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The Swiss Challenge an End to Corruption? | CMFR

The Swiss Challenge an End to Corruption?

Screengrab from Inquirer.net.


DISMAYED WITH the manipulation of the procurement system of government, President Rodrigo Duterte on January 28 announced that government would use the Swiss Challenge in the assignment of big government projects: “‘Yang lowest bid, that is always… if it is there in the project itself and it is to be bidded out, ah wala, corruption sigurado. Sigurado ‘yan.” He added: “Huwag na tayong mag-bidding. ‘Pag mag-bidding ganun rin. Mas lalo nang matagal…(Let’s not have biddings anymore,it’s slow) All projects of the Philippines would be something like a Swiss challenge. (Transcript from the Presidential Communications Operations Office)

The Swiss Challenge involves unsolicited proposals from private groups unlike the public bidding system. The headline in the Philippine Daily Inquirer (“Duterte: No more public bidding on big projects”), the only newspaper among the three nationwide broadsheets to report on this was misleading, as it gave the impression that the Swiss challenge does away with the submission of bids.

Reports by other media organizations later cited Presidential Spokesperson Harry Roque who said that the President’s proposal was legal and provided for under the Build-Operate-Transfer (BOT) Law; that it was done in the past for some projects.

Roque said on January 29: “We have a law that enables us to have unsolicited proposals subject to Swiss challenge. And of course, the Government Procurement Act still provides for competitive biddings. So let’s just say the President now is exploring an alternative that is also lawful.” He said the president has had it with continuous corruption in government contracts. (“Duterte to amend procurement law, deter bidding corruption”)

CMFR cheers Rappler and Bandila (ABS-CBN 2) for the thorough discussion of the Swiss Challenge method under the BOT law.

Section 4-A of the BOT Law provides for deals with unsolicited proposals which triggers the Swiss Challenge process. According to the law, such rule may only apply if certain conditions are met: (1) such projects involve a new concept or technology and/or are not part of the list of priority projects, (2) no direct government guarantee, subsidy or equity is required, and (3) the government agency or local government unit has invited by publication, for three consecutive weeks, in a newspaper of general circulation, comparative or competitive proposals and no other proposal is received for a period of 60 working days.

Rappler’s “Explainer: Not all projects are eligible for a Swiss challenge” walked its readers through Section 4-A of the BOT Law. The story pointed out that several priority big-ticket infrastructure projects of the current administration cannot qualify for unsolicited proposals. Rene Santiago, a transportation expert, also said in the report that some projects that underwent the Swiss Challenge had incurred long delays.

Bandila’s “‘Swiss challenge’ para sa mga proyekto, isinusulong ng Palasyo” on February 1 reported the views of opinion of economic experts and business groups on the matter: the European Chamber of Commerce of the Philippines (ECCP), the IBON Foundation and the Center for People Empowerment in Governance (CENPEG). Some of these saw the advantage of the Swiss challenge and others pointed out that its adoption would not necessarily stop corruption.

Gunter Taus, ECCP president, said that this would help entice more foreign investors as the Government’s Procurement Act is extremely tedious. IBON Foundation Executive Director Sonny Africa said problems under the procurement act such as questionable transparency will worsen under the Swiss Challenge. Prof. Roland Simbulan of CENPEG echoed this, questioning how the Swiss Challenge would better prevent corruption than the existing procurement act.

In reporting the policy proposal, media should point out that the Swiss challenge still involves a selection from the bids received and that this selection is still open to corruption. Furthermore, its adoption for all kinds of projects would require amending the present law.