THE Commission on Audit (COA) on Wednesday maintained that there were no findings of overpricing in the COVID-19 supplies purchased by the Department of Health (DOH) through the Procurement Service of the Department of Budget and Management (PS-DBM) during the onset of the pandemic.
Michael Aguinaldo, the state audit chief, made the statement as he appeared before the House Committee on Good Government and Public Accountability, which launched a motu proprio inquiry into the alleged overpriced medical supplies and equipment procured by the government for its COVID-19 response.
The committee, chaired by DIWA Party-list Rep. Michael Edgar Aglipay, initiated the probe in light of the findings of the Commission on Audit (COA) on the “discrepancies” in the management of COVID-19 funds entrusted to the Department of Health (DOH) in 2020, particularly in the procurement of P42.4 billion worth of medical supplies and equipment.
The DOH had earlier confirmed that P41.4 billion of that amount was paid to the Procurement Service of the Department of Budget and Management (PS-DBM), which was tasked to handle big-ticket government procurements for the pandemic.
During the hearing, Aguinaldo said the COA findings only pertain to procurement that was made without the required memorandum of agreement and supporting documents.
Aguinaldo also said there was nothing illegal with the PS-DBM procurements as long as they comply with Government Procurement Policy Board (GPPB) Circular 1-2000, which applies some rules under Republic Act (RA) 9184 or the Government Procurement Reform Act.
This was despite the fact that said procurements were covered by the Bayanihan to Heal as One Act or Bayanihan 1, which authorized President Rodrigo Roa Duterte to “expeditiously procure” COVID-related goods and services by exempting them from the coverage of RA 9184.
The procurement law usually provides that all government purchases shall be done through competitive bidding, but because of Bayanihan’s exemptions, the DOH—through the DBM-PS—was allowed to resort to negotiated procurements.
“Under the law, Bayanihan 1, the President is authorized to procure expeditiously as an exemption from [RA] 9184 and other related laws. But nonetheless, the DBM agreed to apply emergency procurement perhaps with a little modification as reflected in GPPB Circular 1-2000,” Aguinaldo said in response to a query by committee vice chair Surigao del Sur 2nd District Rep. Johnny Pimentel.
“There is an effort to at least put some order in the procurement process by applying emergency procurement rules as reflected in the GPPB Circular issued on April 6, 2020,” the COA chief added.
Overall Deputy Ombudsman Warren Liong, who was the director of PS-DBM when the questioned COVID-19 supplies were purchased, said they have in fact “went over and above the requirements of the law” in their procurements.
“We went over and above the requirement of the law and did market canvassing. Even if we were not required before we went into direct negotiation, we undertook market price analysis using historical data or actual prices from available suppliers,” Liong said during interpellation by AKO BICOL Party-list Rep. Alfredo Garbin Jr.
Liong said the PS-DBM also “procured the lowest available price” at the time and that the procurements complied with the technical specifications or delivery schedule.
PS-DBM is under fire for allegedly favoring Pharmally Pharmaceutical Corp. in the purchase of medical supplies. Some senators have earlier raised the possibility that PS-DBM was influenced by the close association of Pharmally with the President and Senator Christopher “Bong” Go.
But during the hearing, Ong denied that PS-DBM was influenced to select Pharmally as supplier of COVID-19 supplies.
When asked by committee chair Aglipay if PS-DBM was instructed by Senator Go to award the contract to Pharmally, Ong replied in the negative.
Aglipay, in his opening statement, said the committee wanted to help the DOH and DBM in “identifying and removing the bad weeds who seek to gain profit from this pandemic.”
“We take strong exception over allegations involving public officials from the DOH and DBM who purportedly took advantage of the pandemic and the country’s state of national emergency solely for their own personal gain,” Aglipay said.