The passage of Republic Act No. 12009, or the New Government Procurement Act (NGPA), introduces transformative reforms to the government procurement framework, building upon Republic Act No. 9184, or the Government Procurement Reform Act (GPRA). While the NGPA resolves many inefficiencies of its predecessor, it raises new challenges that may complicate its implementation.
SUSTAINABILITY GOALS IN PROCUREMENTA landmark feature of the NGPA is its explicit incorporation of sustainability into procurement processes. Procuring entities are mandated to establish sustainable public procurement programs aimed at achieving value for money on a whole-life basis while benefiting society and the economy and minimizing environmental impacts.
This progressive agenda introduces opportunities but also raises concerns. How should agencies balance sustainability goals against cost-efficiency? If a more sustainable option is significantly costlier, should it be prioritized despite budgetary constraints? Furthermore, the varying capacities of agencies to assess environmental and social criteria effectively could lead to inconsistent implementation.
SIMPLIFICATION OF PROCUREMENT PROCESSESThe NGPA reduces administrative burdens and increases efficiency, particularly in small-value procurements and alternative procurement methods. Under the GPRA, small-value procurement applies to goods, infrastructure projects, and consulting services not covered by the “Shopping” method. Financial thresholds depend on the procuring entity: national agencies, government-owned and -controlled corporations, government funding institutions, state universities and colleges, and the Autonomous Regional Governments have a limit of P1 million. For local government units, thresholds vary from P1 million to P50,000.
The thresholds for small-value procurements have been adjusted to account for inflation and project complexities, enabling simpler procedures for smaller projects. An evaluation may now proceed with just one quotation if the amount does not exceed P2 million, subject to periodic review and adjustment of the threshold.
The NGPA also expands the use of alternative methods, such as competitive dialogue, unsolicited offers with bid matching, and direct procurement for science, technology, and innovation. It grants the head of the procuring entity greater discretion to approve alternative methods in justified cases, including emergencies.
However, this flexibility raises concerns about accountability and transparency. Simplified procedures, while efficient, could inadvertently weaken oversight and increase the risk of abuse. Safeguards must be implemented to prevent these streamlined processes from undermining procurement integrity.
THE FIT-FOR-PURPOSE APPROACHA key innovation under the NGPA is the adoption of the fit-for-purpose approach, which replaces the one-size-fits-all procurement model with tailored solutions designed to align closely with project-specific requirements.
Section 3(d) of the NGPA emphasizes proportionality, ensuring procurement conditions are scaled to the complexity of the project. Section 7 mandates the incorporation of lifecycle considerations, including environmental and economic impacts, into procurement planning. This approach extends the focus beyond immediate costs to ensure sustainable value throughout a project’s operational life.
Section 26 introduces innovative procurement modes, such as competitive dialogue and unsolicited offers with bid matching. These modalities offer flexibility in addressing complex or innovative projects that may not fit traditional procurement methods.
While this approach promotes efficiency, it also raises potential challenges. The discretionary nature of tailored procurement decisions may lead to inconsistencies across entities or even misuse without robust oversight mechanisms.
DIGITAL TRANSFORMATIONThe modernization of the Philippine Government Electronic Procurement System (mPhilGEPS) represents a significant leap forward.
The integration of e-bidding and e-marketplace features streamlines procurement by enabling electronic payments, interconnecting government databases, and providing a secure audit trail of electronic transactions. These enhancements reduce fraud opportunities and ensure traceable procurement activities.
The modernization reduces compliance burdens for bidders by allowing the submission of a PhilGEPS Certificate of Registration and Membership in lieu of multiple legal, technical, and financial eligibility documents.
Despite these advantages, the reliance on advanced digital technologies assumes universal access and proficiency among government entities and suppliers. Smaller or remote entities may lack the infrastructure or technical capacity to fully utilize mPhilGEPS, potentially creating disparities in participation and access.
CHALLENGES IN IMPLEMENTATIONWhile the NGPA introduces substantial improvements, its implementation raises several challenges:
1. Balancing Goals: Sustainability objectives may conflict with cost-efficiency, requiring clear guidelines on prioritization.
2. Oversight in Simplified Processes: Streamlined methods risk weakening transparency and accountability, necessitating stringent controls.
3. Capacity Disparities: The fit-for-purpose approach and digital modernization depend on the technical competence of procuring entities, which may vary significantly.
4. Equity Concerns: Digital systems like mPhilGEPS must be accessible to all stakeholders, including smaller agencies and less-resourced suppliers, to avoid exclusion.
CONCLUSIONThe NGPA represents a forward-thinking approach to public procurement, addressing inefficiencies in the GPRA while incorporating sustainability, efficiency, and digital transformation. However, its success will depend on tackling challenges posed by its innovative features, particularly balancing flexibility with accountability and ensuring equitable resource access.
While the NGPA positions the Philippines as an exemplar in transparent and sustainable procurement, its effectiveness relies on robust implementation, capacity-building measures, and resolving open-ended problems in real-world scenarios. Addressing these issues will enable the NGPA to foster progress in government procurement.
The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.
Eric Leonardo L. Cembrano is an associate of the Corporate and Special Projects department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).
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