ALTERNATIVE METHODS OF PROCUREMENT CAPACITY DEVELOPMENT DIVISION Government Procurement Policy Board Technical Support Office (GPPB-TSO)

PROCUREMENT STANDARD GENERAL RULE : Sec. 10 All procurement shall be done through competitive bidding, except as provided in Rule XVI of the IRR. EXCEPTION Alternative methods shall be resorted only: In highly exceptional case To promote economy and efficiency Justified by the conditions specified in IRR Prior approval of the HOPE GPPB approval as required under EO 423, S. 2005 (as amended) Most advantageous price for the Government Procuring Entity (PE) shall see to it that the procurement program allows sufficient lead time for public bidding. If original mode indicated in APP is public bidding but cannot be ultimately pursued, the BAC shall prepare a resolution with a justification recommend to the HOPE the change in the mode of procurement and must bear approval

ALTERNATIVE METHODS Limited Source Bidding Direct Contracting Repeat Order Shopping Negotiated Procurement

LIMITED SOURCE BIDDING (Sec. 49) APPLICABILITY: Goods Consulting services CONDITIONS: Highly specialized types where only a few bidders are known to be available Major plant components beneficial to limit bidding to known qualified bidders to maintain uniform quality and performance of the plant Selective Bidding and involves direct invitation to bid from the list of pre-selected suppliers or consultant (i.e sophisticate defense equipment, complex air navigation systems, coal).resorting to Public Bidding will not likely result in any additional supplier or consultant.

LIMITED SOURCE BIDDING List shall be maintained by the relevant government authority (RGA) PE may be the relevant government authority List shall be updated periodically and submitted to the GPPB Pre-selection shall based on capability and resources to perform the contract taking into account: Experience and past performance on similar contracts Capabilities with respect to personnel, equipment, and/or manufacturing facilities Financial position

LIMITED SOURCE BIDDING PRE-SELECTION PROCEDURES PER GPM GPPB Resolution 06-2012 PE through BAC identifies LSB as applicable mode Acquires/Issues a Pre-selected List HOPE transmits list to the GPPB GPPB-TSO acknowledges receipt and posts the list in the website (ministerial) PE posts procurement opportunity and conducts LSB BAC submits (together with TS/TOR and specific criteria used for the evaluation of the pre-selected suppliers) the recommended pre-selected list to HOPE for approval and submit the same to GPPB together with certification justifying the recourse to LSB, compliance to procedure set and said suppliers are known

LIMITED SOURCE BIDDING PRE-SELECTION PROCEDURES GPPB Resolution 06-2012 Relevant Government Authority? PE represents itself as the RGA (self-generated list Issues a List? Competitive Bidding Limited Source Bidding Request for a List Y N PE as RGA shall establish, attests and confirms that it has expertise on the procurement at hand by virtue of its mandate and nature of functions and operations . Submission to GPPB accompanied with HOPE certification that it has expertise on the subject procurement

LIMITED SOURCE BIDDING In order to apply LSB on the procurement of motor vehicle, PE should first establish that the motor vehicle sought to be procured is either a highly specialized type of goods or a major plant component; otherwise, Competitive Bidding shall apply. (NPM 63-2013) Catering Services does not involve highly specialized requirements, and is undoubtedly not a major plant component. Limited Source Bidding cannot be resorted to in the procurement of Catering Services. Competitive Bidding should be resorted to in the acquisition of the contemplated service. (NPM 61-2013)

DIRECT CONTRACTING APPLICABILITY: Goods CONDITIONS: Items of proprietary nature from proprietary source Critical components from a specific supplier to hold a contractor to guarantee its project performance Items sold by an exclusive manufacturer or dealer no other suppliers selling it at lower prices no suitable substitute can be obtained at more advantageous terms to the Government

DIRECT CONTRACTING Since there are other Passport Readers available in the market apart from that manufactured by 3M Corporation, Direct Contracting cannot be utilized for the acquisition of brand new passport readers. Even though 3M Passport Reader is proprietary in nature and can be obtained from the proprietary source, there may be other Passport Readers in the market, which are likewise proprietary in nature that can be obtained. (NPM 41-2013)

REPEAT ORDER APPLICABILITY: Goods CONDITIONS: Same or lower unit prices, provided that such prices are still the most advantageous to the GOP after price verification No splitting of contracts Availed of within 6 months from the contract effectivity date stated in the NTP arising from the original contract, except in cases duly approved by the GPPB Not to exceed 25% of the quantity of each item Original contract awarded through competitive bidding

REPEAT ORDER Repeat Order under Section 51 of RA 9184 does not require post-qualification. The phrase “subject to post-qualification process described in the Bidding Documents”, as stated in the provision refers to Competitive Bidding and not to Repeat Order. (NPM 13-2013)

SHOPPING APPLICABILITY [52.1(A) AND (B)]: Goods CONDITIONS [SHOPPING UNDER §52.1(A)]: There is an unforeseen contingency requiring immediate purchase Amount does not exceed the threshold CONDITIONS [SHOPPING UNDER §52.1(B)]: Procurement of ordinary or regular office supplies and equipment not available in PS-DBM

THRESHOLD FOR UNFORESEEN CONTINGENCIES [S. 52.1(a)] NGAs, GOCCs, GFIs, SUCs – PhP100,000 LGUs – 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 In the case of Barangays, the maximum amount is PhP50,000

NEGOTIATED PROCUREMENT SMALL VALUE PROCUREMENT APPLICABILITY All types of Procurement CONDITIONS: Procurement does not fall under Shopping [§52] Amount does not exceed the threshold

SHOPPING [S 52.1(b)] AND SMALL VALUE PROCUREMENT NGAs, GOCCs, GFIs, SUCs – PhP500,000 LGUs – 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 In the case of Barangays, the maximum amount is PhP50,000

SHOPPING and SMALL VALUE PROCUREMENT Decision to resort to shopping/SVP shall be reflected in the Annual Procurement Plan (APP) After approval, BAC may delegate execution Posting in PhilGEPS required if amount is > PhP50,000 Request for Quotation Extension of deadline for submission of quotation Award PE to validate legal, technical, and financial capability through relevant documents or other means

SHOPPING and SMALL VALUE PROCUREMENT COMMITTEE (SSVPC) Attach copy of DILG Department Order

SHOPPING and SMALL VALUE PROCUREMENT PROCEDURAL GUIDELINES: Prepare RFQ Send RFQ to at least 3 suppliers [may be 1 in case of 52.1(a)] Prepare Abstract of Quotations Extend deadline if no quotation is received Award to LCB/HRB that complies with specs and ABC

NEGOTIATED PROCUREMENT TWO FAILED BIDDINGS APPLICABILITY All types of Procurement CONDITIONS: Two failed biddings Mandatory review of the following: Minimum technical specifications ABC, which may be adjusted up to 20% from last bidding

NEGOTIATED PROCUREMENT TWO FAILED BIDDINGS BAC shall invite and engage in negotiations with sufficient number of suppliers, contractors or consultants to ensure effective competition Requirements, guidelines, documents, clarifications, or other information relative to the negotiations shall be communicated on an equal basis

NEGOTIATED PROCUREMENT TWO FAILED BIDDINGS Submission of best and final offer by suppliers, contractors, or consultants on a specified date. Criteria in selecting the successful offer: Offer should meet the PE’s minimum technical requirements. Offer should not exceed ABC Observers shall be invited in all stages

NEGOTIATED PROCUREMENT TWO FAILED BIDDINGS PROCEDURAL GUIDELINE Preparation of RFQ Invitation of bidders Submission and opening of 1st offer Negotiation with bidders Submission and opening of best and final offer (2nd offer) Awarding of contract

NEGOTIATED PROCUREMENT TWO FAILED BIDDINGS Where the PE failed to receive any quotations for the procurement of the services of a private counsel despite posting twice in the PhilGEPS website, the procuring entity has the discretion to resort to alternative methods of procurement, subject to compliance with the parameters and factors laid out in RA 9184 and its associated IRR. (NPM 09-2013)

NEGOTIATED PROCUREMENT TWO FAILED BIDDINGS PE can only resort to Negotiated Procurement under Section 53.1 (Two-Failed Biddings) of the IRR of RA 9184 for the procurement of the Project if the two-failed biddings were due to circumstances enumerated under Section 35 of the same IRR. If the failure of bidding is due to the declaration by the HOPE pursuant to Section 41 of the IRR , Negotiated Procurement (Two Failed Biddings) cannot be resorted to. (NPM 72-2013)

NEGOTIATED PROCUREMENT EMERGENCY CASES APPLICABILITY: All types of Procurement CONDITIONS: In case of imminent danger to life or property during a state of calamity When time is of the essence arising from natural or man-made calamities Other causes where immediate action is necessary To prevent damage to or loss of life or property To restore vital public services, infrastructure facilities and other public utilities

NEGOTIATED PROCUREMENT TAKE-OVER OF CONTRACTS APPLICABILITY: All types of Procurement CONDITIONS: Rescinded or terminated contract Immediate action is necessary: To prevent damage to or loss of life or property To restore vital public services, infrastructure facilities, and other public utilities

NEGOTIATED PROCUREMENT TAKE-OVER OF CONTRACTS Negotiate starting with the 2nd LCB or HRB at the bidder’s original bid price, then to the next if negotiation fails If negotiation fails, invite a short list of at least 3 to submit bids and negotiate starting with the LCB or HRB

NEGOTIATED PROCUREMENT ADJACENT OR CONTIGUOUS APPLICABILITY: Infrastructure Consulting Services CONDITIONS: Subject contract is adjacent or contiguous to an on-going infra or consulting Original contract is a result of competitive bidding Subject contract has similar or related scopes of work

NEGOTIATED PROCUREMENT ADJACENT OR CONTIGUOUS Within the contracting capacity of the contractor/consultant The same prices or lower unit prices as the original contract less mobilization cost Amount does not exceed amount of the on-going project No negative slippage Negotiations commenced before expiry of original contract

NEGOTIATED PROCUREMENT AGENCY TO AGENCY APPLICABILITY: All types of Procurement CONDITIONS: Cost-benefit analysis indicating A-to-A is more efficient and economical A-to-A does not exceed 25% of PE’s total budget for each category (goods, infra, consulting) Servicing agency has mandate to undertake the project Servicing agency owns or has access to necessary tools required for the project Other requirements provided in Implementing Guidelines on Agency-to-Agency Arrangements (GPPB Resolution 18-2007)

NEGOTIATED PROCUREMENT AGENCY TO AGENCY PITC Pharma, Inc. (PPI) has been given express mandate to be the central/lead agency for procurement of all government agencies’ requirements for drugs and medicines pursuant to RA 9501. However, RA 9501 does not exempt it from the procurement policies, rules and regulations established under RA 9184 and its IRR. PPI is not exempt from posting a Performance Security under §39 of RA 9184 and its IRR when entering into a contract with other government agencies and the PE requires such security. (NPM 37-2013)

NEGOTIATED PROCUREMENT AGENCY TO AGENCY For the procurement of CTC, the more appropriate method to be used is A to A rather than Direct Contracting In cases where procurement from another agency of the government is more efficient and economical, Negotiated Procurement under Section 53.5 (Agency-to-Agency Agreements) may be resorted to. This rule allows a government entity to procure from another government entity without need of public bidding, subject to compliance with the prescribed conditions and procedures under existing rules and the Guidelines on Agency-to-Agency Agreements (Guidelines). (NPM 52-2013)

NEGOTIATED PROCUREMENT PROCUREMENT AGENT APPLICABILITY: All types of Procurement CONDITIONS: HOPE has determined that PE does not have procurement proficiency or capability to undertake a particular procurement ACTIONS AVAILABLE: Request other GOP agencies to undertake such procurement for them Recruit and hire consultants or procurement agents to assist them directly and/or train their staff in the management of the procurement function

NEGOTIATED PROCUREMENT PROCUREMENT AGENT Where a PE has determined that it lacks the proficiency or capability to undertake its rehabilitation project, which need not be based solely on the PE’s failure to constitute its BAC, the PE may request another government agency to be its Procurement Agent as Section 53.6 of the IRR may also apply in cases where a BAC is validly constituted, but due to the number of bidding activities to be undertaken by the procuring entity; magnitude and complexity of the project; experience of the members of the BAC; location and situs of both the principal and the agent; and, other valid and reasonable circumstances, the procuring entity may not have the proficiency or capability to undertake the particular procurement activity. (NPM 38-2013)

NEGOTIATED PROCUREMENT HIGHLY TECHNICAL PROCUREMENT APPLICABILITY: Consulting Services CONDITIONS: Individual consultant Work involves: Highly technical or proprietary Primarily confidential or policy determining, where trust and confidence are the primary consideration Term is, at the most, 6 months, renewable at the option of the appointing HOPE, but in no case to exceed the term of the latter

NEGOTIATED PROCUREMENT LEASE OF REAL PROPERTY APPLICABILITY: Goods (Real Estate and Venue) CONDITIONS: Cost-benefit analysis indicating leasing privately-owned real estate or venue is more efficient and economical APP reflect the proposed lease Selection to follow the guidelines (GPPB Resolution 08-2009) Eligibility documents need not be submitted, but PE must validate whether lessor is technically, legally, and financially capable through other means Lease contracts costing > PhP50,000 should be posted in the PhilGEPS

NEGOTIATED PROCUREMENT NGO PARTICIPATION APPLICABILITY: All types of Procurement CONDITIONS: Appropriation law or ordinance earmarks an amount to be contracted to NGOs PE may opt to conduct public bidding or negotiated procurement for the selection of NGO, subject to the rules provided in the guidelines (GPPB Resolution 12-2007)

NEGOTIATED PROCUREMENT COMMUNITY PARTICIPATION APPLICABILITY: Delivery of goods, including non-consulting services and simple infrastructure projects CONDITIONS: In the interest of project sustainability or to achieve certain specific social objectives PE to propose procedures, specifications, and contract packaging for GPPB approval RESOLUTION NO. 03-2013

NEGOTIATED PROCUREMENT UN AGENCIES APPLICABILITY: All types of Procurement CONDITIONS: Procure from UN Agencies Small quantities of off-the-shelf goods, primarily in the fields of education and health Specialized products where the number of suppliers is limited (e.g., vaccines or drugs)

OTHER TERMS AND CONDITIONS Most advantageous price for government should be obtained (S48.1) Splitting of contracts strictly prohibited (S54.1) Advertisement and posting for the following methods may be dispensed with provided that the BAC through its Secretariat shall post the Invitation or Request for Submission of Price Quotations: Shopping [§52.1(b)] Except: PhP50,000 and below Negotiated Procurement under Two Failed Biddings [§53.1] NGO Participation [§53.11] Small Value Procurement [§53.9] GPPB Resolution No. 03-2011, included NGO Participation

OTHER TERMS AND CONDITIONS ALL awards should be posted, except Shopping and Small Value Procurement with ABC of PhP50,000 and below Bid security NOT necessary, except in Limited Source Bidding Performance and warranty securities necessary, except: Shopping [§52] Emergency Cases [§53.2] Small Value Procurement [§53.9] Lease of Real Property [§53.10] Procurement from UN agencies [§53.13]

  SUMMARY Method Goods Infrastructure Consulting 1. Limited Source Bidding   2. Direct Contracting 3. Repeat Order 4. Shopping 5. Negotiated Procurement

Negotiated Procurement SUMMARY Negotiated Procurement Goods Infra Consulting 1. Small Value Procurement  2. Two Failed Biddings 3. Emergency Cases 4. Take Over Contracts 5. Adjacent or Contiguous  6. Agency to Agency

Negotiated Procurement SUMMARY Negotiated Procurement Goods Infra Consulting 7. Procurement Agent  8. Highly Technical Consultants  9. Lease of Real Property 10. NGO Participation 11. Community Participation 12. UN Agencies

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