House bill seeks to abolish Budget procurement arm

A BILL that seeks to abolish the Budget department’s Procurement Service, which the Senate is investigating for contracts that allegedly disadvantaged the government, has been filed at the House of Representatives.

Cagayan de Oro City Rep. Rufus B. Rodriguez filed House Bill 10222, which will transfer the procurement of common-use supplies to agencies.

The congressman said the Government Procurement Reform Act has made the Procurement Service “redundant and irrelevant.” Under the law, government agencies were mandated to create a procurement board and form their own bids and awards committees.

He said the Budget department’s procurement arm was created to take advantage of economies of scale by handling purchases of common-use supplies and equipment.

Senator María Imelda “Imee” Josefa R. Marcos filed a counterpart bill on Sept. 9, noting that the Budget office had become “a fertile breeding ground of graft and corruption.”

In a separate statement, Mr. Rodriguez cited the office’s “many issues and controversies.”

“The Procurement Service-Department of Budget and Management has also been hounded by allegations of improper procedure and overpriced acquisitions,” he said.

The Budget department’s Procurement Service has come under fire after it entered into P8.68 billion worth of government contracts for overpriced face masks and other medical supplies with Pharmally Pharmaceutical Corp.

The company delivered 500,000 surgical masks to the Budget department before it won the contracts. The Health department and Procurement Service also ordered P5 billion worth of coronavirus test kits with a shelf life of six to 10 months, according to the Senate Blue Ribbon committee.

Under the House bill, the Procurement Service must make an inventory within a year of all common-use supplies to be delivered to agencies.

Unused funds transferred or advanced by agencies to the Budget office will go back to the national Treasury.

Its workers will get separation and retirement benefits under existing laws.

Pharmally officials earlier told the Senate the company had delivered half-a-million face masks even before it won the deal.

Senators investigating the deal scoffed at the idea at a hearing this month, saying officials of the company, whose capability they have questioned, were probably lying.

The company delivered 500,000 surgical masks on March 25 last year, the same day it received a request for a quote from the Budget department, Krizel Grace U. Mago, regulatory affairs head at the company, told the Senate Blue Ribbon committee.

Senator Francis “Kiko” N. Pangilinan doubted that the delivery happened on the same day, noting that Pharmally did not get a notice of award until April 6.

Former Budget Undersecretary Lloyd C. Lao told senators the company had delivered the face masks to prove it had enough capacity.

Pharmally Director Linconn Ong, whom the Senate body had arrested for failing to attend previous hearings, said the masks were bought from local supplier Tigerphil Marketing Corp. for P23 apiece. These were delivered to the Procurement Service warehouse in Paco, Manila, he added.

The government paid Pharmally P13.9 million on April 15 last year, more than the requested quote for P8 million.

Former Budget officials have said the orders from Pharmally were above board because the first stimulus law had allowed emergency orders for medical supplies amid a coronavirus pandemic. —

Russell Louis C. Ku