Benefits, challenges of new govt procurement law

The enactment of Republic Act No. 12009, or the New Government Procurement Act (NGPA), marks a significant step in reforming the Philippine government’s procurement system. Signed into law on July 20, 2024, the NGPA aims to address inefficiencies, delays, and corruption in public procurement while promoting transparency, sustainability, and efficiency. For the business community—including suppliers, contractors, and investors—the law brings both opportunities and challenges.

The NGPA’s Implementing Rules and Regulations (IRR), which took effect on February 25, 2025, introduced a modernized framework with new procurement methods, digital tools, and sustainability measures. These changes aim to make government procurement more business-friendly. However, the lack of professionalized procurement leadership raises concerns about whether these goals can be fully achieved.

One of the law’s key features is the introduction of new procurement methods, such as Competitive Dialogue and Unsolicited Offer with Bid Matching. These approaches are especially useful for complex projects, providing opportunities for businesses that offer specialized or innovative solutions. The NGPA strongly emphasizes sustainability, requiring government agencies to integrate environmental and social considerations into their procurement decisions. This focus on green procurement creates significant opportunities for businesses offering sustainable technologies, eco-friendly products, or socially responsible services. By prioritizing lifecycle costs and environmental impacts, the law opens new markets for businesses aligned with these priorities.

Another major benefit is the shift toward digitalization. The enhanced Philippine Government Electronic Procurement System (PhilGEPS) now includes electronic bidding, virtual stores, and live-streamed procurement activities. These features reduce bureaucratic barriers, simplify participation, and boost transparency. Small and medium enterprises (SMEs), which often face challenges in navigating government procurement, now have a better chance of competing on a level playing field.

Other reforms, such as pooled procurement mechanisms, further support smaller businesses by enabling them to collaborate and compete for larger contracts. Additionally, the law’s domestic preference provisions, which prioritize Philippine-made products and services, boost local industries, fostering greater participation from homegrown businesses in government projects.

The NGPA addresses several long-standing issues in government procurement. Standardizing processes and shortening timelines reduces delays and creates a more predictable environment for businesses. Early procurement activities and multi-year contracting allow companies to plan their resources and investments more effectively, particularly for long-term projects. Transparency is also a significant focus. With live-streamed bidding and recorded procurement activities, the NGPA ensures fairness and accountability, fostering trust and encouraging more businesses to participate in government projects.

While the NGPA offers numerous benefits, it is not without its challenges. One of the biggest concerns is the lack of professionalized leadership in procurement. At present, Bids and Awards Committees (BACs) handle procurement alongside their regular government duties. This setup often leads to inefficiencies, delays, and inconsistent decision-making, which can frustrate businesses and undermine the law’s goals.

Procurement is a highly technical field requiring expertise in areas like market analysis, risk management, and contract oversight. Without trained professionals dedicated to managing these processes, issues like errors and disputes are likely to arise, creating uncertainty for businesses. A professionalized workforce of procurement specialists would ensure the consistent application of the NGPA’s provisions, reduce corruption risks, and build trust in the system.

To fully realize the NGPA's potential, the government must invest in professional procurement leadership. A dedicated team of trained experts would improve efficiency, reduce delays, and ensure that the law is implemented consistently. These professionals could also serve as a bridge between the government and the private sector, addressing businesses’ concerns and fostering better communication. Skilled leadership would also help achieve the NGPA’s sustainability goals without placing unnecessary burdens on businesses.

The NGPA has the potential to transform the Philippine government’s procurement system. Its focus on efficiency, transparency, and sustainability creates new opportunities for businesses, including streamlined processes, expanded procurement options, and a fairer system for competition. However, its success depends on effective implementation. Without professionalized procurement leadership, the law’s ambitious goals may remain unrealized, leaving businesses to deal with inefficiencies and uncertainties.

For the business community, the NGPA represents both an opportunity and a challenge. By advocating for improvements, such as the creation of a professional procurement workforce, and working closely with the government, businesses can help shape a system that benefits everyone. With the right leadership and collaboration, the NGPA can fulfill its promise of a modern, transparent, and business-friendly procurement system.