COURSE DOCUMENT.docx

8/10/2019 COURSE DOCUMENT.docx

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I.INTRODUCTION

1.PROCUREMENT1

A. Definition

1. Procurement refers the acquisition of goods, consulting services, and the contracting for

infrastructure projects by the procuring entity. The definition also encompasses lease ofgoods and real estate.

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B. Guiding Principles

1. The GPRA lays down the five principles to govern government procurement

transparency, competitiveness, streamlining, accountability, and public monitoring.

a.

Transparency is achieved by publicizing bid opportunities and promotingparticipation of non-government organization. It is sought not only during the

procurement process but also during implementation of contracts.

b. To nurture competitiveness, equal opportunities are provided to parties who are

eligible and qualified to participate in the process.

c. A streamlined simple, modernized, and uniformly applicable procurement

process will guarantee effectiveness and efficiency.

d. Accountability is reinforced by the fact that public officials and private parties,

directly or indirectly, involved in the procurement process and contractimplementation may be investigated and held liable for their actions.

e. Public monitoring of the procurement process and implementation of contracts

ensure that contracts are properly awarded pursuant to the provisions of the GPRAand performed strictly according to specifications.

C. Subjects of Procurement

The GPRA provides for the procurement of (1) goods, (2) consulting services and (3)

infrastructure projects.

1. Goods in general refer to supplies, materials and general support services essential to

the operation of a government entity or needed in the performance of government

programs and projects.

1LEGAL REFERENCE: R.A. 9184, GPRA R-IRR.2Sec. 5, (aa), GPRA R-IRR.


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2. Consulting Services are those which require adequate external technical and

professional expertise beyond the capability and/or capacity of the Government to

undertake.3

a.

These services include, among others, (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.They will further be discussed in the succeeding sections.

3. Infrastructure Projects under the GPRA 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.4

D. Kinds of procurement

The preferred mode for government procurement is competitive bidding. Thus, procurementshall be done through competitive bidding, unless circumstances require the use of other

procurement methods. The alternative procurement methods available depend on the subject of

the procurement.

1. Competitive or public bidding is a method of procurement that is open to all

interested and qualified parties. (h)

2. Alternative Procurement as earlier mentioned is resorted to only when the specified

conditions for the applicability of each method have been satisfied.

a. In Limited Source or Selective Bidding, pre-selected suppliers or consultants with

known experience and proven capability demanded by the contract are directly

invited by the procuring entity to bid.

a.1. This method may be employed in the following cases:

a.1.1. Procurement of highly specialized types of goods (e.g., sophisticateddefense equipment, complex air navigation systems, coal) and consulting serviceswhere 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

3Sec. 5, I, GPRA R-IRR.4Sec.5, u, GPRA R-IRR.


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a.1.2 Procurement of major plant components where it is deemed advantageous to

limit the bidding to known qualified bidders in order to maintain uniform qualityand performance of the plant as a whole.

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b.

In Direct Contracting or single source procurementthe supplier is simply asked tosubmit a price quotation or a pro-forma invoice together with the conditions of sale,thus eliminating the need to bother with bidding documents.

b.1. This method is available for:

b.1.1. 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;

b.1.2. When the procurement of critical components from a specific supplier is a

condition precedent to hold a contractor to guarantee its project performance, inaccordance with the provisions of its contract;

b.1.3. 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 beobtained at more advantageous terms.

c. Repeat Orderis a method of procurement of goods from a previous winning bidder,whenever there is a need to replenish goods procured under a contract previously

awarded through Competitive Bidding.

c.1. Repeat orders are further subject to the following conditions:

c.1.1. 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 tothe GOP after price verification;

c.1.2. The repeat order will not result in splitting of contracts, requisitions, orpurchase orders, as provided for in Section 54.1 of this IRR;

c.1.3. 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 inthe Notice to Proceed arising from the original contract; and

c.1.4. The repeat order shall not exceed twenty-five percent (25%) of the quantity

of each item in the original contract.

d. Shoppingis a method of procurement of goods whereby the procuring entity simply

requests for the submission of price quotations for readily available off-the-shelf

5Sec. 49, GPRA R-IRR.


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goods or ordinary/regular equipment to be procured directly from suppliers of known

qualifications.

d.1. This method of procurement shall be employed in any of the following cases:

d.1.1. When there is an unforeseen contingency requiring immediate purchase:Provided, however, That the amount shall not exceed the prescribed thresholds;

d.1.2. Procurement of ordinary or regular office supplies and equipment not

available in the Procurement Service involving an amount not exceeding theprescribed thresholds.

e. Negotiated Procurement is a method of procurement of goods, infrastructure

projects and consulting services, whereby the procuring entity directly negotiates acontract with a technically, legally and financially capable supplier, contractor or

consultant in any of the following cases:

e.1. Two Failed Biddings

e.2. Emergency Cases

e.3. Take-Over of Contracts

e.4. Adjacent or Contiguous

e.5. Agency-to-Agency

e.6. Procurement Agent

e.7. Highly Technical Consultants

e.8. Defense Cooperation Agreement

e.9 Small Value Procurement

e.10. Lease of Real Property

e.11. NGO Participation

e.12. Community Participation

e.13. United Nations Agencies


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Alternative Methods Available

Goods Limited Source Bidding

Direct Contracting

Repeat OrderShopping

Negotiated Procurement

Consulting Services Limited Source Bidding

Negotiated Procurement

Infrastructure Projects Negotiated Procurement


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2.CONSULTING SERVICES

A. Consultant

1. A consultant is natural or juridical person, qualified by appropriate education, training

and relevant experience to render any or all of the types and fields of consulting servicesprovided in the GPRAs revised IRR.

Elements Natural/juridical person

Hired based on expertise, experience andcapability

Filipino consultants preferredif services

required within their expertise

Technology and knowledge transfer to PEwhen applicable

B. Guidelines for Hiring Consultants

1. Consultants must be hired based on their proven expertise, experience and capability.

Cost may likewise be considered a factor in selection of consultants in certain cases.

2. Filipino consultants are preferred whenever the services needed are within their expertise

and capability. However, upon determination by the HOPE that they do not possess

sufficient expertise demanded by the service required, foreign consultants may be hired.

3.

All pertinent laws and regulations of the Philippines shall be followed in hiring foreignconsultants.

4. Whenever applicable, contracts for consulting services will provide technology and

knowledge transfer to the procuring entity.

C. Consulting Services

1. Simply put, consulting services refer to services which require technical and professionalexpertise beyond the in-house capability of the procuring entity. The same should be

distinguished from general services which are treated as goods under the GPRA, and are

thus procured the following the rules for procurement of goods.

2. To avoid the confusion wrought by their seeming similarities, it is important to note that:

a. Service as Goods Services classified as goods under the GPRA include non-personal or contractual services which include repair and maintenance of equipment

and furniture, as well as trucking, hauling, janitorial, security, and related or


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analogous services, as well as procurement of materials and supplies provided by the

procuring entity for such services.

a.1. 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.

b. Service as ConsultancyMeanwhile services falling under consultancy services are

those which require adequate external technical and professional expertise beyond the

capability and/or capacity of the Government to undertake.

Service as Goods Service as Consultancy

Examples from

definition Repair and maintenance

of equipment/furniture

Janitorial

Security

Advertisements

Financial, legalservices

Feasibility Studies

Project Management

InstitutionalStrengthening

Examples from

DOH practice6

Event organizing

Brokerage Services

Distribution and

Hauling

Packaging, sorting,

warehousing anddelivery of DOH

Complete Treatment

Packs Radio Placement

30-sec Infomercial

Quality Management

Systems for ISO

Certification

ExpenditureTracking System

Development of

Policy Notes

Impact Evaluation of

HEMS Short Course on

Urban Health Equity

D. Kinds of Consulting Services7

1. Advisory and review servicesconsist of review and provision of advice on particular

projects or problems. It covers provision of professional services.

2. Pre-investment/feasibility studiesare those which are undertaken by an entity, in order

for it to decide whether or not it should go through with specific projects.

3. Design services include determination of size, scope and location of projects,

preparation of detailed plans and designs, and support services during construction.

6Examples are based on the Procurement Monitoring Reports (PMR) submitted by the DOH from 2011-2013.7RIRR Annex B.


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4. Construction supervision (defined by examples, see table below)

5. Management and related services (defined by examples, see table below)

6. Other technical services or special studies which do not fall within the categories

above, but likewise refer to services requiring specialized expertise to be rendered over aspecified period may be considered consulting services.

Kind of Service Examples

Advisory and

Review Services

Planning, System and Implementation Design, Financial, Fiscal, Legal and other

professional services;

Management, production, inspection, testing and quality control;

Appearances before commissions, boards or other judicial bodies to give

evidence or submit professional options.

Pre-Investment or

Feasibility Studies

To establish investment priorities and sector policies;

To determine the basic features and the feasibility of individual projects;

To define and propose changes in governmental policies, operations and

institutions necessary for the successful implementation or functioning of

investment projects

Design Pre-Design Phase Basic Design Phase

Support Services during construction

Construction

Supervision

Inspection and expediting of the work;

Verification and checking of quantities and qualities of work accomplished by the

contractor as against the approved plans, specifications, and programs of work;

Issuance of instructions for correcting on the work;

Verification and recommendation for approval of statements of work

accomplished and certificate of project completed by the contractor; Review and recommendation for approval of progress and final billings of the

contractor; and

Provision of record or as-built drawings of the completed projects.

Management and

Related Services

Sector policy and regional development studies;

Planning, feasibility, market, economic, financial, technical, operations and

sociological studies;

Project management, including procurement advisory services, impact

monitoring, and post-evaluation services;

Production management, inventory control, and productivity improvement;

Marketing management and systems;

Information and communications technology services, including but not limited

to, information systems design and development, and network design andinstallation;

Institutional strengthening, organization development, manpower requirements,

training and technology transfer;

General management consultancy; and

Other related services.

Other Technical

Services and

Other technical services include:

Institution building, including organization and management studies, and


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Special Studies business process re-engineering and development; Design and execution of training programs at different levels;

Provision of staff to carry out certain functions and to train their replacements;

and

Tasks relating.

Special studies include the following: Soils investigation;

Studies, tests and process determination performed to establish design criteria for

water facilities;

Detailed mill, shop, and / or laboratory inspection of materials and equipment;

Land surveys, establishment of boundaries and monuments, and related office

computations and drafting;

Parcellary surveys;

Engineering surveys (for design and construction) and photogrammetry;

Assistance in litigation arising from the development or construction of projects

and in hearings before various approving and regulatory agencies;

Investigation involving detailed consideration of the operation, maintenance, and

overhead expenses; and the preparation of rate schedules; earning and expense

statements, feasibility studies, appraisals, evaluations, and material audits orinventories required for certification of force account construction performed by

the agencies;

Preparation of environmental statements and assistance to the agencies in public

hearings;

Preparation of operating instructions and manuals for facilities and training of

personnel and assistance in initial operation of facilities;

Designs to meet unique and / or above normal requirements brought about by

severe earthquakes, tornadoes, or blasts, or satisfy unique or abnormal tolerances,

safety requirements, etc.;

Site and physical planning;

Environmental and other aspects of planning;

Housing;

Interior design; Studies on preservation and restoration of historical, cultural, and artworks;

Landscaping;

Construction management; and

Defense systems design, including self-reliance defense program.

Others.

E. Organization of Consultants

1. The umbrella organization of consultants recognized by the government shall be

composed of various organizations of consultants that may be engaged by the

government.

a. It shall accredit its members based on the types of services and professional fields

wherein they are technically and financially qualified. To this end it shall prepare,certify, and regularly update a list of accredited local consultants sorted according to

fields of services and expertise, which it shall also disseminate to appropriate

government agencies. It is likewise tasked with regulating its members for thedevelopment of the industry.


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b. The recognition of umbrella organizations shall be done by the GPPB.

c. The umbrella organization may be consulted by the government on matters relating to

the industry.

2. The umbrella organization may submit its files of accredited consultants to the BAC ofthe procuring entity in accordance with the form prescribed by the BAC; such submission

can serve as registration of the consultants. However, the accredited consultant concerned

must still comply with the eligibility requirements.

3. Qualification statements and the list of accredited consultants from the umbrella

organization shall guide the BAC in determining the availability of qualified and capable

Filipino consultants and whether or not the hiring of foreign consultants may be allowed.

F. GPPB Opinion

1. 2013-12-27, NPM 127-2013What are general support services; encoding services

a. The term "general support services" is understood to include those services that areessential, indispensable, or necessary to support the operations of the procuring entity

or for the enhancement of the welfare of its personnel, including non-personal or

contractual services.

In this regard, if the encoding services being acquired by DOTC are essential,

indispensable, or necessary to support its operations, then such service may be

considered within the coverage of the term "general support services".


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3.DOHPROCUREMENT STRUCTURE8

A. Procuring Entity

1. A procuring entity is any branch, department, office, agency or instrumentality of the

government.

DOH Procuring Entities

Services and Bureaus in Central Office 19

Centers for Health Development 16

DOH Hospitals 70

Attached Agencies 6

8Secs. 5.bb, 11, 12, 13 and 14, GPRA R-IRR.

Head ofProcuring

Entity (HOPE)

Bids and AwardsCommittee (BAC)

End-User

BAC Secretariat

InternalObserver

ExternalObserver

Technical Working Group(TWG)

Resident Ombudsman

Integrity DevelopmentCommittee


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B. Procuring Unit

1. The procuring unit shall refer to the office of the procuring entity which carries out the

procurement function.

C. Head of Procuring Entity (HOPE)

1. The HOPE is the head of the agency or body or his/her duly authorized official.

Authorized Officials in DOH Structure

Central Office Secretary of Health

Center for Health

Development

CHD Director IV

DOH Hospitals,

Special Hospitals, and

Medical Centers

Chief of Hospitals / Medical

Center Chief /

Executive Director

Bureaus and Attached

Agencies

Executive Director

D. Bids and Awards Committee (BAC)

1. Each procuring entity shall establish in its head office a single BAC in order to facilitate

the professionalization and harmonization of procedures and standards.9

2. However, the HOPE is given the prerogative to create a separate BAC where the number

and complexity of the items to be procured so warrants.

a. Accordingly, separate BACs may be organized in the following:

a.1. Geographical location of the Project Management Officer (PMO) or end-userunits

a.2.Nature of the procurement.

b. Presently, the DOH Central Office has four separate BACs.

3.

For the DOH Central Office:

a. HOPE must designate at least five (5) but not more than seven (7) members to theBAC of unquestionable integrity and procurement proficiency.

9Section 11.1.1, GPRA R-IRR.


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Central Office BAC Composition

Five-member BAC Three (3) regular members

Two (2) provisional members

Seven-member BAC Three (3) regular members

Four (4) provisional members

Five (5) regular members

Two (2) provisional members

Four (4) regular members

Three (3) provisional members

COBAC Membership

Chairperson Regular Member

Plantilla Position

At least Assistant Secretary

Vice-chairperson Regular Member

Plantilla Position

Regular Members Plantilla Position

Director III and above

Provisional Members Representative from end-user unit

Has technical expertise on procurement at

hand

Alternate Members Same qualifications as principal

4. Appointment to the BAC is in the nature of a designation, in addition to the regular duties

of the subject official.

5. The members of the BAC shall have a fixed term of one (1) year reckoned from the dateof appointment, renewable at the discretion of the HOPE.

E. BAC Secretariat

1.The BAC Secretariat shall serve as the main support unit of the BAC, providing

administrative as well as technical support in procurement activities.

2.

For the DOH Central Office, the Procurement Service serves as the BAC Secretariat.

F. Technical Working Group (TWG)

1. The TWG is a pool of technical, financial, and/or legal expert to assist in the procurement

process particularly in the eligibility screening, evaluation of bids, and post-qualification.


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2. TWG member must possess certain qualifications such as skills, educational background,

or extensive training in a particular field to be referred to as experts.

G. Observers

1. To enhance the transparency of the process, the BAC shall, in all stages of theprocurement 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.

2. Observers shall be invited to sit in the proceedings involving all stages of the

procurement process of the Procuring Entity concern. All stages of the procurement

process denote that the observers shall be invited to observe in the following

procurement stages:10

a. Pre-Procurement Conference;

b.

Pre-bid Conference;

c. Opening of Bids;

d. Bid Evaluation;

e. Post-qualification; and

f. Contract Award.

3. DOH has an existing agreement with National Citizens Movement for Free Elections forthe designation of two (2) observers in the COBAC as well as in various BACs of CHDs

and Hospitals.11

F. GPPB Recogized Trainers

1. The DOH Central Office has three (3) GPPB recognized trainers. They had to undergo

training under the GPPB for two (2) weeks, and thereafter undergo a comprehensive

examination.

2. As GPPB recognized trainers, they are tasked with conducting procurement training

within their institution. Occasionally, they are invited by the GPPB as resource persons in

trainings of other government agencies, and government hospitals.

10DOH Procurement Manual, Vol 1.11Memorandum of Agreements/ Letter of Partnership with National Citizens Movement for Free Elections

(NAMFREL) Transparency and Accountability Network (TAN), respectively including DOH Executive Committee

Resolution. Effective: 23 March2006.


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3. These trainers from the DOH are:

a. Ms. Crispinita A. Valdez - Director III, Information Management Service;

b. Dr. Kenneth G. Ronquillo Director IV, Health Human Resource Development

Bureau; and

c. Dr. Ma. Theresa G. Vera Director III, Procurement Service

4. While the GPPB invitations for Trainer trainings request that participants sent be at leastof Director-level, there are recognized trainers from other government agencies which are

not of such rank.

G. Honoraria12

1.

The Chairperson and members of the BAC and TWG may be paid honoraria only forsuccessfully completed procurement projects.

2. The Procuring Entity is authorized to grant honoraria to BAC, BAC Secretariat, and

TWG members subject to the following conditions:

a. The amount so granted does not exceed twenty-five percent (25%) of their respective

basic monthly salary;

b. Funds are available for the purpose; and

c.

The grant of honoraria conforms to the guidelines promulgated by the DBM.

3. Department Undersecretary or Assistant Secretary who concurrently serves in the BAC,

in whatever capacity, shall not be entitled to honoraria.

4. The members of the BAC Secretariat whose positions are in the Procurement Unit of the

agency shall not be entitled to honoraria.

H. Procurement Assistance

1.

Government Procurement Policy Board

a. The GPPB regularly issues circulars to provide guidance in procuring activities.

b. The GPPB responds to procurement related queries by various government agencies

by issuing Policy and Non-policy Opinions.

12Sec. 15, GPRA R-IRR.


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a.1. The distinction between the two is not clearly established. However, a perusal of

the archives of Policy and Non-policy Opinions provides the impression that whilethey are essentially the same, policy opinions are issued in favour of government

agencies/institutions, while non-policy opinions may be requested by private parties

which participate in government procurement.

2. Various Government Agencies Adept in Certain Kinds of Procurement

a. Procurement Agent - In order to hasten project implementation, Procuring Entitieswhich may not have the proficiency or capability to undertake a particular

procurement, as determined by the Head of the Procuring Entity concerned, may

request other agencies to undertake such procurement for them.

a.1. For example, in the procurement of certain items, the DOH at times requests the

assistance of the National Kidney and Transplant Institute (NKTI).

3. Procurement Experts

a. In highly meritorious cases the procuring entity may engage the services of

consultants to assist the TWG and the BAC in the procurement process.

a.1. In determining what highly meritorious cases, we refer to the certification

which the Head of the Procuring Entity should make before hiring procurementconsultants. The certification is to the effect that in-house experts cannot provide

adequate technical, financial, legal or project or contract management advice related

to the procurement.

a.2. The hiring of such consultants is subject to availability of funds. Moreover, such

consultants shall serve only in an advisory capacity, and are not entitled to vote on

matters considered.

I. Relevant Jurisprudence

1. Villanueva v. COA, G.R. No. 151987, March 18, 2005

a. The Resident COA representative is only an observer during the procurement process.

As such he/she may not participate or be actively involved in the bidding.

b. The Auditor's presence or that of his duly authorized representative is as witness only

with specific functions to perform maintenance of documentary integrity andphysical security of the records of the bidding

2. Sison v. Tablang, G.R. No. 177011, June 5, 2009


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a. An honorarium is defined as something given not as a matter of obligation but in

appreciation for services rendered, a volrtaluntary donation in consideration of

services which admit of no compensation in money.Section 15 of R.A. No. 9184 usesthe word may which signifies that the honorarium cannot be demanded as a matter

of right.

b. The payment of honoraria to the members of the BAC and the TWG must becircumscribed by applicable rules and guidelines prescribed by the DBM, as provided

by law.

J. GPPB Opinion

1. 2013-04-22, NPM 038-2013LRTA requests DOTC to be its Procurement Agent

a. [R]esort to Section 53.6 of the IRR is couched upon the condition that there is a

general determination of lack of proficiency or capability by the procuring entity toundertake a particular procurement. It does not qualify or limit the lack of proficiency

or capability to specific circumstances. Thus, it is our view that LRTA may request

DOTC to be its PA, provided that the LRTA has determined that it lacks the

proficiency or capability to undertake the LRTA Rehabilitation Projects, which neednot be based solely on LRTA's failure to constitute its BAC. It must be emphasized,

however, that in the conduct of the actual procurement, the PA should strictly apply

the rules and procedures embodied in RA 9184 and its IRR.

2. 2012-11-05, NPM 143-2012 Start-up government agency requests use of another

government agencys BAC, for it still has to form its own BAC

a.

Section 53.6 of the revised Implementing Rules and Regulations (IRR) of Republic

Act (RA) No. 9184 provides that PEs which may not have the proficiency or

capability to undertake a particular procurement, as determined by the Head of theProcuring Entity (HOPE) concerned may - (i) request other government agencies to

undertake such procurement for them; or (ii) engage procurement agents to assist

them directly and/or train their staff in the management of procurement function.

Considering that CIC cannot constitute its BAC meantime due to lack of personnel,

we are of the view that it may request other government agencies, such as the SEC-

BAC, to procure in its behalf.

3.

2013-06-26, NPM 059-2013Grant of Honoraria

a. Section 5.2 of the DBM Circular No. 2004-5A (Circular) provides that the paymentof honoraria shall be limited to procurement that involves competitive bidding, which

is present only in Competitive Bidding (Section 10), Limited Source Bidding (Section

49), and Negotiated Procurement under Two-Failed Biddings (Section 53.1).Conversely, honoraria will not be paid when procurement is through all the other


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alternative modes of procurement provided in RA 9184 and its IRR where

competitive bidding or a semblance thereof is considered not present. Hence,

honoraria should not be given when the procurement method used is NegotiatedProcurement (Small Value Procurement).

4.

2012-09-12, NPM 114-2012Effect of Absence of Observers

a. Section 13.3 of the IRR, x x x, mandates that Observers shall be invited at least three

(3) calendar days before the date of the procurement stage/activity and the absence of

Observers will not nullify the BAC proceedings, provided that they have been dulyinvited in writing. It is clear from Section 13.3 of the revised IRR that the Procuring

Entity (PE) should extend an invitation to the intended Observers so that the

representatives are duly informed of the planned bidding. If any of the Observers fail

to attend the bidding on the indicated schedule, the procurement process shouldcontinue since the absence of any of the observers is not a ground to delay the

proceedings. Conversely, in case the PE fails to properly invite and/or inform the

Observers of the planned procurement process, then the bidding could not proceedwithout the PE satisfying this requirement.


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II.PROCUREMENT PLANNING13

Period: Beginning of the fiscal year

Participants: End-users, Procuring Entity

Budget OfficeHOPE

BAC

BAC SecretariatOversight bodies

Requisites: Budget Call from the DBM

Purpose: To ensure better allocation of resources which ultimately lowers the

procurement costs creating substantial savings, thereby ensuring access to

quality health goods and services

To ensure that resources match expected health outcomes through better

scheduling of procurement activities, better cash allocation, andexpenditure management

Tasks: Preparing Work Financial Plans

Developing Project Procurement Management PlansConsolidating PPMPs into Annual Procurement Plan

Approval of the Annual Procurement Plan

A. Procurement Planning

1. Preparations for the next fiscal years procurement start at the beginning of the fiscal year

and inextricably tied to planning annual projects and budgets

2. Each DOH Procuring Entity must judiciously plan its procurement for the whole year.

3. Procurement planning should be within the Procuring Entitys Budget Proposal reflecting

its priorities and objectives for the budget period.

B. Procedure

13Legal Reference: Sec.7, GPRA R-IRR.

DBMBudget Call PrepareWFP DevelopePPMP

Consolidate

PPMP toAPP

ApproveAPP


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1. The Procuring Entity annually prepares an Agency Budget Proposal. The process is

triggered by the DBMs issuance of the Budget Call.

2. End-user units of the Procuring Entity prepare their respective Work Financial Plans

(WFP) for their different Programs, Activities, and Projects (PAPs) using the authorized

forms provided by the DBM annexed to the Budget Call.

a. The WFP contains the detailed list of projects and their corresponding budgetary

allocation.

3. Each end-user unit must submit their respective WFP to the Procuring Entitys Budget

Office on or before May of each year.

4. WFPs will be evaluated and, if acceptable, included in the Procuring Entitys BudgetProposal.

a.

The WFPs will support the Budget Proposal submitted to DBM.

b. WFP of each end-user unit of the Procuring Entity will be the basis for the proposed

Project Procurement Management Plan (PPMP).

5. End-user units of the Procuring Entity shall prepare their respective PPMP for their

proposed PAPs in the prescribed forms.

6. PPMPs shall then be submitted to the Procuring Entitys Budget Office for evaluation

and if acceptable, inclusion in the Budget Proposal for approval by the HOPE14

7.

After the approval by the HOPE and/or other oversight bodies of the budget proposal, theBudget Office shall furnish a copy of the Procuring Entitys Budget Proposal as well as

the corresponding PPMPs to the BAC Secretariat for review and consolidation with the

proposed Annual Procurement Plan (APP) which shall be consistent with the BudgetProposal submitted.

15

8. As soon as the General Appropriations Act (GAA) becomes final, usually aroundNovember to December, the end-user units shall revise and adjust the PPMP to reflect the

budgetary allocation of their respective PAPs.16

9. The revised PPMP shall be submitted to the BAC, through its Secretariat, for the

finalization of the modes of procurement under the proposed APP.

17

10. The APP shall be approved by the HOPE or the second-ranking official designated by

the HOPE to act on his behalf.18

14Sec. 7.3.3, GPRA R-IRR.15Sec.7.3.4, GPRA R-IRR.16Sec. 7.3.4, GPRA R-IRR.17Sec. 7.3.5, GPRA R-IRR.


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1.PROJECT PROCUREMENT MANAGEMENT PLAN19

Period: Beginning of the fiscal year

Participants: Procuring Entity, End-users

Requisites: Work Financial Plans (WFPs) for the Programs, Activities and Projects,(PAPs) must already be available

Purpose: To serve as procurement planning guide document during procurement

and contract implementation and contract implementation, and as a vitalreference in procurement monitoring

Tasks: Developing Project Requirements

Determining the Approved Budget for ContractDrafting the Terms of Reference

Plotting Procurement Milestones

Determining Method of Procurement

A. The Project Procurement Management Plan

1. The PPMP is a document prepared by the end-user units that reflects the different PAPs,

as well as the mode of procurement to be undertaken for the succeeding calendar year, in

consideration of the DOH Budget Proposal.

2.

It is the basis of the Annual Procurement Plan.

3. Primarily, the PPMP deals with Procurement planning for various project requirements,bidding and procurement strategy, source selection, delivery and payment schedule,

contract administration, contract termination, and other milestones.

4. A PPMP shall contain the following information20

:

a. Whether PAPs will be contracted out, implemented by the administration in

accordance with the guidelines issued by the GPPB, or consigned21

;

b.

The type and objective of the contract to be employed;18Section 7.2 of the revised IRR.19LEGAL REFERENCE: Sec. 7, GPRA R-IRR.20Sec. 7.3.2, GPRA R-IRR.21Consignment under the GPRA refers to the agreement wherein a natural person or juridical entity, referred to as

consignor, enters into an agreement with the Procuring Entity (consignee) to consign goods for a particular period of

time without disbursement of government funds such that the only responsibility of the consignee is to sell the goods

and remit whatever proceeds of sale therefrom to the consignor.


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c. The extent or size of contract scope and packages;

d. The procurement method to be adopted, indicating if the procurement is to be

outsourced, when the proficiency or capability to undertake a particular procurement

is wanting as determined by the HOPE concerned, through another Agency of GOPor through the recruitment of competent consultants, at the option of the end-user22

.

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.

5. With the PPMP, the Procuring Entity is directed to follow a specific action plan andemploy a definite mode of procurement. Thus, it ensures strict adherence to the

provisions of the GPRA and significantly reduces, if not eliminate, graft and corrupt

practices by procurement personnel.

B. PPMP Preparation

1. Develop Project Requirements

a.

The development of Project Requirement should coincide with the preparation of theproposed PPMP.

b. At this stage, the PMOs and End-user units may perform the following:

Developing Project Requirements

a. Identify the needs i. What are the prevailing needs or problems needed

to be addressed?

ii. Will procurement satisfy these needs?

iii. What is the purpose of procurement?

b. Identify the method of

procurement

i. What mode of procurement will be advantageous

in satisfying the needs identified?ii. What procurement strategy will be adopted?

iii. Will contracting out be necessary or is the

employment of the procurement procedure

prescribed by the R.A. 9184 and the revised IRR

enough to meet the needs identified? Or will

consignment be the best solution to the problem

22Section 53.6 of the revised IRR

ConsolidateAPP

DevelopProject

RequirementsDetermine ABC

PlotMilestones

DetermineProcurement

Method


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presented?

c. Identify the alternative

solution

i. What alternative solutions in satisfying the needs

are available in the market?

ii. Are these alternative solutions attainable?

iii. How much is the cost of each alternative?

iv. What is the profile of the supply market?v. What are the sources of these products and

services?

vi. Are the products and services readily available?

d. Compare the Alternative

Solutions

i. Best Value for Money

ii. Risk Assessment and Management

iii. Government Policies Affecting Procurement

iv. Other Relevant Factors Identified

e. Decide Choose from among the alternative solution one

that is most beneficial to the Procuring Entity and

make the necessary recommendation to the

Approving Authority.

2. Determine Approved Budget for Contract (ABC)

a. The ABC is the budget for the contract duly approved by the HOPE as provided inthe General Appropriations Act, continuing and automatic appropriation. It also

pertains to the estimated contract cost for Foreign-funded procurement.

b. In determining the ABC the end-user shall take into consideration:

b.1. Budgetary constraints embodied in the Budget Proposal as well as the APP;

b.2. Appropriation for the project or procurement reflected in the APP;

b.3. Market price of the goods to be procured or the value of the services to be

rendered;

b.4. Inflation or the cost of money which is related to the process of procurement; or

b.5.Mode of procurement sought to be enforced.

3.

Terms of Reference

a. The Terms of Reference (TOR) for Consulting Services is the document prepared by

the Procuring Entity that provides the detailed description of the services deliverable

by the Consultant.

b. Guidelines in preparing the TOR (this shall be further be discussed in the succeeding

sections)


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b.1. Product QualityIt is essential that the quality of the service is determined and

set in writing.

b.2. Product Description The technical description of the product to be procured

should not be generic, not brand or product specific, unless it falls under theexceptions products with intellectual property rights attached, those exclusivelyoffered by a single source, or with no substitutes. Description must be clear and

unambiguous.

b.3. Due to the complexity and highly technical nature of some procurement, of

which the Procuring Entity lacks necessary technical proficiency, it is prudent to

engage as consultants a pool of technical experts to assist in the preparation of TOR.

Due care should be taken that in-house consultants are not connected with theprospective bidders and are barred from participating to the procurement at hand.

b.4. Clearance from Clearing Houses

b.4.1. Technical specifications in the procurement of goods and other related

services, infrastructure, and consulting services requiring technical expertise shall

be cleared with clearing houses having such expertise or the mandate to performsuch activity.

b.4.2. Designated DOH Services/ Divisions/Bureaus shall serve as clearing houseswhich shall review and evaluate the procurement requirement of the different

End-user Offices/PMOs based on the (a) needs, (b) specifications and (c) cost.23

23Department Personnel Order No. 2006-1427: Reconstitution of Various Procurement Committees in the DOH

Central Office and Definition of Functions and Responsibilities, 10 MAY 2006,

(http://home.doh.gov.ph/dp/dpo2006-1427.pdf).

Pertinent DOH Clearing HousesHealth Policy Development and

Planning Bureau

Consulting services

National Center for Health

Promotion

Printing and audio visual supplies and

equipment

Tri-media placements or advertisements

National Center for Health Facilities

Development - Health Infrastructure

Division

Major repairs that require re-planning and

re-design and civil works

Construction design and supervision

Procurement Service All other procurement (not identified in

the DPO).


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2.ANNUAL PROCUREMENT PLAN24

Period: Upon submission of the PPMPs from various end-users in ProcuringEntity

Participants: End-users/PMOsBAC

BAC Secretariat

Requisites: PPMPs of units within the Procuring Entity

Purpose: To consolidate various PPMPs within the Procuring Entity

Tasks: Consolidation of various PPMPs

Determining crucial procurement

Regular review and update of PPMPs and APP

A. Annual Procurement Plan (APP)

1. The APP is the document that consolidates the various PPMPs submitted by the various

PMOs and end-user units within the Procuring Entity. It reflects the entirety of the

procurement activities that will be undertaken by the Procuring Entity within the calendaryear.

B. Guidelines

In preparing the APP, the BAC shall take into consideration the following factors:

24LEGAL REFERENCE: Sec. 7, GPRA.

APP

PPMP

End-user A

PPMP

End-user C

PPMP

End-user B


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1. The APP should include all procurement activities planned for the year.

a. Since the approved APP shall be the basis for the Procuring Entitys procurement,only projects or procurement included therein shall be undertaken.

2.

The APP shall include only those procurements that are considered crucial to the efficientdischarge of governmental functions.

a. A certain procurement is crucial to the efficient discharge of governmental functions

if:

a.1. It is required for the day-to-day operations of the Procuring Entity; or

a.2. It is in pursuit of the principal mandate of the procuring entity concerned.

3. The APP shall include provisions for foreseeable emergencies based on historical

records.

a. The BAC, through the BAC Secretariat, shall include therein a lump sum to cover for

these emergencies or contingencies.

b. Such amount which amount shall not be more than four percent (4%) of the Procuring

Entitys total appropriations for Maintenance, Operating and Other Expenses.

4. Procurement activities should be scheduled in such a way that the conduct of

procurement transaction shall be efficiently managed by BAC and the other offices/units

in the Procuring Entity involved in the procurement.

5.

It is important that project implementation timelines are met.

6. Review and updating of the individual PPMPs and the APP shall be done regularly, atleast once every six (6) months or as often as necessary.

a. The review and updating of the PPMPs will be done by the PMOs and the end-userunits.

b. Services of technical experts may be availed of to review the individual PPMPs.

c. The updated PPMPs will then be submitted to the BAC Secretariat for subsequent

inclusion in the updated APP.

7. The APPs of decentralized procuring entities should be submitted to the central office forinformation and monitoring purposes.


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C. Contents of the APP

1. The APP shall contain the following information

a.

Name of the project/procurement;

b. PMO or end-user unit;

c. General description of the project/procurement (general description of requirementsand quantities, where applicable);

d. Procurement methods to be adopted, and indicating if the procurement tasks are to be

outsourced as provided in Section 53(e) of the revised IRR;

e. Time schedule for each procurement activity; and,

f.

ABC.


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3.PROCUREMENT STRATEGY

Period: During consolidation of

Participants: BAC

BAC SecretariatTWG

Requisites: APP of the Procuring Entity, or at least submission of PPMPs by end-users

Purpose: To ensure efficiency and achieving the most favourable terms in the

procurement of the Procuring Entitys requirements

Task: Determine characteristics of procurement requirements

Determine common requirements which may be bidded together

Adopt procurement strategies

1. The procurement strategy is the approach to be adopted by the BAC in the procurementof the goods, infrastructure projects and consulting services included in the APP.

2. In the process of consolidating the PPMPs, the BAC should determine the extent ofdiversity, quantities, quality, cost, the supply market, and other characteristics of the

procuring entitys requirements for the year.

3. There may be common requirements for the various PPMPs.

a. For example, three (3) projects require the purchase of five (5) units of laptop

computers for each project office, or a total of fifteen (15) laptop computers.Obviously, it will be more cost effective and efficient if the BAC will procure the

fifteen (15) laptop computers in one bidding exercise and as one bid lot.25

4. The BAC may also have to decide on procurement through bid lots and contract packageswhether or not it is best to bid out a project as a single package, or divide it into several

bid lots (based on independent components, not tantamount to splitting).

5. The BAC, through the help of the TWG and the Secretariat, shall determine the best

options for the Procuring Entity.

25Example used in DOH Procurement Manual, Vol. 1.


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Determine ABC

Determine type of consultant to behired

Determine mode of procurement

Prepare the draft terms of reference

III.PROCUREMENT PREPARATIONS

1.PROCUREMENT PLANNING26

Period: Before undertaking procurement

Participants: End-user

Procurement Management Office (PMO)Procuring Entity

Technical Working Group

Technical experts/consultants (when necessary)

Requisites: Before proceeding to this stage, the APP should already be prepared and

the GAA already passed.

Purpose: To achieve efficiency the procuring entity has to schedule its recruitment

activities in advance, and to ensure that procurement plans are properlylinked to corresponding budgets.

Tasks: At this stage, the end-user has to prepare the draft terms of reference,

while the procuring entity has to determine the mode of procurement, the

type of consultant to be hired and the approved budget for contract (ABC).

A. Terms of Reference (TOR)

26LEGAL REFERENCE: Sec. 7, GPRA R-IRR.

End-user

Procurement Entity


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1. The TOR is prepared by the end-user/PMO and duly approved by HOPE or the

authorized approving official.

2. Assistance of external/internal technical experts may be engaged whenever needed in

drafting the TOR.

3. An adequate TOR should provide for the following:

a. Objectives, scope and expected outputs and/or results of the proposed contract;

b. The expected contract duration and/or time frame

c. Obligations, duties and/or functions of the consultant and government counter partsand staff, including working arrangement between the consultant, its staff and

counterpart staff;

d.

The minimum qualifications of consultants, such as track record to be determined by

the Head of the Procuring Entity; and

e. The services, facilities and data, of any, to be provided to the consultants.

B. Mode of Procurement

1. Unless otherwise provided, procurement is to be made through competitive bidding. The

exceptions, or alternative modes, are negotiated and limited source bidding which will be

discussed in greater detail in succeeding sections.

C. Type of Consultant

1. Consultants may either be a natural person or a juridical entity, so long as they meet

qualificationseducation, training, expertise, capability, and experience, among others demanded by service to be performed.

2. In keeping with the policy of the GPRA, whenever the services needed are within

expertise and capability of Filipino consultants they should be hired.

3.

However, upon the determination of the HOPE that Filipino consultants do not possess

sufficient expertise and capability needed for the project, foreign consultants may be

hired subject to all pertinent Philippine laws and regulations.

D. Approved Budget for Contract (ABC)


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1. The ABC is the budget for the contract duly approved by the HOPE as provided in the

GAA and/or continuing appropriations. It refers to the proposed budget for the project

approved by the HOPE based on the APP, which is consolidation of various PPMPs.

2. To determine the ABC, the following factors have to be considered

a. Cost or market price of service itself;

b. Cost of money, to account for government agencies usually buying on credit terms;and

c. Inflationary factor, since planning is done one year ahead of actual procurement date.

3. As a general rule, the ABC should not exceed the appropriation.

a. If various cost components is lower than appropriation, ABC must be equivalent to

total of cost components.

b. If various cost components higher than appropriation, the technical specifications andcomputation of the ABC should be reviewed.

4. However, when so demanded by the contingencies, the ABC may be adjusted upward or

downward.

a. In case there is failure of bidding, the BAC must conduct a mandatory review and

evaluation of the ABC, technical specifications, terms, and conditions in the biddingdocuments and revise the same based on its findings.

5.

The cost of the consultancy shall take into consideration remuneration costs,

reimbursable costs, and a reasonable contingency cost.

ApprovedBudget forContract

RemunerationCosts

Basic Rates

Billing Factor

ReimbursableCosts

Agreed Fixed Rates

Actual CostContingency

(5% of contractmax.)


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a. Remuneration costs are costs to be paid to consultants staff/personnel directly

engaged in the consulting services as agreed, and shall cover basic rates of staff

multiplied by the consulting firms billing factor.

a.1. Basic rates represent actual salaries received by the consultants professionalstaff (certified by sworn statement submitted to the Procuring Entity).

a.1.1. In determining basic salary the following are considered:

- Salary history,

- Industry rates,

- A floor of equivalent to two hundred percent (200%) of the equivalent rate

in the procuring entity.

a.1.2. Basic rates of the consultants staff component shall be indicated in the

contract.

a.2. The billing factor/multipliershall be derived from overhead costs, social costs,

and management fee (supported by audited financial statements from an independent

auditing/accounting firm/entity and certified by the consulting firm).

a.2.1. Overhead costs are the general administrative expense of the firm, aside

from those directly related to the project. These are expressed in percentage of the

total of basic salaries of all personnel of the firm.

a.2.2. Social charges are cost items relative to the welfare and benefit of the

consultants staff in keeping with existing policies of the consultant and pertinentgovernment regulations. There are also expressed as a percentage of the basic rate

of the consultants staff.

a.2.3. Management fees are remuneration or the professional know-how and

expertise of the consultant. It is fixed as a percentage of the sum of basic salary,

RemunerationCosts

BasicRates

Salary history

Industry rates

Floor

Billing Factor/

Multiplier

Overhead Cost

Social Charges

Management Fee


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overhead costs, and social charges, but not exceeding fifteen percent (15%)

thereof.

a.2.4. The sum of basic salary, overhead and social charges and management fee

represents the billing factor or multiplier.

a.2.5. The normal range of multiplier for technical personnel is from 2.0 to 3.0,

while that for administrative personnel does not exceed 1.8.

b. Reimbursable costs include those expenses associated with the execution of the

services, classified into those based on fixed rates and those based on actual costs.

b.1. This includes cost items payable at agreed fixed rates to the staff, includinghousing allowance, per diems, and international travel expenses of foreignconsultants.

b.1.1. Housing allowance covers power and water costs for consultants staff. It

should only be given to consultants staff that will be staying at the designatedofficial station of duty for more than one (1) month, without prejudice to the

Reimbursable Costs

Based on AgreedFixed Rates

Housing Allowance

Per diems

For foreign consultants

Based on ActualCost

International Travel

Domestic Travel

Domestic Transportation

Communication Expenses

Cost of office/other suppliesand services

Cost of field office

Equipment rental

Acquisition of software licenses

Other items


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procuring entitys option to provide for housing facilities at the designated duty

station in lieu of giving the allowance.

b.1.2. Per diems are daily allowances given to consultants staff while on official

trips authorized by the procuring entity or required in the contract.

- It is for trips (1) outside the base of operation (home office) of consultant staffor (2) outside the designated official station of duty, except when staying at

the base of operation.

- Reckoned from a 24-hour day trip of at least 50 kilometers away from the

station.

- Rates vary for short visits and longer stays by location. Stays in cities receivehigher rates compared to municipalities.

b.2. Expenses based on actual cost must be supported with invoices and othersupporting papers. It includes expenses for international travel, domestic travel,

domestic transportation, communication expense, cost of supplies, cost of field office,

equipment rental, acquisition of software licenses, and cost of other items necessary

for the project as certified by the procuring entity.

b.2.1. Cost for international travel covers full fare economy class air

transportation, preferably in a Philippine airline, through most direct andexpeditious air routes. Cost of excess baggage allowed is up to twenty (20)

kilograms for each expatriate staff per trip.

b.2.2. Cost for domestic travel covers full fare economy class air transportationand/or land transportation through most direct and expeditious routes.

b.2.3. Domestic transportation covers provision of vehicles either throughpurchase or rental.

b.2.4. communication costs includes telephone, mobile, two-way radio, telegrams,internet, parcel, freight, courier, and fax, among others.

c. Contingency costsof not more than five percent (5%) of the amount of the contract

are considered for those items which in the performance of the service may turn outto be necessary. These costs must be approved by the procuring entity prior to being

incurred, and must be in accordance to the unit rates and costs specified in the

contract and in strict compliance with the needs of the project.

6. In estimating the cost of consulting services, the end-user must conduct a cost research in

the local market focusing on the above cost components and taking into consideration

reasonable inflation rate, especially for contracts lasting for more than one (1) year.


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II.PREPARATION OF BIDDING DOCUMENTS27

Period: Bidding documents must be prepared in time for presentation at the pre-procurement conference.

Participants: BACTWG

BAC Secretariat and/or the procurement office/unit

End-user/PMOConsultants (hired to prepare the bidding documents)

Purpose: To furnish prospective bidders with information sufficient for them to

prepare their bids.

Requisites: Draft TOR

Determined type and method of procurement, and ABC

Tasks: BAC Secretariat/TWG, with assistance of end-user/PMO prepares bidding

documents in accordance with procurement manuals and standard forms

prescribed by the GPPB.

A. Bidding Documents

1. Bidding documents refer to documents issued by procuring entity as the basis for bids,

furnishing all information necessary for a prospective bidder to prepare a bid for the

consulting services required by the procuring entity.

2. Equal access to information shall be ensured in all stages of the preparation of the

Bidding Documents. However, prior to their official release to prospective bidders noaspect of the Bidding Documents shall be divulged or released to any prospective bidder

or person having direct or indirect interest in the project to be procured, or to any party,

except those officially authorized in the handling of the documents.

B. Contents of Bidding Documents

Content Description

1. ABC It is the budget for the contract duly approved by the HOPE asprovided in the GAA and/or continuing appropriations.

2. Request for Expression ofInterest

Serves as the notice to the public and interested parties of theprocurement opportunity.

3. Eligibility Requirements Requirements that show the status of a bidder as a qualified

27LEGAL REFERENCE: Sec. 17, GPRA-IRR.


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consultant based on its legal, technical and financial competence

to comply with the contract to be bid.

4. Instructions to Bidders All necessary information that would help consultants

prepare responsive proposals, indicating the evaluation

criteria and factors and their respective weights and theminimum passing quality score.

5. Terms of Reference (TOR) It outlines the objectives, scope and expected outputs and/or

results of the proposed contract, among others.

6. Scope of work, whereapplicable;

Detailed description of the goods or services deliverable by theSupplier, Contractor or Consultant, similar to TOR but for

services and infrastructure projects.

7. Plans/Drawings and

Technical Specifications;

Descriptions of what the purchaser requires and what a bidder

must offer.

8. Form of Bid, Price Form,

and List of Goods or Bill of

Quantities;

9. Delivery Time or

Completion Schedule;

Duration of the performance of service required.

10. Form, Amount, and

Validity Period of Bid

Security;

Bid Security Cash, check, bank draft, letter of credit, bank

guarantee, surety bond or a foreign government guarantee thatserves as a guarantee that the successful bidder shall not

default on his offer, and shall enter into contract with the

Procuring Entity and furnish the performance security.

11.Form, Amount, and

Validity of Performance

Security and Warranty; and

A security posted by the winning bidder to guarantee the faithful

performance by the same of its obligations under the contractprepared in accordance with the bidding documents.

An undertaking by the supplier, manufacturer or distributor toguarantee that it will correct any manufacturing defects of the

goods procured by the government.

12. Form of Contract and

General and SpecialConditions of Contract


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C. Issuance of Bidding Documents

1. This preparatory stage requires merely that the bidding documents be prepared or madeready as they are to be issued in the course of the procurement process.

a.

Eligibility documents shall be made available from the time the REI is first advertiseduntil the deadline for the eligibility check.

b. Bidding Documents shall be made available from the determination of the short list

until the deadline for the submission and receipt of bids.

2. A reasonable fee to cover the cost of preparation and development of bidding documents

may be charged to the bidders. The BAC shall issue such bidding documents upon

payment of such cost to the collecting officer of the procuring entity.

3. Bidding documents are to be posted at the DOH and the PhilGEPS websites from the

time the REI is advertised. Such documents may be downloaded by the prospectivebidders provided that bidders shall pay the issuance fees upon submission of their bids.


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III.CONDUCT OF PRE-PROCUREMENT CONFERENCE28

Period: Prior to the advertisement or the issuance of the REI for each procurementundertaken through a public bidding

Participants: BACSecretariat

Representatives of the PMO or end-user unit/s

Members of the TWG/s, including technical experts hired by the procuringentity who prepared the TOR, bidding documents and the draft

advertisement, and

Technical experts who assisted in the preparation of the TOR and the

bidding documents for the procurement at hand.

Purpose: To determine the readiness of the procuring entity to procure consulting

services in terms of the legal, technical and financial requirements.

Requisites: Knowledge of amount to be procured, bidding documents should be

drafted (Cost more than 1M PhP)

Tasks: BAC, through its Secretariat, shall call for a pre-procurement conference.

BAC/sec calls for conference, conduct of conference.

A. Pre-procurement Conference

1. A pre-procurement conference is mandatory for procurements of consulting services

costing more than one million pesos (PhP 1,000,000.00). For smaller procurements, the

holding of a pre-procurement conference may not be required.

2. During the procurement conference, participants should:

a. Confirm description and scope of the contract, the ABC, and contract duration;

b.

Ensure procurement is in accordance with the project and APP;

c.

Determine the readiness for procurement at hand, based on:

c.1. availability or appropriations and programmed budget for contract; and

28LEGAL REFERENCE: Sec. 20, GPRA R-IRR.

Bidding DocumentsBAC call for pre-

procurementconference

Hold ProcurementConference


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c.2. completeness of Bidding Documents and their adherence to relevant general

procurement guidelines

d. Review, modify and agree on the criteria for eligibility screening and short- listing,

detailed bid evaluation and post-qualification;

d.1. determine number of consultants to be short listed

e. Review and adopt the procurement schedule, including deadlines and timeframes, for

the different activities; and

f. Reiterate and emphasize the importance of confidentiality, in accordance with

Section 19 of the revised IRR, and the applicable sanctions and penalties, as well as

agree on measures to ensure compliance with the foregoing.


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II.PROCUREMENT PROCESS OVERVIEW

A.COMPETITIVE BIDDING

1. Competitive or public bidding is a method ofprocurement that is open to all interested and qualifiedparties.

2. Procurement shall be done through competitive

bidding, unless circumstances require the use ofother procurement methods.

3. Competitive bidding involves of the following

steps: advertisement, pre-bid conference, eligibilityscreening of prospective bidders, receipt and

opening of bids, evaluation of bids, post-qualification, and award of contract.

4. However, procurement for consulting service

entails additional steps such as the short listing of

prospective bidders, to ensure that qualified,competent, and experienced consultants are hired

for the service needed.

5. The procurement process from opening of bids

up to the award of contract should not exceed three

(3) months, or a shorter period to be determined bythe procuring entity.

6. Should the deadline for a component step/task

fall on a non-working day, legal holiday, or specialnon-working holiday, the deadline shall be the next

working day.

STEP 11: Issue Notice to Proceed

STEP 10: Sign and Approve Contract

STEP 9: Award the Contract and IssueNotice of Award

STEP 8: Conduct Post-Qualification

STEP 7: Conduct Bid Evaluation ofShortlisted Consultants

STEP 6: Receive and Open Technical and

Financial Envelopes

STEP 5: Conduct Pre-bid Conference andIssue Supplemental Bid Bulletins

STEP 4: Issue Bidding Documents

STEP 3: Short List Eligible Consultants

STEP 2: Submission of EligibilityRequirements

STEP 1: Advertise/Post Request forExpression of Interest


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STEP1.ADVERTISE AND/OR POST REQUEST FOR EXPRESSION OF INTEREST29

Period: After the conduct of pre-procurement conference, when applicable

Participant/s: BAC Secretariat

Requisites: REI approved by the BAC.

Purpose: To increase number of prospective bidders and intensify competition for

the procurement project, thereby ensuring the best possible proposals, interms of quality and costs.

Tasks: Posting of the REI in the Procuring Entity's premises, in newspapers of generalcirculation, the PhilGEPS and the website of the Procuring Entity.

A. Contents of the Request for Expression of Interest (REI)

1.

The REI must contain the following

30

:

a. Name of the contract to be bida general description and other important or relevant

information;

b. The criteria for eligibility check, short listing of prospective bidders, examination and

evaluation of bids, post-qualification, and award;

c. The date, time and place of:

c.1. the deadline for the submission and receipt of the eligibility requirements,

c.2. the pre-bid conference if any,

c.3. the submission and receipt of bids, and

c.4. the opening of bids;

29LEGAL REFERENCE: Section 1.2.1., GPRA R-IRR.30Sec. 21, GPRA R-IRR.

BAC approved REIPost REI in premises

(7 days)Publish REI in

newspaper (1 time)

Except: ABC 1M andbelow, or contract periodless than 4mos.

Post REI in PhilGEPS,DOH Website,

Office/Unit Website


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d. ABC to be bid;

e. Source of funding;

f.

Period of availability of the Bidding Documents, the place where the BiddingDocuments may be secured, the website where the Bidding Documents may bedownloaded, and, where applicable, the price of the Bidding Documents;

g. Contract duration or delivery schedule;

h. Name, address, telephone number, facsimile number, e-mail and website addresses of

the concerned procuring entity, as well as its designated contact person; and

i. Such other necessary information deemed relevant by the procuring entity.

B. Posting Guidelines

1. The REI shall be posted at any conspicuous place reserved for this purpose in the

premises of the procuring entity concerned for seven (7) calendar days.

a. Such posting shall be certified by the head of the BAC Secretariat of the procuring

entity concerned.

2. Thereafter, the REI may be advertised at least once in 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.

a. However, such advertisement in a newspaper of general nationwide circulation shall

not be required for the following contracts:

a.1. those with an approved budget of One Million Pesos (PhP 1,000,000.00) and

below; or

a.2. those whose duration is four (4) months or less for the procurement of consulting

services.

b. Advertisement is likewise not required for alternative methods of procurement.

3. The REI is to be posted continuously in the PhilGEPS website, the website of the

procuring entity concerned, if available, and the website prescribed by the foreigngovernment/ foreign or international financing institution, if applicable, for seven (7)

calendar days starting on date of advertisement.


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Place of Posting Duration

Premises of the

Procuring Entity

Seven (7) calendar days

Newspaper of generalnationwide circulation

One (1) publication

PhilGEPS and Procuring

Entity (DOH) Website

Seven (7) calendar days

from date ofadvertisement

Minimum Periods

No. of Days 1 2 3 4 5 6 7

Posting atPremises

Newspaper

advertisement

Posting atWebsite

C. Reservation Clause

1. The REI likewise includes the reservation clause, wherein the procuring entity declares

that it reserves the right to reject any and all bids, declare failure of bidding, or not toaward the contract altogether.

31

2. However, abuse in the exercise of power to reject any and all bids by influencing any

member of the BAC or any employee of the procuring entity, or for the purposes of

favouring any bidder, among othersshall give rise to criminal liability.32

D. Relevant Jurisprudence

1. J.G. Summit Holdings Inc. v. CA, G.R. No. 124293, January 31, 2005

a. It is a well settled rule that where such reservation (of the governments right to

reject any or all bids or any part thereof or waive any defects contained thereon andaccept an offer most advantageous to the Government) is made in an Invitation to

31Sec. 41, GPRA R-IRR.32Sec. 65.1.c, 65.1.e., GPRA R-IRR.


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Bid, the highest or lowest bidder, as the case may be, is not entitled to an award as a

matter of right.

b. Even the lowest Bid or any Bid may be rejected or, in the exercise of sound

discretion, the award may be made to another than the lowest bidder.

2. NPC v. Philipp Brothers Oceanic, Inc., G.R. No. 126204 November 20, 2001

a. Where the government reserves its right to reject, bids may be rejected on mere

technicality. The losing bidder cannot complain nor dispute such act unless it isshown to be unfair or unjust.

b. The government may not be compelled to award a contract nor accept any bid.

3. First United Constructors Corporation v. PPMC, G.R. No. 178799, January 19, 2009

a.

The discretion to accept or reject bid and award contracts is vested in thegovernment agencies entrusted with that function. This discretion is of such wide

latitude that the Courts will not interfere therewith or direct the committee on bids to

do a particular act or to enjoin such act within its prerogatives unless it is apparent

that it is used as a shield to a fraudulent award; or an unfairness or injustice is shown;or when in the exercise of its authority, it gravely abuses or exceeds its jurisdiction.

E. Practical Considerations

1. The prescribed modes of advertising and posting refer to the bare minimum requirements.

Thus, the Procuring Entity may ensure widespread dissemination, especially whendemanded by the nature of the procurement at hand, by resorting to other available modes

of information dissemination.


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STEP2.SUBMISSION OF ELIGIBILITY REQUIREMENTS33

Period: Eligibility envelopes shall be submitted on or before the deadline specifiedin the REI.

Participants: BACTWG

Secretariat

Prospective bidders

ObserversCOA Representative

Requisites: REI must have already been posted and/or advertised.

Purpose: To determine the eligibility of prospective bidders for the procurement of

consulting services.

Tasks: Receive eligibility envelopes and issue corresponding receipt.

Conduct an eligibility check/screening

A. Eligibility Requirements

1.

For purposes of determining eligibility and short listing prospective bidders, thefollowing documents are to be submitted, using standard forms prescribed by the BAC inthe bidding documents.

Eligibility Documents34

Class A Documents include legal, technical and financial documents

Legal Documents Registration certificate from SEC, Department of Trade and

Industry for sole proprietorship, or Cooperative Development

Authority for cooperatives, or any proof of such registration as

stated in the Bidding Documents;

Mayors permit issued by the city or municipality where theprincipal place of business of the prospective bidder is

located;

Technical documents Statement of the prospective bidder of all its on-going and

completed government and private contracts, including

33LEGAL REFERENCE: Sec. 24, GPRA R-IRR.34Sec. 24.4 and 24.5, GPRA R-IRR.

Post/ Advertise REIReceive Eligibility

EnvelopesConduct Eligibility

Check


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contracts awarded but not yet started, if any, whether similar

or not similar in nature and complexity to the contract to be

bid, within the relevant period as provided in the Bidding

Documents. The statement shall include all information

required in the PBDs prescribed by the GPPB.

Statement of the consultant specifying its nationality andconfirming that those who will actually perform the service

are registered professionals authorized by the appropriate

regulatory body to practice those professions and allied

professions.

Financial documents The consultants audited financial statements, showing, among

others, the consultants total and current assets and liabilities,

stamped received by the BIR or its duly accredited and

authorized institutions, for the preceding calendar year which

should not be earlier than two (2) years from the date of bid

submission.

The prospective bidders computation for its Net Financial

Contracting Capacity (NFCC) or a commitment from a

Universal or Commercial Bank to extend a credit line in favor

of the prospective bidder if awarded the contract to be bid

(CLC).

Class B Documents Valid joint venture agreement, in case a joint venture isalready in existence. In the absence of a JVA, duly notarized

statements from all the potential joint venture partners stating

that they will enter into and abide by the provisions of the

JVA in the instance that the bid is successful, shall be

included in the bid.

-

Failure to enter into a joint venture in the event of a

contract award shall be ground for the forfeiture of the

bid security.

-

Each partner of the joint venture shall submit the legal

eligibility documents.

-

The submission of technical and financial documents by

any of the joint venture partners constitutes compliance.

2. The consultant or its duly authorized representative shall certify under oath that each of

the documents submitted in satisfaction of the eligibility requirements is an authentic andoriginal copy, or a true and faithful reproduction or copy of the original, complete, andthat all statements and information provided therein are true and correct.

a. The BAC may require that the bidders authorized representative should initial every

page of the documents it submits as originals.


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B. Receipt of Eligibility Documents

1. Prospective bidders must submit their eligibility requirements in a sealed envelope or anyappropriate container to the BAC on or before the deadline provided in the REI.

a.

Submissions after the prescribed deadline should not be accepted by the BAC.

2. Upon actual receipt of the envelope, the BAC secretariat must stamp an eligibility

envelope as RECEIVED and also indicate date and time of receipt.

3. The BAC Secretariat must issue in triplicate a pre-numbered receipt, indicating the name

of the prospective bidder and the date and time when the eligibility envelope was

received. One copy shall be attached to the eligibility envelope, one furnished the

prospective bidder, and the original shall be kept as a record.

C. Eligibility Check

1. An eligibility check is a procedure to determine if a prospective bidder is qualified to

participate in the bidding at hand. The BAC shall use non-discretionary pass/fail

criteria, stated in the REI, to determine eligibility of prospective bidders.

2. A prospective bidder shall be eligible to bid for the procurement of consulting services if

it complies with eligibility requirements prescribed within the period stated in theinvitation to bid.

3. Bidders should not be under a declaration of ineligibility for corrupt, fraudulent, collusive

and coercive practices by the government

D. Procedure for Conducting Eligibility Check

1. The BAC shall open in public the submitted eligibility envelopes on the date specified in

the REI.

2. The contents of eligibility envelopes shall be read in public and examined the BAC

shall record presence or absence of eligibility documents from the checklist.

a.

An absent, incomplete or insufficient submission shall render a prospective bidderineligible to bid for the procurement at hand.

3. Based on their findings, the BAC shall classify prospective bidders as either eligible or

ineligible and promptly inform them thereof.

a. Eligibility envelopes shall be marked as such accordingly. The markings shall be

countersigned by the BAC chairperson or a duly designated authority.


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b. A pro-forma notice of eligibility or ineligibility shall be duly accomplished by the

BAC secretariat and signed by BAC members present during eligibility check.

c. In case of ineligibility, the notice shall state there reason therefore.

d. Notice shall be received by bidders authorized representative.

4. The BAC shall ask ineligible bidders whether or not they intend to file a request for

reconsideration.

a. If the ineligible bidder expressly waives the right to file a request for reconsideration,

the eligibility envelope should be returned.

a.1. Waiver should be made in writing by the ineligible bidder or by an authorized

representative.

b.

If the ineligible bidder expresses intention to file a request for reconsideration, the

BAC shall keep the eligibility envelopes.

b.1. The BAC shall reseal the eligibility envelope and sign it in the presence of allparticipants.

b.2. It will then be deposited into a bid box or any such designated secured place ordepository.

Open eligilbility envelopes

Read and examine contentspublicly

Record present/absent documents

Classify bidders: eligible/ ineligible

Mark envelopes accordingly

Issue Notice of Eligibility/Ineligibility

State reasons for Ineligibility


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E. Remedies for Ineligible Bidder

1. A written request for reconsideration must be filed with the BAC seven (7) calendar days

from notice of ineligibility.

a. If the prospective bidder was present during the Eligibility Check a verbal notification

suffices to trigger running of the period.

b. If the prospective bidder was absent, the period runs from the day the Notice of

Ineligibility is received.

2. Once it has received the letter-request, the BAC has seven (7) calendar days to resolvethe request for reconsideration.

a.

The BAC must hold on to the Eligibility Envelopes of the prospective bidders until ithas resolved the matter.

b. When necessary, the BAC can request the prospective bidder to clarify its eligibility

documents.

3. If the request for reconsideration is denied, a protest in writing may be filed with the

HOPE within seven (7) calendar days from receipt of the resolution.

a. A protest is made by filing a verified position paper with the HOPE, and paying a

non-refundable protest fee.

a.1. The position paper shall contain the following information:

a.1.1. the name of the bidder;

a.1.2. office address of the bidder;

a.1.3. name of the project or contract;

a.1.4. the implementing agency or procuring entity

a.1.5. brief statement of facts;

a.1.6. the issue to be resolved

a.1.7. other relevant and pertinent information.

a.2. The non-refundable protest fee should at least be one percent (1%) of the ABC.


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b. The protest has to be resolved by the HOPE within seven (7) calendar days from

receipt thereof.

b.1. HOPE must resolve the issue strictly based on records of the BAC.

b.2. The decision of the HOPE shall be final up to the limit of his contract approvingauthority, subject to provisions of existing laws.