Duque, ex-DBM exec justify transfer of P42B DOH funds for face mask, face shield sans MOA

Health Secretary Francisco Duque III and resigned Department of Budget and Management-Procurement Service  (DBM-PS) chief Christopher Lloyd Lao on Wednesday justified the transfer of P42 billion funds for the purchase of face masks and face shields in 2020 without a memorandum of agreement (MOA).

At the continuation of the Senate Blue Ribbon Committee’s investigation on DOH’s use of its funds for 2020, Senate Minority Leader Franklin Drilon questioned the absence of a MOA on the DOH’s transfer of multi-billion funds to the DBM-PS for the procurement of the said COVID-19 protective materials.

Duque explained that they transferred the funds and availed of the services of the DBM-PS because their own Bids and Awards Committee (BAC) cannot handle the volume of orders they need during the onset of the pandemic.

“Sinubukan nito (DOH) na mag-bid sa pamamagitan ng amin mismong central office bids and awards committee or COBAC ngunit bigo itong magkaroon ng bidders na kakayanin ang dami ng pangangailangan or volume bunga na rin ng limitadong suplay sa merkado maging ang itinakdang kalidad ng PPEs na nais mabili ng DOH,” Duque explained.

(The DOH tried to bid through our central office bids and awards committee or COBAC but we failed to attract bidders who can supply us the volume of orders that we needed due to the limited supply in the market and meet the standard set by the DOH.)

He added that foreign suppliers also limited the number of PPEs that they export as every country were preparing for the COVID-19 pandemic at that time.

But Drilon questioned the ”propriety” of DBM-PS procurement of the medical equipment on DOH’s behalf, pointing out that the Health Department is “better-equipped” in purchasing the face masks and face shields.

“I repeat the question, shouldn’t the DOH do the procurement itself since they are more specialized and these are medical needs? Di ba ang DOH meron po kayong BAC, why was it not handled by the DOH?” he asked.

Duque reiterated that the DOH’s own BAC has limited manpower and it cannot handle the volume being procured by the agency.

The Health chief added that there is a Government Procurement Policy Board (GPPB) resolution, which authorized the departments like the DOH to ask for DBM-PS’s help in procuring items that were already considered as common use supply and equipment (CSE).

At this point, former Budget Undersecretary Lao explained that initially, the face masks and face shields were not part of the CSE inventory but it was later on included in the list following the GPPB resolution which was mentioned by Duque.

“After it was declared as common supplies, Mr. Chair, then that is the time when they requested the PS-DBM to procure because if there is no declaration that these items are common supply then you cannot buy it directly to us and there is a memorandum of agreement,” Lao explained.

“So if such items would have not been declared by the GPPB as common supplies, then there should be a MOA when they procured, but I think when they transferred the funds, these were already declared as common supplies,” he added.

Drilon cited 7.3.3. of the Implementing Rules and Regulations of the Government Procurement Act.

The said provision stated that: “In order to hasten project implementation, Procuring Entities which may not have the proficiency or capability to undertake a particular procurement, as determined by the HoPE (heads of procuring entities) concerned, may outsource the procurement tasks by requesting other GoP (Government of the Philippines) agencies to undertake such procurement for them, through the execution of a memorandum of an agreement containing specific arrangements, stipulations, and covenants, in accordance with government budgeting, accounting and auditing rules.”

“I am sorry, but what you are saying is contrary to the implementing rules and regulations of the Procurement Act. There is nothing there which dispenses with the execution of the MOA which is necessary so that there can be a documentary tracing of this disbursement, P42 billion,” Drilon said.

Still, Lao and Duque maintained that a MOA is no longer needed once the face masks and face shields are included in the CSE list.

Nevertheless, Duque said they will come up with a MOA with DBM-PS as recommended and guided by the COA.

“We can still come up with the MOA as this was one of the deficiencies that was reported (by COA) and we are given 60 days to correct these deficiencies, your honor,” Duque said.

At the latter part of Drilon’s interpellation, Senator Panfilo Lacson questioned the non-inclusion of face shields in the GPPB resolution cited by both Duque and Lao.

“I wonder where the PS-DBM got their authorization to bid out the procurement of face shields because it is not included in the list of the items,” Lacson said.

The lawmaker showed a copy of the GPPB Resolution No. 03-2020 dated March 9, 2020 which does not include the face shield in the list of CSE.

“As you can see, this is a complete list. There is a subsequent resolution IRR dated March 21, 2021, I think it is a generalization of items to be procured as CSE as categorized. So I wonder what authority does the PS-DBM [have] in procuring face shields? With or without MOA. With or without the GPPB resolution, PS-DBM was not authorized at that time to procure face shields kasi wala ito sa listahan [ng CSE],” Lacson added.

There were no explanations given on Lacson’s manifestation both from the DOH and the DBM.

Last week, senators have questioned the transfer of P42 billion DOH funds to the DBM-PS after the COA flagged the overpriced procurement of the said items.—AOL, GMA News