By William Casis
Senate Minority Leader Franklin Drilon on September 14 branded as “overpriced” the purchases of the Department of Budget and Management (DBM), saying PHP422 million in taxpayers’ money could have been saved with due diligence.
“There are a number of procurements done by the DBM-PS and based on our research, the prices were higher compared to the prices in the private sector,” said Drilon.
From the three awards that they have studied alone, Drilon estimated that the total price was jacked up by almost half a billion.
At the hearing of the Senate Committee on Finance on the budget of the DBM and its attached agencies, Drilon cited, for instance, the procurement by the DBM-PS from the Pharmally Pharmaceutical Corp. of 2,000 units of Covid-19 test kits for PHP688 million or PHP344,000 per kit.
Drilon said the purchase is overpriced by PHP208 million since the said kit could be bought for PHP240,000 or for a total of PHP480 million for 2,000 units.
He said the price is also bloated in the purchase of macherey nagel/nucleospin RNA virus preps kit from Lifeline Diagnostics Supplies, Inc. The government bought the kits at PHP108,304 each or a total of PHP73.1 million for 675 units.
However, he said the private sector could buy it for only PHP47,199 each. For 675 units, the contract could have just amounted to PHP31.9 Million as opposed to the procurement price of PHP73.1 million. According to Drilon, there was an over payment of PHP41,245 million
Drilon also cited as overpriced the procurement of Universal Transport Medium and the naso pharyngeal swab, which the Department of Health bought from Biosite Medical Instruments for PHP415,638,000 for a total of 1,611,000 sets, or at PHP258 per set.
He said the purchase could be overpriced by PHP173 million citing the price of the product in the market at roughly PHP150 per set.
The minority leader asked the Budget department to look into the matter closely.
He warned that overpricing is a ground to cancel the contracts. The company may also be held liable to refund the excess.
It has also been pointed out during the hearing that procuring these kinds of supplies for a department or agency is not the usual practice.
The Senate leader said that the usual practice is for common use supplies to go through the Procurement Service like bond papers, ballpens, tissue.
He also called out the DBM-PS for not exercising due diligence in awarding contracts to backlisted companies, citing the case of Ferjan Health Link Enterprises, a sole proprietorship which was awarded a contract worth PHP727.5 Million.
The DBM reasoned that the blacklisted company is in fact a corporation – Ferjan Healthlink Philippines, an entity different from the sole proprietorship.
But Drilon said these companies should not be allowed to hide behind the corporate structure to skirt their disqualification.
According to the Procurement Service, upon checking, they saw that one of the director-incorporators is the owner of the sole proprietorship and that the contract has been cancelled based on other grounds such as overpricing and delay in delivery.
“While it is good that the contract was cancelled, this begs the question: Why is the proper due diligence not conducted prior to the award of such a huge contract. Despite this being a negotiated/emergency procurement, blacklisted entities should not have been allowed to participate. Considering the lapses in screening Ferjan, it is highly possible that similarly situated suppliers may have also secured contracts with the DBM Procurement Service,” Drilon said.