1. DIVESTMENT/DISPOSAL

2. Divestment refer to the manner or scheme of taking away, depriving, withdrawing of an authority, power or title.
Pursuant to Executive Order No. 888 and COA Circular No , the full and sole authority and responsibility for the divestment or disposal of property and other assets owned by national government agencies or instrumentalities, local government units, and government-owned and/or controlled corporations and their subsidiaries shall be lodged in the heads of the departments, bureaus, and offices of the national government, the local government units, and the governing bodies or managing heads of government-owned or controlled corporations and their subsidiaries conformably to their respective corporate charters or articles of incorporation, who shall constitute the appropriate committee or body to undertake the same.

3. OBJECTIVES

4. COMMITTEE ON DISPOSAL reconstituted Pursuant to eo 309 as provided for under eo 888
1. CHAIRMAN - A Senior Official with rank not lower than the level of Assistant Secretary for a department and Assistant Director for bureau/agency or a department head for a GOCC 2. MEMBER - Head of the Department’s Administrative Service or the Agency’s Administrative Division or Head of the GOCC’s equivalent organizational unit 3. MEMBER - Head of the Property Unit A Secretariat and Technical Staff to be manned by existing personnel of the agency concerned shall be formed to handle all the agency’s Technical and Administrative manners as well as the safeguarding and systematic filing of Committee documents and records.

5. Legal basis on disposal
Section 79 of PD “when government property has become unserviceable for any cause or is no longer needed, it shall, upon application of the accountable officer therefore, be inspected by the Head of the Agency or his duly authorized representative and if found to be valueless, it may be sold at a public auction to the highest bidder under the supervision of the proper committee on award or similar body. In the event that public auction fails, the property may be sold at a private sale at such prices as may be fixed by the same committee or body concerned”.

6. WHEN DOES A PROPERTY BECOME UNSERVICEABLE?
Property which can no longer be repaired or reconditioned;
Property whose maintenance cost of repair outweighs the benefits and services that will be derived from its continued use;
Property that has become obsolete or outmoded because of changes in technology;
Serviceable property that has been rendered unnecessary due to change in agency’s mandate or function;
Unused supplies, materials and parts that were procured in excess of requirements; and
Unused supplies and materials that has become dangerous to use because of long storage or use of which is determined to be hazardous.

7. MODE OF DISPOSAL/DIVESTMENT:
1. PUBLIC AUCTION
Conformably to existing state policy, the divestment or disposal of government property as contemplated herein shall be undertaken primarily thru public auction. Such mode of divestment or disposal shall observe and adhere to established mechanics and procedures in public bidding, viz:
a. adequate publicity and notification so as to attract the greatest number of interested parties; (vide, Sec. 79, P.D. 1445)
b. sufficient time frame between publication and date of auction;
c. opportunity afforded to interested parties to inspect the property or assets to be disposed of;
d. confidentiality of sealed proposals;
e. bond and other prequalification requirements to guarantee performance; and
f. fair evaluation of tenders and proper notification of award.
It is understood that the Government reserves the right to reject any or all of the tenders.

8. MODE OF DISPOSAL/DIVESTMENT:
2. Sale Thru Negotiation
For justifiable reasons and as demanded by the exigencies of the service, disposal thru negotiated sale may be resorted to and undertaken by the proper committee or body in the agency or entity concerned taking into consideration the following factors:
a. There was a failure of public auction. As envisioned in this Circular, there is failure of public auction in any of the following instances:
1. if there is only one offeror. 
In this case, the offer or bid, if sealed, shall not be opened.
2. if all the offers/tenders are non-complying or unacceptable.
A tender is non-complying or unacceptable when it does not comply with the prescribed legal, technical and financial requirements for pre-qualification.

9. MODE OF DISPOSAL/DIVESTMENT:
b. The negotiation may be conducted singly, i.e., on a one-on-one basis, or in group, provided that due communication between the offerors and the government is established with a view to ensuring that the government gets the best price.
c. To avert possible confabulation among unscrupulous parties, a record of the proceedings of the negotiation must be maintained.
d. It is understood that the price agreed upon at the negotiation shall not be lower than the floor price as fixed by the government or the highest offer submitted at the failed public auction whichever is higher.

10. MODE OF DISPOSAL/DIVESTMENT:
3. Barter, which is the direct exchange of commodities without the use of money and without reference to price or the exchange of goods of one character for goods of another, may be made with other government agencies or government-owned and/or controlled corporations. This shall be resorted to where there is an offer that would redound to the interest of and is advantageous to the government.

11. MODE OF DISPOSAL/DIVESTMENT:
4. Transfer to Other Government Agencies Where the property or assets involved are no longer serviceable or needed by the department, agency, corporation or local government unit concerned, they may be transferred to other government entities/agencies without cost or at an appraised value upon authority of the head or governing body of the said agency or corporation, and upon due accomplishment of an Invoice and Receipt of Property (Cf., Sec. 76, P.D. 1445).

12. MODE OF DISPOSAL/DIVESTMENT:
5. Destruction or Condemnation
 This mode shall be resorted to only when the unserviceable property has no commercial value, or is beyond economic repair, or there is no willing receiver, and/or the appraised value is less than the administrative cost of sale, subject to prior inspection by the Auditor concerned. Valueless property shall be condemned either by burning, pounding, throwing beyond recovery, and the like. The head of the department, agency and corporation and the local chief executive shall approve the disposition.

13. GUIDE:
The Property Custodian in possession of the unserviceable property shall submit to the Disposal Committee through their Administrative Division Chief the following accomplished forms, as appropriate:
- Inventory and Inspection Report of Unserviceable Property (IIRUP) accompanied by any of the following:
- Individual Survey Report, duly certified by the Supply and Property Officer and Agency Head
- List of missing parts, duly certified by the Supply and Property Officer and Department Head
- Stencils of chassis and engine numbers of motor vehicles
- Current photographs in two positions
- Equipment Ledger Cards
- Equipment Checklists
- Waste Material Report (WMR)

14. GUIDE:
The Disposal Committee shall conduct inspection to observe the physical condition of the property to be disposed. An ocular inspection is usually done to have a first-hand observation of the conditions of the property. After the inspection, appraisal of the properties to be disposed shall be commenced to attain more realistic valuations of property under disposal based on the actual state or condition of properties being disposed of and to provide a basis of ensuring that government recovers a fair return from the disposal of properties.
The Disposal Committee shall recommend to the Agency Head the mode of Disposal as appropriate and deemed most advantageous to the government.
Upon disposal of property, the pertinent portions of the IIRUP, Waste Material Report or Property Transfer Report, whichever is applicable shall be accomplished. These reports shall be the bases for dropping the property from the books of accounts and for taking up the proceeds from the sale of the property.

15. General PROCEDURES1 Responsibility Activity Property Custodian
Prepares the detailed list of unserviceable property based on the IIRUP and WMR.
Fills up the data on date acquired, particulars of property, property number, quantity and remarks.
If property is equipment, attaches the Equipment Ledger Cards, Equipment Checklists and pictures and forwards to Agency Administrative Division Chief.
Agency Administrative Division Chief
Receives the IIRUP, WMR and supporting documents.

16. General PROCEDURES2 Responsibility Activity
Agency Administrative Division Chief
Reviews and evaluates the submitted documents.
If incomplete, returns to Property Custodian.
If complete, forwards to Accountant.
Accountant
Provides the following data on the IIRUP, unit cost, total cost, accumulated depreciation, accumulated impairment losses and carrying amount and forwards to Agency Head.

17. General PROCEDURES3 Responsibility Activity Agency Head
Receives the IIRUP, WMR and supporting documents from Accountant.
Approves the IIRUP and WMR for the request of inspection and disposition and forwards to Disposal Committee.
Disposal Committee
Receives the IIRUP and WMR and supporting documents from Agency Head.
Conducts the inspection and appraisal of unserviceable property based on COA prescribed guidelines and makes Appraisal Report.

18. General PROCEDURES4 Responsibility Activity Disposal Committee
Prepares Disposal Program including the disposal methods to be employed and schedule of bidding and forwards the same together with IIRUP, WMR, Equipment Ledger Card, Equipment Checklist and pictures to Agency Head.
Agency Head
Receives and approves the Disposal Program and schedule of bidding activities and forwards documents to BAC on Disposal.
Disposal Committee/BAC on Disposal
Forwards the same set of documents to COA for information and notification on disposal activities at least twenty (20)

19. General PROCEDURES5 Responsibility Activity
Disposal Committee/BAC on Disposal
days before the advertisement of the call to public auction. The COA with the assistance of TSO will conduct review of the submitted documents, inspection and appraisal of unserviceable properties and prepares Appraisal Review Report.
Upon receipt of the COA Appraisal Review Report, forwards the document to the Disposal Committee. If no report is received from COA within the prescribed period, the schedule of the bidding will commence.
Receives the copy of the COA Appraisal Review Report (if available), approved Disposal Program, IIRUP, Individual Survey Report, List of Missing Spare Parts, Stencils of chassis and engine numbers of motor vehicles, current photographs

20. General PROCEDURES6 Responsibility Activity
Disposal Committee/BAC on Disposal
Equipment Ledger Cards, Equipment Checklists, and Waste Material Report.

21. Procedures: sale thru public bidding1
Responsibility
Activity
Disposal Committee/BAC on Disposal
Advertises by printed notice for not less than three (3) consecutive days in any newspaper or by notices posted in at least three (3) prominent public places in the locality.
Sends invitation to COA at least five (5) calendar days before the scheduled opening of bids.
Allows the bidders to inspect the unserviceable properties within the prescribed period as indicated in the advertisement.
Receives the sealed bids from interested bidders.
Conducts evaluation of bids on the scheduled bid opening and evaluate the submitted documents if in compliance of the minimum requirements set by the BAC

22. Procedures: sale thru public bidding 2
Responsibility
Activity
Disposal Committee/BAC on Disposal
To include the Bidder’s bond which is equivalent to at least 10% of the minimum bid amount, latest Financial Statements and Income Tax Return (ITR.)
Recommends conduct of second bidding if failure of bidding occurs due to no bid qualifiers or no bids received on the closing date and undertake bidding process again from the start of publication.
Prepares BAC Resolution recommending award to the highest bidder for approval of Agency Head.
Agency Head
Receives the BAC Resolution recommending award and approves it.
Forwards the document to BAC for preparation of NOA & Contract of Sale.

23. Procedures: sale thru public bidding 3
Responsibility
Activity
Disposal Committee/BAC on Disposal
Receives the approved BAC Resolution and prepares the NOA & Contract of Sale.
Forwards to the Agency Head for approval.
Agency Head
Receives the Notice of Award and Contract of Sale.
After verifying the correctness, approves the NOA & issues to the winning bidder.
Property Custodian
Receives the NOA & Contract of Sale together with the other supporting documents.
Cashier
Receives the payment of the sold property from the winning bidder and issues Official Receipt.
Issues the withdrawn property to the buyer upon presen-

24. Procedures: sale thru public bidding 4
Responsibility
Activity
Property Custodian
tation of Official Receipt issued by the Cashier. The withdrawn properties shall be released in the presence of the Disposal Committee.
Prepares and accomplishes the tally-out sheet as evidence of actual delivery.
Disposal Committee/BAC on Disposal/Agency Head
Sign the tally-out sheet witnessing the release of the property and by the buyer acknowledging the receipt of items purchased.
Accomplishes the pertinent portions of the IIRUP or WMR and forwards to Accounting Unit together with the other documents supporting the sale. This will be the basis for dropping the property from the

25. Procedures: sale thru public bidding 5
Responsibility
Activity
Property Custodian
books of accounts and taking up the proceeds from the sale of the property.
Accounting Unit
Prepares Journal Entry Voucher to drop the assets from the books of accounts. Updates the PPE Ledger Cards to record the sale of assets.
Updates the Property Cards to record the sale of assets.

26. Procedures: thru negotiated sale 1
Responsibility
Activity
Disposal Committee/BAC on Disposal
Prepares BAC Resolution recommending Negotiated Sale as mode of disposal after two failed bidding and forwards to Agency Head for approval.
Agency Head
Receives and approves the BAC Resolution. Returns to the BAC for the conduct of negotiated sale
Invites qualified bidders to submit sealed proposals. Opens and evaluates submitted bids. Compares if the negotiated price is not lower than the highest offer submitted at the failed public bidding.
Prepares a BAC Resolution recommending award to the negotiated bidder and forwards to the Agency head for approval.

27. Procedures: thru negotiated sale 2
Responsibility
Activity
Agency Head
Receives and approves the BAC Resolution recommending award. Returns to the BAC for the preparation of NOA and Deed of Sale. Receives the NOA and Deed of Sale. After verifying correctness, approves the NOA and issues to the negotiated bidder.
[Apply same procedures – public bidding – pages 3-5, starting role of Property Custodian]

28. Procedures: Transfer of government properties 1
Responsibility
Activity
Agency Head
Receives requests from private or public government agency and forwards the request to the Property Custodian.
Property Custodian
Receives the request and checks if the property requested is no longer needed. If no longer needed, cancels all the PAR covering the transferred properties so that the end user be relieved from accountability over the property.
Takes out the individual employee’s folder the corresponding PARs and forwards the cancelled PARs to the end user(s).

29. Procedures: Transfer of government properties 2
Responsibility
Activity
Property Custodian
Prepares the Property Transfer Report (PTR) and forwards the PTR to the Agency Head.
Agency Head
Receives and approves PTR.
If the property to be transferred is a computer, ensures that the data contained therein are removed by the authorized technician upon approval by the Agency Head and attaches the Certification on computer data and program removal from the PTR.
Releases the transferred equipment to authorized official of the recipient agency.

30. Procedures: Transfer of government properties 3
Responsibility
Activity
Property Custodian
Ensures the appropriate receipt of the items by the receiving entity by signing the PTR. Prepares two (2)copies of all documents (e.g. PTR and computer data and program removal certificate, if applicable) and provides one (1) copy to the receiving agency/entity.
Forwards the copies of the PTR and other supporting documents to the Accounting Unit for dropping in the books of the transferred property.
Accounting Unit
Prepares JEV to drop the assets from the books of accounts. Updates the PPE Ledger Cards to record the transfer of assets.

31. Procedures: Transfer of government properties 4
Responsibility
Activity
Property Custodian
Updates the Property Cards (PC) to record the transfer of assets.