Validity of agency-to-agency procurement upheld

MANILA, Philippines - The Office of the Government Corporate Counsel (OGCC) has issued a legal opinion affirming that Republic Act 9184, otherwise known as the Government Procurement Reform Act allows government agencies to procure goods and services from the Philippines Aerospace Development Corp. (PADC) after mere negotiations.

In his opinion rendered in response to a clarification sought by PADC acting president Conrado C. Cueto, Government Corporate Counsel Justice Raoul C. Creencia said any government agency may validly procure goods and services from PADC without the necessity of a prior public bidding.

PADC is a government-owned and controlled corporation mandated by Presidential Decree 696 to provide technical services and overhaul support to government agencies owning aerospace equipment, the Philippine Air Force, the national airline, foreign airline companies and to the aviation industry in general.

PADC does not receive any subsidy from the National Government and is not part of the annual General Appropriations Act. It has to generate its own corporate funds to sustain its operations.

Anti-graft vigilante groups lauded the OGCC ruling as a timely edict that will not only cut costs but will also expedite the procurement process among government agencies and eliminate opportunities for graft and corrupt practices.

As this developed, aviation industry stakeholders said the P-Noy administration may have to thoroughly review the situation before deciding on the fate of PADC which, according to media reports, has lately been lumped together with some government-owned and controlled corporations (GOCCs) marked for abolition for either losing money or being unnecessary, with some of them being linked to the pork barrel scam.

They cited a recent Commission on Audit (COA) report finding PADC that used to be operating “in the red” has turned around and has been “in the black” since 2011 when its new management took over. The same COA report stated that for the first time in many years, PADC earned a net income of P4.399 million. And for the first time since it was established in 1973, PADC remitted the amount of P2 million as dividend to the National Government during the GOCC day held in Malacañang last June 3, 2013.