One of the major programs of the Department of Education (DepEd) is the Basic Education Facilities Fund (BEFF), whose aim primarily is to address repairs and maintenance of public school buildings and other facilities. For Fiscal Year (FY) 2020, Schools Division of Baguio City received a total BEFF allotment of 97,035,779.78 pesos. On December 16, 2020, the Bids and Awards Committee (BAC) conducted the procurement of the identified projects and resulted in the Notice to Award (NOA) and corresponding obligation of 77,854,307.29 pesos and generation of savings or unobligated balance of 19,181,472.49 pesos. The unobligated balance was forwarded for FY 2021 which is reportedly the 2021 continuing BEFF.
As part of the Commission on Audit’s mandate, the said agency through the resident Auditor conducted the foundation exit conference and issued Audit Observation Memorandum (AOM) No. 2021-07 dated February 08, 2021 relative to the procurement and implementation of the above-mentioned projects. The said AOM underscores the low budget utilization rate of 80.34% and zero (0) percent disbursement rate.
The low percent of the obligated budget was due to the fact that the bidders dropped their bid amount significantly. Bidders offered a bid amount that ranges from 12%-16% of the Approved Budget Cost (ABC) of the project. These surrounding circumstances resulted in unobligated budget allocations of 19,081,483.71 pesos or 19.66% corresponding to the savings generated from the procurement. DepEd Memorandum No. 95 s. 2017, 2.b entitled Guidelines on the Prioritization of the Utilization of Savings Under the Quick Response Fund and Basic Educational Facilities Fund stipulates that savings may be utilized in other schools provided that the project originally programmed is complete according to set standards, specifications and approved agency estimates, hence, savings generated shall only be used if the projects are complete. Besides, DepEd Memorandum OUF-2021-0090, item 1.3 clearly states that Appropriation Items (Personnel Services, MOOE, and Capital Outlays) under RA No. 11520 shall be valid for release, obligation and disbursement until December 2021. Corollary to this DepEd Memorandum, the SDO-Baguio cannot utilize the unobligated budget which is amounting to 19,081,483.71 pesos since the completion of all projects is until August 2021.
In light of the foregoing facts, I proposed remedial measures and a process through a study for the SDO-BEFF and the Bids and Awards Committee (BAC) not only to expedite the utilization of savings but also to ensure that all activities do not circumvent any provision of RA 9184 and its 2016 IRR. The adoption of said process and measures that were spelled out under the innovation and strategy have benefited the schools where repairs are being undertaken.
The study determined the amount of money being allocated in the general requirements and the average number of days from the preparation of Program of Works (POWs) to the issuance of notice to proceed using competitive bidding and negotiated procurement under contiguous/adjacent project.
Results showed that the amount of money from the general requirements using negotiated procurement under contiguous/adjacent project is lower for more or less 10% of the direct cost of the project versus using the competitive bidding. The finding in the study implies that when negotiated procurement under contiguous/adjacent project is applied, the procuring entity will save more or less 10 percent in the general requirement. The reason for the finding is that the cost for mobilization in the project is subtracted. It was not explicitly stated in section No. 53 of the 2016 Implementing Rules and Regulation (IRR) of Republic Act (RA) 9184 that the 10% mobilization will not be included under the general requirement budget but it could be one of the spirits of the law since the contractors need not to transfer their equipment in other construction site. It can be inferred from the aforesaid result that negotiated procurement as a mode of utilizing savings from a project is more beneficial to the end user (school) and more advantageous to the government as well. It is therefore recommended that negotiated procurement under contiguous/adjacent project be utilized most especially if the contractor has no negative slippage in the implementation of the original contract and had satisfactory adhered to program of works and quality standards.
The average number of days from the preparation of POWs to the issuance of notice to proceed using competitive bidding is 70 calendar days longer than the negotiated procurement under contiguous/adjacent project. The finding implies that negotiated procurement under contiguous/adjacent project is better than competitive bidding as far as procurement of projects for the utilization of generated savings is concerned. Obviously, competitive bidding takes longer days because there are some procurement processes and or activities such as the approval of POWs at the DepEd Central Office and the activities that are necessary to be complied with in public bidding, which takes a minimum of 26 calendar days. Furthermore, the competitive bidding process cannot commence not unless the condition embodied in DepEd Memorandum No. 95 s. 2017, item 2.b is met, which states that generated savings may be utilized in other schools provided that the project originally programmed is complete according to set standards, specifications and approved agency estimates.
Finally, the average number of days from the preparation of POWs to the issuance of notice to proceed significantly differ using competitive bidding and negotiated procurement under contiguous/adjacent project.
In the light of the findings in the study, the following are hereby proposed: 1) In the utilization of generated savings, the negotiated procurement under contiguous/adjacent project mode of procurement is encouraged. The mobilization and procurement of tarpaulin should be removed from the general requirements when applying the said method of procurement. 2) The use of negotiated procurement under contiguous/adjacent project should be adopted to maximize the utilization of savings and expeditious implementation of infrastructure projects. 3) The preparation of POWs for the contiguous/adjacent project should be done once variation order in the implementation of the on-going project has been completed. Moreover, the BAC should negotiate with the contractor of the on-going project upon receipt of the POWs from the Division Engineers.**By Nino M. Tibangay
