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U.S.-Based
Philippine e-Government
By Michael Alan Hamlin
January 27, 2003
The Department of Budget & Management
has come up with a novel idea for its Government Electronic Procurement
System (G-EPS): Base it in the U.S. If officials of the Department
of Budget & Management (DBM) and members of the Interagency
Bids and Awards Committee (IABAC) have their way, the Philippine
government's e-procurement processes and data will be sitting in
servers in the United States when the G-EPS is finally implemented.
When it will be implemented, however,
is still anybody's guess, despite published reports indicating that
DBM has awarded the G-EPS project to ITBF Philippines, a consortium
composed of East West Electronic Trade Center, a foreign-owned company
that says it is based in the Philippines, Right Computers, ABC Consulting,
and Infomediary. That announcement was originally expected in January,
in accordance with bidding procedures that stipulate that a Notice
of Award will be issued within 10 days following a decision on whether
to award the bid.
A media report published December
27 quoted DBM secretary Emilia Boncodin as announcing, "The
winning bidder has already been identified." If so, a Notice
of Award should have been issued at the very latest two weeks ago.
That procedural hiccup is important, because DBM assistant secretary
Eduardo Opida said last week in a separate report that IABAC was
justified in removing two other consortiums from the bidding on
procedural grounds. I guess rules apply when it's convenient over
at DBM.
Nevertheless, Mr. Opida is quoted
as insisting, "The G-EPS strictly follows the rules stipulated
in Executive Order 40, series 2001." Yet it is section 30 of
EO 40 that stipulates the procedure for issuing a Notice of Award.
Why is there no notice, then?
Speculation suggests a number of
factors, other than procedural technicalities. Among them is the
sobering prospect of Philippine government data sitting somewhere
in North America, and whether that data will be secure. If the Philippines
goes ahead with this unusual alternative for leveraging the benefits
of e-procurement, it is likely to be the first nation on earth that
out sources sensitive public spending data. Does that mean the Philippines
is emerging as a global e-procurement trend setter, emulating the
increasingly popular practice of global corporations to outsource
business processes?
Probably not, for a couple of reasons.
First, private-sector outsourcing is a cost-cutting initiative,
not an enabling one. Corporations want to save money by outsourcing
to places, ironically, like the Philippines. Our advantages are
lower costs, good infrastructure, and a bright, English-speaking
labor force. Second, the Philippine government apparently is proposing
that it do just the opposite: outsource government data to one of
the highest cost centers in the world. That's got to sound pretty
weird to most people.
Others believe that issues related
to the transparency of the bidding process account for the tardiness
of the Notice of Award. Word leaking out of DBM suggests that the
ITBF consortium failed to disclose in its bid documents that its
e-marketplace is physically located in another country. If true,
the failure to disclose such basic information amounts to a fundamental
shortcoming in the ITBF bid at best, and a clumsy attempt to mislead
the IABAC at worst.
No one knows for sure what the real
story is, however, because so far DBM has also been silent on this
issue, despite the publication of a number of reports suggesting
the failure to disclose is true. Instead, what Opida has had plenty
to say about is the temerity of bidders disqualified on procedural
technicalities to complain about their fate. "Bid rules cannot
be waived," he reportedly complained. "They have to be
followed consistently, once they are formally made part of the bidding
process. To waive one now would be prejudicial to those who religiously
followed them."
What Opida was attempting to do by
that statement, of course, was to deflect speculation away from
substantial issues having to do with data security and disclosure,
toward inflexible and not-very-important procedural rules that,
as it turned out, managed to eliminate two very strong consortiums
(Full Disclosure: One of those consortiums involves a number of
my clients.) for really dumb reasons. That's another interesting
story, which I've previously written about ("Resolved,"
November 18, 2002).
But are these reasons sufficiently
substantial to account for DBM's intransigence? So far, no one seems
to know. Still, one thing is clear, no amount of bureaucratese and
obfuscation is likely to deflect the spotlight that's centered on
the DBM and the G-EPS bid. In the end, I suspect that the whole
thing will once again be proclaimed a failure, and we'll start over
again.
That's good, because it looks like
starting over will save the country from a terrible mistake. It's
unfortunate, because government needs its G-EPS now, and a re-bid
will further delay its implementation. Hopefully, DBM and IABAC
will learn from the experience, and focus on the substantive issues
involved in the bidding, rather than the petty bureaucratic ones
this next, and hopefully final, time around.
(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), and he is currently
at work on High Visibility: The Making and Marketing of Asian Professionals
into Celebrities. Write him at mahamlin@teamasia.com.).
Copyright © 2003 Michael Alan
Hamlin. All Rights Reserved.
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