Press Release
February 17, 2009


Senator Francis "Chiz" Escudero on Tuesday called for changes in the government procurement system, particularly the power of the president to exempt gov't-to-gov't contracts, including those under Official Development Assistance, from "any Philippine law".

"We need to remove the blanket authority given the President over foreign loans and credits with a lending institution," Escudero said during a hearing of the Senate committee on constitutional amendments, revision of codes and laws.

He pointed out that any sitting president can exempt the procurement of certain infrastructure projects, goods and services from the government procurement law "in deference to the contracting of a loan or credit" from a foreign lending institution.

During the hearing, the Department of National Defense admitted that they are not governed by any law in their procurement dealings acquired under a bilateral agreement.

"There are really no guidelines on what we should say yes to or no to. We just rely on market studies and make sure that our project undertakings are at par with the prevailing market conditions," DND Undersecretary Alberto Valenzuela said.

"It is time to plug this loophole so we can be assured that no president will ever use it for selfish ends," said Escudero. The current law allows this because it "mandates the observation of treaties or international or executive agreements affecting procurement," he explained.

The opposition senator, who chairs the committee, filed a bill last year to address three points in the current government procurement system.

The senator said there must only be one procurement law for all projects, except for those that are acquired under a grant.

"A grant is given for free; we can relax a bit and allow foreign entities to lay down their own terms. But if it is a tied loan for which we are eventually going to pay with accrued interest, why must we not apply our own terms and conditions? We have the right to imprint our rules on these contracts."

Under Senate Bill no. 1963, Escudero wants foreign-funded projects covered by the government procurement law.

He also wants to strengthen and advanced transparency in the procurement process by requiring the posting of decisions of the BAC (Bids and Awards Committee) on the criteria, ratings and calculations of bids for procurement.

Escudero said these changes will lessen the discretion of procuring agencies and prevent collusion or bid-rigging among competing contractors.

He also called for the participation of observers in the procurement process as an additional safeguard.

"We can't have more of the same. The ZTE-NBN and World Bank scandals should not be the norm in our way of doing things," Escudero said.

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