DBM insists government saved P2 billion in COVID-19 test kit, PPE purchases

MANILA, Philippines — The Procurement Service of the Department of Budget and Management (PS-DBM) on Tuesday said it saved the government P2 billion after it sourced testing kits, personal protective equipment (PPE) and other medical supplies through negotiated procurement at the height of the COVID-19 lockdown.

In a statement, PS-DBM said these savings were generated when it made the procurements on behalf of the Department of Health (DOH) from March 26 to Aug. 5.

“The savings declared by the PS-DBM are the variance between the allocated budget as identified by the end-user for the item vis-à-vis the awarded contract amount. The allocated budget is determined by the requesting agency through their own preliminary market study, existing price data or latest buying price of the same item,” it explained.

During the implementation of the Bayanihan to Heal as One Law from March to June, the government was allowed to directly negotiate with suppliers for the best deals instead of undertaking a public bidding, which took a longer time.

The government had wanted to fast-track purchases of medical supplies amid the public health emergency.

PS-DBM said it sourced the medical products upon the request of national government agencies such as the DOH, which had indicated the technical specifications, the quantity needed as well as the amount budgeted to buy these goods.

“After receipt of such agency procurement request, the PS-DBM conducts another market scanning wherein interested suppliers submit their price offer relative to the item to be procured,” it said.

Procurement problems

But PS-DBM lamented that the pandemic had created procurement problems, especially during the longest and most stringent COVID-19 lockdown in the region. With the declaration of the national health emergency, PS-DBM said it faced several challenges, including health issues affecting its workforce, logistical problems related to closures imposed by different local governments, the absence of local manufacturers, disruptions in the supply chain from abroad and the high global demand for medical supplies and equipment.

“This resulted in a very limited pool of qualified bidders in the Philippines capable of meeting the requirements specified in the various annual procurement requests that the DOH submitted,” it said.

Despite these limitations, PS-DBM said it was able to get the best prices. It cited the procurement of 4,167 Sansure novel coronavirus nucleic acid diagnostic kits (Sansure test kits) that was awarded on April 20 to the “lowest offeror,” Pacific Field Hong Kong Ltd., which priced the item at P1,464.88 a piece.

PS-DBM said the price was “the most advantageous” for the government based on the market scanning that was conducted and it generated about P4 million in savings for the DOH.

Additional savings

It added that the DOH made an additional savings of P78 million in the procurement of more medical supplies from local distributors such as Pharmally Pharmaceuticals Corp. for the A*Star fortitude kit priced at P1,720 per test and for the Macherey Nagel extraction kit (P625 per preparation. or P31,250 per kit) from Lifeline Diagnostic Supplies Inc.

“After the first procurement of these test kits, the PS-DBM under the supervision of Undersecretary Lloyd Christopher A. Lao explored the possibility of directly negotiating with the manufacturers in order for the agency to purchase medical supplies lower than what private companies in the Philippines could offer,” it said.

PS-DBM disclosed it had sought the assistance of Chinese Ambassador to the Philippines Huang Xilian to later on buy Sansure and A*Star test kits as well as Macherey Nagel extraction kits at prices lower by 45.9 percent (P918 per test), 60.1 percent (P925.27 per test), and 36.3 percent (P433.22 per preparation), respectively, compared to their initial purchases.

In doing so, PS-DBM said the DOH saved roughly P258 million, leaving the health department with more money to spend on additional COVID-19 response items.

“In total, the DOH saved around P1.2 billion for the procurement of test kits, extraction machines, and other consumables. The remaining P800 million out of the P2-billion savings were from the purchase of PPE sets,” PS-DBM said.