RESPONSE OF THE PROCUREMENT SERVICE TO THE ARTICLE PUBLISHED IN VERA FILES LAST JANUARY 10, 2017 ON THE BIDDING FOR THE HOSTING OF THE 2017 ASEAN CONFERENCES

1. “The Department of Budget and Management denied violating procurement rules when it bidded out the P2.8-billion contract for the hosting of the 2017 ASEAN conferences in the country, saying it has full discretion in determining the rules for such processes”.

RESPONSE/CLARIFICATION:
NON-POLICY MATTER OPINION NO. 180-2015 ISSUED BY THE GOVERNMENT PROCUREMENT POLICY BOARD (GPPB) IN 2015 PROVIDES THAT THE PROCURING ENTITY IS IN THE BEST POSITION TO DETERMINE, BASED ON ITS PRIMARY PURPOSE, MOTIVATION AND INTENTION, AND ON THE NATURE OF THE CONTRACT, WHETHER THE INTENDED PROJECT SHOULD BE CLASSIFIED AS GOODS OR CONSULTING SERVICES. THIS IS IN REFERENCE TO THE SELECTION OF THE MODE OF PROCUREMENT FOR MIX PROCUREMENTS ONLY. ONCE DETERMINED, ALL PROCUREMENT RULES PERTINENT TO THE CHOSEN MODE OF PROCUREMENT WERE STRICTLY APPLIED AND COMPLIED WITH.

2. “The DBM-Procurement Service came under fire for classifying the contract as a procurement of goods and not consulting services, and for awarding the contract to the sole bidder, StageCraft International. The DBM insisted StageCraft has already acquired expertise for such projects, having handled the Philippine hosting of the Asia Pacific Economic Conference in 2015, and therefore will supply “goods and services.”"

RESPONSE/CLARIFICATION:
THE RESPONSE TO THE 01 JANUARY 2017 NEWS ITEM OF VERA FILES ON THIS PROCUREMENT REFERS TO EXPERTISE OF THE GOVERNMENT ORGANIZERS OF ASEAN AND NOT TO STAGECRAFT. WHILE THE EXPERTISE OF STAGECRAFT IS IMPORTANT, IT IS NOT THE BASIS IN THE DECISION ON THE MODE OF PROCUREMENT.

3. “EON was unable to submit a bid allegedly because the requirements were tailor-made for StageCraft. In its letter to the DBM-PS, EON asked government to reject the sole bid, declare a failure of bidding or not to award the contract”.

RESPONSE/CLARIFICATIONS:

THE REQUIREMENTS WERE WHAT WERE NEEDED IN THE HOSTING OF THE ASEAN MEETINGS. THEY ARE NOT TAILOR-MADE FOR ANY POTENTIAL BIDDER. IT IS REITERATED THAT THESE REQUIREMENTS WERE PREPARED AT A TIME WHEN POTENTIAL BIDDERS ARE STILL UNKNOWN.

4. “The DBM insists the bidding is not necessarily a failure just because only one party submitted an offer. But a source familiar with government procurement told VERA Files this does not give government the right to award the project to the lone bidder”.

RESPONSE/CLARIFICATION

THIS IS A PROVISION OF LAW. SEC. 35 OF RA NO. 9184 (GOVERNMENT PROCUREMENT REFORM ACT OR GPRA) PROVIDES 4 INSTANCES FOR A BIDDING TO BE CONSIDERED A FAILURE, TO WIT:

1. NO BIDS ARE RECEIVED;

2. ALL PROSPECTIVE BIDDERS ARE DECLARED INELIGIBLE;

3. ALL BIDS FAIL TO COMPLY WITH ALL THE BID REQUIREMENTS OR FAIL POST-QUALIFICATION,

4. WHENEVER A BIDDER WITH THE HIGHEST RATED/LOWEST CALCULATED RESPONSIVE BID REFUSES, WITHOUT JUSTIFIABLE CAUSE TO ACCEPT THE AWARD OF CONTRACT, AS THE CASE MAY BE.
5. “According to the VERA Files source who is a procurement manager, Sec.36 (b) of RA 9184 says a single calculated or rated bid can be considered for award “if after the advertisement and receiving more than one bid, there is only one bidder that met the requirement.”

“Had EON submitted an offer, then the project may be awarded to Stagecraft. However only one submitted an offer and that should prevent government from awarding the project to the lone bidder,” the source told VERA Files.”

RESPONSE/CLARIFICATION

THE QUOTED PROVISION IS 1 OF ANY OF 3 BASIS PROVIDED BY SECTION 36 OF RA 9184 AS BASIS IN AWARDING A CONTRACT TO A SINGLE BIDDER AND IS THE WRONG ONE IN THIS PARTICULAR BIDDING. WE ARE QUESTIONING THE EXPERTISE AND THE MOTIVATION OF THE VERA FILE SOURCE AS A PROCUREMENT MANAGER BY SELECTIVELY QUOTING THE INAPPLICABLE PROVISION OF THE LAW. THE BASIS FOR AWARDING THE CONTRACT TO THE SINGLE RESPONSIVE BID (STAGECRAFT IN THIS INSTANCE) IS PARAGRAPH (a) OF THIS SECTION, TO WIT:

“(a) IF AFTER ADVERTISEMENT, ONLY ONE PROSPECTIVE BIDDER APPLIES FOR ELIGIBILITY CHECK IN ACCORDANCE WITH THE PROVISIONS OF THIS IRR, AND ITMEETS THE ELIGIBILITY REQUIREMENTS OR CRITERIA, AFTER WHICH IT SUBMITS A BID, WHICH IS FOUND TO BE RESPONSIVE TO THE BIDDING REQUIREMENTS”.

THIS IS THE FIRST BASIS IN THE LISTING UNDER THIS SECTION OF THE IRR OF RA 9184. THE VERA FILE SOURCE QUOTED SECTION (b). HOW COULD HE /SHE HAVE MISSED THE FIRST IN THE LIST?

5. “Budget Secretary Benjamin Diokno admitted the government only wanted to deal with one contractor. He quoted ASEAN NOC Director General Marciano Paynor Jr. as saying, “We should just have one bidder. “It’s an indication that they tailor fitted the bidding to admit only one company. It’s against the governing principle of government procurement Section 3(c) which is competitiveness,” the source added”.

RESPONSE/CLARIFICATION:

ONE CONTRACTOR AND ONE BIDDER ARE NOT THE SAME. A SINGLE LOT PROCUREMENT DOES NOT MEAN THAT THE BIDDING IS OPEN TO ONLY ONE BIDDER. A SINGLE LOT BIDDING IS AN OPEN BIDDING SIMILAR TO A MULTI-LOT BIDDING. THE NEED FOR ONE CONTRACTOR WAS ALREADY EXPLAINED IN OUR RESPONSE TO YOUR FIRST NEWS ITEM. IN NO INSTANCE DID SEC. DIOKNO OR AMBASSADOR PAYNOR SAY THAT THERE SHOULD BE ONLY 1 BIDDER. BOTH DID NOT ATTEND ANY OF THE BAC MEETINGS AND DELIBERATIONS AND DID NOT IN ANY WAY INFLUENCE THE DECISIONS OF THE BAC AT ANY POINT OF THE BIDDING PROCESS. COMPETITION IS FOREMOST CONSIDERATION OF PS-DBM IN ALL PROCUREMENT. TO PROVE THIS POINT, PS-DBM COULD HAVE CATEGORIZED THE PROCUREMENT AS AN EMERGENCY PROCUREMENT AND OPTED TO CHOOSE DIRECT NEGOTIATION INSTEAD OF COMPETITIVE BIDDING AS THE MODE OF PROCUREMENT. TO PRESERVE COMPETITION, IT OPTED TO CONDUCT OPEN COMPETITIVE BIDDING SINCE IT IS STILL WITHIN THE MININUM PROCUREMENT TIMELINE REQUIRED BY LAW.

6. “Bids for the procurement of goods and infrastructure require an abbreviated process under Section 32 of the law. The Bids and Awards Committee (BAC) only evaluates the financial component of the bids. From the preliminary examination the “Lowest Calculated Bid” is already determined”.

RESPONSE/CLARIFICATION

ALL THE STEPS IN THE PROCUREMENT PROCESS WERE FOLLOWED. THE SOURCE SHOULD CITE ANY INSTANCE TO PROVE THAT ANY OF THE STEPS REQUIRED UNDER RA NO. 9184 WAS NOT UNDERTAKEN/FOLLOWED. THESE ARE CONJECTURES AND UNPROFESSIONAL. AGAIN, IT IS ERRONEOUS TO SAY THAT ONLY THE FINANCIAL BIDS WERE EVALUATED. THE PROCUREMENT PROCESS WENT THRU ALL THE STEPS PRESCRIBED BY LAW ALL THE WAY TO POST QUALIFICATION.

I HAVE ASKED THE BIDS AND AWARDS COMMITTEE TO ADD TO THESE RESPONSES/CLARIFICATIONS, IF NEEDED. THANK YOU FOR PUBLISHING OUR IMPORTANT RESPONSES TO THE FIRST ARTICLE WHICH ARE RELEVANT TO THIS SECOND NEWS ITEM.