How the Bidding Loot is Divided

It’s the now the most awaited time of the year when government workers revel because of the fat bonuses they expect to receive from their respective agencies in time for the holidays. 

But did you know that there are some state workers who have more reasons to celebrate than their private sector counterparts?

I am referring here to some more ‘enterprising’ members of the government’s various Bids and Awards Committees (BAC).

Especially since December is also the time of the year when government agencies bid out projects that have yet to be awarded, but are already funded.

The move is to beat the deadline to allocate its project funds before the year ends, otherwise it would be reverted back to the general fund. 

Hence, this is also the time of the year when BAC members are kept busy formulating the eligibility requirements and technical specifications for its various public biddings.  

 

Start of corruption in public biddings 

Corruption in public biddings starts shortly after the formulation of eligibility and technical requirements. 

As we all know, the Philippine Government Procurement Law provides standard criteria for the eligibility requirements and technical specifications for prospective bidders to comply.

The BAC is however, given the discretion to decide on issues concerning compliance of prospective bidders to its eligibility and technical requirements, in cases where a particular bidder submits a product other than what is prescribed in the specs.

The BAC, under the law, is given the discretion to choose the equivalent of its prescribed eligibility and technical requirements. 

Hence, tailor-fitting of technical specifications and eligibility requirements to suit a favoured bidder could be possible.

 

How the loot is divided

There are several players involved in the BAC scheme of corruption. 

For example, in one government agency, the BAC plays a key role in putting order to its corruption scheme by facilitating the smooth conduct of the bidding. 

In every bidding there is the so-called “captain ball”. The “captain ball” is the bidder that is supposed to offer the lowest and most compliant bid and therefore should be awarded with the project. 

But the “captain ball”, depending on the project, shall, however, shell out an amount that would, at least, be equivalent to 10% of the total project cost. 

Half of the 10% will go to an elected government official, while the remaining 5% will be divided among the BAC members and losing bidders. With the assurance, of course, by the BAC that losing bidders will also be the “captain ball” in other projects scheduled for bidding. 

In another highly-funded government agency, its recent biddings for billions of pesos worth of supplies and equipment, hundreds of millions of pesos allegedly changed hands, representing the supposedly 3% “standard operating procedure” (SOP) or “tara” in Customs parlance  in the said agency. 

 

Tighter monitoring of BAC needed

The BAC is supposed to protect the government’s interest in the conduct of public biddings. Thus, it is given wide latitude of discretion, if only to enable it to flex its muscle in protecting government interests. 

But it is also this flexibility and latitude of discretion that could be abused by some BAC members for their personal gains. 

Take for instance the BAC’s discretion to impose the “Domestic Preference” provision of law that would allow it to award a project to the second lowest bidder.

The scheme can be done if the lowest bidder’s offered goods are imported and the second lowest bidder’s goods are locally manufactured, and the second lowest bidder agrees to accept the contract based on the lowest bidder’s bid price. 

There are lots of concerns that the BAC should, however, take into consideration in deciding to award the project to the second lowest bidder, such as its production capacity and capability among others. 

That is why the BAC should be transparent in the conduct of its biddings and private sector involvement should be further enhanced.

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Saturday, 20 January 2018
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