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METHODOLOGY FOR ASSESSING PROCUREMENT SYSTEMS (MAPS)

      The Government Procurement Policy Board (GPPB), with the technical assistance of the World Bank (WB) and Asian Development Bank (ADB), conducted the assessment of the Philippine Public Procurement System using the 2018 updated Methodology for the Assessment of Procurement Systems (MAPS) of the Organisation for Economic Co-operation and Development's Development Assistance Committee.

      At the outset, the MAPS is a tool for evaluating the government procurement performance of a country. Using the MAPS, opportunities for, and challenges to, the country's procurement system are identified to serve as a guide to the government in enhancing its current public procurement framework and processes to make it more responsive to the needs of its people. The MAPS final assessment findings shall be officially released as Country Procurement Assessment Report (CPAR) to the requesting country.

      In 2008 and 2012, using the 2006 MAPS, CPARs were released identifying major challenges, as well as the accomplishments in the Philippine Public Procurement System. Then in 2019, with the updating of the MAPS in 2018, the GPPB, through its Technical Support Office (TSO), deemed it is timely and necessary to undertake a comprehensive assessment of the Philippine Public Procurement System.

      Thus, the GPPB, in collaboration with the WB and ADB, initiated on 29 July 2019 the MAPS comprehensive assessment aimed at identifying points of opportunity for improving the country’s procurement system, which would guide the GPPB in enhancing and making the current policy framework more responsive and inclusive to the needs of the government.

      Despite challenges posed by the COVID-19 pandemic, the MAPS Assessment Proper was undertaken in January – November 20212 whereby the MAPS team stepped-up data gathering and examination of the procurement activities of 17 Procuring Entities (PEs),3 notably from National Government Agencies (6), Government-Owned and Controlled Corporations (3), Local Government Units (5), and State Universities and Colleges (3). A total of 186 contracts were analyzed comprised of different procurement types, particularly: 130 Civil Works contracts (70%), 49 Goods contracts (26%), and 7 Consulting Services contracts (4%). Out of these sample contracts, 167 underwent Competitive Bidding while the remaining 19 resorted to Alternative Methods of Procurement.

      On 22 October 2020, during the 12th Regular GPPB Meeting, the World Bank presented to the Committee the highlights of the preliminary findings of the MAPS assessment based on the survey of the participating agencies.

      Then, in January to May 2022, GPPB-TSO conducted its own review of the draft preliminary report and discussed with the WB, this time focusing on the MAPS recommended Key Areas for Improvement.

      Seven (7) Key Areas for Improvement as discussed with the World Bank, to wit: (a) Rules on Participation, (b) Procurement Methods, (c) Support to Value for Money, (d) Complaints Review Mechanisms, (e) Sustainable Public Procurement, (f) Strategy and enabling environment for the professionalization of procurement function and, (g) E-procurement system.

      The preliminary MAPS report with the above key priority areas would need to go through a very stringent two-tier process of validation and quality assurance – first by the MAPS Secretariat, then second, the MAPS Assessment's Technical Advisory Group (ATAG) considering that it will be published as a CPAR. Before they can publish the CPAR, the WB wanted to make sure that the data by which the report was based were sufficient and reliable, hence, another meeting with the WB was held in October 2022.

      Last 16 May 2023, given the non-objection of the MAPS Assessment Technical Advisory Group (ATAG), the GPPB-TSO, through the Office of the Executive Director (OED), received the Final Draft MAPS Report with the target of publication and dissemination by June 2023. During the Steering Committee meeting last 08 June 2023, the MAPS Final Draft Report was presented to the committee members and requested their comments and input. As of 26 June 2023, the MAPS Final Assessment Report was published and issued the Seal of Approval.

      As reported in the latest Steering Committee meeting last 08 June 2023, the GPPB and its TSO have made notable progress already when the following key areas of improvement and WB recommendations, as indicated below:

Key Areas for Improvement and World Bank Recommendations

GPPB Updates

(a) Rules on Participation
  1. Assess whether the restrictive eligibility requirements concerning licensing and nationality/ establishment deliver the desired outcomes and achieve increased competition, reduced cost of bidding, and best value for money in public procurement.
  1. The registration or licensing of  Foreign Bidders was based on the requirements of the Securities and Exchange Commission [e.g. Foreign Bidders in case Consulting Services under Section 37.1.4(iv) of the IRR], and the procurement rules have adhered to and following the relevant SEC rules on the matter. 
  2. Nonetheless, the GPPB has already approved GPPB Resolution No. 09-2022 which requested the SEC to create a special basket (fast lane) for winning foreign bidders for purposes of registration and award of contract. To date, the GPPB-TSO is awaiting the SEC's comments and updates regarding this matter. .
  3. On the other hand, the IRR of the amended Foreign Investments Act (RA No. 11647) was already in effect on 27 July 2022 and the IRR of the amended Public Service Act (RA No. 11659) took effect last 4 April 2023. In addition, on 27 June 2022, the 12th Regular Foreign Investment Negative List (RFINL) was approved, with the inclusion of aligning the same with the amended Foreign Investments Act and amended Public Service Act.  These may already address the eligibility restrictions and licensing requirements of foreign bidders.
  4. Further, the Supreme Court already ruled in Philippine Contractors Accreditation Board v. Manila Water Company, Inc. that foreign corporations may apply for a PCAB Regular License since a corporation engaged in the construction industry is not engaged in the exercise of a profession. The Constitution did not reserve the construction business exclusively to Filipinos and current laws do not prohibit foreigners from entering the same projects as Filipinos in the construction industry.
  5. Once the case attains finality, the Supreme Court’s ruling would effectively lift the foreign ownership restrictions on engaging in construction projects in the Philippines, save only for those that remain under certain special laws.
  6. The GPPB-TSO recommends reviewing and revising the rules and regulations for infrastructure projects to align with the court ruling, if finalized.
(b) Procurement Methods
  1. Amend the legal framework to provide for fit-for-purpose competitive procedures for procurements with more complex needs where prequalification and/or carefully structured negotiation, respecting procurement principles, may be beneficial.
  1. The concept of “pre-qualification” has already been abandoned and replaced by the “simple eligibility check” as enshrined under RA No. 9184.
  2. Nonetheless, the GPPB-TSO recognizes the importance of implementing fit-for-purpose competitive procedures in line with merit-based selection criteria or qualification for bidders. In this regard, the GPPB-TSO deems that there may be a need to explore the same as applied to highly complex, technical, scientific, or sophisticated Procurement Projects.
  3. The GBB-TSO’s concern in this recommendation is on the negotiations factor considering that the current public procurement professionals may not be capacitated enough to undertake the same. This requires a certain level of expertise such as supply chain management and market adeptness.
  4. The GPPB-TSO recommends formulating further steps in capacity building of procurement practitioners i.e., the formulation of organic modules on the procurement of highly complex, technical, scientific or sophisticated Goods, Civil Works, and Consulting Services with the assistance of Development Partners, such as the World Bank.
(c) Support to Value for Money
  1. Comprehensive review of the Philippine Bidding Documents (PBDs), including contract conditions which fall short in addressing topics such as reference to abnormally low bids; price adjustment for long-term contracts; adopting contract conditions not using incorporation by reference but by setting out clearly the terms and conditions, among others.
  2. Amend provisions of the legal framework that prevent achieving best value for money, such as the licensing requirements that potentially bars participation of foreign bidders and the lack of provision on the use of Life Cycle Costing (LCC) in procurement stages.
  1. As improvements to efficiency, the GPPB-TSO, with the help of Development Partners, provided easy access to the PBDs through the PBD Builder.
  2. However, the GPPB-TSO deems that the foregoing contract price concerns cannot be addressed by the review of the PBDs, but rather through efficient procurement and budget planning of procuring entities (PEs) considering that the PE must be able to achieve budget predictability through the conduct of project costing to determine the Approved Budget for Contract (ABC) of projects.
  3. Thus, the GPPB-TSO has determined that the issue behind the recommendation is the ABC (project costing) considering that the CPARs over the years have been raising concerns on having a ceiling bid price for Procurement Projects. This is in view that the WB and ADB do not adopt a ceiling bid price for projects because they have the concept of overruns.
  4. At the outset, the rationale behind ABC and project costing is for budget predictability since the Constitution requires that a project must have a budget passed by the Congress before this can be contracted out to supplier, contractor or consultant, thus they are not allowed any overruns.
  5. Bearing this in mind, the GPPB-TSO underscores efficient procurement and budget planning of procuring entities (PEs) considering that the PE must be able to achieve budget predictability through the conduct of project costing to determine the Approved Budget for Contract of projects. For Multi-Year Contracts, it is imperative that the PE forecasts the full project cost during its budget planning and preparation although the same would be streamed over a specified number of years.
  6. The existing rules provide for price escalation, but they are very rigid with the extraordinary circumstance requirement.
  7. Nonetheless, The GPPB-TSO deems that it is imperative to have a simpler mechanism under the law considering that the current process would entail a long process where the NEDA determines the extraordinary circumstances, evaluates the price escalation claims, and then endorses to the GPPB for approval.
  8. In promoting the best value for money, emphasis must be given to two aspects: (1) procurement planning and (2) contract implementation.
  9. PEs must be able to properly implement project costing and efficient formulation of technical specifications, resulting in a more predictable and responsive ABC of projects.
  10. Currently, the GPPB-TSO is working closely with World Bank consultants in preparing a manual for drafting technical specifications and preparing cost estimates for the procurement of goods, works, and consulting services.
  11. In addition, Life Cycle Costing (LCC) is being considered as a factor, among others, in the selection criteria for bidders of government contracts. LCC is an effective risk management strategy that enables PEs to consider risk triggers in their planning process and consider mitigation techniques and accompanying costs in their project specifications.
  12. Presently, the GPPB-TSO is exploring to include LCC as selection criteria for bidders in procurement contracts, then eventually, would become a requirement during the contract implementation. Moreover, the ongoing hearings on the RA No. 9184 amendment bills have also included this, as one of the provisions.
(d) Complaints Review Mechanism
  1. Establishment of an independent administrative procurement review body that would further improve trust in the system and better competition, in line with the United Nations Convention against Corruption (UNCAC) recommendations, and international good practices.
  1. To ensure efficiency and fairness in resolving procurement-related protests and disputes, it has been included in the proposals to amend RA No. 9184 for the establishment of an independent body, within the GPPB and its TSO or as a new body, much like those established before the Insurance Commission (IC) or Philippine Competition Commission (PCC).
  2. The GPPB-TSO would undertake a study to determine the need to establish an independent body, or even within an existing office to review protests of bidders. It would also be imperative to tap alternative dispute resolution mechanisms to immediately address and improve trust in the system.
(e) Sustainable Public Procurement
  1. Consider the incorporation of sustainable public procurement criteria and use of Life Cycle Costing (LCC) principles at all stages of the procurement cycle including reference to green procurement in technical specifications.
  1. Updates on the Green Public Procurement Initiatives:
    1. The GPPB has already designated the focal persons for Green Public Procurement through GPPB Resolution No. 08-2022.
    2. The first GPP Planning Workshop for Focal Persons was conducted last 01 December 2022 which launched the Sustainable Consumption and Production (SCP) in the Philippines and Group planning on work packages: Monitoring & Evaluation (M&E) System, Standard Operating Procedures (SOPs), and SCP pilot projects.
    3. Kick-off and Planning Workshop for the Scaling of SCP in the Philippines was held on 20-22 February 2023 which identified all pilot agencies with product categories.
  2. For the next step, the GPPB-TSO recommends that the pilot agencies for the identified GPP product categories be recognized and would implement the same to come up with the green specifications and toolkits. This would pave the way for developing future GPP training modules.
(f) Strategy and enabling environment for professionalization of procurement function
  1. Update the strategy and the roadmap for public procurement professionalization to provide an enabling environment for informed use of well-documented discretion by procurement professionals to get results and improve service delivery.
  1. Through the initiatives of the Capacity Development Division of the GPPB-TSO, the following are currently the professionalization programs available for PEs and procurement practitioners alike:
    1. Conduct of Public Procurement Specialist Certification Course in partnership with SUCs and moving forward, to include Private Higher Educational Institutions (HEIs)
    2. Annual Conduct of Digital Learning Series (3 levels) for public procurement practitioners.
    3. Periodic Knowledge and Skills Enhancement Training-Workshop for GPPB Recognized Trainers
  2. Additionally, the GPPB-TSO is actively engaging private organizations and higher education institutions to establish collaborative partnerships for the provision of Certification courses in the field of public procurement.
  3. On a different note, with the ongoing proposals to amend RA No. 9184, it is recommended to continue support including the establishment of a Procurement Management Institute that would pave the way for the future professionalization of procurement practitioners, in coordination with the Professional Regulatory Commission.
  4. The GPPB-TSO recommends laying the groundwork for professionalizing procurement practitioners by defining job levels for them and then establishing a code of conduct and ethical standards for government procurement.
(g) E-procurement system
  1. Consider ways to further strengthen the effectiveness of GPPB-TSO as a regulatory and normative organization to lead the procurement reform at the country level with all required resources and technology support, especially PhilGEPS.
  2. The current procurement data are not validated against any budget or financial management system.
  3. The current information in PhilGEPS is insufficient to provide input to substantiate measurements of GDP or government expenditure.
  4. Absence of an integrated system from budgeting to recording of transactions in procurement process and contract management and payment of invoices
  1. The GPPB has already approved the conditional pioneer implementation of the Electronic Bidding (e-Bidding) Facility in the mPhilGEPS through GPPB Resolution No. 10-2022 as well as the approval of the revised e-Bidding Guidelines through GPPB Resolution No. 12-2022.
  2. However, it must be noted that there have been a couple of legislative proposals to centralize E-Governance and E-Commerce programs, including government procurement.
  3. In line with this, the GPPB-TSO recommends the periodic update of the implementation plan of the mPhilGEPS to synchronize legislative efforts in creating a centralized system of E-Governance and E-Commerce.
  4. Also, in the interest of ensuring the full implementation of the mPhilGEPS Facility to all PEs, the GPPB-TSO recommends confirming with the DICT and PhilGEPS:
    1. ICT infrastructure readiness of all PEs; and
    2. Information dissemination programs to all prospective bidders.

      The GPPB and its TSO, in collaboration with the WB and ADB, officially launched the MAPS Final Assessment Report on 26 September 2023 at the Shangri-la Plaza, Mandaluyong City. During the launching, the priority recommendations in the MAPS Final Assessment Report were presented, wherein the MAPS Steering Committee and invited stakeholders from various stakeholders and development partners had the opportunity to offer valuable comments and insights that may serve as a guide to the GPPB in formulating strategies and policies to enhance the country's procurement system and meet the government's evolving needs.

      The recommendations in the MAPS Final Assessment Report were used as guidance and adopted in the recommendations of the GPPB and its TSO in the amendments of RA No. 9184.

Download MAPS Final Assessment Report