COA: No claim of overpricing in COVID-19 supplies procured by gov't

Published September 15, 2021, 4:10 PM

by Ben Rosario

The Commission on Audit on Wednesday, Sept. 15 cleared the air on the controversy surrounding the reported overpricing of billions of pesos worth of face masks and face shields procured by government, declaring that there was no finding of “overpricing” when it audited the Procurement Service-Department of Budget and Management and the Department of Health.

COA Chairman Michael Aguinaldo

However, COA Chairman Michael Aguinaldo told the House Committee on Good Government that audit examiners cannot categorically state that neither was there anomaly nor a fair deal in the procurement transactions.

“That is a conclusion that is beyond our mandate at this point,” he told Surigao del Sur Rep. Prospero Pichay who questioned him during the Lower House’s initial hearing of the PS-DBM legislative inquiry.

While Aguinaldo agrees with Pichay that the law of supply and demand plays a vital role in government procurement, the COA chief evaded a categorical response that COA found the transactions with Pharmaly Pharmaceuticals and other suppliers were aboveboard.

“We are primarily fact finding, there was no mention of overpricing because our concern was to determine whether disbursements were made and deliveries were made,” Aguinaldo stressed.

In the case of the PS-DBM procurement of PPE’s and COVID-19 supplies, exchanges in supply delivery and payment were made.

Earlier during the hearing presided over by committee chairman and DIWA Partylist Rep. Michael Aglipay, Aguinaldo pointed out that the Bayanihan law empowered President Rodrigo Duterte not to observe the stringent procurement provisions in the Government Procurement Act.

However, the chief executive nonetheless directed the Government Procurement Policy Board to issue guidelines in the emergency procurements of supplies and equipment that are vital in addressing the COVID-19 pandemic situation that gripped the country.

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.

Based on the GPPB circular, state agencies have to show due diligence in ensuring the most advantageous deal to the government.

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

During the hearing, former PS-DBM officials who made the controversial procurement declared that top government officials influenced their decision in awarding the huge procurement of supplies and materials to the suppliers.

Administration lawmakers specifically asked PS-DBM officials if Senator Christopher “Bong” Go was involved in any part of the transactions. All of them, in particular former PS-DBM chief Christopher Lao and Deputy Ombudsman Warren Rex Liong, said Go was never involved and that he could not have influenced them in granting Pharmally the supply contracts.

With regards Pharmally Pharmaceuticals, Lao said the firm did not corner the supply contracts as it delivered only 20 percent of the total personal protective equipment requirement 4.08 percent and only 4 percent of the needs for surgical masks.

For PPE, it was the Sunwest Construction that received the bulk of the total orders made by PS-DBM. It was awarded 33.3 percent of the PPE supply.

Hafid N Erasmus, a Filipino-owned import firm, delivered 44.77 of all face masks requirements, said Lao.

Liong, an incumbent official of the Office of the Ombudsman, disclosed that he was the PS-DBM director for procurement when the controversial PPE’s were purchased.

He stressed that while the supply contracts were conducted under negotiated purchase, the PS-DBM still made efforts to protect the interest of government.

“Kahit hindi nakasaad sa Bayanihan law na mag-market survey, naglagay na rin ang PS-DBM ng market survey para makakuha ng fair price despite the nature of the emergency purchase,” Liong said.