The Department of Finance (DOF) said the claim by Rudolf Jurado, the sacked head of the Office of the Government Corporate Counsel (OGCC), that the Governance Commission for Government-Owned and -Controlled Corporations (GCG) revoked the bidding requirement for the Nayong Pilipino deal is erroneous, given that the oversight body never stated in the first place that public bidding was no longer necessary as a method of procurement for contracts entered into by state-run firms.

DOF Undersecretary Bayani Agabin said that GCG Memorandum Circular (MC) 2018-02, which Jurado was citing to justify his false claim, merely removed administrative overlays such as the submission to, and approval by, the GCG, of a GOCC project before it is bid out.

“The governing boards of GOCCs are still required to ensure that contracts are not grossly disadvantageous to the government,” Agabin, who heads the DOF’s Legal Affairs Office, said. “GCG Memorandum Circular 2018-02 did not, in any way, state that public bidding should no longer be a requirement as a method of procurement for lease contracts of GOCCs.”

Jurado had claimed that a previous GCG circular—MC 2013-03, specified that public bidding should take place for the leasing of GOCC assets, such as the Nayong Pilipino property, but that the GCG and its ex-officio members—Budget Secretary Benjamin Diokno and Finance Secretary Carlos Dominguez III—had revoked this bidding requirement through GCG MC 2018-02.

The former government corporate counsel had cited GCG MC 2018-02 as his basis for allowing Nayong Pilipino to lease its land to a developer without the benefit of public bidding.

Agabin, however, refuted Jurado’s claim, pointing out that the previous circular—MC 2013-03–did not impose public bidding as a mode of procurement for the lease of GOCC contracts in the first place. “Thus, there was no requirement to revoke under GCG MC 2018-02,” he said.

He explained that GCG MC 2013-03 merely required GOCCs to submit proposed projects to the GCG, for coordination with the Economic Development Cluster, “before implementation or execution of public bidding or procurement process.”

This requirement was removed under GCG MC 2018-02 to do away with redundant processes, Agabin said.

“However, this new circular still required that Major Development Projects and Major Contracts be reviewed by the National Economic and Development Authority (NEDA), the NEDA-Investment Coordination Committee (ICC), and/or NEDA Board, pursuant to all applicable existing laws, rules and regulations,” he said.

Agabin likewise said that the governing boards of GOCCs are mandated under existing laws, rules and regulations “to exercise extraordinary diligence in the conduct of the business and in dealing with the properties of their respective GOCCs” to ensure that any contract entered into would not be grossly disadvantageous to the government.

One way to do this, Agabin said, is to get an appraiser and bid out the contract.

“The provisions of a contract, such as the lease term and rate must be among the things considered when evaluating whether a transaction is not grossly disadvantageous to the government,” Agabin said. “The role of the governing boards and subsequent review of the contract review by the OGCC is not limited to whether bidding is required or not. They must look at the totality of the transaction and determine if the proposed contract is not grossly disadvantageous to the government.”

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