The Market Monitor Minding the Nation's Business
By Angel L. Lazaro III /National Academy of Science and Technology
In more than 40 years as a consultant, it has been my experience that whenever a foreign-funded project of the government (no matter how simple) is announced, the first question by an interested Filipino consultant is: “Which foreign consultant will I associate with?” Going for the project as a Filipino consultant is not considered an option.
This is understandable. Except for one instance, I am not aware of any foreign-funded project of the government where a Filipino consultant was awarded a project as principal or lead consultant after an international selection process.
The only exception I am aware of is when the joint venture (JV) of Angel Lazaro and Associates International, Filipinas Dravo and ProConsult was selected in 2001 for Advisory Services for the World Bank funded National Road Improvement and Management Project of the Department of Public Works and Highways (DPWH) was chosen in an international selection process over Japanese and American Consultants.
In this project, the JV assisted the International Bank for Reconstruction and Development (IBRD) Project Management Office in the review, processing and evaluation of submissions of Japanese (Katahira) and European (Renardet) Consultants, who were providing detailed engineering and construction supervision services. The services lasted more than seven years and were satisfactorily rendered with no issues or complaints from the client or the World Bank.
In spite of this successful demonstration of Filipino competence and capability, I am not aware of any other project where a Filipino consultant was selected as principal consultant for a foreign funded project of the government.
Proposals
Instead of analyzing why Filipino consultants have virtually no chance of being selected in an international competition, I am submitting proposals, which I believe, will give Filipino consultants a fighting chance to be selected. I wish to emphasize that I am against dole-outs. Selection must be earned. However, I see nothing wrong with the Philippine government helping Filipinos. These proposals are based on my experience and it is possible that some have been partially or fully implemented in some government agencies. Following are my proposals:
1.The experience of Filipino consultants in projects in the Philippines should be given full credit. To not give such experience full credit defies logic, for which experience would be more applicable to projects in the Philippines? Furthermore, how could the government discriminate against and not give full credit to its own projects? This must apply to the evaluation of both the firm and the proposed individuals.
2. The experience of Filipino consultants as associated consultants or sub consultants to Foreign Consultants should be given full credit. When the consultancy industry in the Philippines was in its infancy, the wise advice was for Filipinos to associate with foreigners, to learn. That was more than 50 years ago. Filipino Consultants cannot be babies forever. If experience as associated consultant or sub consultant is not given full credit, how can the Filipino consultant “graduate” to be principal consultant?
3.Experience thresholds should be set for both firms and individuals, depending on the project and position. Requirements should be thresholds meaning that firms and individuals satisfying the threshold will be given the full grade. For example, if 10 years experience is deemed adequate, all firms or individuals with 10 or more years experience will get the full grade.
4. All experience of Filipino Consultants should be given full credit, not just the last 10 years. Crediting only the last 10 years gives foreign consultants a huge advantage because over this short period, Filipino Consultants will have much fewer projects. Over a longer period, coupled with the threshold criterion (see previous slide), the Filipino consultant will be competitive. In addition, records will show that only a very limited number of favored consultants were able to get projects with the government over the almost 10 years of the Arroyo administration, rendering many Filipino Consultants (with extensive experience) non-competitive.
5. There should be only two classifications of consultants: international and domestic. For international positions, nationals of all eligible countries are qualified, including the Philippines. For domestic Positions, only Filipino citizens are eligible. There should be no positions where Filipinos are not eligible (bawal ang Pilipino).
6. The government should designate a slot for Filipino consultants on the shortlist. It is common practice to include geographical considerations in the preparation of shortlists. Except for bilateral projects, one will not find a shortlist composed of consultants from a single region.
7. ”Pseudo-Filipino” consulting firms should not be allowed as the Filipino associated firm. Many foreign consultants have formed consulting firms registered in the Philippines. These “pseudo-Filipino” consulting firms are nominally 60% owned by Filipinos but are in reality 100% controlled by foreigners. It is common practice for Foreign Consultants to designate their “pseudo-Filipino” consulting firm as their Filipino associated firm. This not only takes away financial opportunities from genuine Filipino consultants but also deprives them of the opportunity to expand their track record.
8. Persons employed by foreign or “pseudo-Filipino” Consulting firms should not be allowed to be nominated for domestic technical positions. It is common practice for foreign consultants to nominate persons employed by them directly or by their “pseudo-Filipino” consulting firm to domestic technical Positions.
9. The Filipino consultant should be a signatory to the contract and co-responsible to the Client and not a mere sub consultant. Foreign consultants cannot be excluded from foreign funded projects. However, existing policies requiring either a JV or association with Filipino consultants must be enforced, otherwise, the Filipino Consultant may not be able to claim credit for the project.
10. Weight percentage of financial proposal should be maximized. In the Quality-Cost Based Selection (QCBS), the technical and financial proposals are given percentage weights. Financial Proposals may be given from 15 to 30% weight. For technical proposals there is a minimum score required. This minimum score should be maintained to insure that whoever is selected is capable to render the required services.
11. Technical assistance projects should be studied. Consultancy projects are often developed through technical assistance funded by grants or loans from multilateral or bilateral funding institutions. Most of these TA’s are done by foreign consultants and are configured to insure that foreign consultants will be engaged. Possible changes in TA projects are: Use local funds; Engage Filipino Consultants; rewrite terms of reference; review outputs before acceptance, etc.
12. A uniform negotiation strategy should be developed to insure the eligibility and maximize the participation of Filipino Consultants. consultancy projects need to be negotiated by the implementing agency and the funding institution. Representatives of the government attending negotiations should be trained regarding this strategy.
13. A monitoring and audit system for Consultants should be set up. This function is currently assigned to government personnel. This function must be given to a third party consultant without any conflict of interest. In my opinion, this is the most important proposal of all the above. Giving Filipino consultants a chance for foreign funded projects will be counterproductive if there is no accountability.
Conclusion
Except for the last three, all of the proposals are immediately doable and do not require any funding. All that is needed is political will and a sincere desire to help the Filipino Consultant.
Except for bilaterally funded projects, my experience is the engagement of foreign consultants for foreign funded projects is seldom mandatory. Within certain limits, procedures and criteria for selection of consultants are the prerogative of the government. The interest of the lending institution is that nationals of eligible countries are allowed to participate and that procedures and criteria are implemented fairly and consistently.
There are many multilateral and bilateral funding institutions offering assistance to the Philippines. The government need not accept those with onerous terms and conditions.