DBM: New law needed to scrap lowest-bidder rule

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Department of Budget and Management -- WWW.OFFICIALGAZETTE.GOV.PH

By Melissa Luz T. Lopez,
Senior Reporter

THE GOVERNMENT can at best amend implementing rules to fast-track public bidding in response to President Rodrigo R. Duterte’s call to scrap the practice of awarding contracts to the lowest bidder, the Budget secretary said.

Secretary Benjamin E. Diokno said scrapping the bidding process for public works projects would need Congressional action, as procurement law specifically requires awarding projects to the lowest bidder.

Mr. Duterte has said that he wants all projects of the Philippines will be “something like a Swiss challenge,” which was his preferred route to eliminate corruption in the bidding process.

A Swiss challenge means the government will accept competing bids from other parties who can present a better deal compared to the original proposal, with the proponent later on entitled to make another offer.

“The concept of a Swiss challenge applies to unsolicited proposals… I think it does not apply to all projects,” Mr. Diokno told reporters in a chance interview. “That’s under the law, you have to amend the law if you want that.”

“We can change the implementing rules and regulations. It’s hard to push legislation, we’re not sure what will come out of Congress,” the Cabinet official added.

Republic Act 9184 or the Government Procurement Reform Act awards contracts to the “lowest calculated responsive bid” received from suppliers and developers.

For now, Mr. Diokno said the Department of Budget and Management (DBM) has drafted a system to categorize supplies for procurement as “low-cost, medium, and high-cost,” as they seek to provide some leeway for government agencies.

The Philippines likely missed the 3% deficit ceiling in 2017, Mr. Diokno added, with a surge in revenue partially offsetting the impact of increased government spending.

Mr. Diokno said the budget gap may have settled at “slightly below 3%” of gross domestic product (GDP) last year, ahead of the release of full-year figures.

This comes as underspending was reduced to “less than 2%,” lower than the 3.6% rate in 2016.

Preliminary figures from the Department of Finance released last month pegged the full-year fiscal gap at 2.6-2.8% of GDP, while economic growth came in at 6.7%.

This year, the government has programmed a 3% budget deficit, which is expected to allow GDP growth to come in at between 7-8%.