Procurement reform: Linchpin of good governance

Cost-effective procurement is the antidote to misgovernance and corruption.

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The World Bank estimates that government spending on public procurement ranges between 13 to 25 percent of gross domestic product (GDP), and that up to 25 percent of the value of contracts can be lost to bribes, overpricing, kickbacks and other nuances of endemic corruption.

The cost of corruption in the Philippines is assessed as being higher; up to 40 percent of the value of procurement contracts could be siphoned off and pocketed. As tracked by the Department of Budget and Management (DBM), procurement items, as a percentage of total expenditure, have averaged 25.2 percent during the past decade.

This was the impetus for the enactment last year of the New Government Procurement Act (NGPA), Republic Act (RA) 12009 that supplanted RA 9184 and embodies provisions that promotes transparency, efficiency, accountability, and sustainability by encouraging adoption of solutions that are tailor-fit to project needs.