Capitol violates procurement rules in P1.17-M medical supplies deal

By: Gerome Dalipe

The Iloilo Provincial Government violated procurement and state auditing rules in the bidding of P1.17 million worth of medical supplies.

This, after the Capitol’s bids and awards committee (BAC) split between two bidders the tied bidding items “based on their agreement,” the Commission on Audit (COA) discovered.

This practice violated the revised implementing rules and regulation of Republic Act 9184 (Government Procurement Reform Act) specifically on dividing tied bidders, state auditors said.

“There should be measures or mechanics to be placed to ensure that the result is free from any influence or biases and non-discretionary,” according to the 2018 annual audit report on the Iloilo provincial government.

Sec. 3 of Circular 06-2005 (Tie-Breaking Method) states that procuring entities are required to identify at the onset of the bidding process… a ready and clear measure to be used in the event that two or more of the bidders have been post-qualified.”

In similar cases, the measure determined by the procuring entity shall be non-discretionary and non-discriminatory such that the same is based on sheer luck or chance.

But in lieu of the pre-determined criteria set and declared in the bidding documents, the procuring entity may opt to bring the concerned bidders to agree on a better selection criteria.

The criteria should also be non-discretionary/non-discriminatory and is similarly based on sheer luck or chance.

But the Iloilo provincial government failed to follow the procurement rules, state auditors noted.

A review of the procurement processes showed that there were five line-item bids that received equal offer from Endure Medical Inc. and Euro-Med Laboratories Philippines, Inc. totaling to P1,175,670.

However, verification by auditors on how the BAC broke the tie disclosed that it was divided by two bidders upon agreement.

“Dividing tied items between the two suppliers based on their agreement, without any selection criteria or non-discretionary measure contradicted the nature of the selection criteria required (by the Government Procurement Reform Act),” read the COA report.

The provincial accountant opposed the payment of the purchase order on July 19, 2018, citing the BAC’s tie-breaking method for non-compliant to the non-discretionary based on sheer luck or chance.

The non-discretionary nature of the tie-breaking method is aligned to the competitiveness principle on government procurement, the auditors said.

“It gives equal opportunity for both bidders, free from any biases or favor, thus it should be based on sheer luck or chance,” the COA said.

In the report, the auditors asked the governor to direct the BAC to incorporate in the bidding documents instructions to prospective bidders a ready and clear measure to be used in the event that two or more bidders have been post-qualified.

Likewise, the bids committee is tasked to furnish the auditor minutes of meeting and other documents showing the agreed mechanics or measure used in the tie-breaking scheme.