Thread by @KenAbante

Shocked about Pharmally, the contractor under Senate investigation?

@covidbudgetph flagged items:
3x - 52x typical govt contract prices
9x - 66x typical market prices
P319 M - P550 M savings if items bought at typical prices (Mar-Aug 2020 sample)

Senate, COA, please check.🧵

1/ The sad news is: it's likely not just Pharmally.

As we wrote in this thread, the risks are systemic.

These can only be addressed through a better system of social accountability to proactively monitor national procurement + improve data quality.

https://twitter.com/KenAbante/status/1394523364635545600

2/ To illustrate:

Two-thirds, or P13 B of P20 B, of our sample did not have sufficient specifications or descriptions.

This means we can't even compare price or quality for majority of goods bought w our tax money.

Still, we found items bought 3x the typical prices.

3/ Public contracts should be specified correctly so our taxes are spent well.

CONCENTRATION RISK makes this even more important.

The top 10 of 435 suppliers represented 66% of our sample value as of August 3, 2020.

Pharmally topped this list. Here are other big contractors.

4/ There were three suppliers in our sample with foreign addresses which had high-value transactions worth at least P300 million as of August 3, 2020.

These suppliers represented more than a tenth of the value of emergency procurement as of August 3, 2020.

5/ Even among procuring entities that had published their contracts as of August 3, 2020:

The top 10 accounted for P18 billion or 88% of total sample value.

The Department of Budget and Management Procurement Service (DBM-PS): P14 billion or 70% of total sample value.

6/ These procuring entities have a lot of selling power. These contractors have a lot of buying power.

These powers affect how price and quality are negotiated during emergency procurement.

A resilient procurement system urgently delivers goods while preventing abusive behavior

7/ We saw lots of possibly overpriced items:

Here's a list of items where taxpayers could have saved at least P10 million if they had been bought at typical market prices.

Can't conclude fraud because of limited available docs. But this analysis can help prioritize w/c to check

8/ So what can we do?

First, procuring entities should better specify the items they buy with our tax money, and upload these contracts online.

In our team's review of contracts as of August 3, 2020; only 205 procuring entities, or a tenth of agencies, had uploaded contracts.

9/ When we checked the document quality of our sample contracts using a 15-step method, we found:

Most contracts also had missing basic information, inconsistent amounts, broken weblinks, or unclear data or signature in the uploaded documents.

10/ Many transactions had inconsistent or missing dates or times across their uploaded documents.

The publicly available documents we checked were the purchase orders, notices of award, and annual procurement plans.

11/ Some transactions had significant typographical or mathematical errors and differences in amounts across the documents they uploaded.

There were some suspended suppliers which were allowed to bid. But these suppliers' transactions had been canceled last time we checked.

12/ The good news is we also found contracts with model supporting documents.

Here are:
a model purchase order (PO) from @BangkoSentral
a model annual procurement plan (APP) from @BangkoSentral
a model notice of award (NOA) from the Department of Agriculture

13/ Second, civil society can organize to use some of the methods we use in this paper, to build a movement to monitor and systematically improve the quality of our public procurement data.

We have to watch procurement with the same rigor and vigor as our elections.

14/ Third, we should heed lessons from grassroots accountability organizers on how we pool demand and make bulk orders, how we specify contracts, and how we mitigate price gouging.

We summarize in our paper all the literature we've read on @opencontracting in the Philippines.

15/ Finally, we invite journalists, students, auditors, oversight bodies, procuring entities, and contractors to:

Study our dataset of P20 billion COVID-19 government contracts, which we've uploaded for public use: bit.ly/phlcovidcontra…

16/16 Read our full report @covidbudgetph @wesolveph and @HivosROSEA via:

📜ResearchGate: bit.ly/phlcovidcontra…
📊Slides: bit.ly/phlcovidcontra…
💻FB Live @opengovPH @R2KRN_PH: facebook.com/opengovPH/vide…
🔢Data: bit.ly/phlcovidcontra…
🌐Web: wesolve.ph/research/stren…