NIA told to re-bid P1.4-B backhoes

Void the old result and re-bid the P1.4-billion purchase of excavators. Thus recommended the government-private sector super body that reviews public contracts above P100 million. The advice was sent to the National Irrigation Administration early this month. Failure to heed it could lead to full-blown investigation of the “backhoe scam”.

The NIA bidding of Jan. 19 for excavators came under scrutiny by the powerful Procurement Transparency Group (PTG). Two wrongs stuck out: NIA imposed that bidders be at least 25 years in business, and altered the bidding venue without due notice. Since the playing field was unleveled, the PTG told NIA to declare failure of bidding. Aside from re-bidding, PTG advised NIA to:

• stick to the Government Procurement Reform Act’s pass-fail rule;

• scrap the extraneous “25-year rule”; and

• ensure the presence of observer-NGOs in the re-bidding.

The PTG has in the past scrapped anomalous biddings; a recent one was for a foreign-funded classroom construction in the Visayas. Two-dozen other dealings are under study. The Government Procurement Policy Board heads the PTG. Five government members come from the Presidential Anti-Graft Commission, NEDA, DOJ, DILG and DBM. Nine NGOs rotate for five private-sector seats, among them the Bishops-Businessmen’s Conference, Makati Business Club, Transparency and Accountability Network, and Volunteers Against Crime and Corruption.

The bishops-businessmen’s group is volunteering to observe the NIA re-bidding. PTG chair Undersecretary Laura Pascua told the agency so. It was not readily known if the NIA has accepted.

Under a program to restore irrigation ditches nationwide, the NIA had bid out:

• Package I — 139 large excavators, estimated at P903,500,000;

• Package II — 69 medium excavators, P400,200,000, and

• Package III — 15 dump trucks, P120,000,000.

This month Sen. Mar Roxas denounced the NIA for tailor fitting its proceedings for favored parties. The month-long process was held in the midst of the Yuletide rush, when there was eleven days of official no work. The notice of bidding was billed as “agricultural equipment”, which refers to threshers or tractors, instead of “heavy machineries.” A 25-year rule was inserted. All these, Roxas said, were contrived to preclude the participation of the top two distributors with 72-percent market hold: Monark, carrier of Caterpillar, and Maxima, seller of Komatsu.

Monark was unable to join because of the mislabeling of the notice, Roxas said. Maxima got disqualified for failing to meet the 25-year-rule. Maxima has been in the trade for 21 years, Monark 22, but their principals, Caterpillar and Komatsu, are both nearly a century old. Unlike competitors, they also have service outlets nationwide.

Complaining to the PTG, Maxima said the 25-year rule was arbitrary. The NIA could not explain why it wasn’t 15 or 20 or 30. The procurement law requires only that bidders be at least three years in existence. The law seeks to remove the discretion of officials to fudge bidding rules, and make them rate bidders only as passed or failed.

Papers gathered by Roxas’s staff showed that the winners didn’t meet NIA’s 25-year rule either. Civic Merchandising (of Package I) and Transport Equipment Corp. (Package II) may be 35 and 33 years old, respectively, but went into heavy equipment only 10 and 15 years ago. Both have no repair-maintenance units outside Manila. Civic and TEC’s capitalization, annual sales, and taxes paid also are miniscule compared to Monark or Maxima. The records debunk NIA’s claim that a firm that’s 25 years in business is likely to stay another 25 and so be able to service the purchased backhoes.

The Pastelero Law Office also complained to the Ombudsman that NIA broke one of the procurement law’s bidding qualifications. Bidders must have sold, in one deal in the past ten years, at least half of the amount now up for bidding. From 1998-2007 records, neither Civic nor TEC had single sales of P400 million or P200 million to qualify for Package I or II.

Maxima wrote NIA that government would have saved P300 million had it not been debarred. NIA snorted that Maxima’s claim is unverifiable precisely because its sealed bid was never opened. There’s only one way to find out — if and when NIA re-bids.

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Several top lawyers reacted to my piece on Raul Gonzalez’s habitual flip-flopping (Gotcha, 23 Mar. 2009). One of them recounted a recent event when the justice secretary had to say something about the public furor over costly fuel. Gonzalez harrumphed that he would investigate the Big 3 oil firms — Petron, Shell, Chevron — for cartel pricing. Whereupon, a Manila judge who was hearing a class suit reminded him that he had just given the court a month before a certification denying any cartel.

A former DOJ official lamented that two clients had been victims of Gonzalez’s somersaults on decisions. A retired cop added that a worse case concerned murder, which underwent several back flips because of a fixer once detailed to Gonzalez’s office.

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