Republic Act No. 9184

Republic Act No. 9184

Government Procurement Reform Act


Simplification of pre-qualification and the strengthening of post-qualificationUse of the Lowest Calculated and Responsive Bid for goods, supplies, materials and related services; and Highest Rated and Responsive Bid for consulting servicesUse of the Approved Budget for the Contract (ABC) as ceiling for the bid price Use of transparent, objective and non-discretionary criteriaIncreased transparency in the procurement processProfessionalization of procurement officialsInclusion of Penal and Civil Liabilities


Effectivity: 26 January 2003 (RA 9184)

18 October 2003 (IRR)

Republic Act No. 9184In cases where the advertisements or invitations for bids were issued after the effectivity of the Act but before the effectivity of this IRR-A, procuring entities may continue adopting the procurement procedures, rules and regulations provided in E.O. 40 and its IRR, P.D. 1594 and its IRR, R.A. 7160 and its IRR, or other applicable laws, as the case may be.


Hence, between 26 January and 18 October 2003, the Procuring Entity may use the law governing prior to RA 9184


Governing Principles of Procurement

TransparencyEqual Opportunity (through standardization)

Streamlined ProcessAccountability

Public Monitoring


Coverage:Goods:

ItemsSuppliesMaterialsneeded in

Transaction of public businessPursuit of any government undertaking, project

or activity


Still considered as goods:Services that are not consulting services

General Support Services(e.g. Janitorial, Security, Repair and Maintenance

Services)Related or Analogous Services(e.g. Lease of Office Space)Materials and supplies needed for such services

Consulting Services:

services for Infrastructure Projects and other types of projects or activities of the Government

requiring adequate external technical and professional expertise

beyond the capability and/or capacity of the Government to undertake


Republic Act No. 9184Infrastructure projects/Civil Works: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


General Rule (section 10, RA 9184):

Competitive Bidding!


What is Competitive Bidding?[Section 5 (e), RA 9184]

Method of procurement Open to participation by any interested party Consists of the following processes: advertisement,

pre-bid conference, eligibility screening of prospective bidders, receipt and opening of bids, evaluation of bids, post-qualification, and award of contract,

Specific requirements and mechanics of which shall be defined in the IRR to be promulgated under this Act


The General Processes of Competitive Bidding:Advertisement

Pre-bid conference Eligibility screening of prospective bidders

Receipt and opening of bidsEvaluation of bidsPost-qualificationAward of contract


Bid and Awards Committee (BAC) Formation

BAC Structure:

GeographicalNature of Procurement

BAC Composition:

Head of Procuring Entity forbidden as Chairperson or

member of BAC



BAC Composition: (for Agencies, GOCCs, SUCs, GFIs,etc.)

Regular Members:1. Chairman- at least third ranking

permanent official of procuring entity2. Member- procurement/legal/

administrative expertise and at least fifth ranking permanent official

3. Member- finance expertise and at least fifth ranking permanent official


BAC Composition:Provisional Members:

1. Member- technical expertise in relevant to the procurement

2. Member- end user unit


BAC Composition: (for LGUs)

One (1) representative each From the regular offices under the office of

the local chief executive (e.g., Office of the Administrator, Budget Office, Legal Office, General Services, Engineering Service)

To be appointed by the local chief executive


BAC Composition:Observers: Two (2)1. At least one (1) shall come from a duly

recognized private group in a sector or discipline relevant to the procurement at hand

2. The other from a non-governmental organization (NGO)

COA Representative


BAC Composition:

No. of Members:At least Five (5) but not more than

Seven (7)

COA Representative & Observers (non-members)


BAC Composition:

Now more professionalized!

honoraria to the BAC members in an amount not to exceed twenty-five percent (25%) of their

respective basic monthly salary subject to availability of funds (Section 15)

Private Legal Assistance as part of indemnification package of BAC Member

(Section 72)


Bid Documents Preparation:

Prepared by procuring entity Following the standard forms and

manuals prescribed by the GPPB


Technical Working Group

from a pool of technical, financial and/or legal experts assist in the procurement process particularly in the eligibility screening, evaluation of bids and postqualification

Standardized Bidding Procedures for Goods

Pre-ProcurementConf.

2-wk advertisement Pre-BidConference

Opening ofEligibility Env. &Eligibility Check

Opening ofTech. Env. &Prel. Exam.

Opening ofFinancial Env.

Submission ofEligibility Req. & Bid

Bid Evaluation& Ranking

PostqualificationAward ofContract


Pre-Procurement ConferencePurposes:

1. Ensure that the procurement is in

accordance with the project and annual procurement plans;



2. Determine the readiness of the procurement at hand, including, among other aspects, confirmation of the availability of ROW, the ownership of affected properties, availability of appropriations and programmed budget for contract, and adherence of bidding documents, technical plans, specifications, scope of work, and/or TOR, and other related matters, to relevant general procurement

Republic Act No. 9184Pre-Procurement Conference

Purposes:3. Review, modify and agree on the criteria for

eligibility screening to ensure their fairness, reasonableness and that they are of the “pass/fail” type and are written in such manner;

4. Review, modify and agree on the criteria for the evaluation of bids/proposals to ensure their fairness, reasonableness and applicability to the procurement at hand;



5. Clarify that the specifications and other terms in the bidding documents are minimum requirements and that the bidder may submit an offer which provides for superior specifications and/or better terms and conditions to the Government at no extra cost, without any bonus, credit or premium in the bid evaluation; and


Pre-Bid ConferencePurposes:

6. Reiterate and emphasize the importance of confidentiality during the bid evaluation process, and the applicable sanctions and penalties, as well as agree on measures to ensure compliance with the foregoing.


Invitation to Bid

1. Publication2. Website3. Posting


Publication:Twice:1. Minimum 6 days maximum 14 days in

between publication2. Newspaper of general nationwide

circulation3. Newspaper published at least 2 years

prior to advertisement


Posting @ Website

1. Website of the procuring entity2. Website of the service provider of the

procuring entity, if available3. Maximum period of 14 days


Posting at premises

1. Conspicuous place2. Reserved for the purpose3. Certified by the BAC Secretariat of

the procuring entity


Pre Bid Conference:

Less than P1M, discretionary for BAC to conduct. Held at least 12 days before the receipt and opening

of bids. Any statement made at the pre-bid conference shall

not modify the terms of the bidding documents, unless such statement is specifically identified in writing as an amendment thereto and issued as a Supplemental/Bid Bulletin.


Eligibility Check:

BAC determines if each prospective bidder is eligible to participate

By examining the completeness of each prospective bidder’s eligibility requirements or statements against a checklist of requirements

Using a non-discretionary “pass/fail” criteria


Eligibility Documents:

Class “A” DocumentsClass “B” Documents



Class “A” Documents:

May be maintained in a file with the BACSuppliers maintain this file current and updated at

least once a year, or more frequently when neededBAC certification to that files are current and

updated submitted to the procuring entity concerned in lieu of the foregoing Class “A” documents



Class “B” Documents:

Submitted per bidding activity


What are these Class “A” Documents?

Legal Documents:1. DTI/SEC registration documents, as

applicable2. Mayor’s Permit/Municipal Licenses3. “Non-blacklisting” statements4. TIN5. Other appropriate Licenses/Permits



Technical Documents:1. Statement of the prospective bidder of

all its ongoing and completed government and private contracts within the relevant period, including contracts awarded but not yet started, if any



Financial Documents:

1. Audited financial statements, stamped “received” by the BIR or its duly accredited and authorized institutions, for the immediately preceding calendar year, showing, among others, the prospective bidder’s total and current assets and liabilities



Financial Documents:2. Bidder’s Computation of Net Financial

Contracting Capacity (NFCC); or a commitment from a licensed bank to extend to

it a credit line if awarded the contract to be bid, or a cash deposit certificate, in an amount not lower than that set by the procuring entity in the Bidding Documents,

which shall be at least equal to ten percent (10%) of the approved budget for the contract to be bid


What are these Class “B” Documents?

1. Valid joint venture agreement, in case of a joint venture

2. Letter authorizing the BAC or its duly authorized representative/s to verify any or all of the documents submitted for the eligibility check


Eligibility Criteria:

1. Nationality/Proof of Existence2. Prospective bidder’s largest single

contract3. NFCC or credit line/cash commitment

Republic Act No. 9184Eligibility Criteria:

1. Nationality/Proof of Existencea. Duly licensed Filipino citizens/sole proprietorships b. 60% Duly organized and existing Filipino Partnershipsc. 60% Duly organized and existing Filipino Corporationsd. Joint Venture with 60% Filipino intereste. Duly registered cooperatives

Not Applicable for foreign procurement



2. Prospective Bidder’s largest single contract

adjusted to current pricescompleted within time period specified

in Invitationsimilar to the contract to be bidat least fifty percent (50%) of the ABC



3. NFCC or credit line/cash commitment

NFCC at least equal to the approved budget for the contract to be bid




Computation of the NFCC:

NFCC = [(Current assets minus current liabilities) * (K)]

minus the value of all outstanding projects under ongoing contracts, including awarded contracts yet to be started.




Computation of the NFCC

Where:K = 10 for a contract duration of one year or less,

15 for a contract duration of more than one year up to two years, and 20 for a contract duration of more than two years.


Receipt and Opening of Bids:

Requisites for an acceptable bid:

1. In the prescribed Bid Form2. On or before the specified deadline3. In two (2) separate sealed bid envelopes,

Technical component of the bid and the Financial component of the bid


Procedure:

1. Late bids shall not be accepted2. Opening of Technical Envelopes3. Counter-checking compliance of

Technical Envelope with requirements4. Opening of Financial Envelope5. Counter-checking compliance of

Financial Envelope with requirements


Procedure:

6. Bid Evaluation7. Ranking8. Lowest Calculated Bid

Note:Bids above the ABC are automatically disqualifiedNo Floor PricesIf failed Technical Envelope, cannot open the Financial EnvelopeBid shall include all taxes



Post-QualificationPurpose:

To determine whether the bidder concerned complies with and is responsive to all the requirements and conditions for eligibility, the bidding of the contract, as specified in the bidding documents


Post-QualificationMethod:

BAC shall verify, validate and ascertain all statements made and documents submitted by the bidder with the Lowest Calculated Bid/Highest Rated Bid, using a non-discretionary criteria, as stated in the Invitation to Apply for Eligibility and to Bid and the Instructions to Bidder


Post-QualificationPeriod:

Within seven (7) calendar days from determination of the Lowest Calculated Bid

In exceptional cases, the seven (7) calendar day period may be extended by the GPPB


Result:

Lowest Calculated Bid becomes

“Lowest Calculated and Responsive Bid”


Recommendation of the Award to the Head of the Procuring Entity

Action of Head on Recommendation:

1. Approve2. Disapprove



Disapproval based only on valid, reasonable and justifiable grounds to be expressed in writing, copy furnished the BAC.



If approval:Head issues the Notice of Award

BAC notifies the losing bidders of the decision



Time period for this step:

15 Calendar Days from determination of Lowest Calculated and Responsive Bid

30 Calendar Days for GOCCs and GFIs


Contract Preparation and Signing

Time Period:

Ten (10) days from receipt of Notice of Award by Winning Bidder


Approval of Contract:

Only in cases where approval of higher authority is needed

Maximum of twenty (20) calendar days from receipt of approving higher authority

In case of GOCCs the board or approving higher authority is given thirty (30) calendar days


Notice to Proceed:

Given to successful bidder together with a copy or copies of the approved contract to the within seven (7) calendar days from the date of approval of the contract by the appropriate government approving authority


Notice to Proceed:

All notices called for by the terms of the contract shall be effective only at the time of receipt thereof by the successful bidder

Unless specified in the Notice to Proceed itself


Notes on Procedure for Infrastructure Projects:

Observer: representative from National

Constructor Associations duly recognized by the Construction Industry Authority of the Philippines (CIAP)



Letter of Intent:Submit a written LOI to BAC together with its application for eligibilityMust be received not later than seven (7) calendar days after the last day of the period for advertising and/or posting of the Invitation to Apply for Eligibility and to Bid



Additional Class “A” Documents:1. Valid Philippine Contractors Accreditation

Board (PCAB) license and registration for the type and cost of the contract to be bid

2. Prospective bidder’s statement of availability of key personnel and equipment

3. On-going and completed government and private projects



Eligibility Criteria:1. Nationality/Existence2. PCAB License3. Bidder’s largest single completed contract4. Satisfactory CPES rating and/or certificate of

completion and owner’s acceptance of the contract




Eligibility CheckEntire process shall not exceed fifteen (15) days

Issuance of Bid DocumentsWithin thirty (30) calendar days from the last

day of the period of advertising and/or posting of the Invitation to Apply for Eligibility and to Bid



Opening of Bids conducted within the following periods from the last day of the issuance of the bidding documents:

Up to twenty five (25) million- 15 to 30 calendar daysAbove twenty five (25) million up to fifty (50) million-15 to 45 calendar daysAbove fifty (50) million up to two hundred (200) million-30 to 60 calendar daysAbove two hundred (200) million- 60 to 90 calendar days


Notes on Procedure for Consultancy Services:

Observer:Project-related professional organization accredited or duly recognized by the Professional Regulation Commission (PRC) or the Supreme Court (SC)



Letter of Intent:Submit a written LOI to BAC together with its application for eligibilityMust be received not later than seven (7) calendar days after the last day of the period for advertising and/or posting of the Invitation to Apply for Eligibility and to Bid

Republic Act No. 9184Notes on Procedure for

Consultancy Services:

Eligibility Envelopes:Shall be opened before the dates of the pre-bid conference and bid opening to determine eligibility of prospective bidders

Only then shall they be allowed to acquire or purchase the relevant bidding documents from the procuring entity



Short listing:Three (3) to seven (7) consultants, with five (5) as the preferable number

Number as determined in the pre-procurement conference

Republic Act No. 9184Notes on Procedure for

Consultancy Services:

Short listing Criteria:1. Specified in the Invitation to Bid2. Includes:

a. Applicable experience b. Qualification of personnel who may be

assigned to the job vis-à-vis extent and complexity of the undertaking

c. Current workload relative to capacity



The BAC recommends the short list of consultants to the head of the procuring entity for consideration and approval The entire process of eligibility check and short listing shall not exceed thirty (30) calendar days



A maximum period of ninety (90) calendar days from the last day of the period of advertising and/or posting of the Invitation to Apply for Eligibility and to Bid up to the opening of bids



Bid Opening:

Opening of the Technical Proposal at opening dated only to determine compliance to formal requirements



Bid Evaluation:

Objective: Highest Rated Bid to be determined by in two steps:

a) The detailed evaluation of the bids of the short listed bidders using numerical ratings based on either the quality-based evaluation/selection procedure or the quality-cost based evaluation/selection procedure

Republic Act No. 9184Notes on Procedure for Consultancy

Services:

Bid Evaluation:

Objective: Highest Rated Bid to be determined by in two steps:

b) The ranking of the bidders based on the numerical ratings from the highest to the lowest. The bid with the highest rating shall be identified as the Highest Rated Bid.



Bid Evaluation Criteria:1. Quality of personnel2. Experience and capability of the

consultant 3. Plan of approach and methodology



BAC assigns numerical weights to criteriaCriteria as indicated in bid documentsBAC recommends to HeadHead has two (2) calendar days to approve

Republic Act No. 9184Notes on Procedure for Consultancy

Services:

Negotiation with Highest Rated Bid 1. BAC shall within seven (7) calendar days

notify and invite the consultant with the Highest Rated Bid for negotiation

2. Financial proposal of the consultant with the Highest Rated Bid shall then be opened by the BAC in the presence of the consultant



Negotiation with Highest Rated Bid 3. Negotiation4. Issues of Negotiation

Contract amountOther technical issues as stated

in the notification letter



Negotiation with Highest Rated Bid 5. In case of Failure of Negotiation with

Highest Rated Bid

Time period: Fourteen (14) calendar days for any one consultant except for meritorious reasons


Failure of Bidding:

1. No Bids are received2. No bid qualifies as the Lowest

Calculated Responsive Bid or Highest Rated Responsive Bid

3. Refusal of winning bidder to accept the award of contract


Failure of Bidding:

Consequence:

1. Second Bidding Process2. If this still fails, BAC may resort to

negotiated procurement


Reservation Clause:Head of Agency may

Reject any and all bids or Declare a Failure of Bidding for:

1. Prima facie evidence of collusion 2. BAC failed in following bidding

procedures3. Any justifiable and reasonable ground

where the award of the contract will not redound to the benefit of the Government


Observations on Failure of Bidding:

1. No more reservation to waive any formalities or defects of bid(s)

2. No more failure of bid for single calculated/rated and responsive bid

*Philippine Star, 30 May 2004



These reservation clauses are already illegal

Cannot be used to justify any waiver of bid formality


Exceptions to Competitive Bidding:

1. Alternative Modes of Procurement 2. Outside the Coverage of RA 9184

1. Acquisition of Real Property2. BOT Law


Alternative Modes of ProcurementGeneral Rule: Public BiddingProcurement program should allow sufficient lead time for public bidding Hence, procuring entity cannot

intentionally delay procurement program to give ground to resort to alternative modes

Resorted to only in highly exceptional cases as recommended by the BAC


Alternative Modes of ProcurementLimited Source Bidding

Direct Contracting Repeat Order

ShoppingNegotiated Procurement


Alternative Modes of ProcurementLimited Source Bidding or Selective Bidding

A method of procurement of goods and consulting services, that involves direct invitation to bid by the concerned procuring entity from a set of pre-selected suppliers or consultants with known experience and proven capability on the requirements of the particular contract


Alternative Modes of ProcurementLimited Source Bidding or Selective

Bidding

Procurement of highly specialized types of goods and consulting servicesProcurement of major plant components to maintain uniform quality and performance of the plant as a whole


Alternative Modes of ProcurementDirect Contracting or Single Source

Procurement

Applies only to procurement of goodsDoes not require elaborate bidding documentsSupplier is simply asked for a price quotation or a pro-forma invoice with the conditions of saleOffer may be accepted immediately or after some negotiations


Alternative Modes of ProcurementDirect Contracting or Single Source

Procurement

1. Proprietary items2. Critical plant components from a specific

manufacturer3. Sold by an exclusive dealer or

manufacturer with no suitable substitute


Alternative Modes of ProcurementRepeat Order

Need to replenish goods Procured under a contract previously awarded through Competitive Bidding


Alternative Modes of ProcurementRepeat Order

1. Same contract prices2. Not a result of splitting3. Within six (6) months from the date of the

Notice to Proceed of the original contract4. Not to exceed twenty-five percent (25%) of

the quantity of each item in the original contract


Alternative Modes of ProcurementShopping

Submission of price quotations Readily available off-the-shelf goods or ordinary/regular equipment Procured directly from suppliers of known qualifications



1. Unforeseen contingency requiring immediate purchase but not to exceed P50,000.00

2. Ordinary or regular office supplies and equipment not available in the Procurement Service not to exceed P250,000.00



Not as a result of splittingAmounts subject to periodic review by the GPPB


Alternative Modes of ProcurementNegotiated Procurement

Directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant Conditions in law and IRR are exclusive



1. Second Bid Failure2. Imminent danger to life or property during a

state of calamity3. Time is of the essence arising from natural or

man-made calamities or 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



4. Take-over of contracts 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

5. Adjacent or Contiguous contract to an on-going infrastructure project



6. Inter-agency purchase of goods7. Individual consultants that are highly

technical or primarily confidential8. Major defense equipment for use by

the AFP


Outside the Coverage of RA 9184

1. Acquisition of Real Property (RA 8974)

2. BOT Law (RA 6957, as amended by RA 7718)


G-EPS

Single Portal General Features


Remedies and Judicial Review

1. Ineligibility2. Failed Bid or Unaccepted Bid3. Post-Disqualification4. Defective Conduct of Bidding5. Judicial Review


Criminal/Administrative

SanctionsFor Bidders

1. Rigging2. Misrepresentati

on


Criminal/Administrative SanctionsFor Head/BAC/TWG

1. Premature Opening of Sealed Bid2. Delaying screening eligibility, opening

of bids, evaluation and post evaluation of bids, and awarding of contracts beyond the prescribed periods


Criminal/Administrative SanctionsFor Head/BAC/TWG

3. Unduly influencing or exerting undue pressure

4. Splitting5. Abuse of power to reject bids