Gov’t to award contracts for projects despite pending okay of 2019 budget

By Chino S. Leyco

Awarding of contracts for the ongoing government projects will proceed as planned under the reenacted budget, the Department of Budget and Management (DBM) assured yesterday.


Budget Secretary Benjamin Diokno (KEVIN ESPIRITU / MANILA BULLETIN) Budget Secretary Benjamin Diokno (KEVIN ESPIRITU / MANILA BULLETIN)

In a statement, Budget Secretary Bejamin E. Diokno said that all government projects including those undertaken early procurement activities (EPA) last year will be awarded despite the pending general appropriations act (GAA).

“Awarding of contracts may already proceed for programs and projects that underwent early procurement if the amount needed can be covered by the funds available under a reenacted budget,” Diokno said.

This is stated in Circular 09-2018 issued by the Government Procurement Policy Board (GPPB) which guides “Procuring Entities in the award of contract undertaken through Early Procurement Activities (EPA) under a reenacted budget”.

GPPB Circular 09-2018 stipulates that “procurement projects covering recurring activities or projects, hence appropriations therefor are included in both the FY 2018 GAA and FY 2019 NEP, undertaken through EPA under the FY 2019 NEP may be awarded on the basis of the FY 2019 Reenacted Budget.”

And that “in all instances” procuring entities “shall not award any procurement project if the amount appropriated under the FY 2019 Reenacted Budget is lower than the amount of contract to be awarded”.

The GPPB Circular is also consistent with DBM’s earlier pronouncements that there would be no new projects under a reenacted budget. The Circular stipulates that “ activities or projects that are included in the FY 2019 NEP, hence not part of the FY 2018 GAA, may be awarded on the basis of the FY 2019 GAA.”

“New projects will have to wait until the passing of the GAA before they can have their contracts awarded. We still encourage them, however, to conduct early procurement activities if they have not done so,” Diokno remarked.

The conduct of early procurement activities, short of award, has been practiced since 2009 to allow the completion of pre-procurement activities before the start of the budget year.

This is to ensure the timely implementation of government projects as agencies continue to cite the procurement process as a major cause of delay in implementation.

Last year, the DBM issued Circular Letter 2018-8 which directed agencies to undertake EPA from October to December 2018. The directive emphasized the importance of undertaking EPA in light of the impending shift to annual cash-based appropriations which would limit the time horizon for implementation of contracts to one year.

Under Early Procurement, agencies begin their procurement activities, short of award, using figures in the National Expenditure Program (NEP) as basis for amounts specified in their contracts.

The conduct of early procurement is guided by circulars to ensure agency compliance with the existing Procurement Law, its Implementing Rules and Regulations and other pertinent rules and regulations, thus avoiding corrupt procurement practices. It speeds up project implementation and spending by agencies, and thus provides better service to the public.