Pork, daang matuwid’ don’t mix: One bidder, one PDAF project

By Roel Landingin
Philippine Center for Investigative Journalism

AUCTIONS for civil-works contractors to carry out “hard” or infrastructure-related pork-barrel projects must be lonely affairs.

There is only one bidder for each of the competitive tenders held by the Department of Public Works and Highways to choose a contractor for infrastructure projects under the PDAF program, according to DPWH data on abstract of bids since July 2010.

That compares to an average of 4.4 bidders per auction for DPWH projects worth P50 million and above. For civil works contracts valued at less than P50 million, the average is 2.4 bidders per auction.

Perhaps it has to do with the tiny relatively sums involved – an average PDAF infrastructure contract is worth only P1.8 million. That has prompted DPWH Secretary Rogelio Singson to move for clustering “hard” or infrastructure-related pork barrel projects for minimum contract costs of at least P5 million.

Right now, he says, many PDAF projects are worth a million pesos or less, but these have the same administrative requirements as a P10 million or even P50 million project. “I will have to prepare individual programs of work, I will have to prepare and publish them for bidding, I will have to monitor them, I will have to assign a materials engineer,” complains Singson. “Can you imagine how much work is entailed if we have to do all that for each small project?”

While economies of scale may help explain why tenders for PDAF projects attract just one bidder, the resulting absence of competition could lead to the government paying more than necessary for civil works and construction supplies. True, each PDAF project is rather small, but the aggregate pork-barrel funds amount to a hefty P24.7 billion in 2012, or more than one percent of the total budget.

With no genuine competition, suspicion is rife that lawmakers themselves have a hand in the selection of contractors to carry out PDAF projects. Senator Panfilo Lacson, who has given up his pork-barrel allocations since 2002, says members of the House and the Senate do not confine themselves to project identification; they are also seen as actively pushing for their favorite contractors.

He explains: “’Di ba pagbigay mo ng allocation sa isang lugar, sasabihan mo na ‘yung mayor or governor? Bitbit na ‘yung contractor. (Isn’t it when you [the lawmaker] give an allocation for a certain place, you already notify the mayor or governor? And the contractor’s already part of it all.)”

The system of fixing the selection of contractors for PDAF-funded projects makes it easy to overprice bids and project costs that finance huge kickbacks to parties involved in the deals. Lacson says, “When I studied this in the past, it was 20 percent for the legislators, five to 10 percent for the district engineers of DPWH, two percent for COA, two percent for DBM, five percent to 10 percent for mayor, and then the barangay captain also wants a piece of the action at two percent. And in some areas, even the NPA (New People’s Army) wants two percent, they’re also part of the commission racket. So you can just imagine how much is wasted in the implementation of the pork barrel.”

Could that explain why PDAF projects exhibited no or miminal improvements in response to Singson’s program to curb collusion in bidding for DPWH projects?

In April 2012, PCIJ examined thousands of summaries of DPWH bidding results from January 2009 to February 2012 in an effort to independently verify government claims that reforms being put in place in the department since President Benigno Simeon C. Aquino III assumed power were helping curb collusion and resulting in large savings.

PCIJ found significant improvements, especially in the bidding results for large-scale projects under the supervision of the head office. For example, the number of bidders for projects worth P50 million and above almost quadrupled to 4.4 per tender under the Aquino administration from only 1.3 bidders in the last year and a half of the previous administration of President Gloria Arroyo. Savings, or the difference between authorized budget contract (ABC), the maximum acceptable bid, and the lowest bid, more than doubled to 10.9 percent from 4.2 percent.

PCIJ also noted an improvement in projects worth P50 million and below though to a lesser extent. The number of average bidders just went up from 1.3 to 2.4 while average savings went up from 1.1 percent to 4.7 percent.

When PCIJ did the same analysis for PDAF projects, however, the results were quite disappointing. The number of bidders remained the same: 1.

Similarly, savings hardly moved from 1.2 percent to 1.5 percent.

The only palpable change was the composition of PDAF infrastructure projects. In the last year and half of the Arroyo administration, the clear favorite was multi-purpose buildings, which accounted for 52 percent of projects, followed by roads, 21 percent. Under Aquino, multi-purpose buildings made up only 39 percent of projects. They remained in first place, though, followed by schools (13 percent) and roads (10 percent).

Somehow Aquino’s “matuwid na daan” acquires turns and curves when it comes to pork-barrel projects. – PCIJ, July 2012

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