Wednesday, August 23, 2006

Procurement too lengthy, says study


Filipinos may have to wait a while longer before enjoying the fruits of government’s fiscal reform program, as the National Economic and Development Authority (NEDA) said procurement activities of public agencies take too long, leading to delays and missed targets.

The Department of Finance recently said the government is spending nearly a third of the fresh revenues generated from a newly amended sales tax law on social services and infrastructure spending.

Under the Reformed Value-Added Tax law, about 30 percent of the amount collected from the tax measure would be set aside for the two expenditure items.

In the first half of the year, the government generated about P38.229 billion from RVAT and this was 23.17 percent more than the P31.037-billion goal for the period.

But in its 14th official development assistance (ODA) review, the NEDA said a wide variance exists in procurement periods of the 21 civil works, four consulting services and 11 goods contract packages included in the study.

Implementing agencies reported that procurement activities from submission of bids to issuance of Notice to Proceed takes between 1.44 months and 35 months instead of the 3.2 months prescribed by Republic Act 9184, the Government Procurement Reform Act.

The Bases Conversion and Development Authority (BCDA) as well as the Departments of Transportation and Communication and of Public Works and Highways cited high bid prices as reason for delay, the NEDA study said.

The same study said the Department of Education and the Philippine National Oil Co.-Energy Development Corp. (PNOC-EDC) cited failure in bidding or rebidding of contracts as a source of delay, while the Metropolitan Waterworks and Sewerage System (MWSS) and the Supreme Court pinned the blame on the lengthy review process.

Other factors that caused delays were changes in the leadership of agencies such as happened at the Department of Agrarian Reform and the BCDA, and the lack of familiarity with the procurement law or the funding institutions’ procurement guidelines.

The BCDA, MWSS, PNOC-EDC and Subic Bay Metropolitan Authority encountered delays in procurement with respect to five major contracts, with amounts ranging from P106 million to P14 billion, resulting in the agencies’ inability to meet performance targets.

The Local Water Utilities Authority (LWUA) and the Department of Environment and Natural Resources, however, showed improved procurement timelines, the NEDA study said.

The report said that the LWUA’s procurement period for civil works, for example, was cut from 3.69 months to 2.91 months.

The study also noted the performance of the Department of Social Welfare and Development and the Laguna Lake Development Authority whose respective procurement periods reached 2.4 months and 2.6 months. These were less than the 3.2 months prescribed by law. In contrast, the High Tribunal’s Judiciary Reform Support Project exceeded the time frame by 1.86 months.

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