PPADB tenders down P4bn as rejection rate balloons

Government's procurement agency is talking a tough stance in its processes
Government's procurement agency is talking a tough stance in its processes

The Public Procurement and Asset Disposal Board (PPADB)’s percentage of tenders rejected increased to 23% in 2018, exceeding the parastatal’s own 10% target for the applications it turns down in any single year.

The 23% rejection rate for the 2017/2018 financial year was up from 15% the previous year. According to the PPADB’s recently released 2017/18 financial year, of the 253 tenders sent by various ministries for approval, 57 bit the dust.

During the year under review, the board received 614 submissions with only 253 of those requiring the board to make adjudication decisions. The rest were only submissions for the PPADB to note. However the board approved 131 submissions, deferred its decision on 65 of them and outright rejected 57.

According to the executive chairperson, Bridget John, the board had set a target of achieving a 70% approval rate, 20% deferral rate and 10% rejection rate.“The decrease in the percentage of approvals and the increase in both the deferral and the rejection rate require that measures be put in place to attain the board’s target,” she said. The annual report suggests that many of the rejected applications by ministries were those involving retroactive approval, a process the PPADB frowns upon.  Retroactive requests involve ministries or procuring entities committing themselves to suppliers and contractors, often consuming or receiving the goods or services, then approaching the PPADB later for approval. A total of 31 retroactive requests were submitted to the board during 2017/2018, with only two of these successful. The procurement agency said the successful requests were “well justified”. The 31 requests involved P5.4 million, while the two approved were worth P198, 127.

“The approved requests satisfied the order that allows the board to approve retroactive requests provided they were urgent and intended to save lives and protect the environment,” John said. “Procuring entities are urged to consistently plan their procurement and initiate it on time to avoid failure to follow procurement procedures and to also reduce the number of retroactive requests.” The report indicates that for 2017/18 the value of awarded tenders amounted to P1.9 billion, compared to P6 billion the previous year, or a 68% decrease. Besides the rejections, the lower value of awarded tenders was also due to the fact that the 2016/17 period had a high number of major road projects awarded to the Ministry of Transport and Communications. In 2017/18, these projects encountered slow progress, leading to less tenders put out by the Ministry. The board expressed frustration with the trend of closed/single bidding processes by procuring entities, saying these discouraged transparency and the attainment of best value by the public purse.

“Over-reliance on less competitive bidding by procuring entities is a matter of concern which needs to be addressed through proper procurement planning among others to ensure government gets the best value,” the executive chair said.

The PPADB adjudicates on government procurement generally exceeding P300 million, with Ministerial and District tender committees responsible for amounts below this.

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