Trade and Industry Secretary Ramon M. Lopez has batted for a change in the bidding procedure for government procurement of critical products, such as personal protective equipment (PPEs), that will give local manufacturers first crack in the supply contract over foreign bidders.
At the virtual joint hearing of the Senate committees on trade, commerce and entrepreneurship, and economic affairs, Lopez suggested the need to come up with a policy to implement the main objective of
the “Buy Local, Go Local’ campaign.
Lopez suggested during the hearing, which was also attended by Rowena Candice Ruiz, executive director of the Government Procurement Policy Board – Technical Support Office (GPPB-TSO),that local manufacturers should be the only ones to be allowed to bid during the first bidding for a government supply. Only when the first bidding failed that foreign bidders will be allowed to participate in the second bid attempt.
The trade chief explained that this can be done for certain critical items where the government has already an existing program like the DTI campaign for companies to repurpose their manufacturing facilities to produce PPEs and face masks, which were in short supply during the pandemic.
It could be noted that companies that have repurposed their factories like those under the Confederation of Wearable Exporters of the Philippines and the Confederation of Philippine Manufacturers of PPEs complained of not being given preference because foreign bidders, which are offering very cheap prices won the supply contracts.
Ruiz, however, explained they already made some adjustments in their bidding policies to observe the domestic preference policy. One adjustment being implemented under the Bayanihan 2 law is that local manufacturers will certainly win if their bid price falls within the 15 percent margin or just 15 percent higher than the lowest foreign bidder’s offer. The local producer will lose that preferential treatment if the offer price exceeds the 15 percent margin ceiling.
Ruiz said this is to mitigate the risks of a failed bid because a failed bidding would create a problem for the procuring entity. Ruiz also said that the GPPB has also veered away from the preference to the company, but only to the products.
Nonetheless, Lopez explained that under his proposal local manufacturers are assured of a first crack to win in the government’s supply contract.
Meantime, Lopez was urged by the Senators to come up with a list of industries that can already sufficiently supply local requirement or to grant more certificate of domestic bidder to qualified local producers.
The certificate of local domestic bidder preference of the DTI is given to domestic producers that use local materials or those locally produced items that met the 40 percent local content or local value adding, which comprises the local materials used, labor and value added like income.
Lopez, however, said that the domestic bidder preference policy is not going to work in all products, but to those under special programs of the government.