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Resolved
By Michael Alan Hamlin
November 18, 2002
Senator Ramon B. Magsaysay Jr. and
Representative Harry C. Angping - co-chairmen of the Congressional
Oversight Committee on e-Commerce Law Implementation - are expected
in the next week or so to file resolutions that will encourage the
Department of Budget and Management (DBM) to reconsider the evaluation
process for its electronic procurement system (G-EPS). That process
has eliminated two of the strongest contenders for the contract,
leaving just two qualified bidders, according to Charlie P. Villaseñor.
Villaseñor is the president and chief executive officer of
Transprocure, which specializes in putting up private exchanges
for e-commerce.
Transprocure is also one of the firms
that has been eliminated from the G-EPS bidding on a technicality
- the bid documents it helped put together arrived at the DBM six
minutes late. Villaseñor, based on published reports, feels
that dismissing a highly qualified bidder on the basis of a technicality
is not so much a matter of strictly adhering to a preset bidding
process, as a matter of robbing the country of the opportunity to
employ the world-class technology his company represents in the
Philippines. Transprocure is a member of a consortium consisting
of Questronix and Magnus, which was formed to bid on the project.
According to a published report last
week, Villaseñor said that, "the disqualification process
has brought down the qualified bidders to two, which obviously (provides)
a limited opportunity to fully consider what is available on the
e-procurement market. The G-EPS project is of vital importance to
the country. Every effort should be made to ensure that the selection
process is thorough and rigorous and that the deployment approach
reaps the full benefits of e-procurement and procurement transformation."
Is Villaseñor simply a sore
loser? Because it is expected that losers will automatically criticize
any selection process, the assumption among many will indeed be
that Villaseñor simply doesn't like losing. But others will
have a different perspective for at least two reasons. First, his
bid was dismissed on a technicality which had absolutely nothing
to do with the benefits of his offer. Second, technicalities are
traditionally used to eliminate strong contenders when the procurement
process is corrupted so that less qualified bidders are favored.
Whether or not that is the case this
time around remains to be seen, and when asked by the same reporter
that interviewed Villaseñor my take on developments, I suggested
that the zeal of the Interagency Bids and Awards Committee (IABAC)
was commendable in terms of its determination to uphold the integrity
of the bidding process. But that they needed to make sure the rules
promote the best interests of the country, not the best interests
of the rules (Incidentally, in the interest of full disclosure,
two of my clients are members of the other consortium that was dismissed.).
When one considers, however, that
not one but two strong contenders have been eliminated, and that
one of the remaining bidders is a foreign firm, circumstances begin
to look a bit murky, to say the least. That's in part because executive
order 40 (EO 40) mandates that Philippine firms should be considered
before foreign suppliers in government procurement bids. IF EO 40
is invoked, it would provide a defacto "win" to the only
other firm that remains in the bidding.
If this happens, the selection committee
will present to government a P250 million e-procurement project
on the basis of just one final bid (four finalists were chosen from
among 10 original bids, two of the finalists have been dismissed
on technicalities, and one of the final two in the running is a
partnership headed by a foreign firm, East West Electronic Trading
Center). I doubt that many would agree that the purpose of the bidding
rules is to make things easy on the selection committee.
Whether there is an attempt to manipulate
the results in favor of the remaining bidder or not, this doesn't
look good. And it would be especially ironic if the G-EPS system,
which is intended to increase transparency and reduce corruption
in government procurement, itself appeared to be tainted. This becomes
an especially critical issue when we consider that the current administration
is already struggling to assert its integrity.
Perhaps it is for these reasons I
am told that Magsaysay and Angping plan to step into the process
in the coming days. Ideally, of course, they shouldn't have to.
The inappropriateness of appearances should, after all, be clear
to the IABAC. And while the committee may have exerted its best
efforts at ensuring an untainted selection process, circumstances
have conspired against it. This is unfortunate, because the country
desperately needs the advantages that e-procurement offers. There
is every reason to expect that implementation of a proven system
will reduce corruption, enhance transparency, and speed procurement
processes.
And that's precisely why the committee
must make certain that it carefully evaluates the best e-procurement
systems available, rather than letting the rules make the decision
for them.
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001). Write him at mahamlin@teamasia.com.).
Copyright © 2002 Michael Alan
Hamlin. All Rights Reserved.
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