Procurement controversies -- The Philippines

Among other factors, the emphasis on best value in government contracting, and its high reliance on proven past performance, is driven by bureaucratic survival techniques such as risk aversion and inertia. Too much risk aversion impacts adversely on fostering competition, and creates an atmosphere of perceived if not actual favoritism and "old boy networking", a bad image for any government any where.

Of course, it is not always risk aversion or inertia that leads to old boy networks. The following story poses the possibility of other factors at work, perhaps more pernicious, though that may be debatable if the result is the same in either event.

Corruption in procurement process of firefighting equipment exposed

After failing to get satisfactory answers and actions from both the Bureau of Fire Protection (BFP) and the Department of Interior and Local Government (DILG) officials, Bayan Muna lawmaker Teddy Casiño now wants Congress to investigate what he said as the “dubious termination” of a government contract amounting to P243 million ($5.65 million) for fire fighting equipment allegedly to favor some regular suppliers of the BFP.

“It’s highly irregular for Perez to have delayed the awarding of the contract; and it’s more dubious still for him to have arbitrarily declared a failure of bidding on technical grounds belatedly raised in mere letters to him by two losing bidders who happen to be regular suppliers of the BFP,” he said.

In October 2010, the BFP opened for bidding various fire-fighting gears, namely helmets, coats and trousers, gloves and boots. On February 11, 2011, the BFP informed Kolonwel Trading that it won the bidding, having submitted the lowest calculated bid of P242,806,753.00. This was the first time the company participated and won in a BFP bidding.

Kolonwel Trading was then asked to submit various post-qualification papers. The company complied, but on April 20, 2011, the BFP again asked for additional documents. A month later, an additional request for test results on the quality and safety of their products was made. After submitting the pertinent documents, the Bids and Awards Committee (BAC) of the BFP finally came out with a resolution on October 17, 2011 and signed by DILG secretary
Jesse Robredo awarding the procurement of said Personal Protective Equipment (PPE) to Kolonwel Trading.

Two losing bidders, Panpisco Technologies, Inc. and 911 Alarm, both long-time suppliers of the BFP then wrote Perez, and soon after he withheld the awarding of the contract to Kolonwel Trading. He later on declared a failure of bidding, but this was two months after the BFP BAC issued its resolution in favor of Kolonwel.

According to Casiño, the said suppliers did not avail of the prescribed protest mechanism as prescribed by the Procurement Law (RA 9184) but raised their concerns through mere letters to BFP Officer in Charge Samuel Perez.

That last statement resonates with me. In a still unresolved controversy I have been involved with, the low bidder's award was also delayed during an interim in which the incumbent higher bidder, rather than protesting, after bid opening sent unsubstantiated, "confidential" communications to the procurement officer intending specifically to undermine the low bid's responsiveness to specifications.

Had the matter been duly raised by protest, it could have been shown that, first, the bid specifications did not require that substantiating material be provided with the bid therefore it was not error for the low bid to not provide it, and, second, that the incumbent's claims were unfounded since third party add-ons, to be provided by the low bidder, rectified any alleged shortfalls.

Protestations to the agency and administrative review authority that such unfair and ex-party communications should not be considered went unheeded. In the result, the claims, never properly brought therefore improperly considered, tainted and poisoned the protest.