Minimizing Corruption At the Local Level MAKATI BUSINESS CLUB SEPTEMBER 21, 2004

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Minimizing CorruptionAt the Local LevelMAKATI
BUSINESS CLUBSEPTEMBER 21, 2004

• Outline
• Why We Have to Make It Work
• City Procurement Experiences
• City Mechanisms and Processes

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Why We Have To Make It Work

• Government will always have to deal with a twin
  predicament
• a constant lack of resources
• an ever-increasing demand for services and
  facilities

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The Naga City Context
Why We Have To Make It Work

• 1998
• empty city coffers a deficit of P 1M
• narrow tax base
• sluggish local economy
• deteriorating basic services, especially for
  health and education
• growing homeless urban poor population

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The Naga City Context
Why We Have To Make It Work

• 2004
• budget 10 lower than the previous year
• need for expanded infrastructure program
• growing demand for basic services
• increase in health service requirements
• 10 rise in City Hospital patients
• challenge of eradicating malnutrition
• 7.7 annual growth in public high school
  enrolment over the past 3 years
• need for a modern solid waste management system

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Procurement and City Strategy
City Procurement Experiences

• To surmount the twin problems of lack of
  resources and increasing demand for services,
  Naga has adopted the following strategies
• Partnerships with the private sector and NGOs
  to tap community resources and multiply LGU
  capacity
• Internal reforms to streamline and improve the
  productivity of the local bureaucracy, including
  procurement reforms

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Procurement Outcomes
City Procurement Experiences

• Road construction cost per kilometer of P 4.35M
  vs. a regular government standard of P 6M to 7M
  (or up to a P 2.94M or 38 difference) cost of
  2-room building at P 0.39M is 38 lower cost of
  asphalt overlay at P 372/sq.m is 47 lower
• Generic medicine procurements are 19 to 70
  lower than those purchased by other LGUs (and an
  average of 62 lower than DTI-PITC branded
  medicine)
• Supplies are up to 33 lower than those procured
  by other LGUs
• City government able to acquire an X-ray machine,
  bulldozer and dump trucks for 59, 16 and 28
  less than the original quoted price, respectively

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Salient Points
City Mechanisms Processes

• Nothing new in procurement rules and procedures
  Naga continues to follow national government
  guidelines
• Present system already has the built-in
  mechanisms to ensure that
• the procurement process is fair
• Government is able to take advantage of the
  services of the best provider at the lowest
  possible cost

The Difference Naga has tried to make the
system work for government
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Making the System Work - Focus
City Mechanisms Processes

• Building an Enabling Environment
• Improving Transparency
• Encouraging Participation by Qualified Entities
  in the Selection Process
• Lowering the Cost of Doing Business with
  Government

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Enabling Environment
City Mechanisms Processes

• Deals with nurturing a culture that values
  innovativeness, accountability, adherence to
  standards of honesty in government transactions
• Function of leadership demonstrating commitment
  to qualities and standards expected from the
  rank-and-file
• Includes a mechanism that ensures that the
  desired culture takes root

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Enabling Environment
City Mechanisms Processes

• Enabling Mechanism The Productivity Improvement
  Program
• Aims to transform government personnel from being
  process- to results-oriented
• Initially focused on improving and setting
  standards for service delivery
• Performance Pledge a contract of deliverables
  against which constituents availing services may
  hold an office or person accountable
• Evolved into a mechanism for setting cost
  standards, as well
• Fosters consciousness of each offices per unit
  standard cost for each service delivered
• Benchmark City Hall vis-à-vis the private sector

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Improving Transparency
City Mechanisms Processes

• Ensures wider participation of qualified service
  providers
• Provides a control mechanism to ensure that the
  system works
• Makes government more accountable
• Provides a feedback mechanism to allow government
  to further source lower-priced goods and services

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Improving Transparency
City Mechanisms Processes

• Measures Adopted
• Wider Dissemination of Notices of Bids
• Notices disseminated through radio and
  television, aside from posting on boards and
  newspaper circulation
• Posting on the Naga City Citizens Board
• Notices sent to all accredited bidders

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Improving Transparency
City Mechanisms Processes

• Measures Adopted
• NGO Participation
• NGO representative to the PBAC is selected by the
  Naga City Peoples Council (NCPC)
• NCPC is a highly-independent organization
• Composed of all business, non-government and
  peoples organizations
• Created through the People Empowerment Ordinance
  of the City of Naga
• Has the following powers
• Appoints representatives to local special bodies
• Observes, votes and participates in the
  conceptualization, implementation and evaluation
  of programs
• Proposes legislation and participates at the
  committee level of the Sanggunian
• Acts as the peoples representative in the
  exercise of their rights to information and
  access to official documents

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Improving Transparency
City Mechanisms Processes

• Measures Adopted
• I-Governance
• Seeks to enhance involvement by individual
  citizens in governance
• Demonstrates everything that the city would like
  to attain in terms of improving transparency
• I in i-governance stands for
• Inclusive governance which seeks to embrace,
  rather than exclude, individuals, peoples and
  sectors in running government
• Information openness that demonstrates that
  information is power, and truly empowering when
  placed at the hand of the citizens
• Interactive engagement which puts premium on
  information exchange through continuing dialog
  between authority and constituency
• Innovative management that is committed to a
  culture of excellence sustained by creativity and
  innovations

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Improving Transparency
City Mechanisms Processes

• Measures Adopted
• I-Governance has a website component
  (www.naga.gov.ph) that shows
• City budget and finances
• Notices and outcomes of bids, auctions and public
  offerings
• Outcomes
• Inputs on further reducing the cost of running
  government
• Greater participation of service providers
• Inputs on costs and other suppliers offering
  lower-priced products and services
• Even lower bid prices as the site provides
  information on the quotations of previous winning
  bidders

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Improving Transparency
City Mechanisms Processes

• I-Governance Website Samples

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Participation by Qualified Entities
City Mechanisms Processes

• Participation by individuals and NGOs, who have
  better expertise and information, in various
  phases of the procurement process
• Examples
• PICE representative in the PBAC Technical
  Committee
• Provides inputs on how the private sector will
  undertake a civil works project
• Points out items that do not need to be included
  in the Program of Work
• NCPC and DTI handled bids for catering during the
  Palarong Pambansa
• Have worked with the sector and knew how they
  operated and how much their services cost
• Private sector (such as the Metro Naga Chamber)
  representative in the committee evaluating bids
  for the Central Bus Terminal
• As businessmen, are in a better position to
  evaluate the financial and technical bids of
  fellow entrepreneurs

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Lowering the Cost of Doing Business
City Mechanisms Processes

• Red tape addressed by
• Productivity Improvement Program
• I-Governance Program
• Prompt payment of obligations