Lack of implementing rules and regulations governing procurement of foreignfunded

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ANNEX B PROPOSED ACTION PLAN FOR THE IMPROVEMENT OF THE PHILIPPINE PUBLIC PROCUREMENT SYSTEM Key Result Area Recommended Action/Measure BLI Improvements in 1(b) (c) Processes and Procedures v Review and formulation of implementing rules and regulations for foreign funded procurement activities (IRR-B), including harmonization of blacklisting guidelines with IFIs (possible adoption of ABC as ceiling for foreign assisted infrastructure projects) Review and formulation of implementing rules and regulations for locally funded specialized procurements for ICB including harmonized bidding documents (IRR-A) (arms and ammunition, pharmaceuticals, information technology) Development of procurement manuals, standard bidding documents for LGUs consistent with budgeting, accounting and auditing procedures Development of simplified procurement guides for barangays consistent with financial management guidelines Lack of implementing rules and regulations governing procurement of foreignfunded projects The legal framework does not provide for the extension of timeframes even if foreign bidders are expected to compete. 1 (c) Lack of implementing rules and regulations and harmonized bid documents for specialized procurements 1 (b) The peculiarities in the procurement practices and operations of local government units were not reflected in the provisions of the existing law 1 (b) Several barangay officials claim that the procurement law may not be applicable to the nature of their procurements TWG, PDF WB Two(2) years June 2007- July 2009 GPPB GOP Base guidelines One (1) year GPPB, LGU Leagues,, DBM GPPB, LGU Leagues,, DBM ADB Harmonization TA EC grant Harmonization One (1) year December 2007 Harmonization March 2008 WB and ADB

Review detailed engineering guidelines, with regards to standards and determine accountability for non-compliance among government agencies and consultants Streamlining and harmonization 7(a) (b) of licensing and registration (c) procedures for civil works Enhancing Linkages Between Financial Management and Strengthening of Monitoring and Enforcement Institutions and Mechanisms Development of a generic financial management manual that includes procurement and logistics processes with financial management Develop clear guidelines for multiyear contracts that will integrate budgeting, expenditure, and procurement program Development and strengthening of feedback or procurement monitoring system at the agency and national levels Establishment and operationalization of a records management system for procurement and contract 3(b), 8(a) 3(a) 5(b) 6(c) There are agencies who do not comply with guidelines on detailed engineering guidelines There are multiple constraints inhibiting private sector access to the procurement market, such difficulties in getting licenses and permits. There is no system linking financial management system and the procurement system to ensure enforcement of law. Agencies do not prepare multi-year plans that are linked to the annual budget process or to the preparation of annual procurement plans. Not all agencies comply with requirement to submit procurement information and feedback mechanism has not been established to monitor procurement activities Lack of established norms for the safekeeping of records and documents related to procurement WB representative will apply for IDF grant particularly on the compliance of the detailed engineering design December 2007 DPWH projects Include the others in the long list of DTI December 2007 PCAB licensing DBM, EC grant GPPB, DBM GOP December 2007 GPPB, Internal Audit Units, Units, CSO GPPB, WB (IDF for Internal Audit - August 2007) GOP, WB (IDF for Internal Audit - Augus 2007) December 2009 December 2007

management transactions (including replication of current good practices systems, i.e., cost estimation process, document tracking, etc.) Completion and mainstreaming of 9(c) internal control systems for all government agencies transactions and contract management that must be kept at the operational level. Although there are written standards for the internal controls, there is no periodic reporting to management to ensure compliance with the standards. PAGC, DBM WB, AusAID December 2007 - Completion of GIAM June 2008 - Pilot Testing and Customization of Manuals Establishment of a covenant among oversight agencies (GPPB,, PAGC, DBM, OMB) to strengthen coordinative linkages on monitoring and enforcement of audit findings, and compliance with the procurement laws, and supported by the creation of a procurement sub-working group under the PDF governance and anti-corruption program Development of systems for the analysis of procurement related information and linkage with other 8 (c), 9(b, 12 (d) Monitoring of outcomes of the dispute resolution cases is rather weak. Compliance of only few agencies with the internal control procedures The anticorruption program requires better coordination at a higher and there are no special measures to prevent and detect fraud and corruption in public procurement 5 (b) There is no analysis of procurement information carried out on a national GPPB,, PAGC, DBM, OMB GPPB, Internal Audit units, GOP possible funding to be raised before the PDF Sub- Working Group on WB (IDF for Internal Audit August 2007) Establishment of pilot Internal Audit Units December 2007 December 2009

government related data bases for policy making and decision making purposes Strengthening organizational 4(c) capacity of GPPB-TSO to monitor and enforce procurement related laws Strengthening of Capacity on Development of Data Base on Related Fraud Cases Development of mechanism for utilization/optimization of observer s reports Formulate a disclosure policy on procurement related information Implementation of the Professionalization Program on including cost estimation and value engineering 8 (c), 12 (c) 12(f) scale. Although, the GPPB does not have to justify its activities before Congress, its financial stability is not secured by the legal framework. Lack of procedures to monitor the outcome of dispute resolution cases There is no organized information on the number of graft related cases filed, prosecuted and resolved Compliance to the submission of observers reports and enforcement of follow-up action taken is not monitored and is rather weak 11 (a) There is no policy on the protection and/or disclosure of proprietary, commercial, personal or financial information of a commercial and sensitive nature related to procurement. 5 (c), 6 (a) There is a need to develop a sustainable strategy to develop the capacity of government officials to units, CSO DBM GOP GPPB,, PAGC,DBM, OMB GPPB, OMB, GOP possible funding to be raised before the PDF Sub- Working Group on EU (existing), Possible funding from TAF December 2009 GPPB, TAN December 2010 GPPB WB (IDF Grant on Professionalization)

Piloting the adoption of Value Engineering as a policy for selected infrastructure projects costing P 50M above Development of procurement audit guide and conduct of regular training programs for external auditors on procurement laws and procedures Conduct of regular training programs on public procurement for private sector bidders Development of manual and training programs for third party observers (CSO) in the 1 (b), 6 (a) 5(d), 9(e) 6 (b), 7(a) 12(d) 6(b) understand and implement the procurement rules and regulations procurement personnel The Medium-Term Philippine Development Plan provides for the application of value engineering in infrastructure projects to ensure the most cost-efficient designs and avoid overpricing of projects and there is a need to jump start such application Need to strengthen knowledge of auditors on procurement. There are no organized efforts to address the capacity of small and medium enterprises to encourage their participation in procurement and to help new entries into procurement marketplace. There is a need to expand the network of third party observers and strengthen DPWH, DOTC, GPPB and NEDA Infracom GOP (DPWH and DOTC budget December 2007 - Start of pilottesting of selected GOP funded infrastructure projects (DPWH, DOTC, PPA) - Issuance of Guidelines by NEDA WB December 2008-2010 DTI, Phil- GEPS GPPB, CSO GOP, ADB January 2008 start training Possible funding to be raised before the PDF Sub-Working

procurement process Development of Complaint and Review Mechanisms for Related Disputes Development and conduct of special training programs on fraud detection for purposes of prosecution (target: investigators, prosecutors, auditors) Development of performance management systems for procurement unit and staff Review of policies and procedures for procurement related complaints and appeals which include a study on the following options: 1. Best practices of other countries 2. Creation of an independent administrative review body 3. Tapping of an existing administrative body with the appropriate mandate 4. Reasonableness of amount of protest fees Develop mechanisms to publish decisions on procurement related disputes (of HOPE on 12(d) their capacity to participate in the procurement process There is a need to train investigators, prosecutors and auditors on fraud detection 5 (d) There is a need to define the skills and knowledge competency requirements for specialized procurement jobs and to monitor compliance to standards among agencies 1 (h), 10 (e) 10(d) Lack of independent administrative body or special court to review procurement related complaints and appeals Existence of policies that discourage filing of protest (protest fee requirement) Decisions are not mandated to be published nor posted in the website. GPPB, OMB, GPPB, CSC, DBM, CESB GPPB Group on Possible funding to be raised before the PDF Sub-Working Group on Possible hiring of international consultant to be funded by the World Bank December 2010 GPPB December 2010

procurement related protest) Communications Development and Implementation 11(a) Strategy of a Strategic Communication Plan for Reform Lack of a communication plan for dissemination of information on procurement reform GPPB Possible funding to be raised before the PDF Sub-Working Group on June 2007 - Medium Term Draft Plan