No 2019 budget, no new projects
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 21 Jan 2019 16:24:26 +0000
No new projects can be awarded until Congress approves — and President Rodrigo Duterte subsequently inks into law — this year’s General Appropriations Act (GAA), the Budget department said on Monday.
In a statement, the department underscored that Circular 09-2018 issued by the Government Procurement Policy Board (GPPB) states that “activities or projects that are included in the FY (fiscal year) 2019 NEP (National Expenditure Program), hence not part of the FY 2018 GAA, may be awarded on the basis of the FY 2019 GAA.”
“New projects will have to wait until the passing of the GAA before they can have their contracts awarded. We still encourage them, however, to conduct early procurement activities if they have not done so,” Budget Secretary Benjamin Diokno said.
The government is currently operating on a re-enacted budget after Congress failed to pass the proposed P3.7570-trillion 2019 GAA before the end of last year. The delay, blamed on factors such as the late submission by the House of Representatives and questions over alleged insertions, has already led to the shelving of mandated pay hikes for government workers.
The conduct of early procurement activities short of award and before the start of a new year, the Budget department said, has been practiced since 2009 to allow timely project implementation as agencies continued to cite the procurement process as a major cause of delays.
Circular Letter 2018-8 issued last year directed agencies to undertake Early Procurement Activities (EPA) from October to December 2018 in light of an impending shift to annual cash-based appropriations, which will limit the time horizon for implementation of contracts to one year.
A number of contracts for ongoing projects will be awarded under the re-enacted budget, the department said, as long as these had undergone the EPA process in 2018.
“Awarding of contracts may already proceed for programs and projects that underwent early procurement if the amount needed can be covered by the funds available under a reenacted budget,” Diokno said.
The department said GPPB Circular 09-2018 also states that “procurement projects covering recurring activities or projects, hence appropriations therefor are included in both the FY 2018 GAA and FY 2019 NEP, undertaken through EPA under the FY 2019 NEP may be awarded on the basis of the FY 2019 Reenacted Budget.
In addition, “in all instances” procuring entities “shall not award any procurement project if the amount appropriated under the FY 2019 Reenacted Budget is lower than the amount of contract to be awarded.”
Diokno has warned that a reenacted budget will reduce disbursements by about P220 billion this year, which could cut gross domestic product growth by 1.1-2.3 percentage points.
Job losses of as much as 600,000 could also occur and 200,000-400,000 individuals could be pushed into poverty, he added.
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