New Duterte EO allows AFP to approve defense deals over P50M

MANILA, Philippines (2nd UPDATE) – President Rodrigo Duterte issued an executive order repealing a previous executive that gave the defense chief the authority to sign defense contracts.

Executive Order (EO) Number 18, released on Monday, April 17, intends to "streamline" rules and procedures governing defense contracts entered into by the Philippine government by repealing EO 235, signed by then president Gloria Macapagal-Arroyo in 2003.

In issuing EO 18, Duterte blamed EO 235 for "bureaucratic impediments and unnecessary delays" in the procurement process at the defense department.

Arroyo issued EO 235 in 2003 to streamline procedures on defense contracts by authorizing the defense secretary to sign contracts except for those that, by law, only the president can approve.

EO 235 also allowed the secretary to "delegate in writing" officials he has empowered to sign contracts below P50 million. For Philippine military contracts below P50 million, the chief of the Armed Forces of the Philippines (AFP) was given the authority to sign. 

EO 235 also established a single Bids and Awards Committee (BAC) for the AFP.

In a letter sent to Rappler on Friday, April 21, the Department of National Defense said Duterte's new EO gives their chief "more flexibility to exercise supervision of the procurement process."

It maintained that the EO "does not 'clip'" the powers of the Defense Secretary though it did not explain if, despite the repealing of the EO, the official would still have power to sign defense contracts.

The DND, through its public affairs chief Arsenio Andolong, explained that the new EO was requested from the Palace by the department to allow the AFP to approve its own procurement, even for projects worth P50 million or more.

"With AFP projects amounting to hundreds of millions of pesos based on actual requirements, the Php 50M cap has become unrealistic, making the procurement process cumberson and in effect holds back the AFP in the performance of its missions which are now at increased operational tempo," said Andolong.

Before EO 18, and due to EO 235, AFP contracts worth P50 million or above could only be approved by the DND chief.

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EO 18 noted that EO 235 "limited" the defense chief's authority "to delegate approvals of procurement contracts." 

Under EO 18, the defense secretary was tasked to "effectively monitor the operations of the separate Bids and Awards Committees" which may be created under Republic Act (RA) No. 9184 or the Government Procurement Reform Act for transparency and accountability purposes.

In a text message to Rappler, Executive Secretary Salvador Medialdea said EO 18 "merely gives SND (Secretary of National Defense) the flexibility to create and/or delegate other Bids and Awards Committees (BAC) in the DND or its agencies in accordance with RA 9184."

Malacañang earlier issued Memorandum Circular No. 16, reminding agencies under the executive department to secure approval from the President before signing or negotiating international agreements, and foreign grants or borrowings. – Rappler.com 

Pia Ranada

Pia Ranada covers the Office of the President and Bangsamoro regional issues for Rappler. While helping out with desk duties, she also watches the environment sector and the local government of Quezon City. For tips or story suggestions, you can reach her at pia.ranada@rappler.com.

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