Setting the record straight

The procurement service of the Department of Budget and Management has been on the hot seat in the past few weeks in connection with alleged irregular procurement of various COVID-19 pandemic-related supplies.

So what is PS-DBM and why was is it the one tasked to buy personal protective equipment (PPE) and other supplies when the government was at a mad scramble to immediately purchase the items at the early stages of the pandemic when they were in short supply?

Remember those days when we ourselves would hoard N-95 face masks even if they costs so much, made our own face shields because the cheap, Hengde ones were not yet available or buy even the ones used in construction? In fact I still have many of those with me, unused, because now they look weird.

According to the website of the Commission of Audit, the PS-DBM was created under LOI 755 relative to the establishment of an integrated procurement system for the national government and its instrumentalities, and is tasked with identifying supplies, materials, and other items, including equipment and construction materials, which can be economically purchased through central procurement. It is also supposed to determine the technical specifications of items that it will procure for agencies of the government; identify the sources of supply which are able to offer the best prices, terms, and conditions; and purchase, warehouse, and distribute items for resale to agencies of the government, including GOCCs.

The said office is also mandated under the Government Procurement Reform Act (GPRA) to administer the government electronic procurement system or G-EPS and all procuring entities are directed to purchase common-use supplies from the PS-DBM.

At a time when supply was scarce and prices were high, PS-DBM was the one tasked by the Department of Health to purchase PPE sets and other pandemic-related supplies to be distributed to healthcare workers at the start of the pandemic.

But in its 2020 report released last month, the COA noted deficiencies in how the DOH handled around P67 billion worth of COVID-19 funds and flagged a number of purchase contracts entered into by the PS-DBM with private suppliers. Aside from the DOH, other agencies have also coursed their procurements via the PS-DBM.

The DOH explained that it had to transfer funds to the PS-DBM for the procurement of COVID-19 items early in the pandemic since it was already leading government’s response to the health crisis, not to mention having to attend to community needs after Taal Volcano erupted in January last year. On top of that, the President had ordered the DOH to produce the PPEs, masks, and shields inspite of the global shortage.

Now, both the DOH and the PS-DBM are being questioned for irregularities in terms of the transfer and use of COVID-19 funds and for allegedly buying the items at high prices.

But do high prices translate to overpricing? At that time, N-95 and other medical-grade face masks and shields were being sold at steep prices because all over the world, governments and their constituents needed it and were stocking up on supplies.

During a hearing of the House Committee on Good Government and Public Accountability last Wednesday, COA chair Michael Aguinaldo reiterated that there was no overpricing, no corruption proven, and no ghost delivery involving the procurement of various COVID-19 pandemic supplies conducted by the PS-DBM.

He said nowhere in the COA report does it say that there was overpricing, and that the observations relate more to inventory management.

The House committee is looking into the procurement of various goods and supplies procured through PS-DBM for the DOH and which were used in the government’s pandemic response.  Earlier, the Senate held a series of similar hearings after COA published a report containing its initial findings over the transfer from DOH of P42 billion to the  PS-DBM.

During the same hearing, House Deputy Speaker Rodante Marcoleta asked DOH resident auditor Rhodora Ugay about the Senate Blue Ribbon Committee ignoring the fact that COA never declared that the subject purchases were tainted with corruption. To this, Ugay said that as far as the DOH audit report is concerned, there were no observations of overpricing in the DOH annual audit report.

Warren Liong, former director of PS-DBM and now overall deputy ombudsman, explained that the government, at the beginning of the pandemic last year, purchased masks at P27.72 each, lower than the P28 suggested retail price amid the price freeze set by the DOH and the Department of Trade Industry.

Liong said there is no truth to reports that there was a local manufacturer who offered to sell masks at P13.50 each and who could deliver by April 2020, at the onset of the pandemic.  The World Health Organization reported then that there was a backlog in the supply of masks for up to six months.

Liong explained how the pre-pandemic eight-piece sets of PPEs in 2015 and 2016 were purchased by the previous administration at P3,500 and P3,864 each, respectively, while the more complete PPEs were purchased in May 2020 for P1,910 only.

He said that apart from PS-DBM officials and those from other agencies directly involved in the purchase, no other personalities had a hand in the said multi-billion purchase of COVID-19 supplies.

Committee chair Michael Edgar Aglipay asked Liong about allegations that Sen. Christopher Lawrence Go was involved in the said procurement, and since Liong was close to Go, there were talks that there were some influential people behind the PS-DBM decisions, to which Liong replied that Go was not involved, and  that he was not close to the senator nor did he work under him, and that nobody influenced the choice of suppliers.

A number of things may have to be corrected. As mentioned by Senate President Pro Tempore Ralph Recto, there is something wrong with the common practice of government agencies transferring funds to the PS-DBM to purchase items which the agencies can procure themselves. Note, however, that the LOI creating the office tasked to implement the central procurement system for the use of other government agencies was issued way back in 1978.

Maybe, it is about time to review the mandate of PS-DBM and make the procurements and transfer of funds more transparent. Government has to, likewise, come up with a better system of addressing emergency situations of a national scale.

But could PS-DBM and the DOH have bought the items at a lower price by going through the long process of bidding out the contracts, and observing each and every procurement protocol at a time when we badly need supplies that are in short supply, and which everyone needs to have?

Indeed, it is difficult to see and act clearly when one is in the middle of something that is totally unexpected and when one has to act in haste. On hindsight, we always have a better view and can say we could have done things better.

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