings for procurement capacity development of government procurement practitioners. Development of the Procurement Professionalization Program currently being pilot tested to professionalize government procurement practitioners. Regular conduct of training activities and seminars for prospective bidders - suppliers, contractors, and consultants.

13. Impact of Reform Measures

14. Sources of Information Experiences from the Ground Feedback from various stakeholders The 2012 Country Procurement Assessment Report Government Procurement Reform Act IMPACT OF REFORM MEASURES

15. Impact of Reform Measures As of 2006, the DepED had realized a total of Php2.6 billion in savings, with an average reduction of 50% in the price of textbooks that allowed achievement of a textbook-to-student ratio of 1:1. One textbook that was being purchased for an average of PhP 100.00 came down to PhP45.00 in competitive bidding. DOH reported an average reduction of 27% in the prices of pharmaceuticals due to increased competition. DPWH reported an average reduction of 15% to 20% of contract cost when compared with budget estimates. Source: 2008 CPAR

16. Impact of Reform Measures Bidding time has been cut in half, and transparency is attained through compliance with the requirement of posting of advertisement, Notice of Award, Actual Contract and Notice to Proceed in the PhilGEPS. Alignment with international practice improved, and the national procurement system became more widely used following the increase in the National Competitive Bidding (NCB) thresholds to US$ 1 Million for goods and US$ 5 Million for works. Source: 2008 CPAR

17. Impact of Reform Measures (World Bank Confidence in Country System) WB NCB Threshold 20082013 GoodsUSD 1 MillionUSD 3 Million WorksUSD 5 MillionUSD 15 Million ConsultingUSD 200KUSD 500K

18. 2013 SWS Survey of Enterprises on Corruption -53% say it is easier to get information for bidding on gov’t contract. -Compared to about 5 years ago, it is now easier for anyone who wants to bid on a government contract to get information about the bidding.

19. Transparency International Corruption Perception Index (CPI) YearRankCPI ScoreNo. of Countries 2000692.890 2001652.991 2002772.6102 2003922.5133 20041022.6146 20051172.5159 20061212.5163 20071312.5180 20081412.3180 20091392.4180 20101342.4178 20111292.6183 201210534176 20139436177 2014 8538175

20. Challenges in Public Procurement

21. Total APP vs. Awarded Contracts (in terms of amount, NGAs) 2011 APP = PhP 137.91 B Awarded = PhP 30.19 B 2012 APP = PhP 131.17 B Awarded = PhP 31.74 B

22. Failed Biddings (Total Contracts Awarded vis-à-vis Number of Procurement Activities) 2011 Procurement Activities = 8,731 Contracts Awarded = 8,058 Difference = 673 2012 Procurement Activities = 11,450 Contracts Awarded = 9,555 Difference = 1,895

23. PRIMARY CAUSES OF DELAYS AND FAILURES OF BIDDING (Based on APCPI Confirmation Result of Participating Agencies)

24. What have we missed? Where is the disconnect? How do we bridge the gap?

25. Sharing the Lessons Learned: CountryEffectivity of Procurement Legal Framework Cambodia2012 LAO PDR2007 Mongolia2005 (Amended 2011) Timor Leste2005 (Amended 2010) Vietnam2013 (repealed Bidding Law of 2005

26. How do we keep our system attune with modern procurement approaches and strategies? – Principles Based vs. Rules Based approach – Professionalization / Competency Framework – Framework Agreement – SPP/GPP – WTO-GPA – Observer Status – Electronic Bidding / Electronic Reverse Auction – Open Contracting / Open Data Standards Stakeholders’ participation in government procurement. – Public procurement practitioners – competition v. negotiation – Market Operators – Policing their ranks / Integrity Pledge – How do we incentivize procurement opportunities and make it attractive to bidders? – CSO Participation / Sustaining Participation / Social Benefit Fund – SAIs, the impact of their function in decision making. – Innovative mechanisms to combat graft and corruption in procurement – Developing capacity of procurement investigators.

27. Measuring results in public procurement? – OECD-DAC MAPS / APCPI – Compliance vs. performance – Peer Review Process – What are other available tools out there? What are the necessary steps to make procurement reform sustainable and irreversible?

28. Up by 240.8% from 2010-2015

29. Public procurement delayed is public service denied…

30. This is our Procurement Story…

31. …we are willing to Listen, and we are willing to Act!

32. Thank You… Dennis S. Santiago Executive Director V Government Procurement Policy Board – Technical Support Office