Republic of the Philippines
Bouse of Representatives

Constitution Hills, Quezon Cite

Fifteenth Congress
Second Regular Session

House Bio, 4921

Introduced by HON, ROMEO M. ACOP

EXPLANATORY NOTE

‘Transparency constitutes a central pillar of any public procurement system, without
which vast goverment nasources channeled through public procurement run the danger of
increased corruption and misuse of funds. Thus, Republic Act No. 9184, otherwise known as
‘An Act Providing for the Modernization, Standardization and Regulation of the Procurement
Activities of the Government’, as amended, declares as Its primordial guide the principle of
transparency in the procurement process and in the implementation of procurement contracts.

Transparency in public procurement is about information. The access to key
procurement information by stakeholders and how they use them directly enhances
accountability. Transparency of decisions on contract awards ensures that decisions are taken
strictly on the basis of evaluation criteria and technical specifications set out in advance and are
applied objectively. Moreover, post-qualification information made available to tenderers who
failed to win @ bid is provided with the opportunity to ascertain that they had been treated
equitably according to the criteria and requirements taid down in the tender documentation,
‘These information should be made known and generally made available to interested parties
through accessible sources such as the electronic media. Electronic media offer significant
benefits in terms of bath time and costs and have been shown to be increasingly used in the
foreseeable future.

Republic Act No. 9184 further requires public monitoring of the procurement process to
guarantee that contracts are awarded and performed in accordance with law. Under Section 13,
of the law, civil society organizations are allowed to monitor all stages of the procurement
procass sitfing as observers in the proceedings with the requirements that they must have
knowledge of the sector or discipline relevant to the procurement at hand, and that they do not
have interest in the contract to be bid out However, the absence of observers during the


procurement proceedings do not nullify the proceedings. Hence, there is lack of compulsion to
comply with a mandatory requirement of the law. This situation undermines the transparency of
the proceedings.

Moreover, in the midst of rising incidents of illegal, irregular, wasteful and anomalous
disbursements of public funds due to inadequacies of intemal controls, there is a growing
clamor for the revnstitution of pre-audit mechanisms in selected govemment transactions.
particularly in its procurement activities. The argument that preaudit schemes will result in
further delays that may unduly hamper implementation of urgent goverment projects must yield
to the higher interest of protecting and conserving goverment resources and minimize losses
from illegal expenditures in these hard times. in the case of goverment procurement, there is
need for pre-audit of the financial components of bids tendered to determine compliance of
these bids with existing laws and regulations, and whether the bids are not excessive and
unconscionable and are supported by evidence. This way, errors are discovered early prior to
warding of contracts. Consequently, opportunities for corruption and incidents of wastage of
public funds are greatty reduced if not eradicated.

This bill seeks to strengthen transparency in the goverment procurement process
through >

1) The posting of the decisions of the Bids and Awards Committee (BAC) relative to
cfiteria, ratings and calcutations of bids, responsive or otherwise, on the procuring
agency's website of that of the Goverment Procurement Policy Board (GPPB). By
making such decisions public, anomalies in the bidding process are hoped te be reduced
if not eradicated, and culpable parties can ba identified when anomaties do occur,

2) The compulsory presence of BAC observers in the procurement process with their
absencs resulting to the nullification of the proceedings.

3) The requirement of pre-audit of all tendered bids prior to the determination of the winning
bid and awarding of contract

Transparency in government is about allowing the people to see and know how their
taxes are spent, and what services are delivered to them. By making more information available
to the public, goverment officiais and agencies become more accountable for their actions and
decisions. Greater accountability maans fess corruption and slippage of precious public funds.

For the foregoing reasons, the immediate passage of this bill is eamestly sought.



Republic of the Philippines

Bouse of Representatives

Constitution Wills, Quezon City

Fifteenth Congress
Second Regular Session

House Gu wo. 4921

Introduced by HON. ROMEO M. ACOP

AN ACT
TO FURTHER ENSURE TRANSPARENCY IN THE GOVERNMENT PROCUREMENT
BIDDING PROCESS , AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 9184,
OTHERWISE KNOWN AS ‘AN ACT PROVIDING FOR THE MODERNIZATION,
STANDARDIZATION AND REGULATION OF THE PROCUREMENT ACTIVITIES OF
THE GOVERNMENT’, AS AMENDED

Be it enacted by the Senate and the House of Representatives of the Philippines in
Congress assembled :

SECTION 1. Section 13 of Republic Act No. 9184, otherwise known as ‘An Act
Providing for the Modemization, Standardization and Regulation of the Procurement
Activities of the Government’, as amended, is hereby amended to read as follows :

SECTION 13. Observers - To enhance the transparency of the process, the
BAC shall, in all stages of the procurement process, invite, in addition to the
representative of the Commission on Audit, at least two (2) observers to sit in its
proceedings, one (1) from a duly recognized private group in a sector or
disciptine relevant to the procurement at hand, and the other from a non-
government organization : Provided, however, that they do not have any direct or
indirect interest in the contract to be bid out PROVIDED, FURTHER, THAT
THE ABSENCE OF OBSERVERS SHALL NULLIFY THE PROCEEDINGS.


The observers should be [ duly registered with the Securities and Exchange
Commission ] MEMBERS iN GOOD STANDING OF THE SECTOR,
DISCIPLINE OR NON-GOVERNMENT ORGANIZATION THEY REPRESENT
AS DULY CERTIFIED BY THEIR PRESIDENT OR CHAIRPERSON AS THE
CASE MAY BE, and should moet the criteria for observers as set forth in the
IRR

SECTION 2. Section 32 of Republic Act No. 9184 is hereby amended to read as
follows

SECTION 32. Bid for the Procurement of Goods and infrastructure Projects —
For the procurement of Goods and Infrastructure Projects, the BAC shall
evaluate the financist component of the bids: PROVIDED, THAT SUCH
FINANCIAL COMPONENT OF THE BIDS AND THEIR INDIVIDUAL ITEMS
SHALL BE SUBJECT TO PRE-AUDIT BY THE COMMISSION ON AUDIT. The
bids that passed the preliminary examination shall be ranked from lowest to
highest in terms of their corresponding calculated price shail be referred to as the
‘Lowest Calculated Bid’.

SECTION 3. Section 34 of Republic Act No. 9184 is hereby amended to read as
follows :

SECTION 34. Objective and Process of Post-Qualfication; TRANSPARENCY
_  Post-qualification is the stage where the bidder with the Lowest Calculated

Bidding Documents.

If the bidder with the Lowest Calculated Bid or Highest Rated Bid passes all the
criteria for post-qualification, his Bid shall be considered the “Lowest Calculated
Responsive Bid’, in the case of Goods and Infrastructure or the “Highest Rated
Responsive Bid’, in the case of Consulting Services. However, if @ bidder fails to
meet any of the requirements or conditions, he shall be ‘post-disqualified’ anc
the BAC shall conduct the post-qualification on the bidder with the second
Lowest Calculated Bid or Highest Rated Bid. If the bidder with the second
Lowest Bid or Highast Rated Bid is post-disqualified, the same procedure shalt
be unt] the Lowest Calculated Responsive Bid or Highest Rated
Responsive Bid is finally determined.

In all cases, the contract shall be awarded only to the bidder with the Lowest
Calculated Responsive Bid or Highest Rated Responsive Bid.

PROVIDED, THAT THE CALCULATED RATINGS, BID PRICES OF ALL
BIDDERS, INCLUDING THE RATINGS GIVEN TO EACH OF THEM BY EACH
MEMBER OF THE BAC, SHALL BE POSTED IN THE PROCURING ENTITY'S
WEBSITE OR THAT OF THE GOVERNMENT PROCUREMENT POLICY
BOARD (GPPB) FROM THE END OF EVALUATION TO SIXTY (60) DAYS
AFTER AWARD OF CONTRACT. ALL BIDDERS SHALL INCLUDE ALL


THOSE WHO SUBMITTED BIDS REGARDLESS OF COMPLETENESS OF
REQUIREMENTS AND RESPONSIVENESS.

SECTION 4. implementing Rutes and Regulations - The Government Procurement
Policy Board (GPPB}, jointly with the members of the Oversight Committee, shall
formulate and issue the necessary rules and regulations within sixty (60) days from the
effectivity of this Act, and shall be approved by the President of the Philippines.

SECTION 5. Separability Clause - If, for any reason, any section or provision of
this Act is declared unconstitutional or invalid, such parts not affected thereby shall
remain in full force and effect.

SECTION 6. Repealing Clause - All laws, executive orders, issuances, rules and
regulations or parts thereof, which are inconsistent with the provisions of this Ac are
hereby repealed or repealed accordingly.

SECTION 7.  Effectivity Clause - This Act shail take effect upon its complete
publication in at least two (2) newspapers of general circulation.

Approved.