The Philippine Energy Efficiency Alliance (PE2) said the New Government Procurement Act (NGPA) or Republic Act (RA) 12009 signed into law over the weekend will help push for energy efficiency improvements in government buildings and public infrastructures.
The NGPA explicitly included a provision on life cycle cost modality of government procurement that will shift competitive pricing for purchases and contracts for energy efficiency upgrades, Alexander Ablaza, PE2 president, told reporters in a message.
The life cycle cost modality recognizes all amount associated with obtaining, owning and disposing of an investment which, in this case, involves government buildings, public street and outdoor lighting and other energy uses in public infrastructure, such as water supply, treatment and distribution and sewage treatment.
Ablaza said the new law will allow procurement of technologies, solutions and services yielding the lowest life cycle costs by selecting the offer delivering the optimal energy efficiency and overall quality.
Such was not possible under the previous government procurement law which anchored competitive bid selection only for the lowest initial capital cost, PE2 said.
“In many cases, the cost of energy, typically electricity consumption, is the most significant component of life-cycle cost, often outweighing the acquisition cost of the delivered and installed equipment,” Ablaza said.
“PE2 hopes the implementing rules and regulations of RA 12009 will have specific provisions enabling the government procurement of energy service company performance contracts, which were not possible under the superseded procurement law, RA 9184,” Ablaza added.
The government said the NGPA will enhance public services and promote greater transparency as it streamlines procurement procedures for both national government agencies and local government units.
The new law introduces several key reforms including the most economically advantageous and responsive bid, which emphasizes not only the lowest price but other factors like quality, sustainability and social impact; most advantageous and responsive bid which allows procuring entities to consider factors beyond price, such as technical specifications, delivery time and post-award services; and sustainable procurement which encourages environment-friendly practices that consider the life cycle cost of goods and services, including energy efficiency, recyclability and environmental impact.
Earlier, PE2 said if the Philippines would have to invest $243 billion to achieve what is intended for the energy efficiency roadmap through 2040, it would benefit from savings of as much as $726 billion, deferred 45,900 megawatts in new power plants, and reduced carbon emissions and slower rise in power prices.
