A LoGICal next step: Including open contracting in South Cotabato’s integrity mechanisms

June 11, 2019

By: Adelle Chua


Creating Integrity Circles in local governments (LoGIC) is not a new idea. For years, various organizations have been working to improve local governance situations with the end in view of increasing investor confidence and providing more jobs to residents.

In the Philippines, the circles are composed of representatives of different sectors – local governments, business and civil society – who use various steps and approaches to attain transparency, accountability and effective administration.

But the introduction of open contracting practices among integrity circles is a new development.

“As a whole, the program builds integrity. This was our jumpoff point. But creating integrity has many aspects, and open contracting is very much a part of that,” says Zyra Fastidio, events and project manager of the European Chamber of Commerce in the Philippines (ECCP).

ECCP worked with the provincial government of South Cotabato, under Governor Daisy Fuentes. The Local Government Unit (LGU) was identified because it had been cited by the National Competitiveness Council as the second most competitive province, because the local executive showed great political will, and the integrity circle in the province was already mature and active.

The Hivos project takes the endeavor one step further.

“We wanted to introduce open contracting as a best practice. The private sector is not very knowledgeable in procurement, and so this presented a new challenge for us,” she says.

“Based on our previous observations, the province has developed integrity mechanisms and has been implementing them. This means that the probability of success in introducing the open contracting component would be high.”

Success would be measured through increased disclosure of information and improvements in the procurement process, leading to higher business confidence and greater investments.


Early misgivings

South Cotabato, being a frontrunner in competitiveness across the country, is already compliant with the Government Procurement Reform Act. Still, the conditions were far from perfect.

The governor, for instance, had initial misgivings about contracting. Many public biddings were failing, ECCP learned, precisely because there were no bidders.

“This was how we immediately linked,” says Fastidio. “She wanted to get to the root of these barriers.”

Businesses were not participating in the biddings because there was a notion that it was difficult to work with the government. The bidding took a long time, was tedious, and the engagement did not bring much profit.

And then there was the disconnect between the LGU and the Government Procurement Policy Board. Complaints about the procurement process, according to those interviewed, were not elevated to proper bodies. As a result, nothing came of the complaints, disenfranchising businesses.

Another concern was raised by local employees, who said that if they took on the open contracting aspect, they would end up doing additional work for the same dismal results. Worse, the employees felt that they were already doing what was necessary to comply with requirements, and if they put in the extra effort, they might be cited by the Commission on Audit or the GPPB.

“What we did was to show them, in subsequent meetings, that the project will precisely remove these barriers by providing a platform for them to escalate their issues with the right people, and see action being taken on their concerns,” says Fastidio.


Smooth sailing

By itself, ECCP had a number of strengths to make it capable of undertaking the project. With its more than 700 members, it had the capacity to truly engage the private sector and tap the LGU network. Its prior project with Integrity Circles also lent it credibility and competence to pursue the inclusion of open contracting.

The Hivos engagement banked heavily on the participation of other stakeholders, many of which already had some prior existing relationship with ECCP and familiarity with the Integrity Circle concepts. This allowed the project to proceed with minimal resistance hardly any sizeable stumbling blocks.

“There were not many problems along the way,” said Fastidio. “After we secured the buy-in of the governor, we engaged the Bids and Awards Committee, the private sector, and civil society organizations.”

For the rest of the project period, Hivos was particularly instrumental in providing the focus so that ECCP could zero in on building its own, and the other stakeholders’ capacity in open contracting. “It’s not yet a very hot topic here in the Philippines, so they gave us all the support we needed and the space in which to engage the stakeholders.”

One of the milestones of the project was the inclusion of open contracting in the province’s Open Government Partnership action plan, the success being tied to the private sector. Contractors who had not participated in any bidding before now said they had the opportunity to be heard and to converse with their peers. They were also given document maps so they could more closely follow the procurement process.

As for the local government, outcomes were improvements in the procurement process, improved understanding of disclosure requirements, and increased disclosure of procurement-related documents.

The business and CSO representatives together with ECCP during the Integrity Week in September 2018 where South Cotabato’s OGP Commitments, one of which is Open Contracting, were launched in the event.

Lessons learned

Institutionalization is the best way to ensure continuity amid dynamic politics. South Cotabato, like any other Philippine LGU, is vulnerable to the unstable political environment and the dynamics of local politics. 2019 is an election year again, and voters have to pick their officials from city/ municipal councilors to senators. How, then, can initiatives such as this be isolated from political headwinds?

Fortunately, the Integrity Circles with their integrity mechanisms have already been institutionalized through an ordinance.

Even the support of the local executive is not a guarantee for quick results. “Even when you get the support of the leader, do not assume that everyone on the implementation side will follow,” says Fastidio. “We learned this in the previous project that’s why we were not able to implement some strategies. This time around, we engaged the Bids and Awards Committee immediately so that we would gain access to the documents at once.”

Multiple stakeholders are needed to push an agenda. Because open contracting is a new concept, it was difficult to be knowledgeable of it and support it at the local level. “But since there was a multi-stakeholder group that was organic to the area, we had an easier time rallying support for the measure,” says Fastidio. “As ECCP, this was our number-one learning and this is what we will bring to any government program.”


This article was originally published in the ECCP website. Click here to view the original article.