Bayanihan to steal as one?

Bayanihan to steal as one? was first published by The Manila Times on 8 September 2021 – Admin.

THE controversy surrounding the “overpriced” personal protective equipment (PPE) and other pandemic-related supplies following an award of billions of pesos worth of contract by the Procurement Service of the Department of Budget and Management (PS-DBM) to Pharmally Pharmaceutical Corp., has prompted Palace spokesman Harry Roque Jr. to clarify the government’s position.

He had been quoted as saying that “the Philippine government dealt with Pharmally as a ‘separate’ legal entity from its owners,” adding that “it was the corporation that made the bid. So, there was no need to scrutinize the [persons] behind the corporation.”

Earlier, Sen. Ana Theresia “Risa” Hontiveros alleged that an officer of Pharmally and another from its Taiwan-based parent, Pharmally International Holding Co. Ltd., were fugitives from Taiwan’s criminal justice system. She also identified a third one – Zheng Bingquiang, president of a Xiamen, China-based company Full Win Group of Companies whose chairman is President Duterte’s former economic adviser Michael Yang – who is also being hunted down by Taiwanese authorities.

Bayanihan to steal as one - Presidential Spokesman Harry Roque
Bayanihan Presidential Spox Harry Roque

Roque explained that “he was unaware of any rules under Republic Act 9184, or the ‘Government Procurement Reform Act’, and on expedited procurement under Republic Act 11469, or the ‘Bayanihan to Heal As One Act,’ that required intensive background checks on the stockholders and officers of participating companies… Maybe the identity of the bidder would be important if he bidded (sic) in his individual capacity. But what we look at is if that company has not been blacklisted by the government for failing to deliver in previous transactions or is not paying taxes.”

He is wrong with respect to RA 9184. He can be right or wrong with respect to RA 11469, depending on context.

Public competitive bidding conducted under RA 9184 requires the bidder, in the case of a corporation or joint venture, to submit a sworn statement certifying, among other things, that–

“[It] is not ‘blacklisted’ or barred from bidding by the government of the Philippines or any of its agencies, offices, corporations, or local government units, foreign government/foreign or international financing institution whose blacklisting rules have been recognized by the Government Procurement Policy Board, by itself or by relation, membership, association, affiliation, or controlling interest with another blacklisted person or entity as defined and provided for in the Uniform Guidelines on Blacklisting.”

Roque’s definition of blacklisting not only creates routes by which one can disregard the intent of the law, it also ignores two possible indictable acts. One is that Pharmally probably lied or submitted a fraudulent bid with a false sworn statement. Two, negligence on the part of PS-DBM. Submitting false information in bid documents is ground for blacklisting. In today’s age of information technology, PS-DBM should not require the services of Scotland Yard to establish the fact that some of Pharmally’s incorporators are fugitives in Taiwan. Its Consolidated Blacklisting Report is wanting, given that Taiwan (Taipei-China) is a member state of the Asian Development Bank, and the Philippine government recognizes ADB’s blacklisting rules.

Managing big data and its real-time reporting has been an issue for the government. It can be seen in how Covid cases are being reported – for example, the Department of Health (DoH) reports daily that “x number of recoveries that were earlier tagged as recoveries were reclassified as deaths after final validation” – or in establishing a scam-proof list of social amelioration beneficiaries. For PS-DBM to have missed Pharmally’s profile is a result of either incompetence or a deliberate act to defraud the taxpayers, given that it is tasked by law “to manage the Philippine Government Electronic Procurement System (PhilGEPS).” RA 9184 tasks PhilGEPS to serve as the primary and definitive source of information on government procurement.

Reports show that PS-DBM has awarded contracts for supply of pandemic related goods in the amount of at least P20.9 billion, P8.7 billion of which went to Pharmally. The DoH also awarded contracts to Pharmally in the amount of P4.84 billion.

Apart from the blacklisting issue, questions have been raised regarding Pharmally’s qualification to enter into a procurement contract with government on account of its performance record and financial capacity. Formed only in 2019 with a paid-up capital of less than a million pesos, Pharmally does not appear to meet at least two eligibility criteria. For one, no proof has been shown that it has completed a single contract that is similar to the contract to be bid, and whose value… is at least 25 percent of the approved budget, which is P2.2 billion for the P8.7 billion contract. Pharmally also appears deficient with respect to the net financial contracting capacity (NFCC) requirement of the procurement law.

PS-DBM reportedly awarded the contract to Pharmally through negotiation, a procurement mode allowed by law in two instances, namely: 1) two bidding processes have been conducted and they resulted in failure (that is, no contract was awarded); and 2) during emergency cases. The entire country has been in a state of emergency since last year due to the pandemic, therefore government could have awarded negotiated contracts to suppliers even without the Bayanihan to Heal As One law. However, the provision on negotiated procurement is clear: the procuring entity (in this case the PS-DBM) under any one of the two mentioned conditions can directly negotiate a contract with a “technically, legally and financially capable supplier….” Pharmally is hardly a supplier of that kind.

Bayanihan PS DBM Logo

This brings us to Roque’s defense by invoking RA 11469. He said that while background checks of company officials are done in regular procurement under RA 9184, “the expedited bidding authorized under RA 11469 did not state such checks should be conducted.”

Section 4, paragraph (k), of that law authorizes the president to “undertake the procurement of the following as the need arises, in the most expeditious manner, as exemptions from the provisions of RA 9184, and other relevant laws.”

This authority can be understood as a license for the President, through his procurement managers, to buy pandemic-related goods, civil works, or services, in any way they please. There is no restriction whatsoever, except perhaps a conscience that makes one realize that public procurement entails taxpayers’ money, and its guiding principles, whether expedited or not, are fairness, efficiency, transparency and accountability.

Whenever government procures overpriced, and oftentimes sub-standard goods or civil works, it is likely that those procurement principles, in pursuit of self over public interest, have been ignored or disrespected. In these pandemic times where people suspect that billions of taxpayers’ money have been lost to overpricing, both procurement managers and Congress – the one that gave them carte blanche authority – must answer for how healing as one may have given occasion to stealing as one.

“Bayanihan to Steal As One?” by Ingming Aberia.

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