PhilGEPS – Government’s Tool for Procurement Reforms and

Transparency

Public Procurement

Procurement is commonly defined as the acquisition of appropriate goods and/or services at

the best possible price to meet the needs of the purchaser in terms of quality and quantity,
time, and location. The procurement process formally starts from the point where the need
to make a purchase to deliver an objective has been identified, and its process ends when
the product has been used up or sold on, or the service contract has been delivered
completely and the supplier or contractor is paid in full. The procurement function makes it
possible for organizations to plan, acquire and distribute their needed resources - from
paper and pens, to mobility items, IT systems and applications, security contracts,
consultancies - to continue the business operations of the firm. In any
organization,procurement is the largest or second-largest category of expenditure. In
contemporary business parlance, the term procurement is an “umbrella” term which
includes in its sphere concepts such as logistics and inventory management, online
transactions, sourcing and outsourcing, supply chain management and operations, and
eBidding. Procurement is an essential function that helps shape corporate strategy and
success.

All organizations aim for good procurement practices and that means value for money –
that is, buying something that is fit for purpose, taking into account the overall cost. A good
procurement process should also be delivered efficiently, to limit the time and expense for
the parties involved.

Procurement is also a major activity in government. In the Philippines, hundreds of billions

of pesos is spent by the government to buy the goods and services it needs to operate the
bureaucracy, carry out projects and deliver services to its citizens. The World Bank, a
development partner, cites that for the past four years, an average of P121 billion worth of
infrastructure, equipment, materials, supplies, and services pass through government
procurement processes each year which accounts for 15% of the country’s annual budget.

Procurement plays a central role in delivering all Philippine government priorities – from the
free drugs and medicines at public hospitals, the public school buildings, desks and chairs,
to the guns and ammunitions of the military and police and the electronic systems that
supported our recently-concluded automated elections.

The Philippines’ procurement system used to be described as cumbersome and prone to

corruption as there were many outdated and inconsistent laws and many agencies dealing
with issuance of guidelines and procedures in procurement. The public perception was that
government procurement was characterized by fraud, inefficiency and lack of transparency.
As a result, there was very low trust and confidence in the public procurement system.

The Government Procurement Reform Act (Republic Act No.9184 s. 2003)

With the passage in January 2003 of the Government Procurement Reform Act (GPRA) or
Republic Act No. 9184 (RA 9184), the Philippine procurement system was rationalized and
harmonized with international standards and best practices.
RA 9184 espoused the principles of transparency, competitiveness and accountability. It
also mandates the use of streamlined procurement processes and monitoring of government
procurement activities by the public. More importantly, the GPRA created the Government
Procurement Policy Board (GPPB), as the central policy and monitoring body with the
following functions:

 Protect national interest in all matters affecting public

procurement, having due regard to the country’s regional and
international obligations
 Formulate and amend, whenever necessary, the implementing
rules and regulations and the corresponding standard forms for
procurement
 Ensure that Procuring Entities regularly conduct procurement
training programs and prepare a Procurement Operations
Manual for all offices and agencies of government; and
 Conduct an annual review of the effectiveness of the
Government Procurement Reform Act and recommend any
amendments thereto, as may be necessary

The GPPB acts as the oversight authority in all government procurement. It is headed by
the Secretary of the Department of Budget and Management as Chairman and the Director-
General of NEDA as Alternate Chairman. The Members of the Board are comprised of the
Secretaries or the authorized representatives of the Departments of Public Works and
Highways, Finance, Trade and Industry, Health, National Defense, Education, Interior and
Local Government, Science and Technology, Transportation and Communications, and
Energy. A representative from the private sector appointed by the President also sits as a
Member of the Board. Representatives from the Commission on Audit and from relevant
government agencies and professional organizations from the private sector are invited in
GPPB Meetings to serve as Resource Persons.

The GPRA likewise provided for the creation of the GPPB Technical Support Office (TSO)
which provides technical and administrative support to the GPPB.

Standard bidding documents and generic procurement manuals were developed by the
GPPB-TSO and anti-corruption provisions were incorporated in the law, including provisions
for sanctions and penalties for non-compliance with the rules and guidelines. To enhance
transparency in government procurement processes, the law also required the invitation of
observers from the Commission on Audit, the civil society or professional organizations and
from non-government organizations to sit in procurement proceedings conducted by
government agencies. The GPPB-TSO also embarked on a comprehensive training program
to educate, professionalize and improve the skills of government procurement practitioners.

Another important breakthrough in the Government Procurement Reform Act is the

provision mandating all government agencies to utilize the Government Electronic
Procurement System (now the PhilGEPS http://philgeps.gov.ph) as the single portal that
shall serve as the primary source of information on all government procurement. The
procurement process across all government agencies, from all branches of government, to
local government units and public schools and universities, now involves announcing and
advertising all procurement opportunities, inviting qualified parties to bid, evaluation of
bids, awarding of contracts, monitoring of delivery and performance and payment. The
whole process is recorded and posted electronically for others to see.
The Philippine Government Electronic Procurement System (PhilGEPS)

What has become PhilGEPS today had its beginnings as the Pilot Electronic Procurement
System (Pilot EPS) in November 2000. By utilizing the accessibility of the internet, the EPS
was established with the assistance of the Canadian International Development Agency
(CIDA) as a common portal for registration of suppliers and advertisement of bid
opportunities.

The passage of the Government Procurement Reform Act in 2003 further boosted the
importance of PhilGEPS. This law set forth the rules and regulations for
government0020procurement transactions as guided by the principles of transparency,
competitiveness, streamlined procurement processes, accountability, and public monitoring.
It required all government requirements from goods, consulting services to civil works to be
centrally posted through an internet infrastructure which will be called the Philippine
Government Electronic Procurement System (PhilGEPS).

With the implementation of RA 9184, all National Government Agencies (NGAs),

Government Owned and Controlled Corporations (GOCCs), Government Financial
Institutions (GFIs), State Universities and Colleges (SUCS) including Local Government
Units (LGUs) are mandated to use the PhilGEPS. Suppliers, manufacturers, contractors,
consultants are also required to register as well. Through the use of the PhilGEPS,
transparency in government procurement is enhanced since opportunities to trade with
government and the ensuing transactions are provided online. Information on changes in
terms of references, bid schedules and on the winning bidder and contract amount are all
accessible through the system. In addition, the electronic catalogue, which provides
information on pre-approved cost of commonly used items, will help government auditors
check that supplies purchased by a government agency are not grossly over-priced. Before
the enactment of RA 9184, bid opportunities costing 2M and above for goods and consulting
services and 5M and above for civil works should be advertised twice on two newspapers of
general circulation. With the new law, opportunities are now required to be advertised only
once in a newspaper of general circulation and posted continuously in the PhilGEPS for
seven calendar days. As a result, the government has been able to save close to Php 1.05
billion in newspaper advertisement expenses alone as of June 2014.

As of December 31, 2014, the PhilGEPS hosted bid opportunities posted by 23,668
government agencies and accessed by 65,544goods and services providers. A total of
2,745,639 bid notices have been posted by various procuring entities in the system.

The PhilGEPS is presently managed by an Executive Director III who reports to the
Procurement Service Executive Director IV and the Government Procurement Policy Board.
The PhilGEPS management office consists of 43 officers and staff who perform the following
critical tasks:

 Formulate, recommend and implement long and short range

plans and strategies relative to the PhilGEPS project
 Regularly report to the GPPB and PS-PhilGEPS Executive
Director IV on the status of the project
 Manage the contract/service level agreements with the
outsourced system developers and service provider
  Administer the PhilGEPS system including the registration and
provision of helpdesk services to the agencies and suppliers
 Develop and maintain the PhilGEPS Business Plan
 Monitor and evaluate the compliance of agencies and suppliers
in the use of the PhilGEPS; and
 Update and improve market research and promote the use of
the PhilGEPS for both government and private entities

The PhilGEPS has brought significant benefits to the government in terms of the following:

 Improved transparency in government procurement

 Enhanced competition and realization of value for money in
procurement
 Improved administrative efficiencies
 Reduction in procurement costs, including newspaper
advertisements
 Provision of audit trails through information posted in the
system; and
 Serves as a medium in implementation of government
procurement policies, transparency and good governance
measures
 The expansive database of information in PhilGEPS aids
government agencies in procurement planning and monitoring

Merchants – i.e. suppliers and contractors doing business with government derive the
following gains from using the system:

 Access to government bid opportunities 24 hours a day and 7

days a week
 Downloading of electronic bid documents
 Automatic notification, through the user’s email, of bid postings
and supplements
 Savings on newspaper costs, transportation and manhours
 Information on government bid projects is important in market
research and in making business decisions

The PhilGEPS has been benchmarked and studied by neighboring countries such as
Indonesia, Vietnam, Nepal, Bhutan and other countries such as Malawi, Tanzania, Papua
New Guinea and Sierra Leone who envision having their own central e-procurement system.
PhilGEPS officials have been invited to present the PhilGEPS program and experience in
various fora, symposia and other gatherings of world-renowned e-Procurement
organizations and practitioners such as those in the United States, South Korea and
Singapore and in global gathering of procurement experts here and abroad. In March 2015,
a study group led by the PhilGEPS Executive Director went to New Zealand to observe
reforms and efficiencies in that country’s procurement system. In all these international
gatherings, the efforts of the Philippine government in pushing for reforms in government
procurement were recognized and commended. Multilateral development partners like the
World Bank (WB) and the Asian Development Bank (ADB) acknowledge the fact that the
PhilGEPS is a viable instrument in the government’s efforts at improving efficiency in the
procurement function and has accepted the PhilGEPS for application on ADB and WB-
funded procurement projects. Development partners and a multi-stakeholder foundation like
CoSTPHILS also continue to support the PhilGEPS systems development, training endeavors
and communications activities by providing grants and technical assistance.

PhilGEPS presently offers the following functionalities:

 Electronic Bulletin Board

 Government Official Merchants’ Registry
 Electronic Catalogue
 Automatic Bid Notification
 E-Bidding
 Electronic Payment of PhilGEPS Fees and Purchase of Bid
Documents (for PS)

The modernization of the PhilGEPS is ongoing with the vision of making it the total provider
of eProcurement solutions to the government and its stakeholders. This includes the
installation of additional functionalities like a more integrated e-bidding system tied into the
government annual procurement plans and a facility for electronic payment to merchants,
purchase of bid forms and payment of other bidding fees. The contract was awarded in
January 2014 and the transition to the new system is expected by October 2015.

Good procurement is essential to ensure good public services, from buying goods and
services that work as they are supposed to, to achieving savings that can be ploughed back
into front-line services. PhilGEPS is committed to proactively participate in the challenges of
contributing to procurement reforms by maintaining a safe and secure internet-based,
open, and competitive marketplace for government procurement. PhilGEPS also embraces
the task in helping develop procurement professionals and partnering with other
government agencies to bring about reforms that will reflect our fervor to ensure that
procurement drives further advancement in our delivery of public services to match the
Filipinos’ rightly held high expectations for a government that serves the public’s best
interests.

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