NFA allowed to skirt rules to prevent rice shortage

The Department of Justice (DOJ) has allowed the National Food Authority (NFA) to proceed with its plans to import 91,500 metric tons of rice worth P1.3 billion through negotiated procurement to avert a looming rice supply crisis.

Acting Justice Secretary Merceditas Gutierrez said in a legal opinion that the NFA’s plan to import rice through negotiated procurement — a process that is conducted without public bidding — can be done under Republic Act 9184, a law providing for the modernization, standardization and regulation of the government’s procurement activities.

The law allows negotiated procurement "in case of imminent danger to life, or property during a state of calamity, or when the time is of the essence arising from natural or man-made calamities" and "where immediate action is necessary to prevent damage to or loss of life or property or to restore vital public services, infrastructure facilities and other public utilities."

The DOJ "is of the opinion that the proposal to import rice through negotiated procurement is exempt from the requirement of public bidding under existing laws, rules and regulations," Gutierrez said.

However, she clarified that the DOJ gave its opinion on the assumption that the documents the NFA submitted as the basis for its claims were true copies of the originals and that the representations made in the documents were true.

Under Executive Order 109-A, all procurement contracts involving at least P300 million, which the head of the agency believes should be done through "alternative means of procurement," or without public bidding, must first obtain a favorable opinion from the DOJ.

In asking for the authority to import rice through negotiated procurement, NFA Administrator Arthur Yap said the country needs some 91,500 metric tons of imported rice to fill the supply gap.

Yap said if the rice import requirement for this year, particularly during the lean months of July to September, is not addressed immediately, it may result in a shortfall that can "be likened to the 1995 rice crisis."

"Accordingly, the importation of rice through negotiated procurement is necessary in order to maintain the (NFA’s) effectiveness in rendering the public service it is providing the public," he added.

Yap explained that from this year’s rice import requirement — estimated at 810,000 to 945,000 metric tons — about 310,000 metric tons were allocated for farmers’ organizations and the private sector to import, while the NFA took care of importing the rest.

The NFA said it will have to negotiate "with another government corporation" to purchase the rice supply gap created with the failure of the farmers’ organizations and the private sector to import their rice allocation.

Yap said the NFA has bidded out 200,000 metric tons of the 310,000 metric tons of rice to be imported.

However, he noted that for the remaining 110,000 metric tons, only 8,500 metric tons had been imported thus far because of the prevailing high world market prices of rice.

"The circumstances, when taken together, manifest the element of urgency which justifies resort to the alternative mode of procurement," Gutierrez said.

She added that the negotiated procurement of rice should be done in observance of existing laws and applicable rules and regulations, including the conditions set by the implementing rules of RA 9184.

For the bidding of rice imports, the NFA said it will invite Thailand’s Department of Foreign Trade of the Ministry of Commerce, Vietnam Southern Food Corp., and the China National Cereals, Oils and Foodstuff Import and Export Corp..