1. Updates on the Revised Implementing Rules and Regulations of R.A. 9184
Association of Government Accountants
of the Philippines (AGAP)
The Legend Palawan
Puerto Princesa, Palawan
21 October 2011

2. What is Procurement?

3. What is Procurement?
Procurement refers to the acquisition of goods, consulting services, and the contracting for infrastructure projects by procuring entity. (Sec. 5(aa), IRR, R.A. 9184)
Procurement means the acquisition by any means of goods, construction or services. (UNCITRAL Model Law on Procurement)

4. What is Procurement?
Acquisition means the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. (FAR, US)

5. What is Procurement?
Procurement encompasses the whole process of acquiring property or services. It begins when an agency has identified a need and decided on its procurement requirement. Procurement continues through the processes of risk assessment, seeking and evaluating alternative solutions, contract award, delivery of and payment for the property or services and, where relevant, the ongoing management of a contract and consideration of options related to the contract. (CPG, 2008)

6. What is Procurement?
Procurement we define as the whole of life-cycle process of acquisition of goods, services and works from third parties – beginning when a requirement is first defined and ending with the ultimate disposal of an asset or end of a service contract. (P. Gershon, OGC, UK)

7. What is Procurement?
Value for Money – is the optimum combination of whole of life costs and quality to meet the customer’s requirements… (P. G.)
It must be government’s policy that all public procurement, should be based on value for money, having due regard to propriety and regularity. (P.G.)

8. What is Procurement? LCC – Life Cycle Costing
“Cost” should consider all costs throughout the life-cycle – acquisition cost, utility costs (energy/water consumption, maintenance), and disposal costs.
“C to G” vis-à-vis “C to C”

9. What is Procurement? 5 Rights in Public Procurement: Right Source
Right Quality – Satisfaction of End-User?
Quality may refer to the overall relationship and integration of effects of performance, lifespan, integrity, durability, and conformity of the goods with the technical requirements of the project.
Right Quantity – (J.I.T / Lean Procurement)
Right Price
Right Time/Delivery

10. Updates on the IRR

11. IRR Revisions Background Harmonization Address the Needs of PEs
Alignment with International Best Practices
Address the Needs of PEs
Concerns raised by procuring entities, bidders and observers

12. IRR Revisions Scope and Application (Sec. 4)
All domestically-funded procurement activities
All foreign-funded procurement activities, unless otherwise stated in the treaty, international or executive agreement
But procurement funded thru foreign grants are excluded

13. IRR Revisions Scope and Application (Sec. 4)
GOP negotiating panels shall:
Default position - use of the IRR or selection thru competitive bidding
Explain in writing if treaty, international or executive agreement states otherwise
Revised IRR defines treaty, international or executive agreements, foreign loans & grants

14. IRR Revisions Procurement Planning (Sec. 7)
No procurement shall be undertaken unless it is in accordance with the approved APP
End-user units shall prepare their PPMP which shall be submitted to the budget office
Budget office shall evaluate and include in budget proposal for approval of HOPE
Upon approval by HOPE, budget office shall furnish a copy of budget proposal and PPMP to BAC Secretariat

15. IRR Revisions Procurement Planning (Sec. 7)
BAC Secretariat shall review and consolidate into the proposed APP
Upon approval of GAA/corporate budget/ordinance, end-user shall revise/adjust PPMP and submit to BAC Secretariat
BAC shall finalize modes of procurement under the proposed APP
APP shall be approved by HOPE or 2nd ranking official designated by HOPE

16. IRR Revisions Bids and Awards Committee (Sec. 11)
Alternate BAC member allowed:
Same qualification and term as principal
Attend meetings and receive honoraria
Accountability limited to their acts and decisions
Honoraria for BAC Secretariat subject to DBM Rules

17. IRR Revisions Observers (Sec. 13) Allows observers from cooperatives
Requires 3 days’ prior written notice for invitation of observers
Requires observers to inhibit in case of actual or potential conflict of interest
Access to documents upon signing of a confidentiality agreement

18. IRR Revisions Advertising of Invitation to Bid (Sec. 21)
IAEB to Invitation to Bid (goods and infra) or Request for Expression of Interest (consulting)
Includes posting in the website prescribed by the foreign government/foreign or international financing institution, for foreign-funded procurement

19. IRR Revisions Pre-Bid Conference (Sec. 22)
May be extended at least 30 cd before bid submission
Method, nature and complexity of contract
Encourage international participation
At the option of procuring entity, only bidders who purchased bid documents are allowed to attend or ask questions

20. IRR Revisions Eligibility Requirements (Secs. 23 & 24)
Reduced to 5-6 documents
Others to be submitted during –
Post-qualification
Prior to Award of Contract

21. IRR Revisions Submission and Receipt of Bids (Sec. 25)
Two-Envelope System (Eligibility requirements included in the Technical Proposal)
Documentary requirements trimmed down
Project related documents lumped into one document
In Infrastructure Projects, Technical (incl. eligibility requirements) and Financial Proposals will now be submitted at the same time

22. IRR Highlights Bid & Performance Securities (Secs. 27 & 39)
Deleted certified check from acceptable forms
In general, bank issued securities must be issued by a universal/commercial bank
However, in biddings conducted by LGUs, securities may be issued by banks certified by BSP as authorized to issue said instruments
Surety Bonds must be accompanied by certification from Insurance Commission that issuer is authorized to issue such security

23. Form of Bid and Performance Security Amt of Performance Security
IRR Revisions
Form of Bid and Performance Security
Amt of Bid Security
(% = ABC)
Amt of Performance Security
(% = Contract Price)
Cash, cashier’s/manager’s check (issued by Universal/Commercial Bank 2%
5% (Goods & Consulting)
10% (Infra)
Bank guarantee/draft or irrevocable LC
Surety bond callable upon demand 5%
30%
Combination of the foregoing
Proportionate to share of form with respect to the total amount of security

24. IRR Revisions Bid & Performance Securities (Secs. 27 & 39)
Bidder has option to choose among acceptable forms of security
Procuring entity may not limit options available to bidders

25. IRR Revisions No Contact Rule (Sec. 32)
BAC, thru Secretariat, may request for clarification of bid as long as it is in writing
Bidder’s response to the BAC’s inquiry must also be in writing 25 25

26. IRR Revisions Post-qualification (Sec. 34)
3 cd from notice of LCB, submit the ff:
Tax clearance
Latest income and business tax returns
Certificate of PhilGEPS registration
Other appropriate licenses and permits required by law and stated in the Bidding Documents.
Failure to submit on time / dubious veracity = forfeiture of Bid Security / disqualification for award

27. IRR Revisions Notice of Award (Sec. 37) Conditioned on the following:
If joint venture, submission of JVA
Posting of Performance Security
Signing of Contract
If required, approvals by higher authority

28. IRR Revisions Disclosure of Relations (Sec. 47)
Relatives within the 3rd civil degree of the following shall be disqualified:
Head of the procuring entity
Members of the BAC, Secretariat and TWG
Head of the end-user unit or project management office
Project consultants

29. IRR Revisions Alternative Methods of Procurement (Secs. 48 to 53)
Alignment with international best practices
Recognized additional instances of Negotiated Procurement (e.g., procurement from UN Agencies, Community Participation)
Increase in shopping/small value procurement thresholds

30. IRR Revisions Alternative Methods of Procurement (Secs. 48 to 53)
Address concerns raised by stakeholders
Clearer rules on negotiated procurement due to 2-failed bidding – submission of BAFO
Increase in thresholds
Lease of venue
Distinguishes Agency-to- Agency Agreements from Procurement Agents
Shopping clarified – Only 52.1(b) needs 3 quotations.

31. IRR Revisions Effectivity Transitory 2 September 2009
30 days from publication in the Official Gazette (3 August 2009)
Transitory
When was Invitation to Bid/Request for Expression of Interest published?

32. GPPB Issuances
GPPB Resolution No (Implementing Guidelines for Lease of Privately-owned Real Estate and Venue)
GPPB Resolution No (Guidelines for Shopping and Small-Value Procurement)

33. GPPB Issuances
GPPB Resolution No (Approving the Guidelines on the Procurement of Printing Services)
GPPB Resolution No (Approving and Adopting the 4th Edition of the Philippine Bidding Documents for Goods and Infrastructure Projects (As Harmonized with Development Partners) and Consulting Services)

34. GPPB Issuances
GPPB Resolution No (Approving Amendments to the Guidelines on the Procurement of Printing Services)
GPPB Resolution No (Approving the Pre-selection Procedure in the conduct of Limited Source Bidding under Section 49 of Republic Act 9184 and its Revised Implementing Rules and Regulations)

35. Non-Policy Matter Opinions

36. Repeat Order
NPM No
What stage in the procurement process can repeat order be considered to be within the reglamentary period of 6 mos. as provided under Section 51 (c) of the of the revised IRR) of RA 9184?

37. Repeat Order
NPM No
The reckoning period for computing the 6 mo. period is the effectivity date of the contract as stated in the Notice to Proceed (NTP) – Sec. 51, IRR of R.A
The contract effectivity date, as provided in the NTP, shall not be later than 7 cd from its issuance (Sec of the IRR)

38. Agency-to-Agency Agreements
NPM No
Can a GOCC having its own charter, directly engage its wholly-owned subsidiary created under the Corporation Code under Section 53.5 [Negotiated Procurement (Agency-to-Agency Agreement)] of the revised IRR) of RA 9184?

39. Agency-to-Agency Agreements
NPM No
As a general rule, GOCCs formed under the Corporation Code cannot enter into Agency-to-Agency Agreements
Except when a parent-subsidiary relationship exists between the 2 GOCCs. As long as the parent GOCC owns directly or indirectly more than half of the voting power of its subsidiary, then it may directly engage the services of said subsidiary.

40. Post-qualification Requirement
NPM No
Whether all the requirements under Section 34.2 of the IRR would have to be submitted by all the parties to a joint venture, for purposes of post-qualification, viz:
Tax clearance;
Latest income and business tax returns;
PhilGEPS registration certificate; and
Other appropriate licenses and permits required by law and stated in the bidding documents.

41. Post-qualification Requirement
NPM No
The principle that all the parties to a joint venture were required to submit all legal requirements provided under the previous IRR-A is still applicable under the revised IRR.
All the parties to a joint venture must still submit all the legal documents, regardless of the time/stage when these documents are required to be submitted.

42. Post-qualification Requirement
NPM No
The documents enumerated under Section 34.2 of the revised IRR would have to be complied with not only by one but by all the parties to a joint venture for purposes of passing the post-qualification.

43. Surety Bonds as Bid and Performance Securities
NPM No. 13 &
What is the correct form of certification that should accompany the surety bond which is submitted as a bid or performance security?

44. Surety Bonds as Bid and Performance Securities
NPM No. 13 &
The certification which must be submitted must :
Unequivocally state that the surety /insurance company is specifically authorized to issue surety bonds callable on demand, and
Issued by the Insurance Commission

45. Bidding Documents NPM No. 14-2010
Whether a procuring entity may set a deadline for the availability of bid documents at a date earlier than the deadline for the submission and receipt of bids?

46. Bidding Documents NPM No. 14-2010
No. Sec of the revised IRR of RA 9184 mandates the BAC to make available the bid docs from the time the invitation to bid is first advertised/posted until the deadline for the submission and receipt of bids.

47. Bidding Documents NPM No. 14-2010
Whether a procuring entity may be allowed to partially upload bidding documents in its website and the PhilGEPS considering the large sizes of the files and the high degree of security and discretion which BSP infrastructure projects require?

48. Bidding Documents NPM No. 14-2010
No. Pursuant to Sec of the IRR, it is mandatory for procuring entities to post all its bidding documents on both its website and the PhilGEPS.

49. Survey of Supreme Court Decisions on Public Procurement

50. Section 4, R.A. 9184 Abaya vs. Ebdane 14 February 2007
DBM-PS vs. Kolonwel Trading
8 June 2007
Loan Agreement, through Exchange of Notes, executed by the President with an IFI is an “Executive Agreement” and must be observed pursuant to “pacta sunt servanda.”

51. Protest
Phil. Pharmawealth, Inc. v. Phil. Children’s Medical Center BAC, et. al.
26 June 2006
The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative authorities to accord them the prior opportunity to decide controversies within their competence before the same may be elevated to the courts of justice for review.
Protest Mechanism under R.A and its IRR must be observed.

52. Protest DBM-PS vs. Kolonwel Trading 8 June 2007
Three elements of a Protest:
In writing, in the form of a verified position paper
Submitted to the head of the procuring entity
Payment of a non-refundable protest fee
Protest mechanism applies to foreign-funded projects

53. Protest
First United Constructors Corp. vs. Poro Point Management Corp.
19 June 2009
Petitioner violated doctrine of judicial hierarchy in directly filing its petition for Certiorari before the Supreme Court
One must first invoke special and important reasons

54. Technical Specifications
COA vs. Link Worth Int., Inc.
13 March 2009
Procuring entity must verify, inspect and test whether the technical specifications comply with its requirements
It does not give occasion for procuring entity to arbitrarily exercise its discretion and brush aside the very requirements it specified

55. Honoraria Sison vs. Tablang 5 June 2009
Section 15 of R.A authorizing grant of honoraria is not self-executing. It still needs an implementing guideline.
Honorarium is something given not as a matter of obligation but in appreciation for services rendered. Section 15 uses the word “may”.

56. Splitting of Contracts
Balderbin v. Sandiganbayan
22 March 2007
- Supreme Court cited COA Circular No in defining and identifying forms of splitting of contracts.

57. Discretion to Accept or Reject A Bid
Albay Accredited Constructors Association v. Ombudsman
30 January 2006
The discretion to accept or reject a bid and award contracts is vested in the government agencies entrusted with that function. The discretion given to authorities to accept or reject a bid is of such wide latitude that courts will not interfere, unless it is apparent that it is exercised arbitrarily, or, used as a shield to a fraudulent award.

58. COA’s Presence in Public Bidding
Villanueva v. COA
18 March 2005
Upon the agency that called for the bidding, therefore, rests the burden of ensuring that the process undertaken is above-board and that the outcome thereof is most advantageous to the government. The presence of the COA representative, as witness or observer, on the other hand, is fundamental only to the extent of guaranteeing documentary integrity and transparency in the bidding process.

59. Perfection of Contract
Insular life Assurance Co., Ltd. v. Asset Builders Corp.
5 February 2004
The effect of giving the Notice of Award … would have been the perfection of the contract. No such acceptance was communicated to respondent; therefore, no consent was given. Without that express manifestation, as required by the terms of its proposal, there was no contract.

60. Thank you Comments, questions? Telephone/Fax: (+632) 900-6741 to 44
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