THE Department of Agriculture (DA) has remained firm that its emergency procurement for fertilizer followed the law to the letter and pointed out that its purchase caused retail prices of the farm input to go down.
This was the answer of the DA amid allegations that its negotiated procurement for its fertilizer project for rice farmers is overpriced compared to prevailing retail prices of urea.
Agriculture Secretary William D. Dar explained that they were able to procure over 1.8 million bags of fertilizer at a cheaper price compared to national average retail prices and below their set approved budget for the contract (ABC).
The DA has set a P1,000 per bag ABC for the procurement of 5.691 million 50-kilogram bags of urea, while the winning bids ranged from P900 to P990 per bag.
The DA explained that both the ABC and the winning bids were lower than the prevailing national average retail price of urea fertilizer during the time of procurement.
Citing data from the Fertilizer and Pesticide Authority, the DA said urea fertilizer cost P1,035.60 for April 27 to May 1; P1,037.53 for May 4 to 8; and P1,040.68 for May 11 to 15.
Dar argued that they have followed provisions and rules stipulated by the procurement law in undertaking the purchase that was initiated when the country was under a state of emergency due to Covid-19 by virtue of Bayanihan to Heal as One Act.
Under Republic Act 9184 or the Government Procurement Reform Act, a procuring entity could undertake a negotiated procurement based on certain conditions such as “emergency cases.”
The law defines negotiated procurement as a method of procurement of goods, infrastructure projects and consulting services, whereby the procuring entity “directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant.”
Dar explained that some of the bidders for the first round of bidding were disqualified for lack of capacity to fulfill the contract.
“Other bidders were disqualified because they were not able to show that they have the legal, financial and technical capacity to deliver the goods, execute the works and perform the services to address the emergency procurement of urea fertilizers,” he said in a recent interview with reporters.
Dar said the contract requires prospective suppliers to deliver and distribute the urea fertilizers to the different municipalities covered by the rice resiliency project (RRP), the DA’s flagship program to boost domestic rice supply amid the Covid-19 pandemic.
Furthermore, he said the allegations thrown at DA failed to consider that the ABC includes the cost of fertilizer, transportation costs, incidental services and applicable taxes.
‘It’s overpriced’–groups
Groups like the Samahan ng Industriya ng Agrikultura (Sinag) had claimed that the DA’s fertilizer procurement is overpriced as prevailing retail price of urea fertilizer in the market today is only about P850 to P880 per bag, which is P50 to P140 lower than the winning bids.
La Filipina Uy Gongco Corp. bagged the contract for the supply of urea fertilizer in three regions: Region 4-A (97,615 bags at P990 per bag); Region 6 (694,904 bags at P995 per bag) and Region 3 (911,073 bags at P995 per bag). On the other hand, Atlas Fertilizer was awarded the contract for the delivery of 107,498 bags of fertilizer to Region 7 after bidding P900 per bag.
Agriculture Undersecretary Waldo R. Carpio said the law doesn’t limit or stipulate a minimum number of bidders for a procurement to push through.
“Basta may nag-bid at nag-qualify sa [As long as there’s a bidder and this met the] specifications, we are bound to uphold what is in the law,” Carpio said.
“Kung isa lang ang nag-bid, as long as nag-comply siya kailangan natin ibigay sa kanya [If there’s only one bidder, as long as it complied, we have to award it],” Carpio added.
Carpio said DA is guided by the data from FPA and the Philippine Statistics Authority (PSA) in setting the ABC for the procurement; hence, they will not change the ABC for the bidding of the remaining lots.
The DA divided the procurement into 16 lots, with 4 of the lots having winning bidders who have been already awarded with contracts and have started delivering the fertilizer.
Dar argued that the retail prices of urea fertilizer declined after the DA undertook the procurement, which is the goal of the centralizing bidding.
“We started the bidding in April and that is the time that retail prices also started to go down. That’s the outcome of the process, retail prices declined,” he explained.
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