SEN. Francis Tolentino is moving to amend Republic Act 9184 to restore congressional oversight over the Government Procurement Policy Board (GPPB), which he described as the “root cause” of the multibillion-peso mess in pandemic-related purchases now being investigated by the Senate Blue Ribbon Committee.
In remarks at the 10th Senate hearing on Tuesday, Tolentino noted that GPPB was able to “mangle, dissect, and usurp the powers of Congress” by issuing 21 implementing rules and regulations (IRR) over the years for the Government Procurement Law, or Republic Act 9184.
“It is the only agency that was able to issue so many IRRs for a single law,” he added.
The senator pointed out that the most controversial of this is the Common Use and Services (CUSE) categorization that the GPPB used at will and which spawned many anomalies, including the series of transactions flagged in the 2020 Commission on Audit report on the Department of Health, particularly P62-billion in deficiencies in pandemic fund use and inventory management.
In earlier Senate hearings, it was noted that the CUSE was used before to allow the entire bureaucracy some economies of scale by allowing a single entity like the Procurement Service of the Department of Budget and Management (PS-DBM) to buy in bulk usual office supplies like paper, pens, paper clips, which other government agencies can then buy from it at much lower prices.
The CUSE was not intended to be used for sensitive items like the pandemic-related products, which are unique to the Health department.
By categorizing even pandemic-related items—personal protective equipment and test kits, or items that should have been procured directly by the agencies that need them and which have expertise for vetting them like the Department of Health—the “CUSE” tag attached to the PPEs needed by the DOH allowed the latter to outsource bidding to the controversial PS-DBM.
The PS-DBM, which senators noted had no expertise to check sensitive products like PPEs and test kits, went on a procurement spree, using the “urgency” lent by the Bayanihan law, to award a series of negotiated contracts to the low-capital startup Pharmally Pharmaceutical Corp. that the Blue Ribbon is investigating.
Senators have openly aired suspicion that Pharmally, which is not a manufacturer, simply used its influence and “connections” to bag billions in contracts for supplies that are being investigated for possible “overpricing” or for being expired or substandard.
In all, Pharmally bagged P11 billion in contracts from PS-DBM, out of the total P42 billion unilaterally transferred to it by the DOH from its pandemic fund budget.
Earlier hearings heard Pharmally officials admitting they got funding to cover the cost of the initial deliveries of PPE items from Davao businessman Michael Yang, former economic adviser and friend of President Duterte. Yang has disowned any business interest in Pharmally.