And no ghost deliveries in procurement of pandemic supplies 

COMMISION on Audit (CoA) chairman Michael Aguinaldo on Wednesday told the House committee on good government and public accountability hearing that his agency did not say that overpricing marred the Department of Budget and Management-Procurement Service’s (DBM-PS) procurement of its pandemic supplies, including the transaction with Pharmally Pharmaceutical Corp.

During the panel hearing chaired by DIWA party-list Rep. Michael Aglipay, Aguinaldo said most of its audit report on PS-DBM was about inventory management.

“Ang masasabi ko lang po is wala po sa CoA report ng PS-DBM ang statement na may overpricing po, there’s no statement to that. The observations relate more to inventory management than overpricing,” Aguinaldo told the hearing.

The Aglipay panel held a parallel probe with the Senate on the DBM-PS procurement of materials for COVID-19 items after CoA flagged the Department of Health’s (DoH) transfer of P42 billion funds to fight pandemic to various agencies, including the DBM-PS.

“So hindi po tama na sabihing ang CoA ang nagsabi na may overpriced, kasi wala po sinabi ‘yon. Anyway, nandito po kami to be able to provide clarification to any of the questions the committee members will ask,” Aguinaldo said. Earlier, CoA found out the supposed DoH’s deficiencies in the use of its COVID-19 funds last year where it highlighted the P42 billion transfers of the department’s funds to different agencies such as the DBM-PS.

The Senate panel led by Sen. Richard Gordon hit the P8.7 billion funds that went to Pharmally, which only has P625,000 capital, in the procurement of pandemic items.

There were allegations that the PS-DBM bought face masks at a high price from Pharmally, a company being linked to Michael Yang, a former adviser on economic affairs of President Rodrigo “Rody” Duterte.

Like CoA, Overall Ombudsman Warren Liong, then director of the PS-DBM when the P8.7 billion contract was given to Pharmally, also denied that there was overpricing.

On March 16, 2020, Leong said the DoH issued a price freeze on face masks, fixing it at P28 per piece and the government purchased the item at “P27.72 some even lower.”

Liong also explained that PS-DBM followed the procedure for the emergency procurement under Republic Act (RA) No. 11469 or the Bayanihan To Heal as One Act of 2020, otherwise known as Bayanihan 1.

Bayanihan 1 exempts the procurement of necessary items from the provisions of Government Procurement Reform Act or RA 9184).

“Under Bayanihan 1 we were allowed to directly negotiate but we still underwent market price analysis. Pinili po natin ‘yung mga kayang makapag-deliver agad or at least at the nearest possible time, pinakamababang presyo base sa mga quotation na nakuha sa mga suppliers na kayang mag-deliver sa tamang oras and dapat po compliant sa technical specification ng DoH,” Liong said.

NOTHING ILLEGAL

Aguinaldo also said there was nothing illegal with the PS-DBM procurements as long as they comply with Government Procurement Policy Board (GPPB) Circular 1-2000, which applies some rules under Republic Act (RA) 9184 or the Government Procurement Reform Act.

This was despite the fact that said procurements were covered by the Bayanihan to Heal as One Act or Bayanihan 1, which authorized President Rodrigo Roa Duterte to “expeditiously procure” COVID-related goods and services by exempting them from the coverage of RA 9184.

The procurement law usually provides that all government purchases shall be done through competitive bidding, but because of Bayanihan’s exemptions, the DOH—through the DBM-PS—was allowed to resort to negotiated procurements.

“Under the law, Bayanihan 1, the President is authorized to procure expeditiously as an exemption from [RA] 9184 and other related laws. But nonetheless, the DBM agreed to apply emergency procurement perhaps with a little modification as reflected in GPPB Circular 1-2000,” Aguinaldo said in response to a query by committee vice chair Surigao del Sur 2nd District Rep. Johnny Pimentel.

“There is an effort to at least put some order in the procurement process by applying emergency procurement rules as reflected in the GPPB Circular issued on April 6, 2020,” the COA chief added.

Overall Deputy Ombudsman Warren Liong, who was the director of PS-DBM when the questioned COVID-19 supplies were purchased, said they have in fact “went over and above the requirements of the law” in their procurements.

“We went over and above the requirement of the law and did market canvassing. Even if we were not required before we went into direct negotiation, we undertook market price analysis using historical data or actual prices from available suppliers,” Liong said during interpellation by AKO BICOL Party-list Rep. Alfredo Garbin Jr.

Liong said the PS-DBM also “procured the lowest available price” at the time and that the procurements complied with the technical specifications or delivery schedule.

PS-DBM is under fire for allegedly favoring Pharmally Pharmaceutical Corp. in the purchase of medical supplies. Some senators have earlier raised the possibility that PS-DBM was influenced by the close association of Pharmally with the President and Senator Christopher “Bong” Go.

But during the hearing, Ong denied that PS-DBM was influenced to select Pharmally as supplier of COVID-19 supplies.

When asked by committee chair Aglipay if PS-DBM was instructed by Senator Go to award the contract to Pharmally, Ong replied in the negative.

Aglipay, in his opening statement, said the committee wanted to help the DOH and DBM in “identifying and removing the bad weeds who seek to gain profit from this pandemic.”

“We take strong exception over allegations involving public officials from the DOH and DBM who purportedly took advantage of the pandemic and the country’s state of national emergency solely for their own personal gain,” Aglipay said.

Also present during the hearing was Health Secretary Francisco Duque III, who thanked the PS-DBM for “generously stepping into the procurement activities of the [DOH] at a time of absolute necessity” in order to provide the much-needed personal protective equipment to frontline health workers.