DPWH’s reaction to letter on ‘savings’ lies

THIS REFERS to the letter titled “Statements of lies from public works department” by Ricardo B. Ramos (Opinion, 7/11/15), which discussed the “savings” generated by the Department of Public Works and Highways.

In this regard, we wish to inform that the “savings” of the DPWH refer to the difference between the approved budget for the contract (ABC) and the contract award price. This means that if the winning contractor offers a bid lower than the approved budget for the contract, the difference will form part of the savings.

Through reforms that we have instituted in the department’s procurement process, which now allow full transparency, competitive bidding and reduced indirect costs of projects, the DPWH was able to realize P48.55 billion in savings from biddings since July 2010 to May 2015.

The term “savings” of P48.55 billion refers to the difference between the total ABC of 66,447 awarded contracts amounting to P653.7 billion and the total awarded cost of P605.18 billion bid out between July 2010 and May 2015.

These savings were made possible by the reforms instituted in the DPWH procurement process such as:

• simplified bidding process which resulted in bidders submitting only five documents;
• streamlined procurement tracking mechanism which improved efficiency and transparency;
• doing away with the submission of Letter of Intent to allow wider participation from bidders, eliminate collusion among bidders and achieve the best price;
• strict monitoring of bidding results nationwide;

• prospective bidders now enabled to download bidding documents in DPWH and PhilGEPS websites and to pay at any DPWH office nationwide;

• scrapping the use of bank credit line certification to improve net financial contracting capacity (NFCC); NFCC is now strictly based on networth of contractors;
• clustering of small projects to allow better qualified contractors—with proper construction equipment and the required technical personnel—to implement clustered projects, resulting in improved quality of work;
• adoption of PhilGEPS Electronic Bidding (e-bidding) Modernization System.

—ROGELIO L. SINGSON, secretary, Department of Public Works and Highways