DBM should purge government suppliers

The Trade Union Congress of the Philippines (TUCP) recently urged the Department of Budget and Management (DBM) to purge its list of accredited suppliers under the government’s Electronic Procurement System (EPS), amid reports it is full of prohibited sellers of goods and services to the public sector.

The DBM should see to it that only firms dutifully complying with Philippine statutes, including labor and social security laws, are authorized as suppliers under the EPS.

Firms that are delinquent in paying their dues and their workers’ contributions to the Social Security System, Philippine Health Insurance Corp. and the Pag-IBIG Fund should be removed from the list of accredited suppliers until they update their payments.

Government should not give any business to firms remiss in fulfilling their obligations to their workers.

The DBM must also ensure that every accredited provider fully complies with the Procurement Reform Law, or Republic Act 9184, which requires that only entities at least 60 percent-owned by Filipino citizens may bid to supply goods and services to the government.

Take for instance the case of Roche Philippines Inc., a 100 percent Swiss-owned entity, which was anomalously awarded by the Department of Health (DOH) the contract to supply millions of pesos worth of Influenza A(H1N1)-testing machines.

The DOH never conducted any due diligence on Roche’s pre-qualification papers. It simply relied on Roche’s EPS accreditation. But Roche was irregularly EPS-certified. Roche cleverly submitted its obsolete 1962 incorporation papers, which indicated it was at least 60 percent-owned by Filipinos.

Had the DOH bothered to check Roche’s 2008 filings with the Securities and Exchange Commission, they would have easily discovered that Roche is already 100-percent owned by Swiss nationals, and thus an ineligible supplier.

We have a procurement law. The DBM and other agencies are duty-bound to fully enforce it. Otherwise, the law will lose its integrity. Without integrity, the law can be disregarded by anybody.

The DOH is investigating allegations that officials at its Research Institute for Tropical Medicine (RITM) had schemed so that Roche would corner the supply of the flu-testing machines. Roche lost in the open and competitive bidding for the contract. But Roche won anyway after RITM officials moved to acquire the machines via a negotiated purchase.

The onus is on the DBM to rigorously screen every supplier accredited under the EPS. This is crucial because most government agencies now rely on EPS certification to clear suppliers, even if the procurement is not done through the EPS.

Still, every government agency should conduct its own due diligence on all the credentials submitted by prospective suppliers. –Ernesto Herrera, Manila Times