What kind of animal is PS-DBM?

By Atty. Rolando “Nonoy” Andaya Jr.

I write this in the hope of clarifying the issues surrounding the controversies of my former department, the Department of Budget and Management (DBM) and its attached office the PS-DBM. Central to this discussion is RA 9184 otherwise known as the Government Procurement Act and its Implementing Rules and Regulations, of which I am the principal author. Upon its enactment, I was also the first DBM Secretary to implement the law and craft its implementing rules and regulations together with the concerned agencies. So, I can say that I know something about this topic.

PS-DBM is an office attached to the DBM and its head is solely appointed by the Secretary, no need for a presidential approval. Its primary task is to merely procure the office supply needs of the entire bureaucracy, like bond papers, rubber bands, paper clips and printer inks. It was created so that other offices can concentrate in carrying out their annual procurement activities in line with their mandate and expertise. This way, bulk discounts can also be availed in favor of the government. Given its menial task, it is manned mostly by casual and job order employees. No accountants, lawyers and engineers are hired.

In 2017, instead of undertaking their annual procurement activity, line departments started pouring in funds to PS-DBM. This is contrary to their annual investment plan, which is submitted to Congress together with their budget proposals. The annual investment plan contains the procurement activities to be undertaken by their respective departments for a particular year. It is their budget which they should implement. This massive transfer of funds to PS-DBM was never envisioned nor intended by the law. No matter the revisions in the IRR, to accommodate procurement activities other than office supplies, the original intent of the law cannot be altered.

Case in point is the procurement activities undertaken by PS-DBM for DOTr in the amount of P300 billion in 2018. This amount is almost the entire budget of the DOTr for that year. PS-DBM has no technical people on hand to handle this amount nor does it have the technical knowledge to ascertain the specifications needed in the procurement of trains, subways, airplanes, ships, construction of airports and seaports. What work is then left to DOTr and their technical people and experts? Mind you, this is just one department that transferred funds for PS-DBM in 2018, there were others. Last 2018, Congress invited the then Secretary of DBM to shed light on this seemingly anomalous activity.

Unfortunately, our repeated invitations were not acknowledged. It’s a pity. All of these present political controversies could have been avoided had the Secretary just attended and explained the issue. Likewise, the Commission on Audit (COA), as early as 2018 red-flagged this practice. The concerned auditors of COA were responsible enough to attend the aforesaid congressional investigations and affirmed what I have been saying.

In the present issue, COA is absolutely correct in saying that there is a lack of a key document in which the absence of such, allowed the anomalous transaction to happen – the Memorandum of Agreement (MOA) between the Department of Health (DOH) and PS-DBM regarding the fund transfer and the manner of utilization in the procurement of face masks and face shields. It is the MOA which would have specified the pre-qualifications of all potential bidders thereby weeding out the legitimate suppliers from bogus ones. DOH, on its own, previously tried to procure these face masks and face shields in the amount of P9 billion using the DOH’s standard when it comes to medical supplies. Unfortunately, none of the bidders qualified in terms of capitalization, track record and availability. So, it comes as no surprise that when the funds were transferred, without a MOA spelling-out the needed standards, an under-capitalized bidder with no track record won the contract.

Simply stated, all the safeguards mandated by law were left outside the door. The President already publicly admitted that he ordered the procurement of these medical supplies not to undergo the usual bidding but instead undertake a negotiated bidding. He is correct, for it would be faster and would be allowed by law. But why was his order disobeyed? Because, if they went through the process of a negotiated bidding, the standard of pre-qualifications of DOH suppliers likewise would have to be followed and the eventual winner would never have qualified. So, contrary to the instructions of the President, a regular bidding without a MOA was undertaken. This is the situation now.

I hope this would add clarity to the issue and lead to more specific questions propounded by our investigators. I likewise call upon the senior officials of the DBM to tell the truth when asked to testify in the proper forum.