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Republic of the Philippines ‘ E ie | VED z
HOUSE OF REPRESENTATIVES DATBEP_1 2 2022 bd

Quezon City

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NINETEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 4680

Introduced by: Hon. Keith Micah “Atty. Mike” D.L. Tan

AN ACT
ABOLISHING THE PROCUREMENT SERVICE - DEPARTMENT OF BUDGET AND
MANAGEMENT (PS-DBM)

EXPLANATORY NOTE

Article II, Section 27 of the 1987 Constitution provides that, "The State shall
maintain honesty and integrity in the public service and take positive and effective
measures against graft and corruption.”

On October 1978, the Procurement Service of the Department of Budget and
Management (PS-DBM) was created through Letter of Instruction (LOI) No. 755, and
thereafter amended by Executive Order No. 285 and 359.

PS-DBM's primary mandate seeks to establish an integrated procurement
system for the national government in order to take advantage of economies-of-scale
in procurement

Itacts as a procurement arm of other government agencies for the procurement
of common-use supplies, equipment, and infrastructure projects. To avail of this
service, government agencies remit in advance to the PS-DBM such funds needed for
its procurement.

On top of its function to procure common-use supplies for other national
government agencies, the PS-DBM also does trading by buying stocks of common-
use supplies for resale to other government agencies using its own budgetary
appropriation

The passage of Republic Act No. 9184, otherwise known as the "Government
Procurement Reform Act", however, undermines the mandate of the PS-DBM through
the inclusion of relevant provisions that seeks to strengthen the procurement service
of national government agencies.

Article 5, Section 11 of RA 9184 states that “all procurement agencies shall
establish a single BAC (Bids and Awards Committee) for its procurement". Section 63
(0) further tasks the Government Procurement Policy Board (GPPB) to strengthen the
said BACS by ensuring "that Procuring Entities regularly conduct procurement training
programs and prepare a procurement operation manual for all offices and agencies of
government"

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In addition to its mandate being affected by changes in national policies and
legistation, the PS-DBM have dealt with issues regarding the exercise of their mandate
in the previous years.

Recently, PS-DBM was embroiled in controversy regarding the transfer of Php
42 billion by the Department of Health (DOH) for the procurement of face shields, face
masks, personal protective equipment, and other pandemic-related purchases.

Itwas again involved in procurement issues related to the acquisition of laptops
for the Department of Education

In this light, this measure seeks to address the systemic corruption in
government by abolishing the PS-DBM, which has also been rendered archaic and
irrelevant in these current times. The DBM-PS has become a fertile breeding ground
of graft and corruption and, as such, should be abolished as it has outlived its functions
to the National Government

In view of the foregoing, the approval of this bill is earnestly sought.

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Keith Micah “Atty. Mike” D.L. Tan
4th District, Quezon


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

NINETEENTH CONGRESS
First Regular Session

House Bit no. 4680

Introduced by: Hon. Keith Micah “Atty. Mike” D.L. Tan

AN ACT
ABOLISHING THE PROCUREMENT SERVICE - DEPARTMENT OF BUDGET AND
MANAGEMENT (PS-DBM)

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

SECTION 1. Declaration of Policy. - The State shall maintain honesty and
integrity in the delivery of public service and take positive and effective measures
against graft and corruption. Thus, the State shall maintain accountability and
responsibility among its public officials and employees and shall take appropriate
measures to prevent unlawful and ineffectual acts and practices, therefore promoting
efficiency and transparency in the conduct of its business.

SEC. 2. Abolition of the Procurement Service - Department of Budget and
Management (PS-DBM). - The Procurement Service - Department of Budget and
Management (PS-DBM) created under Letter of Instruction No. 755 and other laws,
rules, and regulations shall be abolished.

In lieu of the abolition of the PS-DBM, the respective Departments, Agencies,
Government Owned and/or Controlled Corporations (GOCCs), State Universities and
Colleges (SUCs), and Local Government Units (LGUs) shall, thereafter, undertake the
procurement of common-use supplies, materials and equipment.

SEC. 3. Separation and Retirement from Service. - Employees affected by the
abolition of PS-DBM shall receive separation benefits under the Government
Reorganization Law and other existing laws, rules, and regulations. Provided that,
those who are qualified to retire and receive retirement benefits under existing
retirement laws shall be allowed to retire under existing laws, rules, and regulations.

SEC. 4. Reversion of Funds. - In coordination with the concemed Departments,
Agencies, GOCCs, SUCs, and LGUs, all prior year’s and current year's advances for
the purchase of supplies, materials, and equipment not available in the PS-DBM
inventory shall be reverted to the National Treasury.

SEC. 5. Transition Period. - One (1) year upon effectivity of this Act, the PS-
DBM, in coordination and under direct supervision of the DBM, shall undertake an
inventory of all the supplies, materials, and equipment under their custody for use of
the different departments, agencies, GOCCs, SUCs, and LGUs. The PS-DBM shall


continue to service the requirements for common-use supplies, materials, and
equipment until the inventories of such are fully consumed. Provided that, no additional
procurement shall be undertaken by the PS-DBM during such period.

SEC. 6. Repealing Clause. - All laws, decrees, orders, rules and regulations or
other issuances or parts thereof inconsistent with the provisions of this Act are hereby
repealed or modified accordingly

SEC. 7. Separability Clause. - If any portion or provision of this Act is declared
unconstitutional, the remainder of this Act or any provision not affected thereby shall
remain in force and effect.

SEC. 8. Effectivity. - This Act shall take effect after fifteen (15) days following
the completion of its publication either in the Official Gazette or in a newspaper of
general circulation in the Philippines.

Approved,