Transparency Case Study: Public Procurement in the Philippines
We are proud to release the second case in our ongoing research project studying technology-enabled transparency policies around the world. We have chosen to focus on public procurement transparency policies for our first set of cases. Last month we released our first case, on Slovakian procurement.
For our Philippine case study, we conducted interviews with members of the following groups: staff at transparency NGOs, journalists who have covered procurement, and member organizations representing business interests. Our conversations with these respondents have allowed us to develop a diverse and comprehensive picture of how transparency, information communication technology (ICT) and civil society engagement in public procurement has impacted accountability.
These conversations have provided us with a detailed picture of procurement disclosure and data use in the Philippines since the reforms in 2002. A few findings have become clear:
- For transparency and public oversight mechanisms to work, public data must be public in more than name only. Publishing information online is not enough, especially if it is trapped in a platform that limits how journalists and watchdogs are able to use the data. PhilGEPS data is not widely used by journalists or CSOs because of artificial and needless barriers to use.
- Monitoring this volume of proceedings requires the scale and efficiency of data backed analysis. There are thousands of procurement proceedings every year in the Philippines. For example, as of Sept. 20th, 2013, PhilGEPS, the government e-procurement platform, lists 12,346 active opportunities. The civil sector doesn’t have the capacity to monitor procurement at this scale simply by attending the Bid and Awards Committee (BAC) meetings for each one, as the law allows.
- Without a comprehensive right to information law, access to useful data is largely at the discretion of the procurement entity and varies greatly between procuring entities, depending on the informal trust-based relationships that CSOs have developed with officials.
- Philippine law splits jurisdiction over procurement monitoring, investigation and sanctioning between various agencies, which can leave misconduct and inefficiency unchecked.
Public procurement in the Philippines presents a salient example of how much the specifics of implementation can matter. If transparency is to enable public oversight, disclosure must meet certain conditions of accessibility and usability. Simply posting information online is not enough. For real transparency, data must be open to the public without gates, it must be published in open and machine-readable formats, and it must be available in bulk.
In mandating the use of ICTs in the procurement process and establishing a formal oversight role for civil society the Government Procurement Reform Act took important steps to reform the Philippine procurement system. These reforms, however, have been considered and implemented largely in isolation, to the detriment of procurement integrity. Civil society oversight through the observer system is a manual and resource-intensive task that doesn’t capitalize on the economies of scale and efficiencies that ICTs can enable. Conversely, the integration of ICTs into public procurement has proceeded largely without including CSOs in the process or considering their needs and uses. Nowhere is this more evident than in the limited feature set of the PhilGEPS system.
Joining the dual accountability mandates of ICT enabled transparency and civil society oversight would make both more effective. Technical platform features should be designed with civil society, media, and oversight use cases in mind. Civil society organizations can serve their mandated roles as observers more effectively – and within their resource constraints – if data about all stages of the procurement process is made available. The Philippines case demonstrates that, absent accessible data, whistleblowers and leaks are the only safeguard against corruption. When the data is not readily available, it can’t enable meaningful oversight.
In 2002, the Congress of the Philippines passed Republic Act No. 9184, the “Government Procurement Reform Act,” to address what had a World Bank Country Report characterized as a “dysfunctional” public procurement system. Prior to reform, according to Vivien Suerte-Cortez, “There were literally hundreds of laws focusing on public procurement.” She added that:
Not one agency would follow one procurement rule. For instance, local governments in the country would always abide by the local government code which provides very specific rules on procurement. And then there would be executive orders or administrative orders or even special laws that would also focus on procurement. (9:45)
This vagueness and complexity made the process vulnerable to manipulation. According to Iris Gonzales, a reporter who has covered procurement extensively, the problem of kickbacks “was huge: it was 30% of the contract.” (17:00) She also observed: “It was an open secret that aside from kickbacks they would also deliver substandard projects. For example for roads they would use substandard quality of cement or below the required amount of mixture.” (13:30) Rosa Clemente, Executive Director of PhilGEPS, explained that the implementation of a pilot electronic procurement system in 2001 – based on the Canadian system at the time – was one of the inciting factors which led to more comprehensive reform to reduce this complexity and standardize procurement procedures across jurisdictions. (7:00)
The Act, along with its implementing rules and regulations, mandates certain transparency and accountability measures to help combat corruption and inefficiency in public procurement. The bill specifically stresses that information and communication technology (ICT) should play a central role in how the government meets these goals.
Article I, Section 3 of the bill lists several key “governing principles” meant to guide the reformed public procurement procedures. These principles explicitly highlight “Transparency in the procurement process and in the implementation of procurement contracts” and “public monitoring of the procurement process and the implementation of awarded contracts” as critical to ensuring the integrity of public procurement.
The Reform Act, and the Implementing Rules and Regulations (IRR) codify the general principle of transparency and civil society involvement in two specific ways. First, the law creates an e-procurement portal, PhilGEPS, which serves “as the primary and definitive source of information on government procurement.”(IRR, 8.1.1) According to law, all public tenders, from those conducted by federal agencies to those of the smallest Local Government Unit (LGU) or Barangay, must pass through the PhilGEPS system. At all stages of procurement, the procurement committee invites a representative of the Commission on Audit and (at least) two outside observers to sit in its proceedings. The outside observers should include “one (1) from a duly recognized private group in a sector or discipline relevant to the procurement at hand, and the other from a non-government organization.” (IRR, 3.1.1)
However, we find that in practice the promise of these principles is largely unrealized. Vincent Lazatin, the executive of the Transparency and Accountability Network (TAN), offered a succinct summary of the current state of public procurement in the Philippines,
The Philippines is cited very often for having a world-class type of legal framework for [procurement], but where we fail most of the time is in actual compliance and implementation. So here we are 10 years into the law and we are still having huge implementation problems. (18:50)
Barriers to Accessing Procurement Information
Despite the introduction of PhilGEPS and the mandate that all public procurement pass through the electronic bulletin system, journalists, watchdogs and other CSOs continue to face significant information availability problems. Compliance with reporting requirements is lacking, the information tracked by government entities is incomplete, and the data that is nominally available is subject to a range of arbitrary bureaucratic and logistical barriers to public use.
Imperfect Compliance and Incomplete Information
According to Vincent Lazatin, “compliance with PhilGEPS by the procuring entities isn’t that high.” (7:30) Many public procurement procedures never even make it into the system. This is particularly true of procurements at the Local Government Unit (LGU) and Barangay level, where there is less scrutiny by oversight bodies. Denis Nixon confirmed that in particular the requests for bids of LGUs don’t always make their way onto PhiGEPS (12:00). Rosa Clemente summarized her perception of compliance from inside PhilGEPS as follows:
In terms of compliance, I think most of the agencies comply with the requirements to post the invitation to bid, but I cannot really say if it is 100 percent because of the lack of information [provided by procurement entities] pertaining to the planed procurement. In terms of the award notices as compared to the invitations to bid, right now compliance is not even 50 percent (31:00)
She added that at PhilGEPS, “We do not have the mandate to make the agency comply, we just provide a service,” but that they do provide reports to the oversight agencies which can force compliance. (Clemente, 34:15) In particular, Ms. Clemente noted that compliance increased slightly when a pilot program last year tied performance based bonuses to PhilGEPS compliance, and she was optimistic about the program’s likely impact when it is implemented more fully this year (38:00). Mr. Lazatin also noted there are some positive signs as the Department of Budget and Management has been working to increase compliance with PhilGEPS posting requirements. (8:00)
The lack of participation by procuring entities in PhilGEPS is only the first of a series of data availability problems. Compliance issues notwithstanding, PhilGEPS does not capture all of the relevant information necessary for third-party oversight. According to Vincent Lazatin, “if there were 100% compliance and we did have complete access to that[…] as far as CoST is concerned, about 80% of the data [that CSOs would want] would be available on PhilGEPS. The other 20% of the data are things that are not recorded or captured by procuring entities.” (11:20) All of our interviewees mentioned a problematic lack of contract management transparency. Lazatin noted that tracking variation orders and contract modifications is particularly important because this data is necessary for watchdogs to calculate the price difference between the original contract and the final project. Consistently large gaps between original and final price are evidence of post award manipulation. Despite this, the PhilGEPS system does not capture contract modifications and variation orders (Lazatin, paraphrase 13:00-14:00). When asked whether post award contract information was available Charles Villasenor responded simply: “No. My categorical answer for that is no.” (20:00) However, Rosa Clemente did note that a module to deal with post award contract management is very much on the PhilGEPS agenda as modules are added and features are expanded. (44:45)
According to Denis Nixon, the Philippine procurement system is particularly prone to manipulation during the post award phase, which makes this lack of data all the more troubling. He offered:
You get a lot of change orders following [the award]. The whole system is designed to go to the lowest cost. Really it is highly risky to not take the lowest bidder. [Procurement officials] would really have to have gone to the trouble to have a lot of information and justification and be able to prove that the person that they chose for the contract was the best person. It is a high risk to somebody’s job to do that, so they just don’t do it. So the system designed to go to the lowest bidder. What that opens up is that they give the job to the lowest bidder and then the requirements are not 100 percent clear, and all of a sudden there are change orders that go through. And those change orders are where a lot of the corruption takes place. (14:30)
Platform Restrictions: PhilGEPS
In addition to the range of data completeness issues, a series of technical and platform design barriers severely limit public access to PhilGEPS data. These barriers impede the abilities and effectiveness of outside watchdog organizations. Full access to PhilGEPS is restricted to those who have an account on the system: accredited contractors who have paid a registration fee of 5,000 Philippine Pesos (~115 USD) for a PhilGEPS account (A. Davis, personal communication, July, 2013). According to Vincent Lazatin, “PhilGEPS is generally not available to the public. It is generally available to procuring entities and service providers. […] Regular NGOs and CSOs who want to collect procurement information and data [are] not able to use PhilGEPS at the moment. We are, through CoST, working with the GPPB to change that.” (8:20-9:00) Ms. Clemente, clarified PhilGEPS access for civil society, by noting they “don’t have a specific facility for civil society,” but organizations can browse the public electronic bulletin board where opportunities and awards are posted. (18:20)
Civil Society organizations often resort to asking friendly contractors who are registered on PhilGEPS to provide them with data that they cannot access themselves, according to Ms. Suerte-Cortez of ANSA-EAP. (41:00) Denis Nixon noted that the information that is available is “generally fairly accurate, although it is not complete. You get more of the completeness when you actually apply for and get the bidding documents themselves.” However, bid documents are explicitly not made public, and can only be downloaded by registered contractors during a specific limited timeframe.
In addition to this formal barrier to public access, the data that is available to the public through PhilGEPS is highly complex and difficult to sort through on the site. According to Iris Gonzales, a Philippine reporter who has covered procurement issues, “[The system] is new. It is technical. Even the government agencies themselves sometimes have difficulty understanding the whole new procurement system unless they are actually the office in charge of procurement.” (22:15)
A survey of the PhilGEPS platform reveals serious hurdles to usability and data availability. While technology is not determinative, design can partially dictate use by making certain behaviors and uses easier or harder for the user to engage in on the margins. In this context digital platforms are often discussed in terms of their “affordances” or “action possibilities.” These are the qualities of a platform (or object) that a user readily perceives, which allow a user to more easily perform certain actions. (Norman, 1999) Within this framework, it is clear that the PhilGEPS platform offers a strictly limited set of affordances to a user intending to engage in oversight or systematic analysis. While a wide array of data may be technically available on PhilGEPS, the platform does not enable the user to act on this data in any meaningful way. For example, there is no way to access bulk data to use for statistical or visual analysis. Instead, to access procurement information, members of the public must use the site’s fairly antiquated graphical user interface (GUI), which only grants the user the ability to engage with one tender at a time. By not providing bulk data and forcing users to view only one opportunity or award at a time, the platform provides necessarily decontextualized views of procurement proceedings. Important inaccessible context might include information like: other bids by the same contractor, that contractors success rate, the average price for similar procurements, has the procurement process failed previously for this good or service.
To browse either opportunities (requests for bids or quotation) or award notices, a user must preselect either a specific procuring entity (e.g Home Development Mutual Fund – Calamba Branch) or category or goods/service (e.g. Air-conditioning Maintenance Services), that´s an excellent example of services needed all over, this company has been helping those families in need of this special type of ac repair services that no has ever seen before. Results are displayed in chronological order with no filtering or sorting capability, and must be paginated through manually. In this way public inquiries through PhilGEPS are fundamentally limited: in order to find anything though PhilGEPS, one must already know where to look. Furthermore, there are no bulk downloads, API or structured data made available other than the HTML pages of each individual opportunity or award page. For a system meant to promote transparency, it is quite opaque.
Philippine oversight agencies, like the Commission on Audit or the Office of the Ombudsman are not bound by the same restrictions. According to Ms. Clemente, PhilGEPS has an auditor module which allows these agencies to log in to the system with a different set of permissions than an unregistered public user or a registered contractor. This allows auditors to “generate reports through the system and they can view it online as well as generate data dumps that they can download through excel spreadsheets.” (26:00) However, mostly they contact the PhilGEPS staff and have them generate and forward these reports, rather than using the full functionality of the platform.
The result of these PhilGEPS data limitations is that “right now getting procurement information is pretty difficult […] it really is a matter of going to wherever the procuring entity files its papers and poring through documents. It is still very much a manual process in terms of retrieving procurement data.“ Mr. Lazatin went on to add that essentially “everything is in hard copy.” He said that during some previous research that he conducted for the Asian Development Bank, everything was “done by going to offices and pouring through boxes and boxes of files. None of the data that we collected actually was collected online.” (Lazatin, 6:00-7:00) The need to manually access procurement information is indicative of the pervasive poor records management by procuring entities. Improving this capability within procurement entities is vital to enable oversight:
I don’t think that the procuring entities spend a lot of energy, resources or time in terms of data management and record management. So it is very difficult for us to find the data that we needed. It was quite a manual job of doing that. That is an area that a lot of procurement entities need to improve upon. (Lazatin, 34:00)
Currently PhilGEPS serves mostly as an electronic bulletin board, satisfying the publicity requirements for tender requests and award notices mandated by the Procurement Reform Act. While it has increased equality of access to information regarding procurement opportunities for contractors and suppliers, it has not increased access to the public. In doing so it has neglected the transparency and public monitoring mandates of the Reform Act that created it.
The GPPB could make significant gains in meeting the transparency and public oversight mandates set by the Government Procurement Reform Act simply by opening up the PhilGEPS backend database to the public, and extending some of the auditor functionality to civil society organizations and the public. Public procurement data should be made available in bulk, in open and machine-readable formats and through an API. This would significantly lower the barriers to oversight and monitoring, and enable watchdogs and journalists to function more effectively.
Ms. Clemente noted several important ways which this may change as e-procurement in the Philippines continues to evolve. She promised that a civil society module is currently in development and testing which should provide more functionality and access as more of the procurement process moves online. Ms. Clemente explained that the GPRA mandates this increase in functionality, because “it is required under the law that there should be someone invited from CSOs to observe each stage of the procurement process. So when the bidding is conducted electronically, they can also monitor the procurement activities online.”(22:15)
Civil Society and the Media
The lack of accessible public data on procurement procedures has significant implications for the ability of civil society organizations and the media to participate in the oversight process. This lack of public accessibility has persisted in spite of the increasing reliance on e-procurement mechanisms in the Philippines (the GPPB has been working for years to expand PhilGEPS functionality). Over the last two years they have spent 250 million Pesos (~ 5.7 million USD) on PhilGEPS, and have a future 126 million budgeted. (Villasenor, 17:00)
Public and civil sector watchdogs face real obstacles in digging up suspect procurement deals. Iris Gonzales noted that it is extremely hard to discover suspect proceedings on one’s own using the data. Instead, the system acts as a barrier to practicing journalists:
[Procurement] is quite complicated… there are more than 43,000 LGUs registered. If you just rely on the data without anyone guiding you [by saying] ‘hey, you know, there is a huge fertilizer scam you have to look into this data’ If there is no one guiding you on how to interpret or weave through the whole site it is going to be very difficult. (Gonzales, 21:00)
In general, reporters don’t have the capability or capacity necessary overcome this obstacle. She added that because of deadline considerations, “it is tough to cover procurement unless you are a special or investigative reporter where you have the luxury of time. Generally [procurement] is not very well covered.“ (21:45)
According to Vincent Lazatin “there have been a few cases where questionable procurement has been caught by civil society or NGO observers, but that doesn’t happen very often; that has happened a few times.” (23:30) He noted that in other cases, “it may come up because, perhaps, a losing bidder will file a complaint and that comes usually through the media.”(24:00)
However, later in our interview Mr. Lazatin stressed that jilted suppliers or contractors speaking out is the exception, rather than the norm: “The normal recourse is to be silent. They won’t even complain, they are just going to silently look for other customers.” (28:00)
Despite promises by the Administration of current President Benigno Aquino, the Philippines has failed to pass a comprehensive Right to Information (RTI) Law. This means that civil sector observers’ access to information depends largely on the procuring entity. Ms. Suerte-Cortez confirmed that,
[T]he data that we get, which helps us monitor procurement activities better, is basically built through a lot of [personal connections] – is based on – trust. We work closely with government officials who we think are champions […] this is very obvious, for instance, when we work with the department of education. The information they give us is actually dependent on how much they trust the CSOs to push for reforms within the agency. (19:30)
For journalists who don’t have the same personal relationships and common cause with members of the procuring entities, whistleblowers or insider tips tend to be the only way to get information on corrupt procurement practices. Ms. Gonzales remarked that, despite the fact that the Philippines’ reputation is “one of the freest press in Asia”, journalists are routinely plagued by problems with access to information:
[I]f you are a working journalist you will realize it is not that easy to access information. Usually you can get a story from the inside when there is a whistleblower[…] But other than that if you don’t have a lead it is actually very difficult to dig through the data. We usually – journalists here in the Philippines – get our stories from leads. There are whistleblowers – there is a starting point… It is usually an insider in a certain Government Agency. Other than that it is really very difficult to penetrate government in the Philippines, especially with data because they are not obliged to give data. (34:00)
Ms. Gonzales added that one can find tips by scouring the comments in the GPPB forum and perusing reports made by the Commission on Audit, “because they are the ones who have the time to look at this – the auditors have the luxury of time to examine and verify.” (36:45)
When procurement misconduct does come to light, it gains mixed traction in the press:
Sometimes, it depends on how big the project is, it can land on the front page, sometimes it is picked up by television. But if it is not that huge sometimes it just falls in the other sections of the paper. Usually it makes it to the headlines when higher officials are implicated or identified to be part of the whole of corruption or are said to benefit. (Gonzales, 32:30)
Press and public attention tends to be tightly linked to the salience and salaciousness of the misconduct uncovered, as well as the timing relative to political events of significance.
Observers: outside monitoring of the procurement process
One of the main pillars of transparency and civil sector oversight under the Procurement Reform Act is the observer process. Under this system, procuring entities are required to invite outside organizations to sit in on meetings of their Bid and Awards Committees (BACs). However, for various reasons this mechanism has proved to be mostly ineffective.
The Transparency and Accountability Network, which is led by Vincent Lazatin, trained “a few hundred people to become observers.” However, several years on it resource limitations have become clear.
CSOs have had a very hard time fielding observers, the reason being that – although we know it is done on a voluntary basis – it still requires resources from the NGO, whether that be person hours, time taken away from the office, whether that is transportation to get to and from the office of the procuring entity, whether it is simple meals, it does require some amount resources and these resources are generally not available. […] So while [organizations] show an initial interest, when it comes right down to it, a lot of them don’t have the resources to support that [fielding observers]. (Lazatin, 48:40)
High turnover rates among NGOs and CSOs deplete the reserves of staff trained to observe over time. Don Parafina, executive director of ANSA-EAP, citing this issue, suggested observer trainings for CSO staff on an ongoing basis, instead of just during the brief period after the provision was introduced. (35:00) Keeping up with this demand for trainings, however, could place even further strain on civil sector resources—they would likely have to conduct those trainings.
The civil sector cannot oversee this volume of proceedings in-person, at scale. According to Mr. Parafina, the civil sector oversees less than 1 percent of procurement proceedings, and even that may be a generous estimate. (27:00) Furthermore, monitors are not likely to see the misconduct, since they are not present during the parts of the process where misconduct most likely occurs. Collusion tends to be prior to bidding and manipulation after the award. “For example, when bidders want to collude you won’t see that in the actual bid process.[…]You can even fake competition. If five bidders collude, all five bidders will submit bids so it will look like there are five competitive bids, but you know they are not because they have colluded prior to the actual process.” (Lazatin 49:00) Other times, according to Mr. Lazatin, “the technical specifications for the procurement are padded or give room for bidders to make money on the side.” A CSO observer who is present for the bid opening or submission processes would not catch either form of misconduct. (Lazatin, 50:00)
As with access to procurement information in general, the degree to which CSO observers are granted a meaningful and participatory role varies greatly depending on the procuring entity. According to Mr. Parafina,
Some agencies interpret ‘observing’ literally. As in, they can just observe. When you go to the bid opening, for example, you can’t even talk because, they would say, ‘you are just an observer.’ But in my case, as an observer with the department of education they really allow us to sit with them around a table, and after they have reviewed a particular bid document it will be passed on to us and we will scan it and validate with them whether they have really fulfilled all of the documents.(24:20)
The civil sector observer system is seen as entirely separate from the ICT enabled e-procurement of PhilGEPS. However, just as introducing ICTs into the opportunity and bidding processes can lead to efficiency gains for the government and contractors, ICTs can enable more efficient oversight by the civil sector. Limiting oversight to observation at the time and place (BAC meetings) unnecessary constrains civil sector oversight. ICTs can enable asynchronous and remote observation, which can significantly ease the resource burden of observation. By allowing those in the oversight to community to access procurement data in useful (i.e. bulk, structured, machine readable and open) form, rather than in name only, civil sector observation can truly occur at all stages of the process. While this has not happened yet, it does appear that this is the direction that PhilGEPS and civil society oversight is moving. Once PhilGEPS is a more fully functional platform that actually has e-bidding, rather than just serving as a bulletin board, the Government Procurement Reform Act will, according to Ms. Clemente, mandate that civil society be able to “observe” this bidding through the platform itself. (22:15)
Mr. Lazatin, speaking of the procurement oversight community, commented on the need for improvement within the civil sector in terms of pushing for greater data availability, and more sophisticated use of that data.
I think we need to up our game in terms of using procurement information to evaluate and to assess how well procurement is being done in particular agencies. You do have, for example organizations such as Road Watch, and CoST to a certain extant, who really try to create the demand for that information and try to build capacity in this area to analyze efficiency of procurements and stuff like that… But we all have a ways to go in terms of being able to use that information effectively. (Lazatin, 38:00)
Currently the barriers to entry for sophisticated use of procurement data are high. While Mr. Lazatin indicated that organizations and researchers may collect and analyze detailed data for specific projects, these tend to be manual, one-off efforts, not systematic advances in ICT enabled procurement tracking. More easily accessible, and machine-readable public data is needed to lower the barriers to this type of sustained activity.
Limited Effectiveness of Enforcement Mechanisms
Philippine public procurement presents a mixed case on enforcement. While our interviewees agreed that corruption and inefficiency were pervasive, several promising themes did emerge. In particular, several respondents highlighted changes in political will in key departments and oversight bodies under President Aquino as instrumental in beginning to effect change. In this section we address enforcement in two parts: 1) formal, legal channels and 2) enforcement through public pressure.
Formal Enforcement Mechanisms
Several of our respondents highlighted the Department of Public Works and Highways (DPWH) as a federal procuring entity which has made great anti-corruption strides in recent years. According to Mr. Nixon “In the last 3 years we have seen a big shift. More suppliers have come in on projects because they believe they will get a fair shake. The public works area was sort of the worst reputation, they now have a pretty good reputation and they are saving money by getting things done on time.”(18:45) Under the Arroyo Administration (President Aquino’s predecessor), the DPWH, which manages a great deal of procurement for large infrastructure projects, was notoriously corrupt. Ms. Gonzales noted that the DPWH has been active in banning suppliers “because of substandard [behavior] and anomalies discovered in their specific cases.” (31:00) Mr. Lazatin detailed the success of a “three strikes” policy implemented by the DPWH to cut down on the potential for collusion. Under the three strikes policy,
[I]f a bidder expresses interest in a bid – but fails to submit a bit – and if that bidder does that three times in a row, then they are prohibited from participating in future bids, because that behavior is suspect. They either get bought off or …. Something like that had never really been enforced. You had bidders for years who would buy bid documents and express interest in a bid, who would never actually bid. Just to be bought out by whichever contractor who did want to buy the bid. So it was a money-making thing for a lot of these bidders… Now the department is strictly enforcing this policy. [Reform] can be something as simple as that. (Lazatin, 46:38)
Mr. Parafina and Ms. Suerte-Cortez, also repeatedly mentioned the Department of Education as being exceptionally cooperative, and forthcoming.
However, even as processes themselves are beginning to become more effective as the DPWH example indicates, there is, according to Mr. Nixon, a widespread sense that formal mechanisms for redress of grievances are “not generally effective. One of the problems is the length of time that justice takes in the country.” Something that would be settled in a few months in Canada might take three years in the Philippines. (Nixon, 22:40)
One of the reasons that official sanctions can be slow in coming is that the current institutional structure splits responsibility for outcomes among multiple agencies. Procurement monitoring and sanctioning falls under the jurisdiction of three agencies within the federal government: the Commission on Audit, the Government Procurement Policy Board, and the Office of the Ombudsman. The Commission on Audit (CoA) is an independent constitutionally established government body tasked with auditing all matters pertaining to government revenues or expenditures, including the use of funds used for procurement. The commission is empowered to investigate and make recommendations, but not to sanction. The GPPB may reverse improper procurement procedures, order that procurement processes be redone, and maintains blacklists of suppliers and constructors who are barred from participating in all government procurement opportunities. The Office of the Ombudsman pursues criminal sanctions, should there be any.
Because this system leaves responsibility for investigation and sanctioning fractured between various agencies, corrupt practices often go unpunished, as things fall through the bureaucratic cracks. According to Mr. Lazatin, “it doesn’t seem as though there is anyone ultimately responsible for these things in terms of imposing sanctions.” (22:00-22:30) Mr. Lazatin added that until relatively recently, “The CoA would just do its audit and come up with its report and findings until somebody would decide to pick it up [and] either pursue it or not pursue it. But generally it had been the case that nobody would bother to pursue some of those findings and see what was going on. (25:15) Mr. Lazatin did note that in recent years there has been increased recognition by the leadership of the Commission on Audit and the Office of the Ombudsman that the gap between investigation and sanctioning needs to be bridged. Since then cooperation has increased. He attributed this change to the political will of the Aquino administration. (Lazatin, 25:00 – 26:30)
In addition to issues over interdepartmental cooperation, there are also limits to the capabilities of the government watchdogs. Mr. Villasenor expressed some concern over whether the Commission on Audit has adequate capacity to oversee public procurement, given that “they have other things to look into.”(26:00) While Mr. Villasenor noted Commission on Audit’s investigations are capable of bringing improper procedures to light, he stressed the limits of these investigations because the framework the Commission applies “is really shallow.”(25:00) According to Mr. Villasenor, “the current law will allow inefficiency to happen. When the commission on audit checks they will catch severe malpractices, but people can get away with bad procurement practices simply because they are following the law, even though it is inefficient.” (24:30)
Mr. Nixon echoed Mr. Villasenor’s concern about the procedural “thinness” of proper procurement. He noted that suppliers or contractors can go to the courts to complain if they feel they lost a bid for improper reasons, but that “[i]t is very often not very successful because when the evidence is shown that they went thought the bureaucratic process and the rules were followed etc. etc. then it is a case of saying all of the rules were followed so you don’t have a case.” (20:45) He added that “[t]he problem the ombudsman have is not that they don’t suspect something is going on, it is in getting hard evidence[…] the Justice Department can’t move unless they have hard evidence.”(28:45) To satisfy these evidentiary requirements whistleblowers and “first hand witnesses are really important.” (29:50) Historically few people have been willing to step forward as whistleblowers, but this also is beginning to change. (Nixon, 28:00)
Enforcement Through Public Pressure
In addition to official channels of investigation and sanctioning, watchdogs, NGOs and the media continue to push for transparency and accountability in the public procurement in the Philippines. In some cases, according to Mr. Lazatin, “Some of these NGO observers have been able to question procurement procedures. Those resulted in, as far as I can recall, the procuring entity having to alter its procurement to conform with the law or they have had to rebid some of these procurements precisely because the observers found that the first procedure was not in accordance with the law” (39:40)
While media attention has succeeded in drawing attention to high profile procurement corruption, Mr. Lazatin could not recall a time when “it has reached the press and resulted in charges being filed against procuring officials.” (40:00). Rather, it is usually a matter of procurement entities or officials backing down and conceding to rebid on a contract. Ultimately, however, he concluded that it is the fear of attention and sanction that motivates these officials to correct their behavior. (41:00).
This pressure tends to be most effective “when the NGOs really stand their ground on what they see and really insist on doing a process over or making sure the process is done properly.” (42:00) In this context, it is clear that increasing access to procurement information for these NGOs and watchdogs would strengthen their hand when pushing for government responses.
Both Mr. Lazatin and Ms. Gonzales indicated that the recent progress made in departments like DPWH, the Office of Management and Budget and inter-agency cooperation between the Commission on Audit and the Office of the Ombudsman can largely be attributed to a shift in political will. This shift came after the election or President Aquino who ran on a platform of anti-corruption and good governance. His election, and his appointment of reformers to lead key departments can be seen as a result, of sorts, of ongoing public pressure for better governance in the Philippines.
Philippine public procurement has a long way to go. The Government Procurement Reform Act and its associated regulations enshrined the appropriate and significant principles of transparency, civil sector involvement and the use of ICTs. However, the promises of this legislation remain largely unmet.
The PhilGEPS system limits outside oversight by CSOs and journalist by restricting access to data. The platform’s features and affordances place real constraints on data use, impose barriers to entry for engaging with the data and, ultimately decrease the scale and scope of outside investigation, analysis and oversight.
For transparency to enable public oversight and change the incentives of internal actors, the data needs to be easily accessible and usable. Procurement information should be available in bulk, machine-readable, open formats.
Civil society observers are not able to cope with the scale of procurement proceedings that occur everyday. Data-backed and ICT enabled oversight presents an opportunity to move beyond oversight founded on the notion of physical co-presence. PhilGEPS system features and data access should be designed with this in mind. Such reforms could, potentially, enable CSOs and journalists to expand their oversight beyond the meetings they can attend and the tips they get from insiders and whistleblowers.
References and Supporting Material
Donald A. Norman (1999). Affordance, Conventions and Design. Interactions 6(3):38-43, May 1999, ACM Press.
Government Procurement Reform Act of 2002. Republic Act No. 9184. 12th Cong., 2nd Sess. (July 22, 2002). Available: http://www.gppb.gov.ph/laws/laws/RA_9184.pdf
Revised Implementing Rules and Regulations of Republic Act 9184. Government Procurement Policy Board. August 3, 2009. Available: http://www.gppb.gov.ph/laws/laws/RevisedIRR.RA9184.pdf
Denis Nixon, Procurement and Supply Institute of Asia
Iris Gonzales, Investigative Reporter
Vincent Lazatin, Transparency and Accountability Network
Charlie Villasenor, Procurement and Supply Institute of Asia
Vivien Suerte-Cortez and Don Parafina, ANSA-EAP
Rosa Clemente, Executive Director, PhilGEPS
We also spoke with Alan Davis of the Institute with War and Peace Reporting. Unfortunately, that file of the recording for that interview was corrupted so we have not quoted from it here. Our was still extremely useful as background.
Thanks to those (above) who generously gave their time to our interviews. Additional thanks to Júlia Keseru, Lee Drutman, Tom Lee, and Ben Chartoff for their comments and input.
Photos, from top: Makati skyline via Wikimedia Commons; Philippine flag via Wikimedia Commons; PhilGEPS platform screenshot; San Juanico Bridge via Wikimedia Commons