Revised Implementing Rules and Regulations Republic Act No. 9184 1

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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)]

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

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

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

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

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

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

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

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 15% 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

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

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

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

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

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

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

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

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

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

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

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?

Thank you Comments, questions? GPPB On Line Forum http://gppb.topicsolutions.net/ 50