THE BARANGAY AND THE GOVERNMENT PROCUREMENT REFORM ACT (Republic Act No.9184 s. 2003) ARCHIMEDES C. ARTICULO, M.B.A.

, Ll. B., D.P.L.A. Dean, College of Arts & Sciences Vice-Chairman, University Bids & Awards Committee Con-current Head, Bids & Awards Committee Secretariat Cagayan State University Andrews & Carig Campus 1. Introduction The call for the Philippine government to rationalize and harmonize its procurement system with international standards and best practices was positively, and finally, responded to by the government in January, 2003 with the passage of the Government Procurement Reform Act (GPRA) or Republic Act No. 9184 (RA 9184). The new procurement law espoused the principles of transparency, competitiveness and accountability. It also mandates the use of streamlined procurement processes and monitoring of government procurement activities by the public. One important breakthrough in the Government Procurement Reform Act is the provision mandating all government agencies to utilize the Government Electronic Procurement System (now the PhilGEPS http://www.philgeps.net) as the single portal that shall serve as the primary source of information on all government procurement.1 The procurement process across all government agencies, from all branches of government, to local government units and public schools and universities, now involves announcing and advertising all procurement opportunities, inviting qualified parties to bid, evaluation of bids, awarding of contracts, monitoring of delivery and performance and payment. The whole process is recorded and posted electronically for others to see.

Sec. 8.1.1. on PROCUREMENT BY ELECTRONIC MEANS AND THE PHILIPPINE GOVERNMENT ELECTRONIC PROCUREMENT SYSTEM (PHILGEPS), the law states that to promote transparency and efficiency, information and communications technology shall be utilized in the conduct of procurement procedures. Accordingly, there shall be a single portal that shall serve as the primary source of information on all government procurement. The PhilGEPS shall serve as the primary and definitive source of information on government procurement.

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On July 28, 2011, President Benigno S. Aquino III, issued Administrative Order No. 17 on Directing the Use of the Procurement Service and the Philippine Government Electronic Procurement System in Procurement Activities in Accordance With Republic Act No. 9184, And Improving the Operation of the Procurement Service. AO 17 prescribes coverage and compliance of procurement rules even by Local Government Units. We quote DBM Secretary Florencio B. Abad, when he announced the savings and efficiencies that the government realized through Procurement reforms:
With our present fiscal state, every peso should count. We are encouraging all government departments and agencies, as well as the local government units up to the barangay level, to use PS and PhilGEPS so that their procurement will be cost-efficient, he said. But more than the cost benefits, PhilGEPS will enshrine transparency and accountability in all government procurement and minimize human intervention and discretion in the bidding process. Technology will empower us to fulfil the promise of kung walang corrupt, walang mahirap, he said. (DBM Press Release Feb. 8, 2011)

While it is true that most Barangays have small procurements, nevertheless, the reach of the procurement law covers even the smallest local government unit. It is therefore important to understand the salient features of the Procurement Law as they relate to the procurement activities of the Barangay. 2. SCOPE AND COVERAGE OF RA 9184

REPUBLIC ACT NO. 9184 GOVERNMENT PROCUREMENT REFORM ACT

REVISED RULES & REGULATIONS OF R.A. No. 9184

SEC. 4. Scope and Application. This Act shall apply to the Procurement of Infrastructure Projects, Goods, and Consulting Services, regardless of source of funds, whether local or foreign, by all branches and instrumentalities of government, its department, offices and agencies, including government-owned

Section 4. Scope and Application of the IRR 4.1. This IRR shall apply to all procurement of any branch, agency, department, bureau, office, or instrumentality of the GOP, including government-owned and/or controlled corporations (GOCCs),

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and/or controlled corporations and local government units, subject to the provisions of Commonwealth Act No. 1382. Any treaty or international or executive agreement affecting the subject matter of this Act to which the Philippine government is a signatory shall be observed.

government financial institutions (GFIs), state universities and colleges (SUCs), and local government units (LGUs).

3. PROCUREMENT PRINCIPLES Why do we need to observe the new rules on government procurement? The answer is enshrined in Section 3 of the rules as it declares that government procurement must be guided by specific, to wit: a) Transparency in the procurement process and in the implementation of procurement contracts through wide dissemination of bid opportunities and participation of pertinent non-government organizations. b) Competitiveness by extending equal opportunity to enable private contracting parties who are eligible and qualified to participate in public bidding. c) Streamlined procurement process that will uniformly apply to all government procurement. The procurement process shall be simple and made adaptable to advances in modern technology in order to ensure an effective and efficient method. d) System of accountability where both the public officials directly or indirectly involved in the procurement process as well as in the implementation of procurement contracts and the private parties that deal with GOP are, when warranted by circumstances, investigated and held liable for their actions relative thereto. e) Public monitoring of the procurement process and the implementation of awarded contracts with the end in view of guaranteeing that these contracts are awarded pursuant to the provisions of the Act and this IRR, and that all these contracts are performed strictly according to specifications.

COMMONWEALTH ACT NO. 138 - AN ACT TO GIVE NATIVE PRODUCTS AND DOMESTIC ENTITIES THE PREFERENCE IN THE PURCHASE OF ARTICLES FOR THE GOVERNMENT

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4. TERMS TO REMEMBER Goods. Refer to all items, supplies, materials and general support services, except consulting services and infrastructure projects, which may be needed in the transaction of public businesses or in the pursuit of any government undertaking, project or activity, whether in the nature of equipment, furniture, stationery, materials for construction, or personal property of any kind, including non-personal or contractual services, such as, the repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security, and related or analogous services, as well as procurement of materials and supplies provided by the procuring entity for such services. The term related or analogous services shall include, but not be limited to, lease or purchase of office space, media advertisements, health maintenance services, and other services essential to the operation of the procuring entity. Infrastructure Projects. Include the construction, improvement, rehabilitation, demolition, repair, restoration or maintenance of roads and bridges, railways, airports, seaports, communication facilities, civil works components of information technology projects, irrigation, flood control and drainage, water supply, sanitation, sewerage and solid waste management systems, shore protection, energy/power and electrification facilities, national buildings, school buildings, hospital buildings, and other related construction projects of the government. For purposes of, and throughout this IRR, the term Infrastructure Projects shall have the same meaning as, and shall be used interchangeably with, civil works or works. Consulting Services. Refer to services for infrastructure projects and other types of projects or activities of the GOP requiring adequate external technical and professional expertise that are beyond the capability and/or capacity of the GOP to undertake such as, but not limited to: (i) advisory and review services; (ii) pre-investment or feasibility studies; (iii) design; (iv) construction supervision; (v) management and related services; and (vi) other technical services or special studies. General principles on consulting services are provided for in Annex B of this IRR. Procurement. Refers to the acquisition of goods, consulting services, and the contracting for infrastructure projects by the procuring entity. In case of projects involving mixed procurements, the nature of the procurement, i.e., goods, infrastructure projects, or consulting services, shall be determined based on the primary purpose of the contract. Procurement
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shall also include the lease of goods and real estate. With respect to real property, its procurement shall be governed by the provisions of R.A. 8974 and other applicable laws, rules and regulations. Procuring Entity. Refers to any branch, constitutional commission or office, agency, department, bureau, office, or instrumentality of the GOP (NGA), including GOCC, GFI, SUC and LGU procuring goods, consulting services and infrastructure projects. 5. BAC COMPOSITION Are the provisions of R.A. 9184 pertaining to BAC composition also applicable to barangay units? Are all barangays obliged to create their own BAC? Who are to be members of the barangay BAC? Under R.A. 9184 and its IRR, all procuring entities, including barangays are mandated to create at least one (1) BAC. In relation to this, the GPPB has issued a resolution regarding the composition of the BAC in the barangay level. According to Resolution 01 2004 that was issued by the GPPB, the BAC in barangay levels shall be composed of five (5), but not more than seven (7) regular members of the Sangguniang Barangay, except the Punong Barangay. The Punong Barangay, being the local chief executive, shall designate the members of the BAC. The members shall elect among themselves who shall act as the Chairman and Vice-Chairman. In no case shall the Head of the Procuring Entity and/or the approving authority be the Chairman or a member of the BAC (Read Sec. 11.2.5. of the Revised IRR). The Punong Barangay may suspend or remove a member of the BAC for justifiable causes, including, but not limited to, violations of the provisions of the R.A. 9184 or its IRR-A and the Anti-Graft and Corrupt Practices Act. The following officials are disqualified from membership in the BAC:3 1) The Punong Barangay; 2) The Barangay Treasurer; 3) Other appointive barangay officials.

VOLUME 1. Guidelines on the Establishment of Procurement Systems and Organizations download copy at http://www.gppb.gov.ph/downloadables/forms/GPM%20-%20Vol.1.pdf

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6. FUNCTIONS OF THE BAC Sec. 12.1. of the Revised IRR provides following functions of the BAC: 1. advertise and/or post the invitation to bid/request for expressions of interest; 2. conduct pre-procurement and pre-bid conferences; 3. determine the eligibility of prospective bidders; 4. receive bids; 5. conduct the evaluation of bids; 6. undertake post-qualification proceedings; 7. resolve motions for reconsideration; 8. recommend award of contracts to the Head of the Procuring Entity or his duly authorized representative: 9. recommend the imposition of sanctions in accordance with Rule XXIII; 10. recommend to the Head of the Procuring Entity the use of Alternative Methods of Procurement as provided for in Rule XVI hereof; and 11. perform such other related functions as may be necessary, including the creation of a Technical Working Group (TWG) from a pool of technical, financial, and/or legal experts to assist in the procurement process, particularly in the eligibility screening, evaluation of bids, and post-qualification. As to Quorum during BAC meeting, the rule provides, a majority of the total BAC composition as designated by the Head of the Procuring Entity shall constitute a quorum for the transaction of business, provided that the presence of the Chairman or Vice-Chairman shall be required (Read, Sec. 12.3. revised IRR). The Chairman or, in his absence, the Vice-Chairman, shall preside at all meetings of the BAC. The decision of at least a majority of those present at a meeting at which there is quorum shall be valid and binding as an act of the BAC: Provided, however, That the Chairman or, in his absence, the ViceChairman, shall vote only in case of a tie. (See Sec. 12.4. of the Revised IRR). 7. THE BAC SECRETARIAT The Head of the Procuring Entity shall create a Secretariat which will serve as the main support unit of the BAC. In the Barangays, the Treasurer shall serve as the Head of the Procurement Unit/Office.4
VOLUME 1. Guidelines on the Establishment of Procurement Systems and Organizations download copy at http://www.gppb.gov.ph/downloadables/forms/GPM%20-%20Vol.1.pdf
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The Secretariat shall have the following functions and responsibilities: (Read Sec. 14.1. of the Revised Rule) 1. Provide administrative support to the BAC; 2. Organize and make all necessary arrangements for BAC meetings and conferences; 3. Prepare minutes of meetings and resolutions of the BAC; 4. Take custody of procurement documents and other records; 5. Manage the sale and distribution of Bidding Documents to interested bidders; 6. Advertise and/or post bidding opportunities, including Bidding Documents, and notices of awards; 7. Assist in managing the procurement processes; 8. Monitor procurement activities and milestones for proper reporting to relevant agencies when required; 9. Consolidate PPMPs from various units of the procuring entity to make them available for review; and 10. Act as the central channel of communications for the BAC with end users, PMOs, other units of the line agency, other government agencies, providers of goods, infrastructure projects, and consulting services, observers, and the general public. 8. OBSERVERS To enhance the transparency of the process, the BAC shall, in all stages of the procurement process, invite, in addition to the representative of the COA, at least two (2) observers, who shall not have the right to vote, to sit in its proceedings.5 If this provision is violated, the entire BAC proceeding is invalid. However, the absence of observers will not nullify the BAC proceedings, provided that they have been duly invited in writing.6

13.1. of the Revised IRR. According to the rules, at least one (1) shall come from a duly recognized private group in a sector or discipline relevant to the procurement at hand, for example: For infrastructure projects, national associations of constructors duly recognized by the Construction Industry Authority of the Philippines (CIAP), such as, but not limited to the following: (1) Philippine Constructors Association, Inc.; (2) National Constructors Association of the Philippines, Inc.; and (3) Philippine Institute of Civil Engineers (PICE). For goods, a specific relevant chamber-member of the Philippine Chamber of Commerce and Industry. For consulting services, a project-related professional organization accredited or duly recognized by the Professional Regulation Commission or the Supreme Court, such as, but not limited to: (1) PICE; (2) Philippine Institute of Certified Public Accountants (PICPA); and (3) Confederation of Filipino Consulting Organizations; and b) The other observer shall come from a nongovernment organization (NGO). Sec. 13 of the Revised Rule. Sec. 13.1. of the Revised Rule

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9. PROCUREMENT PLANNING Sec. 7.2. of the Revised IRR of R.A. 9184 states:
No procurement shall be undertaken unless it is in accordance with the approved APP of the procuring entity. The APP shall bear the approval of the Head of the Procuring Entity or second-ranking official designated by the Head of the Procuring Entity to act on his behalf, and must be consistent with its duly approved yearly budget.[emphasis added]

How does the Annual Procurement Plan (APP) prepared? Section 7 of the Revised IRR details the procedure, covering both procurement planning and Budgeting Linkage. The rule states that the APP shall be formulated and revised only in accordance with the following guidelines7: 1. At the start of every budget period, the procuring entity shall prepare its proposed budget for the succeeding calendar year, taking into consideration the budget framework for that year in order to reflect its priorities and objectives for the budget period.8 2. The end-user units of the procuring entity shall prepare their respective Project Procurement Management Plan (PPMP) for their different programs, activities, and projects (PAPs). The PPMP shall include (See Sec. 7.3.2.): a) information on whether PAPs will be contracted out, implemented by administration in accordance with the guidelines issued by the GPPB, or consigned;9 b) the type and objective of contract to be employed; c) the extent/size of contract scopes/packages;

See Sec. 7.3. See Sec. 7.3.1. Consistent with government fiscal discipline measures, only those considered crucial to the efficient discharge of governmental functions shall be included in the Annual Procurement Plan (APP). For purposes of this IRR, a procurement project shall be considered crucial to the efficient discharge of governmental functions if it is required for the day-to-day operations or is in pursuit of the principal mandate of the procuring entity concerned. 9 For purposes of this Section, consignment refers to an arrangement where the following requisites are present: (a) delivery of goods by their owner (consignor), without sale, to a government agency (consignee); (b) consignee must try to sell the goods and remit the price of the sold goods to the consignor; (c) consignee accepts without any liability except for failure to reasonably protect them from damage; (d) no disbursement of government funds is involved; and (e) at terms not disadvantageous to the GOP.
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d) the procurement methods to be adopted, and indicating if the procurement tasks are to be outsourced as provided in Section 53.6 of this IRR; e) the time schedule for each procurement activity and for the contract implementation; and f) The estimated budget for the general components of the contract. Note that the term end-user units refer to sub-offices of the Barangay, for instance, the Barangay council, the Lupon, the Office of the Barangay Captain, etc. which, in the performance of their official functions, may require goods, such as office supplies and/ or equipments. 3. The PPMP shall then be submitted to the procuring entitys Budget Office. The procuring entitys Budget Office shall evaluate each end-users submitted PPMP and, if warranted, include it in the procuring entitys budget proposal for approval by the Head of the Procuring Entity.10 4. After the budget proposal has been approved by the Head of the Procuring Entity and/or other oversight bodies, the procuring entitys budget office shall furnish a copy of the procuring entitys budget proposal as well as the corresponding PPMPs to the BAC Secretariat for its review and consolidation into the proposed APP.;11 5. The proposed APP shall be consistent with the procuring entitys budget proposal. 6. As soon as the GAA, corporate budget, or appropriation ordinance, as the case may be, becomes final, the end-user units shall revise and adjust the PPMP to reflect the budgetary allocation for their respective PAPs. The revised PPMPs shall be submitted to the BAC, through its Secretariat, for the finalization of the modes of procurement under the proposed APP. The APP shall then be approved in accordance with Section 7.2 of this IRR. (See Sec. 7.3.5.). 10. UPDATING OF PROCUREMENT PLAN Note that the PPMP is not fixed. It may be updated from time to time.
10 11

See Sec. 7.3.3. See Sec. 7.3.4.

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Under the rules, updating of the individual PPMPs and the consolidated APP for each procuring entity shall be undertaken every six (6) months or as often as may be required by the Head of the Procuring Entity. The updating of the PPMPs shall be the responsibility of the respective end-user units of the Procuring Entities, while the consolidation of these PPMPs into an APP shall be lodged with the BAC Secretariat, subject to approval of the Head of the Procuring Entity. (Read Sec. 7.4. of the Revised IRR).12 We may ask, how about procurements in emergency cases? Will they be included in the plan? Under the rules, yes. Although we cannot identify the specific nature of the items to be procured under emergency procurement, at least we could anticipate, based on experience, that there are circumstances that procurements are unanticipated. The APP shall include provisions for foreseeable emergencies based on historical records (Sec. 7.1., Ibid.). 11. COMPETITIVE BIDDING The Procurement law declares that all procurement shall be done through competitive bidding, except as provided in Rule XVI of this IRR (read Section 10). Steps in Public Bidding: 1. Pre-Procurement Conference13: Prior to the advertisement or the issuance of the Invitation to Bid/Request for Expression of Interest for each procurement undertaken through a public bidding, the BAC, shall call for a pre-procurement conference to perform, among others, the following: to confirm the description and scope of the contract, the ABC, and contract duration; to ensure that the procurement is in accordance with the project and annual procurement plans; and determine the readiness of the procurement at hand;14
Note, the ABC as reflected in the APP or PPMP shall be at all times consistent with the appropriations for the project authorized in the GAA, continuing, and automatic appropriations, the corporate budget, and the appropriation ordinance, as the case may be. For NGAs, to facilitate the immediate implementation of projects even pending approval of the GAA, the ABC shall be based on the budget levels the proposed national budget submitted by the President to Congress. (See Sec. 7.5., R-IRR) 13 See Sec. 20 of the Revised IRR 14 Others include, d) Review, modify and agree on the criteria for eligibility screening, evaluation, and post-qualification; e) Review and adopt the procurement schedule, including deadlines
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2. Advertising and Contents of the Invitation to Bid/Request for Expression of Interest15: The Invitation to Bid/Request for Expression of Interest shall provide prospective bidders the relevant information about the procurement at hand. As per Section 21.2., the IAEB should be advertised observing the following guidelines: 2.1. If the contract to be bid has an approved budget of more than two Million Pesos (P2,000,000.00) for the procurement of goods, more than Five Million Pesos (P5,000,000.00) for the procurement of infrastructure projects, and more than One Million Pesos (P1,000,000.00) or those whose duration is more than four (4) months for the procurement of consulting services, the invitation to bid must be advertised in at least one (1) newspaper of general nationwide circulation which has been regularly published for at least two (2) years before the date of issue of the advertisement. If the ABC is less than the aforementioned, this requirement may be dispensed with; 2.2. IAEB to be posted continuously in the PhilGEPS website for seven (7) calendar days starting on date of advertisement, 2.3. IAEB to be posted continuously in the website of the procuring entity concerned, if available, for seven (7) calendar days starting on date of advertisement; and 2.4. IAEB to be posted at any conspicuous place reserved for this purpose in the premises of the procuring entity concerned for seven (7) calendar days, if applicable, as certified by the head of the BAC Secretariat of the procuring entity concerned. 16 3. Pre-bid Conference17: If the contract to be bid is less than One Million Pesos, this stage may be dispensed with. The pre-bid conference shall discuss, among other things, the eligibility requirements and the technical and financial components of the contract to be bid. Attendance of the bidders shall not be mandatory. However, only those who have

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and timeframes, for the different activities; and f) Reiterate and emphasize the importance of confidentiality, in accordance with Section 19 of this IRR, and the applicable sanctions and penalties, as well as agree on measures to ensure compliance with the foregoing. Note, however, that as per Section 20.2. of the Rules, the holding of a pre-procurement conference may not be required for small procurements, i.e., procurement of goods costing Two Million Pesos (P2,000,000.00) and below, procurement of infrastructure projects costing Five Million Pesos (P5,000,000.00) and below, and procurement of consulting services costing One Million Pesos (P1,000,000.00) and below; Section 21 of the Revised Rules Advertisement of the Invitation to Bid/Request for Expression of Interest in a newspaper of general nationwide circulation provided in Section 21.2.1(a) shall not be required for. Sec. 21.2.2. of the Revised Rules. Section 22, Revised IRR

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purchased the Bidding Documents shall be allowed to participate in the pre-bid conference and raise or submit written queries or clarifications. 4. Submission, Receipt, and Evaluation of Bids18: Only the BAC, through the BAC Secretariat, is authorized to receive bids. Under the new rule, the two envelope system is adopted. The first envelope contains the Eligibility and Technical documents and the second envelope contains the financial proposal. The BAC shall open the bids at the time, date, and place specified in the Bidding Documents. The bidders or their duly authorized representatives may attend the opening of bids. The BAC shall adopt a procedure for ensuring the integrity, security, and confidentiality of all submitted bids. The minutes of the bid opening shall be made available to the public upon written request and payment of a specified fee to recover cost of materials. 5. Post-Qualification19: The Lowest Calculated Bid/Highest Rated Bid shall undergo post-qualification in order to determine whether the bidder concerned complies with and is responsive to all the requirements and conditions as specified in the Bidding Documents. 6. Notice and Execution of Award20: It involves the issuance of Notice of PostQualification if the bidder passes the Post-Qualification, Notice of Award, once the bidder posts performance security, the Signing of Contract, and Notice to Proceed. Note that under Section 46, on Lease Contracts, the procurement law provides that the the lease of construction and office equipment, including computers, communication and information technology equipment, are subject to the same public bidding and to the processes prescribed under the Act and this IRR. Lease may also cover lease purchases or lease-to-own and similar variations.

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Sections 25 to 30 of the Revised IRR See Sec. 34 20 See Section 37, of the Revised IRR

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12. ALTERNATIVE MODE OF PROCUREMENT It is emphasized that: 1. As a general rule, the mode of procurement should be Public Bidding, in accordance with Section 10 of the Revised IRR. Alternative methods shall be resorted to only in the highly exceptional cases provided for in this Rule. (Read Section 48.2. of the Revised IRR); 2. Alternative modes of procurement can only be used when: 2.1. There is a prior approval from the Head of the Procuring Entity; 2.2. Conditions provided in the procurement law, justifying the use of the alternative mode, exist (Read Sec. 48.1.); 2.3. If the original mode of procurement recommended in the APP was public bidding but cannot be ultimately pursued (Sec. 48.3.), and justified as such by the BAC via resolution, and approved by the HOPE. 3. The conditions on the use of the Alternative Mode of Procurement, as per Section 54 of the Revised IRR, are properly observed, to wit: 3.1. Splitting of Government Contracts (Read Sec. 54.1.) Splitting of Government Contracts means the division or breaking up of GOP contracts into smaller quantities and amounts, or dividing contract implementation into artificial phases or sub-contracts for the purpose of evading or circumventing the requirements of law and this IRR, especially the necessity of public bidding and the requirements for the alternative methods of procurement. 3.2. Invitation or request for submission of price quotations is posted/ advertised continuously, for a period of seven (7) calendar days, in the PhilGEPS website, the website of the procuring entity concerned, if available; and at any conspicuous place reserved for this purpose in the premises of the procuring entity (Read Sec. 54.2.), for the following alternative modes: 3.2.1. Shopping under Sections 52.1 (b) 3.2.2. Negotiated Procurement under Section 53.1 (two-failed biddings) 3.2.3. Negotiated Procurement under Sections 53.9 (small value procurement) Notice of award in all instances of alternative methods of procurement shall be posted, for information purposes, in the PhilGEPS website, the website of the procuring entity concerned, if
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3.3.

available, and at any conspicuous place reserved for this purpose in the premises of the procuring entity (Read Sec. 54.3.); 3.4. 3.5. Posting of bid securities for alternative mode of procurement is not required, except for Limited Source Bidding (Sec. 54.4.); Performance and warranty securities, as prescribed in Sections 39 and 62 of the IRR, shall be submitted for contracts acquired through the alternative methods of procurement, except for the following (read Sec. 54.5.): 3.5.1. Shopping under Section 52; 3.5.2. Negotiated Procurement under Sections 53.2 (emergency cases), 3.5.3. Negotiated Procurement under Sec. 53.9 (small value procurement), 3.5.4. Negotiated Procurement under Sec. 53.10 (lease of real property), and 3.5.5. Negotiated Procurement under Sec. 53.13 (UN agencies).

In all instances, the procuring entity shall ensure that the most advantageous price for the Government is obtained (Read Sec. 48.1. of the revised IRR). What follows are the different alternative modes of procurement: LIMITED SOURCE BIDDING (UNDER SEC. 49) As a Mode: Limited Source Bidding, otherwise known as selective bidding, is a method of procurement of goods and consulting services that involves direct invitation to bid by the procuring entity from the list of pre-selected suppliers or consultants with known experience and proven capability on the requirements of the particular contract. Conditions of Use: This alternative method of procurement may be employed under any of the following conditions: 1. Procurement of highly specialized types of goods (e.g., sophisticated defense equipment, complex air navigation systems, coal) and consulting services where only a few suppliers or consultants are known to be available, such that resorting to the public bidding method will not likely result in any additional suppliers or consultants participating in the bidding; or
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2. Procurement of major plant components where it is deemed advantageous to limit the bidding to known qualified bidders in order to maintain uniform quality and performance of the plant as a whole. DIRECT CONTRACTING (Under Section 50) As a Mode: Direct Contracting or single source procurement is a method of procurement of goods that does not require elaborate Bidding Documents. The supplier is simply asked to submit a price quotation or a pro-forma invoice together with the conditions of sale. The offer may be accepted immediately or after some negotiations. Conditions of Use: Direct contracting may be resorted to by concerned Procuring Entities under any of the following conditions: 1. Procurement of goods of proprietary nature which can be obtained only from the proprietary source, i.e. when patents, trade secrets, and copyrights prohibit others from manufacturing the same item; 2. When the procurement of critical plant components from a specific supplier is a condition precedent to hold a contractor to guarantee its project performance, in accordance with the provisions of its contract; or 3. Those sold by an exclusive dealer or manufacturer which does not have sub-dealers selling at lower prices and for which no suitable substitute can be obtained at more advantageous terms to the GOP. REPEAT ORDER (Under Section 51) As a Mode: Repeat Order, when provided for in the APP, is a method of procurement of goods from the previous winning bidder, whenever there is a need to replenish goods procured under a contract previously awarded through Competitive Bidding. Conditions for Use: Repeat orders shall likewise be subject to the following conditions:

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1. Unit prices of the repeat order must be the same as or lower than those in the original contract, provided that such prices are still the most advantageous to the GOP after price verification; 2. The repeat order will not result in splitting of contracts, requisitions, or purchase orders, as provided for in Section 54.1 of this IRR; 3. Except in cases duly approved by the GPPB, the repeat order shall be availed of only within six (6) months from the contract effectivity date stated in the Notice to Proceed arising from the original contract; and 4. The repeat order shall not exceed twenty-five percent (25%) of the quantity of each item in the original contract. SHOPPING (Under Section 52) As a Mode: Shopping is a method of procurement of goods whereby the procuring entity simply requests for the submission of price quotations for readily available off-the-shelf goods or ordinary/regular equipment to be procured directly from suppliers of known qualifications. Conditions for Use: This method of procurement shall be employed in any of the following cases: 1. When there is an unforeseen contingency requiring immediate purchase: Provided, however, that the amount shall not exceed the thresholds prescribed in Annex H of this IRR.

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2. Procurement of ordinary or regular office supplies and equipment not available in the Procurement Service involving an amount not exceeding the thresholds prescribed in Annex H of this IRR.

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Section 52.3. of the Revised Rule states that:

Under Section 52.1 (b) of this IRR, at least three (3) price quotations from bona fide suppliers shall be obtained.

The submission of three (3) quotations applies only to Shopping (b) and not to Sopping under emergency cases (Shopping [a]). Important Terms/Phrases/Words to remember when using Shopping as a Mode: 1. The phrase ordinary or regular office supplies shall be understood to include those supplies, commodities, or materials which, depending on the procuring entitys mandate and nature of operations, are necessary in the transaction of its official businesses, and consumed in the day-to-day operations of said procuring entity (Read Sec. 52.2). 2. The phrase ordinary or regular office supplies does not include services such as repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security, and related or analogous services. NEGOTIATED PROCUREMENT21 (Under Section 53) As a Mode: Negotiated Procurement is a method of procurement of goods, infrastructure projects and consulting services, whereby the procuring entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant. Conditions for Use: Negotiated Procurement may only be used in any of the following cases: 1. Two Failed Biddings (Read Sec. 53.1). Where there has been failure of public bidding for the second time as provided in Section 35 of the Act and this IRR.

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For purposes of this Paper, the following modes are excluded from this section: Agency-toAgency (Sec. 53.5), Procurement Agent (Sec. 53.6), Highly Technical Consultants (Sec. 53.7) Defense Cooperation Agreement (Sec. 53.8). the Revised Rules to learn more about this modes.

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2. Emergency Cases22, this form of negotiated procurement may only be used when any of the following conditions are present: 2.1. In case of imminent danger to life or property during a state of calamity, or 2.2. When time is of the essence arising from: 2.2.1. Natural or man-made calamities or 2.2.2. Other causes where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities. Note that in the case of infrastructure projects, the procuring entity has the option to undertake the project through negotiated procurement or by administration or, in high security risk areas, through the AFP. 3. Take-Over of Contracts23. Take-over of contracts, which have been rescinded or terminated for causes provided for in the contract and existing laws, where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities. 4. Adjacent or Contiguous24. Where the subject contract is adjacent or contiguous to an on-going Infrastructure Project or Consulting Service where the consultants have unique experience and expertise to deliver the required service: Provided, however, that: 4.1. 4.2. 4.3. 4.4. 4.5. 4.6. 4.7. The original contract is the result of a Competitive Bidding; The subject contract to be negotiated has similar or related scopes of work; It is within the contracting capacity of the contractor/consultant; The contractor/consultant uses the same prices or lower unit prices as in the original contract less mobilization cost; The amount involved does not exceed the amount of the ongoing project; and The contractor/consultant has no negative slippage/delay; Negotiations for the procurement are commenced before the expiry of the original contract.

Sec. 53.2 Sec. 53.3 24 Sec. 53.4

22 23

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5. Small Value Procurement25. Where the procurement does not fall under Shopping in Section 52 of this IRR and the amount involved does not exceed the thresholds prescribed in Annex H of this IRR. A good example where this form may be used is the procurement of a Barangay electric generator with an ABC, for instance, of 20,000 and procured for a purpose and reason other than unforeseen contingency. The generator is not an office supply, but equipment. Since shopping (b) covers on regular and ordinary office supplies, the generator does not fall under Shopping, and since the ABC does not exceed 50,000, which is the threshold prescribed for Barangays under Annex H of the Revised Rules, the procurement, therefore, qualifies for Small Value Procurement. 13. OFFENSES AND PENALTIES Imposable penalties under the Procurement Law are of three (3) kinds, Criminal26, Civil27, and Administrative28. We will limit our attention to the criminal penalty imposable on erring public officers. Under the law, the criminal penalty is imprisonment of not less than six (6) years and one (1) day, but not more than fifteen (15) years, without prejudice to the provisions of R.A. 3019 and other penal laws, to public officers who commit any of the following acts: 1.1. Opening any sealed bid including but not limited to Bids that may have been submitted through the electronic system and any and all documents required to be sealed or divulging their contents, prior to the appointed time for the public opening of Bids or other documents. 1.2. Delaying, without justifiable cause, the screening for eligibility, opening of bids, evaluation and post evaluation of bids, and awarding of contracts beyond the prescribed periods of action provided for in this IRR.

Sec. 53.9 Sec. 65 27 Sections 67 and 68 28 Sec. 69

25 26

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1.3.

Unduly influencing or exerting undue pressure on any member of the BAC or any officer or employee of the procuring entity to take a particular action which favors, or tends to favor a particular bidder. Splitting of contracts which exceed procedural purchase limits to avoid competitive bidding or to circumvent the limits of approving or procurement authority. Abuse by the Head of the Procuring Entity of his power to reject any and all bids as mentioned under Section 41 of the Act and this IRR, with manifest preference to any bidder who is closely related to him in accordance with Section 47 of the Act and this IRR.

1.4.

1.5.

According to the rules, when any of the foregoing acts is done in collusion with private individuals, the private individuals shall likewise be liable for the offense. In addition, the public officer involved shall also suffer the penalty of temporary disqualification from public office, while the private individual shall be permanently disqualified from transacting business with the Government.29 14. FINAL NOTES In a 2008 case, the Supreme Court struck down as void the Manila International Airport Authoritys authority to enter into negotiated contracts for its janitorial and maintenance services without holding a public bidding, it said:
The rationale behind the requirement of a public bidding, as a mode of awarding government contracts, is to ensure that the people get maximum benefits and quality services from the contracts. More significantly, the strict compliance with the requirements of a public bidding echoes the call for transparency in government transactions and accountability of public officers. Public biddings are intended to minimize occasions for corruption and temptations to abuse of discretion on the part of government authorities in awarding contracts.30

If we, in the Barangay, endeavor to observe, as best as we could, in light of our circumstances and individual realities, the provisions of the procurement law, then, we could send a strong message across our polity that responsible governance, through accountable government procurement, is a doable ideal that is possible in the grassroots level.

29 30

Sec. 65.2. MIAA, et al vs. Gana, et al. G.R. No. 146184-85. January 31, 2008

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