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 PriceRight Time/Delivery
11 IRR Revisions Background Harmonization Address the Needs of PEs Alignment with International Best PracticesAddress the Needs of PEsConcerns raised by procuring entities, bidders and observers
12 IRR Revisions Scope and Application (Sec. 4) All domestically-funded procurement activitiesAll foreign-funded procurement activities, unless otherwise stated in the treaty, international or executive agreementBut 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 biddingExplain in writing if treaty, international or executive agreement states otherwiseRevised 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 APPEnd-user units shall prepare their PPMP which shall be submitted to the budget officeBudget office shall evaluate and include in budget proposal for approval of HOPEUpon 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 APPUpon approval of GAA/corporate budget/ordinance, end-user shall revise/adjust PPMP and submit to BAC SecretariatBAC shall finalize modes of procurement under the proposed APPAPP 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 principalAttend meetings and receive honorariaAccountability limited to their acts and decisionsHonoraria 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 observersRequires observers to inhibit in case of actual or potential conflict of interestAccess 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 submissionMethod, nature and complexity of contractEncourage international participationAt 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 documentsOthers to be submitted during –Post-qualificationPrior 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 downProject related documents lumped into one documentIn 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 formsIn general, bank issued securities must be issued by a universal/commercial bankHowever, in biddings conducted by LGUs, securities may be issued by banks certified by BSP as authorized to issue said instrumentsSurety 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 RevisionsForm of Bid and Performance SecurityAmt of Bid Security(% = ABC)Amt of Performance Security(% = Contract Price)Cash, cashier’s/manager’s check (issued by Universal/Commercial Bank2%5% (Goods & Consulting)10% (Infra)Bank guarantee/draft or irrevocable LCSurety bond callable upon demand5%30%Combination of the foregoingProportionate 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 securityProcuring 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 writingBidder’s response to the BAC’s inquiry must also be in writing2525
26 IRR Revisions Post-qualification (Sec. 34) 3 cd from notice of LCB, submit the ff:Tax clearanceLatest income and business tax returnsCertificate of PhilGEPS registrationOther 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 JVAPosting of Performance SecuritySigning of ContractIf 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 entityMembers of the BAC, Secretariat and TWGHead of the end-user unit or project management officeProject consultants
29 IRR Revisions Alternative Methods of Procurement (Secs. 48 to 53) Alignment with international best practicesRecognized 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 stakeholdersClearer rules on negotiated procurement due to 2-failed bidding – submission of BAFOIncrease in thresholdsLease of venueDistinguishes Agency-to- Agency Agreements from Procurement AgentsShopping 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)TransitoryWhen was Invitation to Bid/Request for Expression of Interest published?
32 GPPB IssuancesGPPB 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 IssuancesGPPB 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 IssuancesGPPB 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)
36 Repeat OrderNPM NoWhat 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 OrderNPM NoThe 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.AThe 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 NoCan 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 NoAs a general rule, GOCCs formed under the Corporation Code cannot enter into Agency-to-Agency AgreementsExcept 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 NoWhether 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; andOther appropriate licenses and permits required by law and stated in the bidding documents.
41 Post-qualification Requirement NPM NoThe 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 NoThe 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, andIssued 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 Trading8 June 2007Loan 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 ProtestPhil. Pharmawealth, Inc. v. Phil. Children’s Medical Center BAC, et. al.26 June 2006The 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 paperSubmitted to the head of the procuring entityPayment of a non-refundable protest feeProtest mechanism applies to foreign-funded projects
53 ProtestFirst United Constructors Corp. vs. Poro Point Management Corp.19 June 2009Petitioner violated doctrine of judicial hierarchy in directly filing its petition for Certiorari before the Supreme CourtOne must first invoke special and important reasons
54 Technical Specifications COA vs. Link Worth Int., Inc.13 March 2009Procuring entity must verify, inspect and test whether the technical specifications comply with its requirementsIt 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. Sandiganbayan22 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. Ombudsman30 January 2006The 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. COA18 March 2005Upon 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 2004The 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 Website:
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