Corruption in Proc Sys

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CorruptioninthePhilippineNavy

ProcurementSystem

By:

LT ANTONIO F TRILLANES IV PNMarch 2002


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INTRODUCTION

On February 2001, the Philippine Navy (and the Armed Forces of thePhilippines) was rocked by a leadership crisis when the Philippine Marines (PMAR)demanded the relief of the Flag-Officer-In-Command, Rear Admiral Guillermo Wong

(Pazzibugan, 2001). The crisis was triggered by the berating of the Marines by RAdmWong for alleged irregularities in the procurement of P3.8 million worth of KevlarHelmets (Pablo, 2001). In the events that followed, the Marines prevailed and RAdmWong was stripped of his command and was promoted to an ambassadorial post. Thecrisis, while it was eventually resolved peacefully, exposed a previously unseen face ofthe Navythe face of CORRUPTION.

BACKGROUND: THE PHILIPPINE NAVY

The Philippine Navy (PN) is one of three branches of service of the Armed Forcesof the Philippines (AFP). Its mission is to conduct prompt and sustained navaloperations in support of the AFPs mission. Among its functions are: provide naval

defense to ensure the sovereignty of the Philippines and protect the people fromexternal threats; conduct naval operations in support of air and ground operations;conduct maritime law enforcement within the territorial waters and Exclusive EconomicZone; promote safety of life at sea and environment protection; and assist in nationaldevelopment efforts (NOQC Naval Orientation Reference Handguide, 1997).

The following are other relevant information about the Philippine Navy:

A. Personnel - 1,687 Officers10,561 EP

Marines - 387 Officers7,142 EP

B. Budget - P6.88B (see Annex C)(Source: GAA 2000)


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C. Organizational Chart

* The units highlighted in red ink will be the subjects to be used to generalize the

findings in this research as explained in the Methodology chapter below.

AUTHORITY

The authority of the Philippine Navy and all government agencies to procureis in accordance with the guidelines prescribed under the Implementing Rules andRegulations (IRR) of Executive Order No. 302 (entitled Providing Policies, Guidelines,Rules and Regulations for the Procurement of Goods/Supplies by the NationalGovernment) dated February 19, 1996 (this was amended later by E.O. 262) and withdue regard to the provisions of the Government Accounting and Auditing Manual.(Manual on Procurement, 1999). For the AFP, this was operationalized by theDepartment of National Defense Department Order Nr 47 dated 30 April 1996 entitledDelegation of Authority on Local Procurements and further regulated by J-4 LogisticsDirective Nr PC-97-03 dated 01 August 1997.

PROCUREMENT PROCESS


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RESEARCH PROBLEMS

This research seeks to resolve the following problems:

1. Does corruption exist within the procurement system of the Philippine Navy?

If so, what are the different forms of corruption being practiced? And, where within thePN bureaucracy do these corrupt practices occur?

2. Is there a relationship between offices exposed to boundary exchange andcorruption propensity?

CONCEPTUAL AND THEORETICAL FRAMEWORK

This research covers two parts. The first part is a descriptive analysis of theexistence and extent of corruption, the forms of corruption being practiced, as well asthe other variables stated.

The second part will follow the theoretical framework shown below:


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From this framework, this research hypothesizes that the boundary exchangeprocesses between PN procurement officials and accredited dealers, which work withinthe milieu of the procurement system will result to bureaucratic corruption.

CONCEPTUAL DEFINITIONS

1. BUREAUCRATIC CORRUPTION - is defined as a dysfunctional and

pathological act that negates the accomplishment of its constitutional mandate ofpromoting public interest (Sosmena, 1999: 6).

2. CORRUPTION According to Klitgaard, it is the misuse of a public office forpersonal gain (Sosmena, 1999). Corruption may be categorized into two: individualizedor systemic (Carino, 1985: 15). Individualized corruption is where a person performs asecret moneymaking act in relation to his duties as public official or governmentemployee. While systemic corruption is committed in an agency where corruption hasbecome so regularized and institutionalized that organizational supports back wrong-doing and actually penalizes those who live up to the old norms (Caiden, 1977: 306). Itis demonstrated when bureaucrats and clients can describe the same illegal process,including such details as bribery rates per service and the way these are shared amongthe members of the syndicate throughout the agency. Those with initiative and daringshare the largesse with their colleagues with less opportunities, thus engulfing everyonein an administrative culture that tolerates, even idolizes, the fruits of corruption.(Carino, 1985: 15)

3. BOUNDARY EXCHANGE a value-free interaction or exchange ofboundaries between the client and the public official (as defined by Dr ProsperinaTapales during an interview conducted on 21 March 2002).

4. PROCUREMENT OFFICIAL - for the purpose of this research, all PN officers,enlisted personnel, and civilian employees involved in the PN procurement system willbe labeled as procurement officials. It will also include the officials and personnel of thelocal Commission on Audit office.

5. FORMS OF CORRUPTION:

A. Bribe or Lagay- also known as SOP, commission, porsyento, for theboys, etc. This is grease money given to the procurement official by thedealer to facilitate the processing of documents or as a return favor for aproject given.B. Extortion or Tong- money demanded by the procurement official to adealer to facilitate the processing of documents.C. Negotiated Canvass or Nego- an arrangement made by the dealer and theprocurement official to manipulate a canvass method of procurement to

INPUT OUTPUTPROCESS

-PN PROCUREMENTOFFICIALS

-

ACCREDITED DEALERS-BOUNDARY EXCHANGE

PROCUREMENT

SYSTEM

BUREAUCRATIC

CORRUPTION


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ensure that the purchase order would be won by the said dealer. This isdone by giving all the canvass papers of a certain project to the favoreddealer; thus, effectively depriving other interested dealers.D. Rigged Bidding or bidding-biddingan- an arrangement made by the dealerand the procurement official/s to manipulate a public bidding method ofprocurement to ensure that the purchase order would be won by the saiddealer. This is done by the collusion between all the attending bidders, whichinclude the favored dealer, and the Bids and Awards Committee.E. Ghost Delivery or Conversion the process in which government fundsallocated through budget releases are converted into cash. This is done bypreparing procurement documents taken from either a negotiated canvass ora rigged bidding, then, instead of delivering the items stated in the purchaseorder, the dealer would deliver the cash equivalent of the goods in thepurchase order, less certain percentages for the dealers profit.F. Over-Pricing to cover for the additional expenses incurred by the lagay,the dealers and procurement official mutually agree on setting the price,which are way above the authorized limits.

G. Under Delivery again to cover for the additional expenses incurred bythe lagay, the dealers and procurement official mutually agree that thequantity of the delivery would be lower than the one specified in thepurchase order.H. Substitution to circumvent certain prohibitions of the law, specificallythe General Appropriations Act, where certain govt agencies have no capitaloutlay and, therefore, cannot buy equipment, the dealer and the procurementofficial mutually agree to deliver items other than those stated in thepurchase order.

OPERATIONAL DEFINITIONS

1. Perception of corruption on the PN procurement system this will bemeasured by asking the respondents the question, Sa pananaw ninyo, mayroon bangcorruption sa procurement system ng PN sa kasalukuyan?

2. Perception of corruption on the procurement system of major units of the PN this will be measured by the statement Base sa inyong pananaw, sukatin ninyo ang level ngcorruption ng mga sumusunod na unit ng PN. To quantify the different levels, a fixedratio scale was formulated wherein a standardized value was assigned to acorresponding level of corruption. A value of 0 was assigned for the level, walangcorruption; 1 for the level, madalang ang corruption; 2 for the level, di-gaano laganap angcorruption; 3 for the level, laganap ang corruption; 4 for the level, talamak ang corruption.

3. Perception of corruption of the different offices involved in the procurement

system- is measured by the question Sa pananaw ninyo, alin sa mga sumusunod na opisinana kasapi sa procurement system ay mayroong nagaganap na corruption?

4. Perception on the eradication of corruption in the PN procurement system- ismeasured by the question Kayo ba ay pabor na alisin ang corruption sa procurementsystem ng PN?

REVIEW OF RELATED LITERATURE


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While there are volumes of literature on corruption, there are very rare writingsthat directly dealt with corruption on the procurement system of a military organizationor any government agency for that matter. One such writing is the article for thePhilippine Center for Investigative Journalism by Malou C. Mangahas entitledKickbacks and Negotiated Deals mar AFP Procurement System. While the said articlemade some startling revelations, it did so under conditions of journalistic freedom,where the data gathered came as unstructured information fed by people from bothinside and outside of the organization (AFP) and, therefore, lacks the criteria of validityand reliability to support its findings as in a technical research.

SIGNIFICANCE OF THE STUDY

The Martial Law years have created a fearful reputation for the AFPorganizations. Because of this, no group has ever dared to conduct any formal researchon corruption on the procurement system of a military organization. Thus, thesignificance of this research couldnt possibly be overstated.

This research will provide a vivid picture of what used to be a restricted domain

of the AFP. It can also be seen as a microcosmic representation of the procurementsystems of various government agencies.

METHODOLOGY

RESEARCH DESIGN

The survey design was used since it is the most applicable for the quantitative-descriptive and quantitative-explanatory approaches of this research.

UNITS OF ANALYSIS

The following are the units of analysis:

1. The Philippine Navy. It is represented by its five major units based in theManila-Cavite area namely; Headquarters Philippine Navy, Headquarters SupportGroup (HPN, HSG); Headquarters Philippine Fleet (HPHILFLT); HeadquartersPhilippine Marines (HPMAR); Naval Logistic Center (NLC) and the Naval Sea SystemsCommand (NASSCOM). These units were chosen because of their huge individualbudgets and, therefore, are the main procuring agencies of the PN.

A. HPN, HSG The support unit of the main headquarters of the PN.B. HPHILFLT One of two operating arms of the PN. This unit has theadministrative control over all floating and air assets.C. HPMAR The other operating arm of the PN. It has administrativecontrol over all Philippine Marine (PMAR) brigades and other PMAR units.D. NLC The main procuring agency of the PN. It is responsible forsupplying the bulk of the logistical requirements of the whole PN.E. NASSCOM The main service support group of the PN. It is alsoresponsible for the repair of ships and other major equipment.

2. All offices involved in the procurement process (as shown in the diagramabove).


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3. Accredited dealers of the PN.

RESPONDENTS

The respondents chosen are the accredited dealers of the PN because they areconsidered to be insiders in the procurement system and they would be easier subjectsto extract confidential information from, than the officials involved in the procurementsystem.

TECHNIQUES OF DATA COLLECTION

A primary technique of data collection (questionnaire) was used for this research.As for the sampling strategy, a simple random sampling from a sample frame of allaccredited dealers of the PN was initially planned. However, it was found that there wasno updated list available and the said non-current list contained inactive or inexistentdealers, which made probability sampling inapplicable. Hence, purposive samplingmethods were resorted to.

STATISTICAL TOOLS

Chi-square Statistic was used to establish the relationship between two nominalvariables namely; boundary exchange and corruption. The application of said statisticaltool was facilitated by the use of Statistical Package for Social Sciences (SPSS) software.

LIMITATIONS OF THE STUDY

Due to the sensitivity of the research subject, which could expose or incriminate amilitary organization like the Philippine Navy, the respondents may not have fullydetached themselves from the physical or professional risks involved, despite theassurances of the researcher. Thus, the objectivity of some of their answers may havebeen affected by the fear of reprisal.

FINDINGS

DESCRIPTIVE STATISTICS

PROFILE OF THE RESPONDENTS

Of the 30 accredited dealers chosen as respondents, only 1 (3.3%) is a male while29 (96.7%) are females (Table 1). This could be explained by the conjecture that since the


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PN is a male-dominated workplace, having females as dealers may help in facilitatingbusiness transactions.

TABLE 1: FREQUENCY DISTRIBUTION BY GENDER

Gender

Frequency PercentFemale 29 96.7

Male 1 3.3Total 30 100.0

PERCEPTION OF CORRUPTION ON THE PHILIPPINE NAVY PROCUREMENTSYSTEM

The frequency distribution on the perception of corruption on the PNprocurement system yielded an absolute (100%) affirmative answer that corruption doesexist. (See TABLE2)

PERCEPTION OF THE LEVEL OF CORRUPTION ON THE PROCUREMENT SYSTEMOF THE MAJOR UNITS OF THE PN

HPHILFLT scored the lowest at 1.43 and falls under the level of madalang angcorruption. This is due mainly to the integrity and moral resolve of its incumbentcommander, RAdm Ruben G Domingo. Most of the respondents even qualified theiranswers in a way that if it werent for the lagay at COA, HPHILFLT would have beencorruption-free. HPN, HSG came in a distant second with a score of 2.30, followed bythe HPMAR at 2.39. Both of these units fall under the level of di-gaano laganap angcorruption. The most corrupt PN units as far as the dealers were concerned wereNASSCOM (2.87) and NLC (2.95), whose scores fall under the level of laganap ang

corruption. According to them, the high levels of corruption of these units were causedby their commanders blatant negative bureaucratic behavior. (See TABLE 3)

FORMS OF CORRUPTION

The most common form of corruption being practiced is the lagay, whichrecorded a 100% frequency. This was followed by the negotiated canvass at 86.7% andrigged bidding at 76.7%. The least practiced is the under delivery at 36.7%. (SeeTABLES 4 and 5)

REASONS WHY CORRUPTION IS BEING RESORTED TO

The main reason why corruption is being resorted to by the dealer is, in order toexpedite the processing of documents (96.7%). A significant number of respondents(63.33%) also said that another reason is to be able to get a project or transaction. Only36.7% of the respondents answered that utang na loob was the reason. (See TABLE 6)

WHO INITIATES CORRUPTION?


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On the question of who initiates corruption?, a significant number (83.3%)claimed that the corrupt practices were mutually agreed upon by both parties withneither one initiating directly. Instead, these under-the-table transactions have become aroutine activity that it had evolved to an SOP or standard operating procedure. (SeeTABLE 7)

PERCEPTION OF CORRUPTION PER OFFICE

Surprisingly, the offices, which emerged as the top three from the frequencydistribution, are civilian offices; the Commission on Audit (100%); the Accounting Office(66.7%); and the Supply Accountable Office (66.7%). While the finding for the COA isindisputable, a big factor in the findings for other two offices could be that the dealersare more willing to volunteer information against civilian employees than againstmilitary officers.

Among the military offices, the procurement office figured the highest in termsof corruption perception at 60%. It is followed by the logistics office and theCommanders office both at 56.7%. The Bids & Awards Committee (16.7%), Deputy

Commanders office (20%), and Chief of Staff office (20%) are the three lowest in termsof corruption perception. (See TABLE 8)

IS THERE A FIXED RATE OF LAGAY PER OFFICE

According to all 30 respondents, there is a fixed rate of lagay per office. However,this finding is deceiving because, while it is applicable to the COA where there isconsistency in the fixed rate indicated by the respondents at 1-2% of the total amount ofthe purchase order, the entries for the other offices had a wide range of variance. Thiscould be explained by the tendency of the dealers to get confused in assigning fixedvalues for every office. They further qualified that these are dependent on the totalamount of the transaction. At any rate, the finding for the COA is very significant andindisputable at the same time. (See TABLES 9 and 10)

IS IT PROFITABLE TO DEAL WITH THE PN?

28 out of 30 respondents (93.3%) felt that despite the existence of corruption,transacting business is still profitable. This could give us an idea of the high profitmargins being padded by the dealers on the goods and services delivered to the end-users just to cover for the expenses incurred by the corrupt practices. (See TABLE 12)

PERCEPTION ON THE ERADICATION OF CORRUPTION IN THE PNPROCUREMENT SYSTEM

Amazingly, a slight majority of the respondents (53.3%) were not in favor of theeradication of corruption, while 46.7% felt otherwise. One possible explanation for this isthe dealers who did not favor the eradication of corruption are apprehensive that a levelplaying field may not assure them of getting transactions and, thus, not favor them asmuch as the status quo. Specifically, a level playing field will negate whateverbusiness connections they have with those with discretionary powers. (See TABLE 13)


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INFERENTIAL STATISTICS

RELATIONSHIP BETWEEN CORRUPTION PROPENSITY AND BOUDARYEXCHANGE

Chi-square statistic was used to establish if there is a relationship betweenboundary exchange and corruption propensity for every office involved in theprocurement system. Of the 12 offices subjected to the research, only the DeputyCommanders office and Bids & Awards Committee obtained a significance level higherthan the 0.05 threshold set to conclusively establish a relationship. Hence, for these twooffices, there was not enough evidence to conclude that there is a relationship. But foreach of the other offices, the relationship between boundary exchange and corruptionpropensity was found to be conclusive.

COMMANDERS OFFICE

Chi-Square Tests

Value df Asymp. Sig.(2-sided)

Pearson Chi-Square 19.615 1 .000

ANALYSIS:

The data indicate that at the office of the Commander, corruption propensity andboundary exchange are directly related. Of the 17 respondents who perceived that thereis corruption at the office of the Commander, all of them had boundary exchangeprocesses with the said office. Statistically, this is validated by the chi-square test valueof 19.615 and significance level of 0.000.

DEPUTY COMMANDERS OFFICE

Chi-Square TestsValue df Asymp. Sig.

(2-sided)Pearson Chi-Square 3.750 1 .053

ANALYSIS:

The chi-square test value of 3.75 and significance level of 0.053 will indicate thatat the office of the Deputy Commander, there is not enough data to conclude that

corruption propensity and boundary exchange are directly related. Of the 6 respondentswho had perceived there is corruption at the said office, 4 (66.66%) had boundaryexchange processes, while 2 respondents (33.33%) did not.

CHIEF OF STAFF OFFICE



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ANALYSIS:

The data indicate that at the office of the Chief of Staff, corruption propensityand boundary exchange are directly related. Of the 6 respondents who perceived thatthere is corruption at the office of the Chief of Staff, 5 (83.3%) of them had boundaryexchange processes with the said office while only 1 (16.66%) did not. Statistically, this isvalidated by the chi-square test value of 5.868 and significance level of 0.015.

LOGISTICS OFFICE



ANALYSIS:

The data indicate that at the Logistic Office, corruption propensity and boundaryexchange are directly related. Of the 17 respondents who perceived that there iscorruption at the Logistic Office, all of them had boundary exchange processes with thesaid office. Statistically, this is validated by the chi-square test value of 11.940 andsignificance level of 0.001.

COMPTROLLERS OFFICE



ANALYSIS:

The data indicate that at the Comptroller Office, corruption propensity andboundary exchange are directly related. Of the 10 respondents who perceived that thereis corruption at the Comptroller Office, all of them had boundary exchange processeswith the said office. Statistically, this is validated by the chi-square test value of 8.684

and significance level of 0.003.

PROCUREMENT OFFICE


(2-sided)

Pearson Chi-Square 5.000 1 .025


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ANALYSIS:

The data indicate that at the Procurement Office, corruption propensity andboundary exchange are directly related. Of the 18 respondents who perceived that thereis corruption at the Procurement Office, all of them had boundary exchange processes

with the said office. Statistically, this is validated by the chi-square test value of 5.000and significance level of 0.025.

SUPPLY ACCOUNTABLE OFFICE



ANALYSIS:

The data indicate that at the Supply Accountable Office, corruption propensityand boundary exchange are directly related. Of the 20 respondents who perceived thatthere is corruption at the Supply Accountable Office, all of them had boundary exchangeprocesses with the said office. Statistically, this is validated by the chi-square test valueof 6.667 and significance level of 0.010.

COMMISION ON AUDIT

Chi-Square TestsValue

Pearson Chi-Square .N of Valid Cases 30

ANALYSIS:

The SPSS could not compute statistically the chi-square value and significancelevel of the given data because the variable of corruption perception at the Commissionon Audit was misread as a constant since all the respondents perceived the COA to becorrupt. Nonetheless, by looking at the Cross Tabulation count, of the 30 respondentswho perceived COA to be corrupt, 28 (93.33%) had boundary exchange processes at thesaid office. Hence, corruption propensity and boundary exchange are directly related.

FINANCE OFFICE




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ANALYSIS:

The data indicate that at the Finance Office, corruption propensity and boundaryexchange are directly related. Of the 14 respondents who perceived that there iscorruption at the Finance Office of the Commander, all of them had boundary exchangeprocesses with the said office. Statistically, this is validated by the chi-square test valueof 6.563 and significance level of 0.010.

TECHNICAL INSPECTION COMMITTEE



ANALYSIS:

The data indicate that at the Technical Inspection Committee, corruptionpropensity and boundary exchange are directly related. Of the 13 respondents whoperceived that there is corruption at the Technical Inspection Committee, all of them hadboundary exchange processes with the said office. Statistically, this is validated by thechi-square test value of 6.982 and significance level of 0.008.

BIDS & AWARDSS COMMITTEE



ANALYSIS:

The chi-square test value of 3.409 and significance level of 0.065 will indicate tous that, at the Bids and Awards Committee, there is not enough data to conclude thatcorruption propensity and boundary exchange are directly related. Of the 5 respondentswho perceived that there is corruption at the office of the Commander, 3 (60%) of themhad boundary exchange processes with the said office while 2 respondents (40%) did

not.

ACCOUNTING OFFICE




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ANALYSIS:

The data indicate that at the Accounting Office, corruption propensity andboundary exchange are directly related. Of the 20 respondents who perceived that thereis corruption at the Accounting Office, all of them had boundary exchange processeswith the said office. Statistically, this is validated by the chi-square test value of 4.286and significance level of 0.038.

CONCLUSIONS

Based on the data gathered, the following are the conclusions:

1. There is corruption in the Philippine Navy procurement system. However,the levels of corruption of the different units of the PN varied and are dependent on thecorruptive or non-corruptive behavior of their respective Commanders.

2. There are several forms of corruption being practiced. These are; lagay,negotiated canvass, rigged bidding, ghost delivery, overpricing, tong, substitution and

under delivery.3. The main reason for corruption is to expedite the processing of documents.

Also, the corruptive behavior is not initiated by the dealer nor the procurement officialinstead, the practice had become a routine that both parties readily and mutually agreeon the terms.

4. All offices involved in the procurement system had corruption incidences.However, some offices were perceived to be more corrupt than the others. Ironically, theCOA, which is supposed to be the watchdog of the government against corruption, got a100% response in corruption perception.

5. There is a prevailing fixed rate of lagay. However, this is dependent on theamount of transaction except for the COA, where the consistent response yielded the

amount of lagay at 1-2% of the amount of the transaction.6. The data gathered validated the hypothesis inferred from the theoreticalframework that boundary exchange processes between the procurement officials andaccredited dealers, which work within the milieu of the procurement process, will resultto bureaucratic corruption. However, this is not applicable to offices, which have nodiscretionary powers, as in the case of the Deputy Commanders office and offices,which are already part of the largesse as in the case of the BAC.

RECOMMENDATIONS

There are only two practical recommendations that can be formulated as a result

of this study. First, the PN must strictly adhere to the merit system of promotion andselection of officers to be designated as commanders of its different units. The primarycriteria for qualification should be an officer who possesses technical competence andvision to effectively formulate reforms and, more importantly, he should have the moralintegrity and political will to implement these reforms.

The other recommendation is to limit the boundary exchange processes to thefront line levels only so as to totally insulate the other offices. This way, these offices can


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perform their review and inspection functions with a more independent anddispassionate perspective.

AREAS FOR FURTHER RESEARCH

This research has opened a floodgate for future investigative researches.Foremost of which is an operations research on the auditing processes of the COA. It isvery frustrating to know that the very agency tasked to weed out corruption wasunanimously found to be the most corrupt office. Another future study is a policyresearch to formulate policies to address this endemic problem of bureaucraticcorruption.

TABLES

TABLE2: PERCEPTION OF CORRUPTION ON THE PN PROCUREMENT SYSTEM

Frequency Percent

yes 30 100.0

TABLE 3: MEAN/STANDARD DEVIATIONS OF THE LEVELS OF CORRUPTION PER PN UNIT

N Minimum Maximum Mean Std. Deviation

HPN,HSG 20 1 4 2.30 1.08

HPHILFLT 23 0 4 1.43 .99

HPMAR 18 1 4 2.39 1.14

NLC 22 1 4 2.95 1.13

NASSCOM 23 1 4 2.87 1.18


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TABLE 4: FREQUENCY OF DEALERS EXPOSURE TO/EXPERIENCE ON CORRUPTION

Frequency Percent

yes 30 100.0

TABLE 5: FREQUENCIES OF DEALERS EXPOSURE/EXPERIENCE ON THE VARIOUS

FORMS OF CORRUPTION

"LAGAY" "TONG"

Frequency Percent

nagawa 30 100.0

NEGOTIATED CANVASS OR "NEGO" RIGGED BIDDING

Frequency Percent

nagawa 26 86.7

nasaksihan 2 6.7narinig 2 6.7

Total 30 100.0

GHOST DELIVERY or CONVERSION OVER PRICING

Frequency Percent

nagawa 18 60.0

nasaksihan 3 10.0

narinig 9 30.0

Total 30 100.0

UNDER DELIVERY SUBSTITUTION

Frequency Percent

nagawa 11 36.7

nasaksihan 3 10.0

narinig 16 53.3

Total 30 100.0

TABLE 6: FREQUENCY DISTRIBUTION OF DEALERS' REASONS WHY CORRUPTION IS

BEING RESORTED TO

REASON: To be able to get a project or transaction. REASON: To help expedite theprocessing of documents

Frequency Percent

yes 19 63.3

no 11 36.7

Total 30 100.0

Frequency Percent

nagawa 17 56.7

nasaksihan 1 3.3

narinig 12 40.0

Total 30 100.0

Frequency Percent

nagawa 23 76.7

nasaksihan 5 16.7

narinig 2 6.7

Total 30 100.0

Frequency Percent

nagawa 18 60.0

nasaksihan 7 23.3

narinig 5 16.7

Total 30 100.0

Frequency Percent

nagawa 13 43.3

nasaksihan 5 16.7

narinig 12 40.0

Total 30 100.0

Frequency Percent

yes 29 96.7

no 1 3.3

Total 30 100.0


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REASON: Utang na loob for those who gave the project.

Frequency Percent

yes 11 36.7

no 19 63.3

Total 30 100.0

TABLE 7: WHO INITIATES CORRUPTION?

Frequency Percent

dealer 2 6.7

procurement systemofficial

3 10.0

nagkakaintindihanna o 'SOP' na

25 83.3

Total 30 100.0

TABLE 8: PERCEPTION OF CORRUPTION PER OFFICE

Commander Deputy Commander

Frequency Percent

corrupt 17 56.7

not corrupt 13 43.3

Total 30 100.0

Chief of Staff Logistics Office

Frequency Percent

corrupt 6 20.0

not corrupt 24 80.0

Total 30 100.0

Comptroller's Office Procurement Office

Frequency Percent

corrupt 10 33.3

not corrupt 20 66.7

Total 30 100.0

Supply Accountable Office Commission on Audit

Frequency Percent

corrupt 20 66.7not corrupt 10 33.3

Total 30 100.0

Finance Office Technical Inspection Committee

Frequency Percent

corrupt 14 46.7

not corrupt 16 53.3

Frequency Percent

corrupt 6 20.0

not corrupt 24 80.0

Total 30 100.0

Frequency Percent

corrupt 17 56.7

not corrupt 13 43.3

Total 30 100.0

Frequency Percent

corrupt 18 60.0

not corrupt 12 40.0

Total 30 100.0

Frequency Percent

corrupt 30 100.0


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Total 30 100.0

Bids & Awards Committee Accounting Office

Frequency Percent


Total 30 100.0

TABLE 9: IS THERE A FIXED RATE OF LAGAY PER OFFICE?

Frequency Percent

yes 30 100.0

TABLE 10: FIXED RATE OF CORRUPTION PER OFFICE

Commander

Frequency Percent

14 46.7

1 percent 2 6.7

10-15 percent 1 3.3

10 percent 6 20.0

20 percent 1 3.3

5 percent 2 6.7

P10,000.00 1 3.3

P100-10,000.00 1 3.3

P20,000.00 1 3.3

P5,000-20,000.00 1 3.3

Total 30 100.0

Deputy Commander Chief of Staff

Frequency Percent

25 83.3

depends 1 3.3

P100-10,000.00 1 3.3

P5,000.00 2 6.7

P5,000.00 up 1 3.3

Total 30 100.0

Logistics Office Comptroller Office

Frequency Percent

19 63.3

0.5 percent 2 6.7

1 percent 1 3.3

5 percent 1 3.3

P1,000-3,000.00 1 3.3

P1,000-5,000.00 1 3.3

Frequency Percent

corrupt 13 43.3

not corrupt 17 56.7

Total 30 100.0

Frequency Percent


Total 30 100.0

Frequency Percent

26 86.7

P100-10,000.00 1 3.3

P3,000.00 1 3.3

P5,000.00 1 3.3

P5,000.00 up 1 3.3

Total 30 100.0


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P1,000.00 1 3.3

P100-10,000.00 1 3.3

P3,000.00 2 6.7

P500.00 1 3.3

Total 30 100.0

Procurement Office Commission on Audit

Frequency Percent

15 50.0

0.5 percent 1 3.3

1 percent 2 6.7

10 percent 1 3.3

5 percent 1 3.3

depends 1 3.3

P1,000-5,000.00 2 6.7

P100-10,000.00 1 3.3

P2,000-5,000.00 1 3.3

P3,000.00 1 3.3

P5,000-20,000.00 1 3.3

P5,000.00 2 6.7

P500.00 1 3.3

Total 30 100.0

Supply Accountable Office Finance Office

Frequency Percent

12 40.0

.5 percent 1 3.3

0.5 percent 2 6.7

1 percent 3 10.0

3 percent 1 3.3

P1,000-1,500.00 1 3.3

P1,000.00 2 6.7

P1.000-3,000.00 1 3.3

P100-10,000.00 1 3.3

P2,000-5,000.00 1 3.3

P3,000.00 1 3.3

P300.00 1 3.3

P5,000.00 1 3.3

P500.00 1 3.3

SOP only 1 3.3

Total 30 100.0

21 70.0

0.5 percent 2 6.7

1 percent 1 3.3

P1,000-3,000.00 1 3.3

P100-10,000.00 1 3.3

P2,000.00 1 3.3

P3,000.00 1 3.3

P5,000-20,000.00 1 3.3

P500.00 1 3.3

Total 30 100.0

Frequency Percent

1-2 percent 1 3.3

1 percent 20 66.7

1.5 percent 3 10.0

2 percent 5 16.7

P100-10,000.00 1 3.3

Total 30 100.0

Frequency Percent

16 53.3

0.5 percent 3 10.0

1 percent 1 3.3

P1,000-5,000.00 1 3.3

P1,000.00 2 6.7

P100-10,000.00 1 3.3

P100-500.00 1 3.3P100/head 1 3.3

P200.00 1 3.3

P500-1,000.00 2 6.7

P500.00 1 3.3

Total 30 100.0


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Technical Inspection Committee Bids & Awards Committee

Frequency Percent

17 56.7

0.5 percent 1 3.3

P10,000.00 1 3.3P100-10,000.00 1 3.3

P100/head 1 3.3

P2,000-20,000.00 1 3.3

P200.00 1 3.3

P3,000.00 2 6.7

P500-1,000.00 1 3.3

P500.00 3 10.0

P600.00 1 3.3

Total 30 100.0

Accounting Office

Frequency Percent

10 33.3

0.5 percent 4 13.3

1 percent 2 6.7

depends 1 3.3

P1,000.00 2 6.7

P100-10,000.00 1 3.3

P100-500 1 3.3

P100/head 1 3.3

P2,000-20,000.00 1 3.3

P2,000-5,000.00 1 3.3

P2,000.00 1 3.3

P5,000.00 1 3.3

P500-1,000.00 1 3.3P500.00 2 6.7

SOP only 1 3.3

Total 30 100.0

TABLE 11: EXISTENCE OF BOUNDARY EXCHANGE PROCESSES

Frequency Percent

yes 30 100.0

TABLE 12: IS IT PROFITABLE TO DEAL WITH THE PN?

Frequency Percent

yes 28 93.3

no 2 6.7

Total 30 100.0

TABLE 13: PERCEPTION ON THE ERADICATION OF CORRUPTION FROM THE PN

PROCUREMENT SYSTEM

Frequency Percent

26 86.7

0.5 percent 1 3.3depends 1 3.3

P100-10,000.00 1 3.3

P5,000.00 1 3.3

Total 30 100.0


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Frequency Percent

yes/in favor 14 46.7

no/not in favor 16 53.3

Total 30 100.0

REFERENCES

Caiden, Gerald and Naomi1977 Administrative Corruption. As quoted in Carino, Ledivina V.

1985.International Review of Administrative Sciences: A Journal ofComparative Public Administrations No.1 1985.

Carino, Ledivina V.1985 The Politicization of the Philippine Bureaucracy: Corruption or

Commitment?, International Review of Administrative Sciences: AJournal of Comparative Public Administrations No.1 1985.

Mangahas, Malou C.2001 Kickbacks and Negotiated Deals Mar AFP Procurement System

(Corruption-free modernization?). A PCIJ Report downloaded from PCIJwebsite at www. PCIJ. org


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Pazzibugan, Dona

2001 Golez: Military row inevitable given Wongs crusading mode.Philippine Daily Inquirer. Feb 28

Pablo, Carlito and Nocum, Armando2001 AFP turmoil worsens. Philippine Daily Inquirer. Feb 272001 Wong links Biazon to mess. Philippine Daily Inquirer. Feb 28

Sosmena, Gaudioso1999 Concept of Bureaucratic Sedition. Vol II No.6. NDCP Occasional paper

1996 Department of National Defense Department Order Nr 47 dated 30April

1997 2NFSU Manual on Procurement, Zambales

1997 AFP J-4 Logistics Directive Nr PC-97-03 dated 01 August

1998 NOQC Naval Orientation Reference Handguide, Zambales, NavalSchool Center

1999 Manual on Procurement. COA-PTTAF. Quezon City; Adriana PrintingCo Inc.

2000 Gen Appropriations Act. Downloaded from DBM website at www.DBM.gov.ph

QUESTIONNAIRE

Ang impormasyon na ibibigay ninyo dito sa questionnaire na ito ay hindi makakalabas kahit kanino lamang. Ito ayisang academic study na ginagawa ng mga graduate students ng University of the Philippines, Diliman, QuezonCity, bilang bahagi ng kanilang course requirements para sa degree na Master of Public Administration. Ito ayhindi kunektado kahit anumang paraan sa pamamalakad ng Philippine Navy. Dahil dito, wala sa sagot ninyo angmakakaapekto sa mga transaksyon ninyo, ngayon man o sa hinaharap, sa nasabing organisasyon. (Theinformation that would be given in this questionnaire would be treated with strict confidentiality. This is anacademic study being conducted by graduate students of the University of the Philippines, Diliman Quezon City,as part of the course requirements of their degree in Master of Public Administration. This study is not connected

in any way with the affairs of the Philippine Navy and, therefore, none of your answers in this questionnaire wouldaffect your current and future transactions with the said organization.)

NAME (optional)_____________________ BUSINESS NAME (optional) ___________________AGE ___________ SEX ____________

1. Kayo ba ay isang accredited dealer ng Philippnie Navy (PN)? _____ (Oo/Hindi). Kung oo, gaano katagal nakayo bilang isang accredited dealer ng PN?_______2. Alin sa mga sumusunod na unit ng PN kayo nakikipag-deal o nakapag-deal na?


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____ a. Headquarters Philippine Navy HHSG(HPN, HSG)____ b. Headquarters Philippine Fleet (HPHILFLT)____ c. Headquarters Philippine Marines (HPMAR)____ d. Naval Logistic Center (NLC)____ e. Naval Sea Systems Command (NASSCOM)

3. Sa pananaw ninyo meron bang corruption sa procurement system ng PN sa kasalukuyan? _____ (Oo/Hindi).Kung oo, base sa inyong pananaw, sukatin ninyo ang level ng corruption ng mga sumusunod na unit ng PN.Lagyan ng check sa ilalim ng hanay na angkop na level ng corruption para sa bawat unit.

:Walang :madalang ang :Di gaano laganap: laganap ang :talamak ang :________ :corruption :corruption :ang corruption : corruption :corruption :a. HPN, HSG : : : : : :b. HPHILFLT : : : : : :c. HPMAR : : : : : :d. NLC : : : : : :e. NASSCOM : : : : : :

4. Sa mga pakikipag-deal ninyo sa PN, nakagawa/nakasaksi/nakarinig na ba kayo ng kahit na anong uri ngcorruption? _____ (Oo/Hindi). Kung oo, alin sa mga sumusunod na uri ng corruption ang

nagawa/nasaksihan/narinig ninyo? (Lagyan ng G sa guhit kung ito ay nagawa na ninyo, S - kung nasaksihanlamang, R kung narinig lamang sa iba at D kung di ninyo alam kung ano ito.)

____ a.LAGAY - kilala din bilang SOP, commission, porsyento, etc.,.____ b. TONG - extortion, paghingi ng pera o pabor ng isang taong kasapi sa procurement system.____ c. NEGOTIATED CANVASS o NEGO - pag areglo ng isang dealer sa isang taong kasapi sa procurementsystem para makuha ang isang purchase order (PO) para di na dumaan sa actual canvass.____ d. RIGGED BIDDING o BIDDING-BIDDINGAN lutong macao, isang bidding na magkakasabwat angmga kasapi o di kaya alam na kung sino ang mananalo bago pa simulan ang bidding.____ e. GHOST DELIVERY o CONVERSION pagbigay ng dealer ng pera sa halip na I-deliver ang mga bagayna nakalagay sa PO.____ f. OVER PRICING pag presyo ng higit pa sa nararapat na tubo .____ g. UNDER DELIVERY pag deliver ng mga bagay na nakalahad sa PO ngunit kulang sa bilang.

____ h. SUBSTITUTION pag deliver ng bagay na iba sa nakalahad sa PO.

5. Kung nakagawa na kayo kahit anumang uri ng corruption na nailahad, ano ang dahilan o mga dahilan kungbakit ninyo ito nagawa?

____ a. Para magka-project.____ b. Para bumilis ang papel.____ c. Utang na loob sa nagbigay ng project.____ d. Ibang dahilan.(Isulat ang dahilan.) ______________________________________.

6. Sa pagkaalam ninyo, sino ang madalas na nag-i-initiate ng corruption sa procurement system?

____ a. Dealer____ b. Opisyal ng PN (kasama na ang SAO, Accountant at COA)____ c. Pareho ng nagkakintindihan dahil nakasanayan na sa sistema o SOP na.

7. Sa pananaw ninyo alin sa mga sumusunod na opisina na kasapi sa procurement system na pinagdaraanan ngpapel (PO o voucher) ninyo ay mayroong nagaganap na corruption? Lagyan ng check ang mga opisinang maycorruption sa inyong pananaw.

____ a. Commander ____ b. Deputy Commander ____ c. Chief of Staff


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____ d. Logistic Office (N4, F4, LC4,etc) ____ e. Comptroller Office (N6,F6, LC6, etc) ____ f. Procurement Office____ g. Supply Accountable Office(SAO)____ h. Commission on Audit (COA) ____ i. Finance Office____ j. Technical Inspection Committee ____ k. Bids & Awards Committee ____ l. Accounting Office

8. Mayroon bang karaniwang halaga ng lagay, commission o porsyento para sa bawat opisina na kasapi saprocurement system? _____ (Oo/Hindi). Kung oo, maari ba ninyong isulat ang halaga ng lagay, commission oporsyento sa katabi ng mga sumusunod na opisina.

________ a. Commander ________ b. Deputy Commander________ c. Chief of Staff ________ d. Logistic Office (N4, F4, LC4,etc)________ e. Comptroller Office (N6,F6, etc) ________ f. Procurement Office________ g. Supply Accountable Office(SAO) ________ h. Commission on Audit (COA)________ i. Finance Office ________ j. Technical Inspection Committee________ k. Bids & Awards Committee ________ l. Accounting Office

9. Kayo ba ay pinahihintulutan pumasok sa mga opisinang ito para kumuha ng project, upang mag-follow-up nginyong papel (PO o voucher), o para sa anumang dahilan? _____ (Oo/Hindi). Kung oo, lagyan ng check alinmansa mga sumusunod na opisina kung saan kayo ay pinahihintuluyan pumapasok para kumuha ng project, upangmag-follow-up ng inyong papel (PO o voucher), o para sa anumang dahilan?

________ a. Commander ________ b. Deputy Commander________ c. Chief of Staff ________ d. Logistic Office (N4, F4, LC4,etc)________ e. Comptroller Office (N6,F6, etc) ________ f. Procurement Office________ g. Supply Accountable Office(SAO) ________ h. Commission on Audit (COA)________ i. Finance Office ________ j. Technical Inspection Committee________ k. Bids & Awards Committee ________ l. Accounting Office

10. Kayo ba ay kumikita sa ganitong sistema? _____ (Oo/Hindi).

11. Kayo ba ay pabor na alisin ang corruption sa procurement system ng PN? _____ (Oo/Hindi).

MARAMING SALAMAT PO!

Corruption in Proc Sys

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