Alleged irregularities in the DepEd procurement

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Alleged irregularities in the DepEd procurement

Post by jamsadain on Wed Oct 21, 2009 4:06 pm

DepEd is faced with another procurement issue, as its procurement of medical and dental supplies is alleged of overpricing. Read the full story in the Business Mirror, Manila Times, and Inquirer.


Last edited by jamsadain on Tue Oct 27, 2009 3:42 pm; edited 2 times in total
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Re: Alleged irregularities in the DepEd procurement

Post by engrjhez® on Thu Oct 22, 2009 5:51 am

To rule out overpricing, the two conditions must be present:

  1. That the ABC as determined by the PE was not through a study of average prevailing market price and that the price obtained were maliciously on the higher side; and,

  2. The bidders themselves follow the prices that are already high, regardless of their capacity to bid it the lowest, with or without consent of the PE and/or among bidders themselves.

The ABC being the upper limit of all bids should have the limiting factor to prevent overpricing. But again, when the quantities and unit prices are manipulated so as to satisfy the two conditions above, then overpricing may become a real issue. Very Happy
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Re: Alleged irregularities in the DepEd procurement

Post by sunriser431 on Thu Oct 22, 2009 4:11 pm

jamsadain wrote:DepEd is faced with another procurement issue, as its procurement of medical and dental supplies is alleged of overpricing. Below are the link to the articles.
Solon seeks probe of DepEd medical-supplies procurement
Procurement discrepancy hounds DepEd anew
Price is right for anti-lice shampoo, says Department of Education
For information only
Excerpt from COA Circular 85-55A
EXCESSIVE EXPENDITURES
Definition:The term "excessive expenditures" signifies unreasonable expense or expenses incurred at an immoderate quantity and exorbitant price It also includes expenses which exceed what is usual or proper as well as expenses which are unreasonably high, and beyond just measure or amount.They also include expenses in excess of reasonable limits.
Standards for "Excessive" Expenditure"
The term "excessive expenditures" pertains to the variables of Price and Quantity.
1.Price - The price is excessive if it is more than the 10% allowable price variance between the price paid for the item bought and the price of the same item per canvass of the auditor.
2.Volume Discounts - The price is deemed excessive if the discounts allowed in bulk purchases are not reflected in the price offered or in the award or in the purchases/payment document.
3.Factors to be Considered In determining whether or not the price is excessive,the following factors may be considered.
A - Supply and demand forces in the market.
Ex. - Where there is a supply shortage of a particular product, such as cement or GI sheets, prices or these products may vary within a day.
B - Government Price Quotations
C- Warranty of Products or Special Features
The price is not necessarily excessive when the service/item/item is offered with warranty or special features which are relevant to the needs of the agency and are reflected in the offer or award.
D - Brand of Products
Products of recognized brand coming from countries known for producing such quality products are relatively expensive.
Ex. - Solingen scissors and the like which are made in Germany are more expensive than scissors which do not carry such brand and are not made in Germany.
Situational Cases of "Excessive" Expenditures - (applicable to NLC sectors)
1.Overpricing of purchases, characterized by grossly exaggerated or inflated quotations, in excess of the current and prevailing market price by a 10% variance from the purchased item are considered excessive expenditures.
2.Payment for repair of government equipment at a cost exceeding 30% of the current market price of the same or similar equipment is also an excessive expenditure.
3.Expenditures for supplies and materials in quantities beyond that required herein and that needed by the agency for a determinable period resulting in overstocking is excessive.
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Re: Alleged irregularities in the DepEd procurement

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