DBM bats for direct procurement from suppliers deemed ‘reliable’

THE Department of Budget and Management’s (DBM) Procurement Service (PS) is proposing two new methods to streamline government procurement, including the direct purchase of goods from suppliers with acceptable track records and the direct purchase of goods used in research and development.

Dennis S. Santiago, executive director of the PS, proposed the two methods in a letter to Senator Juan Edgardo M. Angara, who heads the Senate Finance Committee. The letter had been provided by Mr. Angara’s staff.

“We have really introduced a lot of measures that would open up and (inject) more flexibility on government contracting… especially with the use of fit-for-purpose procurement or proportionality,” he told a committee hearing on Wednesday.

“We will be using modalities that are most useful to the government.”

The committee is considering amendments to the Government Procurement Reform Law to minimize delays to government projects and the resulting impact of underspending on the economy.

In his letter, Mr. Santiago described the proposed direct-purchase mode as applicable to suppliers that have “satisfactorily delivered goods or services to another government agency under a contract.”

This can only be pursued if a previous contract has been awarded through competitive bidding and if the supplier agrees to the terms of the procurement contract, according to Mr. Santiago’s letter, dated Feb. 12 and sent to BusinessWorld on Wednesday.

The PS is also proposing easier procurement rules for products used in innovation projects and research and development, including raw materials, substances, chemicals, and animals.

Mr. Santiago noted that competitive bidding is the primary method of procurement of government agencies under the law, noting that alternative methods of procurement often flagged when transactions come under scrutiny.

Senate Bill No. 2466, which was filed by Mr. Angara, aims to analyze current procurement modes, manage their risks, and establish a single electronic procurement portal. The measure would also make procurement from an electronic marketplace an option.

The committee also tackled Senate Bill No. 1123, filed by Senator Maria Imelda Josefa Remedios R. Marcos, which seeks to abolish the PS, who alleged that funds are often stalled at the procurement stage.

The DBM has been pushing to amend the procurement law, seeking the adoption of a single electronic portal known as the Philippine Government System for all procurement activities.

The cash utilization rate of government agencies at the end of 2023 was 98%, it said earlier this month.

Mr. Angara cited the need to improve procurement since many agencies tend to go for the lowest bidder, risking delivery of subpar goods.

“We’re forced to buy those given the inflexibility in the law, which is obviously unintended,” he said at the committee hearing. — John Victor D. Ordoñez