1. Revised Implementing Rules and Regulations
Republic Act No. 9184 1

2. IRR Revisions Background Harmonization
Alignment with International Best Practices
Application of Domestic Preference
AO 227, Flag Law
Learning from Experience
Concerns raised by procuring entities, bidders and observers 2

3. 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 3

4. IRR Revisions Scope and Application (Sec. 4)
GOP negotiating panels shall:
Adopt as default position, use of the IRR or selection thru competitive bidding
Explain in writing if treaty, international or executive agreement states otherwise
IRR now includes definition of treaty, international or executive agreements, foreign loans & grants 4

5. IRR Revisions Procurement Planning (Sec. 7)
End-user units shall prepare their PPMP which shall be submitted to the budget office
Budget office to evaluate and include in budget proposal for approval of HOPE
Upon approval, budget office shall furnish a copy of budget proposal and PPMP to BAC Secretariat
BAC Secretariat shall review and consolidate into the proposed APP 5

6. IRR Revisions Procurement Planning (Sec. 7)
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 6

7. 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 7

8. 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 8

9. 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 9

10. IRR Revisions Pre-Bid Conference (Sec. 22)
May be extended at least 30 cd before bid submission
Method, nature and complexity of contract
International participation is more advantageous
At the option of procuring entity, only bidders who purchased bid documents are allowed to attend or ask questions 10

11. IRR Revisions Eligibility Requirements (Secs. 23 & 24)
Reduced to 5-6 documents
Others to be submitted during –
Post-qualification
Prior to Award of Contract 11

12. IRR Revisions: Eligibility Requirements – Goods and Infra (Sec. 23)
Class “A”
Legal Documents
DTI / SEC / CDA Registration
Mayor’s permit for principal place of business
Technical Documents
Statement of all on-going and completed contracts
PCAB license and registration (Infra only)
Unless otherwise stated in treaty or international or executive agreement 12

13. IRR Revisions: Eligibility Requirements – Goods and Infra (Sec. 23)
Class “A”
Financial Documents
Audited Financial Statement received by the BIR
NFCC computation or Credit Line Commitment from a universal or commercial bank
For LGUs, other banks authorized by BSP to issue said instrument 13

14. IRR Revisions Eligibility Requirements – Goods and Infra (Secs. 23-24)
Class “B” Documents: If Joint Venture -
JVA
If no JVA, sworn statements by each partner that they will enter into and abide by provisions of the JVA if awarded the contract 14

15. IRR Revisions: Eligibility Criteria – Goods (Sec. 23)
Legal Eligibility - Goods
General rule: 60% Filipino
Foreign bidders eligible allowed –
If stated in treaty, international or executive agreement
National of a country offering reciprocity rights to Filipinos
Goods not available from local suppliers
To prevent situations that defeat competition or restrain trade 15

16. IRR Revisions: Eligibility Criteria (Sec. 23)
Legal Eligibility - Infra
General rule: 75% Filipino (LOI 630)
Foreign contractors allowed if stated in treaty or international or executive agreement
If joint venture, less than 75% is allowed if -
Not less than 25% Filipino
Structures to be built require techniques not possessed by 75% Filipinos 16

17. IRR Revisions Eligibility Requirements (Sec. 23) If foreign bidder –
Submit equivalent documents issued by country
Accompanied by English translation certified by appropriate embassy or consulate in the Philippines 17

18. IRR Revisions Eligibility Criteria (Sec. 23)
Technical Eligibility (Goods) - Single Largest Contract
General Rule
Exceptions
Then require the ff.:
Expendable Supplies
25% of the ABC
Services and Non-expendable Supplies
50% of the ABC
If, at the outset and after market research, applying the general rule will likely result to:
Failure of bidding; or
Monopoly
At least 2 similar contracts aggregate amount at least equivalent to required percentage; and
Largest of the similar contracts amounts to at least 50% of required percentage 18

19. IRR Revisions Eligibility Criteria (Sec. 23)
Expendable Supplies (Sec. 5 [m])
Articles normally consumed within 1 year or value is substantially decreased after 1 year
Examples: medicines, stationery, fuel, and spare parts 19

20. IRR Revisions Eligibility Criteria (Sec. 23)
Non-expendable Supplies (Sec. 5 [w])
Not consumed in use
Serviceable life more than 1 year
Examples: furniture, fixtures, transport, and other equipment 20

21. IRR Revisions Eligibility Criteria (Sec. 23)
Technical Eligibility (Infra)
Track Record: Single Largest Contract
Retain at 50%
But within a period of ten years
For foreign funded procurement, a different track record may be agreed upon 21

22. IRR Revisions Eligibility Criteria (Sec. 23)
Financial Eligibility (Goods and Infra)
NFCC at least equal to ABC
Credit Line Certificate at least equal to 10% of ABC
Issued by Universal or Commercial Bank
For LGUs: other banks certified by BSP as authorized to issued said CLC
Option to submit cash deposit certificate deleted 22

23. IRR Revisions Eligibility Criteria (Secs. 23 & 24)
Government corporate entities eligible only if –
Legally and financially autonomous
Operate under commercial law
Not dependent agencies of GOP or procuring entity 23

24. IRR Revisions Submission and Receipt of Bids (Sec. 25)
Two-envelope system (Eligibility Documents included in Technical Proposal)
Documentary requirements trimmed down
Project related statements lumped into one document 24

25. IRR Revisions Submission and Receipt of Bids (Sec. 25) First Envelope
Eligibility requirements
Bid security
Technical specifications (Goods)/
Project requirements (Infra)
Omnibus sworn statement 25

26. IRR Revisions: Submission and Receipt of Bids (Sec. 25)
Second Envelope
Financial information/documents specified in the Philippine Bidding Documents 26

27. IRR Revisions 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

28. 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, bank guarantee/ draft 2%
5% (Goods & Consulting)
10% (Infra)
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

29. 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

30. IRR Revisions Ceiling for Bid Prices (Sec. 31)
Enumerated conditions for application of ABC as ceiling for foreign-funded procurement
Definition of ABC includes estimated contract cost in the case of foreign-funded procurement [Sec. 5(b)]

31. IRR Revisions No Contact Rule (Sec. 32)
BAC, thru Secretariat, may request for clarification of bid as long as it is in writing 31 31

32. IRR Revisions Post-qualification (Sec. 34)
3 days from notice of lowest calculated/highest rated bid, submit the following documents:
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. 32

33. IRR Revisions Notice of Award (Sec. 37) Conditioned on the following:
If joint venture, submission of JVA
If foreign-funded and stated in treaty, international or executive agreement, PCAB License
Posting of Performance Security
Signing of Contract
If required, approvals by higher authority 33

34. IRR Revisions Domestic and Foreign Goods (Sec. 43)
Provides procedures in determining entitlement to domestic preference
Applies only where the lowest bid has a foreign component (foreign bid/entity) and the next lowest bid has a domestic component (domestic bidder/entity) 34

35. IRR Revisions Domestic and Foreign Goods (Sec. 43)
Requires procuring entity to give preference to domestic entities and to materials and supplies produced, made, and manufactured in the Philippines (domestic bidder).
Domestic entities can only claim preference if certified by SEC/DTI/CDA
Domestic bidder can only claim preference if certified by DTI 35

36. IRR Revisions Domestic and Foreign Goods (Sec. 43)
Domestic entities (Sec. 5 [k])
75% Filipino
Habitually established in business and engaged in the manufacture or sale of product to be bid
In existence for at least 5 consecutive years
Domestic entities can only claim preference if certified by SEC/DTI/CDA 36

37. IRR Revisions Domestic and Foreign Goods (Sec. 43)
Domestic bidder (Sec. 5 [j])
Any person or entity
Offering articles/materials/supplies
If unmanufactured, grown or produced in the Philippines
If manufactured, substantially from those grown or produced in the Philippines
Domestic bidder can only claim preference if certified by DTI 37

38. SAMPLE APPLICATION OF PREFERENCE
Sample Computation
Lowest Calculated Bid
Next Lowest Calculated Bid
Foreign Bidder
Domestic Bidder/Entity
Bid
2,653,360.00
3,009,492.00
% Preference
x %
398,004.00
+ 2,653,360.00
Bid as increased
3,051,364.00
Result
Award to Domestic Bidder/Entity at 2,653,360.00, or
Award to Foreign Bidder if Domestic Bidder/Entity refuses 38

39. IRR Revisions Warranty Security – Goods (Sec. 62)
Expendable Supplies – 3 months, unless consumed earlier
Non-expendable Supplies – 1 year 39

40. IRR Revisions Warranty Security – Infra (Sec. 62)
Warranty period vs. Warranty security period
Warranty security period reduced to 1 year
Liability per stage
From project construction to final acceptance
From project completion to final acceptance
From final acceptance to warranty security period
Bidding
Construction
Completion
Acceptance
Warranty 40

41. 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

42. Shopping & Small Value Procurement
Higher Threshold Amount for Unforeseen Contingencies
NGAs, GOCCs, GFIs, SUCs – P100,000
LGUs –
In the case of Barangays, the maximum amount is P50,000
Classification
Maximum Amount (in Philippine Pesos)
Province
City
Municipality
1st Class
100,000
50,000
2nd Class
3rd Class
80,000
4th Class
60,000
5th Class
6th Class

43. Shopping & Small Value Procurement
Higher Threshold Amount for Regular Office Supplies and Small Value Procurement
NGAs, GOCCs, GFIs, SUCs – P500,000
LGUs –
In the case of Barangays, the maximum amount is P50,000
Classification
Maximum Amount (in Philippine Pesos)
Province
City
Municipality
1st Class
500,000
100,000
2nd Class
3rd Class
400,000
4th Class
300,000
50,000
5th Class
200,000
6th Class

44. 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
Increase in thresholds
Lease of venue

45. IRR Revisions Failure of Bidding (Sec. 35)
Mandatory review after each failed bidding
Based on findings
Revise terms, conditions, specifications
Adjust ABC, subject to required approvals
Rebid

46. IRR Revisions Two-Failed Bidding (Sec. 53.1)
Mandatory review and agree on the following:
Minimum technical specifications
ABC adjusted only up to 20%
Invite sufficient number to ensure competition
Information communicated on an equal basis

47. IRR Revisions Two-Failed Bidding (Sec. 53.1, cont.)
Simultaneous negotiations
Submission of best and final offer on a specified date

48. IRR Revisions Two-Failed Bidding (Sec. 53.1, cont.)
Successful offer to be selected:
Meet minimum technical specifications
Does not exceed ABC
Observers shall be invited in all stages

49. 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?

50. Thank you Comments, questions? GPPB On Line Forum 50