This publication has been reviewed by the Philippine Government Electronic Procurement System

Rationale:

The Philippines has been perceived to be one of the most corrupt nations in Asia. This public perception may have stemmed from reports and studies of corruption in public procurement. Thus, in 2003, the government, together with non-governmental organizations, spearheaded the enactment of a comprehensive law that will cover all government purchases, whether domestic or foreign. Said law, most commonly referred to as the 2003 Government Procurement Reform Act, includes such important features such as participation of civilian observers and an electronic portal called the Philippine Government Electronic Procurement System (PhilGEPS). The implementation of the law is still said to be in its infancy stage, requiring information about the law with the general public and the latters participation in the quest for a more transparent public procurement system.

Description: This is a module designed to assist trainors in the World Bank-Knowledge for Development Center (KDC) Project on Transparency in Public Procurement. It covers the Philippine public procurement processes and systems including its laws, implementing rules and regulations, issuances and directives which are adopted by the Government Procurement Policy Board (GPPB) and the Philippine Government Electronic Procurement System (PhilGEPS). These agencies are under the countrys Department of Budget and Management.

Target Audience: With special emphasis on the PhilGEPS, this module aims to streamline the trainings conducted by KDC branches in the Philippines as part of their endeavor to impart the basic principles on the countrys public procurement system to young people aged 12-24 years old. The training envisions that young people will appreciate how transparency can be promoted in the public procurement system, both in its ideal and practical applications. In addition, the

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training will help them effectively gather and provide data as they actively participate in measures to promote transparency in government transactions and expenditures. Young people are an ideal target audience for this endeavor primarily because the quest of nation-building does not border age. The KDCs are established for the purpose of maximizing the participation of the youth sector in important good governance initiatives, particularly in promoting transparency in public procurement.

Goals and Objectives: At the end of the training, it is envisioned that young participants are able to: Know the basic principles of a sound public procurement system like transparency, integrity and efficiency; Know the basic principles and processes involving the Philippines public procurement system under the new Government Procurement Reform Act, its implementing rules and regulations, and other related government issuances; Know how the PhilGEPS works; Identify red flags in actual procurement processes; Identify compliance of bidders and government agencies with existing procurement laws by viewing PhilGEPS; Fill out a standard PhilGEPS questionnaire regarding the use of PhilGEPS in specific local government units; Promote the principle of transparency in public procurement. If called for, act as civilian observers in any public bidding.

Outline: I. Introduction to public procurement A. Definitions B. Principles of a Sound Public Procurement System C. History of Philippine Public Procurement
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II. The Public Procurement System in the Philippines A. Special Features a. Comprehensive Law b. Civilian Observers c. PhilGEPS d. Bids and Awards Committee e. Coverage of National and Local Governments B. Types of Procurement Covered a. Procurement of Goods b. Procurement of Infrastructure Projects c. Procurement of Consulting Services C. The Procurement Process Competitive Bidding a. Pre-procurement Conference b. Invitations to Bid c. Pre-bid Conference d. Submission of Bids and Bid Opening e. Bid Evaluation f. Post-Qualification g. Award D. The Procurement Process- PhilGEPS a. Nature b. Features c. Process E. Red Flags in the Bidding Process a. Same Supplier/Contractor Gets the Award Repeatedly b. No Posting of Invitations to Bid c. No Posting of Bid Bulletins d. No Pre-bid Conference e. No Opening of Bids in Public f. No Announcement of Lowest Complying Bid (LCRB/HCRB) g. Award of Contract to BAC Members Relative
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h. Winning Bid Too Low i. Bid Accepted after Close of Bids; BAC accepts modifications of bids after the close of bids F. Penalties for Violations of Transparency a. For government employees b. BAC members c. Other government employees d. For suppliers/contractors e. For other private persons acting in connivance G. NGOs and government agencies where citizens can help in promoting transparency in public procurement

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TRAINING PROPER

I.

Introduction to Public Procurement A. Definitions 1. Public procurement This is the process by which government buys goods and services from suppliers (from both public and private) for the needs of its people. 2. Public Bidding Definition under R.A. 9184: A method of procurement which is open to

participation by any interested party and which 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, the specific requirements and mechanics... Explanation for the Trainor: This is the process of knowing which person or company should government buy goods and services. Under Philippine law, that would be the one that meets the minimum specifications at the lowest price. 3. Bid

Definition under R.A. 9184: This refers to a signed offer or proposal submitted by a supplier, manufacturer, distributor, contractor or consultant in response to the Bidding document.

Explanation for the Trainor: This is an offer or proposal to enter into a contract with government. It is given by a supplier, called the bidder, to the government agency who does the bidding.

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4. Bidder

Definition under R.A. 9184: An eligible contractor, manufacturer, supplier, distributor and/or consultant competing for the award of a contract in any government procurement. A contractor, manufacturer, supplier, distributor or consultant is said to be eligible if it meets all the eligibility requirements issued by the procuring entity. Explanation for the Trainor: This refers to a person who submits the bid either for himself or for another person who has given him the authority to do the submission before the government agency concerned.

5. Goods Definition under R.A. 9184: These refer to all items, supplies, materials and general support services, except consulting services and infrastructure projects, which may be needed in the transaction of public businesses or in the pursuit of any government undertaking, project or activity, whether in the nature of equipment, furniture, stationery, materials for construction, or personal property of any kind, including non-personal or contractual services such as the repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security, and related or analogous services, as well as procurement of materials and supplies provided by the procuring entity for such services. The term related or analogous services shall include, but not be limited to, lease or purchase of office space, media advertisements, health maintenance services, and other services essential to the operation of the procuring entity.

Explanation for the Trainor: This refers to all items, supplies, materials and general support services which may be needed by government and its agencies for its activities. Goods can be equipment, furniture, stationery, materials for construction, or property of any kind, including repair of equipment and furniture, trucking, hauling, janitorial, security, and related services.

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6. Infrastructure Definition under R.A. 9184: These include the construction, improvement, rehabilitation, demolition, repair, restoration or maintenance of roads and bridges, railways, airports, seaports, communication facilities, civil works components of information technology projects, irrigation, flood control and drainage, water supply, sanitation, sewerage and solid waste management systems, shore protection, energy/power and electrification facilities, national buildings, school buildings, hospital buildings, and other related construction projects of the government. For purposes of, and throughout this IRR-A, the term infrastructure projects shall have the same meaning as and shall be used interchangeably with civil works. Explanation for the Trainor: This includes the construction, improvement, development, demolition, repair, or maintenance of roads and bridges, railways, airports, seaports, communication facilities, irrigation, flood control and drainage, water supply, sanitation, national buildings, school buildings, hospital buildings, and other related construction projects of the government.

7. Bids and Awards Committee (BAC)

This is a group of at least five (5) but not more than seven (7) persons who are all government officials occupying plantilla positions. They are in charge of the conduct of bidding for government purchases.

8.

Consulting Services. These are services for Infrastructure Projects and other types of projects or

activities of the Government requiring adequate external technical and professional expertise that are beyond the capability and/or capacity of the Government to undertake such as, but not limited to: (i) advisory and review services; (ii) pre-investment or feasibility studies; (iii) design; (iv) construction supervision; (v) management and related services; and (vi) other technical services or special studies.
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B. Principles of a Sound Public Procurement System Transparency This is a principle that allows all interested participants (government agency, private company and the general public) to know and understand the processes of awarding government contracts. Under Philippine law, competitive bidding is preferred in all types of government procurement. Efficiency This refers to spending the least in buying what is needed. Integrity This involves rules to ensure that the bidding is within established rules and regulations. Competition This ensures that everyone has an equal opportunity to take part in government transactions. Best Value and Customer Satisfaction This ensures that government gets the best value for the taxpayers money. Uniformity This ensures that the law applies to all government purchases and transactions Public Monitoring

This guarantees that contracts are awarded pursuant to the provisions of the Act and this IRR-A, and that all these contracts are performed strictly according to specifications.

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C. History of Philippine Public Procurement Is there a law that applies to government purchases? Yes, Republic Act 9184 which is also known as the Government Procurement Reform Act of 2003. It is the first law that applies to all government purchases whether national government or local government units such as provinces, cities and municipalities including NGAs, GOCCs, GFIs, LGUs, Provinces, Cities, Municipalities and Barangays. What was government procurement like before Republic Act 9184? Since 1901, government purchases of supplies, materials and equipment have been done through public bidding. The purchase of infrastructure and consulting services were governed by separate laws. It was only in 2001 when government decided to put together all procurement rules and procedures. Finally, on January 10, 2003 President Gloria Macapagal-Arroyo signed into law what is today the Government Procurement Reform Act (RA 9184). It took effect on October 8, 2003. II. The Public Procurement System of the Philippines A. Special Features a. Comprehensive Law Technical Statement: Republic Act 9184 is the first law that applies to the Procurement of Infrastructure Projects, Goods and Consulting Services, regardless of source of funds, whether local or foreign, by all branches and instrumentalities of government, its department, offices and agencies, including government-owned and controlled corporations and local government units. Explanation for the Trainor: Republic Act 9184 is the first law that covers all government purchases whether goods, infrastructure or consulting services.

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b. Civilian Observers Who are civilian observers? They are persons who are not government officials or employees who are invited by the BAC to be present in its proceedings. At least two civilian observers are invited by the BAC.

What is the role of civilian observers in the procurement process? The civilian observers serve as a watchdog of the general public in government transactions. They assist in ensuring the government purchases meet minimum specifications. They also function as a deterent to possible anomalous transactions during the bidding process.

Who are qualified to be civilian observers? R.A. 9184 Definition: Any person who shall come from a duly recognized private group in a sector or discipline relevant to the procurement at hand and is familiar with the procurement law but has no direct or indirect interest in the contract to be bid our; another person who shall come from an NGO. Explanation for the Trainor: Any person who is knowledgeable on the subject matter and processes of the contract, and has no interest in the said contract.

Where do civilian observers come from? They include: 1. a representative from a private group which has knowledge of the procurement to be done, for example: a. for infrastructure projects National Constructors Association (PCA)

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The Philippine Institute of Civil Engineers b. for goods a member of the Chamber of Commerce (an organization of businesspersons) 2. a representative from a non-government organization (an organization of persons who organize for a cause, usually to help society) like Procurement Watch, Inc or Transparency and Accountability Network.

What are the responsibilities of the observers? The observers have the following responsibilities: 1. Prepare a report indicating their observations on the bidding activity conducted by the BAC. 2. Sign documents if they believe that the bidding activity followed the correct procedure or has complied with the law.

What if the BAC does not allow the observer to sign? The observer must tell the BAC that he is required by law to sign.

If there is no observer present during the bidding process, can the BAC proceed with the public bidding? Yes. The BAC can proceed with the public bidding. However, it is necessary that a written invitation should have been given to the observers at least two (2) days before the scheduled bidding. c. PhilGEPS Technical Statement: This is the central portal that serves as the primary and definitive source of information on all government procurement. This is a website where government can publish what goods, consulting services and infrastructure projects it needs and where suppliers, private contractors and companies can search
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and view these procurement opportunities including the result. In the full implementation of PhilGEPS, these suppliers may submit their offer or bid online. The website address is www.philgeps.net. Explanation for the Trainor: This is a website where government can publish what goods and services it needs and suppliers can submit their offer to. It is at www.philgeps.net. Note: There are five (5) phases in the law for making relevant procurement information available in PhilGEPS. To date, PhilGEPS is still on Phase 1. d. Bids and Awards Committee (BAC) What is the composition of BAC for national agencies, departments, bureaus, or barangays? The regular members consist of the chairman and four other members (2 regular and 2 provisional: representative of end-user and one with technical expertise). For National Government agencies, departments, bureaus, offices, or

instrumentalities of the Government, including the judiciary and legislative branches, constitutional commissions, SUCs, GOCCs, and GFIs, the following are their BAC members: Regular Members: 1. Chairman, who is at least a third ranking permanent official of the procuring entity; 2. An officer, who is at least a fifth ranking permanent official, with knowledge, experience and/or expertise in procurement who, to the extent possible, represents the legal or administrative area of the procuring entity, provided that in the case of bureaus, regional offices and subregional/ district offices, BAC members shall be at least a third ranking permanent personnel; 3. An officer, who is at least a fifth ranking permanent official, with knowledge, experience and/or expertise in procurement who, to the extent possible, represents the finance area of the procuring entity, provided that in the case of bureaus, regional offices

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and sub-regional/district offices, BAC members shall be at least a third ranking permanent personnel; Provisional Members: 4. An officer who has technical expertise relevant to the procurement at hand, and, tothe extent possible, has knowledge, experience and/or expertise in procurement; and 5. A representative from the end user unit who has knowledge of procurement laws and procedures.

For Local Government Units, the BAC shall be composed of one (1) representative each from the regular offices under the Office of the Local Chief Executive such as, but not limited to the following: Office of the Administrator, Budget Office, Legal Office, Engineering Office, General Services Offices. The end user office shall always be

represented in the BAC. The Chairman of the BAC shall be at least a third ranking permanent official of the procuring entity. The members of the BAC shall be personnel occupying plantilla positions of the procuring entity concerned.

Who will designate the members of the BAC? The head of the procuring entity or the Local Chief Executive (City or Municipal Mayor, Provincial Governor, Barangay Chairman) shall determine the members of the BAC. Can the head of the procuring entity or the local chief executive serve as the chairman of the BAC? No. Can the head of the procuring entity refuse to create a BAC? No. Are relatives of the City or Municipal Mayor disqualified to be a BAC member?

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Yes, to avoid conflict of interest. They might favor a bidder who is a supporter of the mayor. The prohibition extends to the fourth civil degree (first cousin). The fourth civil degree is determined by counting from the common ascendant. To illustrate: The grandson is the BAC member. From the grandson, go up to his father (1) (ascendant) and then to the grandfather (2)(common ascendant). Then from the common ascendant, go down to his fathers sister (3) and go down to her daughter (4) who is the grandsons first cousin.

What is the term of office of BAC members? Regular BAC members shall have a fixed term of one (1) year counted from the date of designation. This can be renewed. Who can question the composition of the BAC if it does not conform to the requirements of the law? Any party, such as the Commission on Audit (COA) and the observers.
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What are the functions of the BAC? The BAC undertakes the procurement process (planning to award of contract) and ensures compliance with the law. e. Coverage for National and Local Governments The procurement reform act covers all government purchases (national and local governments). B. Types of Procurement Covered The law covers the procurement of infrastructure projects, goods and consulting services, regardless of source of money, whether local or foreign, by all branches and instrumentalities of government, its departments, offices and agencies, including government-owned and/or-controlled corporations and local government units. a. Procurement of Goods Goods refer to all items, supplies, materials and general support services which may be needed in the transaction of the public businesses or in the pursuit of any government undertaking, project or activity. Excluded in the procurement of goods are consulting services and infrastructure projects. b. Procurement of Infrastructure Projects These include the construction, improvement, rehabilitation, demolition, repair, restoration or maintenance of the following: roads and bridges railways airports seaports communication facilities civil works components of information technology projects

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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 other related construction projects of the government

c. Procurement of Consulting Services These refer to services for projects or activities of the government which require professional expertise that cannot be rendered by government employees. General Mode of Procurement Minimum Requirements All procurement, regardless of cost, shall be conducted through competitive bidding. However, procuring entities may use the following alternative methods, when the situation requires: 1. Limited Source Bidding otherwise known as selective bidding, is a

method of procurement of goods and consulting services, that involves direct invitation to bid by the concerned procuring entity from a set of pre-selected suppliers or consultants. These suppliers or consultants are known to have

experience and proven capability to fulfill the requirements of the particular contract. The pre-selected suppliers or consultants come from a list maintained by the relevant government authority that has expertise in the type of procurement
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concerned. This list should have been submitted to the GPPB, and the government authority should ensure that the list is updated. The BAC of the concerned procuring entity shall directly send to the pre-selected bidders the invitation to bid, which should already indicate the relevant information required to enable the bidders to prepare their bids. 2. Direct Contracting or single source procurement is a method of

procurement of goods that does not require elaborate bidding documents. The supplier is simply asked to submit a price quotation or a pro-forma invoice together with the conditions of sale. The offer may be accepted immediately or after some negotiations. 3. Repeat Order is a method of procurement of goods from the previous

winning bidder, whenever there is a need to replenish goods procured under a contract previously awarded through Competitive Bidding. Repeat orders from the previous winning bidder may be resorted to by procuring entities only in cases where the procured item is clearly superior to the other bids in terms of the price quoted equipment reliability, availability of spare parts, after-sales service and delivery. It shall not exceed 25% of the quantity in the original contract. 4. Shopping is a method of procurement of goods where the procuring entity

simply requests for the submission of price quotations for readily available offthe-shelf goods or ordinary/regular equipment to be procured directly from suppliers of known qualifications.

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5.

Negotiated Procurement is a method of procurement of goods,

infrastructure projects and consulting services, where the procuring entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant. Does R.A. 9184 cover foreign-assisted projects? Yes, R.A. 9184 covers foreign-assisted projects. However, any international agreements involving these projects shall be observed. This means that if the project is the effect of a bilateral agreement between the Philippines and another country, the provisions of that bilateral agreement will govern. To date, the implementing rules for procurement of foreign-funded projects is still being drafted.

C. The Procurement Process: Competitive Bidding The procurement process takes at least thirty (30) calendar days.
Pre-Procurement Conference Preliminary Examination

Advertisement for Competitive Bidding

Bid Evaluation and Ranking

Pre-Bid Conference

Post-Qualification

Submission and Receipt

Notice of Award

Public Bid Opening

Notice to Proceed

Note: Baseline is for goods. Timelines change for infrastructure and consulting services.
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STEP 1 - Pre-Procurement Conference R.A. 9184 Definition: A pre-procurement conference is the forum where all officials involved in the procurement discuss all aspects of a specific procurement activity. The discussion covers the technical specification, the ABC, the applicability and appropriateness of the recommended method of procurement and the related milestones, the bidding documents and availability of the pertinent budget release for the project. This shall be attended by the BAC, the unit or officials who prepared the bidding documents and the draft Invitation to Bid, as well as the consultants hired by the agency concerned and the representative of the end-user. Explanation for the Trainor: A pre-procurement conference is a meeting between the government and any resource person knowledgeable on the procurement involved. In this stage, the government agency confirms whether there is money to pay any person who wins the bid. The specific good or service to be bought is also reviewed.

When is a Pre-Procurement Conference held?

The pre-procurement conference must be held at least seven (7) days before the advertisement of the invitation to bid for the general public.

When is a Pre-Procurement Conference not Necessary? The holding of a pre-procurement conference may not be required for small procurements like procurement of goods costing Php2M and below; procurement of infrastructure projects costing Php5M and below; and the procurement of consulting services costing Php1M and below.

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STEP 2 - Advertisement Invitation to Apply for Eligibility of Bid (IAEB) The Invitation to Bid is a statement from the government agency that wishes to purchase goods, consulting services or infrastructure. It shall contain: (a) A brief description of the project, goods, or services to be procured; (b) A general statement on the criteria to be used for choosing the contractor; (c) The date, time and place of the deadlines for the submission and receipt of the eligibility requirements, the pre-bid conference, if any, the submission and receipt of bids, and the opening of bids; (d) The Approved Budget for the Contract to be bid; (e) The source of funds; (f) The period of availability of the Bidding Documents, and the place where these may be found. The invitations to bid of projects whose ABC is below 1M (for consulting), 2M (for goods) and 5M (for works) shall be posted at least in the website of the procuring entity, if any, in PhilGEPS and in a public place within the procuring office.

Note: Place in powerpoint for IAEB for specifications.

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Bidding Documents

Definition under the Generic Procurement Manual: Bidding documents refer to documents issued by the procuring entity as the basis for bids. They contain all information necessary for a prospective bidder to prepare a bid for the infrastructure projects, goods and/or consulting services, required by the procuring entity. These shall clearly and adequately define, among others:

1. The objectives, scope and expected outputs and/or results of the proposed contract; 2. The technical specifications of the goods, infrastructure projects and consulting services to be procured; 3. Expected contract duration, the estimated quantity in the case of the procurement of goods, delivery schedule and/or time frame; 4. The obligations, duties and/or functions of the winning bidder; 5. The minimum eligibility requirements of bidders, such as track record to be determined by the head of the procuring entity.

STEP 3 - Pre-Bid Conference

What is a Pre-Bid Conference?

The pre-bid conference is a meeting between Bids and Awards Committee and the prospective bidders where they discuss matters related to the procurement, including rules and regulations.

It must be held for contracts with approved budget of at least one million pesos (P 1 Million) and upon written request of a prospective bidder.

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When do you hold a Pre-bid Conference?

The pre-bid conference must be held at least twelve (12) calendar days before the deadline for the submission of bids.

What is a Supplemental/Bid Bulletin?

Any prospective bidder intending to submit a bid must make a written request for clarification to the BAC at least ten (10) calendar days before the deadline for the submission and receipt of bids. The BAC must answer the questions by issuing a supplemental/bid bulletin to be made available to all those who have properly secured the bidding documents at least seven (7) calendar days before the deadline for the submission and receipt of bids.

The procuring entity may, in its own initiative, also issue supplemental/bid bulletins to clarify any provision of the bidding documents not later than seven (7) calendar days before the deadline for the submission and receipt of bids. Any change in the bidding documents must be labeled as an AMENDMENT.

The supplemental/bid bulletin should be posted on the website of the procuring entity concerned and on the PhilGEPS, within the same timetable.

All those who have signified interest or who secured bid documents must be furnished with a copy of the bid bulletin.

STEP 4 - Submission of Bids and Bid Opening

How is a bid submitted? Each bidder shall submit three sealed envelopes for the bid(1) one for eligibility (2) one for the technical component containing all relevant documents and (3) for the financial component which includes the price for the project.
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During the opening of bids, the eligibility envelopes will be opened first using the pass/fail criteria. If the bidder passes the criteria, his two other envelopes (representing technical and financial components) will be opened. The price must not go beyond the approved budget for the contract (also called ABC). STEP 5 - Bid Evaluation and Ranking This is the opening of the technical envelopes. If the bidder complies with the technical specifications of the project, the BAC opens the financial envelopes and ranks the remaining bids according to price. The bidder with the lowest bid is ranked first. Lowest Calculated Bid for goods and infrastructure and for Consulting Services, Highest Rated Bid.

Bidder 2

Bidder 1

STEP 6 - Post-Qualification Post-qualification is the stage where the Lowest Calculated Bid for goods and infrastructure projects or the Highest Rated Bid for consulting services is checked and validated to ensure that it has passed all the requirements and qualification as stated in the bidding documents. If it does, it shall be referred to as the Lowest Calculated Responsive Bid or the Highest Rated Responsive Bid.

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What happens if the Lowest Calculated Bid or the Highest Rated Bid does not meet all the criteria? The BAC shall look at the bidder with the second Lowest Calculated Bid or Highest Rated Bid. If the bidder with the second Lowest Calculated Bid or Highest Rated Bid does not meet the criteria either, the same procedure shall be repeated until the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid is finally determined.

Lowest Calculated Bid/ Highest Calculated Bid

Second Lowest Calculated Bid/Second Highest Calculated Bid

Third Lowest Calculated Bid/ Third Highest Calculated Bid

When does a Failure of Bidding happen? There is a Failure of Bidding if a) no bids are received; b) all prospective bidders are declared ineligible; c) all bids fail to comply with all the bid requirements or fail post-qualification or in consulting services, no successful negotiation, or d) the bidder with the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid refuses to accept the award with no valid justification.

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What happens when there is a Failure of Bidding? The contract shall be re-advertised and re-bid. The BAC shall observe the same process and set the new periods according to the same rules during the first bidding. When should post-qualification be conducted?

The post-qualification process must be conducted and completed within seven (7) calendar days from date of determination of the HRB/LCB. This period may be extended but no case shall the period exceed thirty (30) calendar days.

STEP 7 - Award The contract is awarded after the approval by the head of the procuring entity of the recommendation of the BAC. This is done within fifteen (15) days from the determination of the Lowest Calculated Responsive Bid or the Highest Rated Responsive Bid.

When must the winning bidder and the procuring entity enter into a contract?

The winning bidder and the procuring entity must enter into a contract immediately after all documents needed for the contract have been submitted. The parties must sign the contract within ten (10) calendar days from receipt by the winning bidder of the Notice of Award.

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D. The Procurement Process: PhilGEPS 1. Nature To ensure transparency and efficiency in government transaction, the electronic procurement system called PhilGEPS was established. It is the website that contains the required information about all government procurement. May add:

To promote transparency and efficiency, information and communications technology shall be utilized in the conduct of procurement procedures. Accordingly, there shall be a single portal that shall serve as the primary and definitive source of information on government procurement. All procuring entities are required to use PhilGEPS in all their procurement activities. To fully comply with the requirement and to promote transparency and efficiency, procuring entities are mandated to post all bid notices, notices of awards of contract and other related information at all times.

2. Features of PhilGEPS

a. Electronic Bulletin Board

PhilGEPS has a centralized electronic bulletin board. All government agencies are required to post the following in the PhilGEPS Electronic Bulletin Board:

Invitation to Bid and all notices of other procurement opportunities Supplemental/Bid bulletins Contract awards, the corresponding notices of award, including the reasons for award of contract Results of bidding and related information Other notices, announcements, information for interested parties

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Bid matching of procurement opportunities with appropriate PhilGEPS registered suppliers is being done automatically by the system once a government buyer posts an opportunity.

To date, bid opportunities, notices of award, supplemental bids bulletins, results of bidding and other related information are found on the website.

b. Registry of Manufacturers, Suppliers, Distributors, Contractors and Consultants

PhilGEPS has a database of all manufacturers, suppliers, distributors, contractors and consultants registered under the system.

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c. Electronic Catalogue

PhilGEPS includes a list of common-use goods, supplies, materials and equipment called Electronic Catalogue. Procuring entities are required to procure common-use goods, supplies, materials and equipment through the Electronic Catalogue in the PhilGEPS.

What is the effect of a failure to post a procurement opportunity?

Failure to post a procurement opportunity will make the contract null and void. The government office that failed to post the procurement opportunity will be fined and may face imprisonment.

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Steps: This is an illustration of the steps involved:

Registration of a procuring agency

Username and Password given

Posting of Procurement Opportunity or Invitation to Bid

Pre-Bid Conference

Submission of Bid

Bid Evaluation and Ranking

Post-Qualification

Notice of Award

Notice to Proceed

Preparation of Contract/Purchase Order

Delivery of Goods and Technical Inspection

Payment Processsing
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V. Red Flags in the Bidding Process 1. Actual Bidding Process a. Same Contractor/Supplier gets the award repeatedly Philippine procurement law promotes the principle that each interested person or corporation can have equal opportunity to bid for any government contract. If a bidder is repeatedly awarded a contract, the situation creates a suspicion that such contractor is given special consideration above all others because of his relationship with the members of the BAC or the city or municipal officials. It can also indicate that there is a possibility of corruption. If this happens, the observers who are present during the bidding should increase their vigilance to make sure that no bidder is favored over the others.

b. No invitations to bid are found in public places, any newspaper of national circulation or the PhilGEPS website and a contract is awarded to a person If a project is awarded by government without an invitation to bid was posted as required by law, a violation of the procurement laws exists and the opportunity was not made available to all. This also creates a suspicion that the contractor is favored

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by government over all others or that government officials probably received a special gift in cash or in kind. Observers in actual bidding should ask for a copy of the invitation to bid or look at the PhilGEPS website to make sure that the posting requirement has been complied with. c. No bid bulletin posted in public places, any newspaper of national circulation or the PhilGEPS website and a contract is awarded to a person All changes in the invitation to bid or bid opportunities made after pre-bid conference should be posted in PhilGEPS. At the same time, the BAC must furnish copies of the bid bulletin to all who have signified interest to bid or who have secured copies of the bid documents. The notice of the changes is important to the bidding process because the bidders who submitted before the issuance of the Supplemental/Bid Bulletin are still allowed to modify their bids to fit the new requirements. Without the issuance of the Supplemental/Bid Bulletin, fair competition is denied. As a review, it is required that the Invitation to Bid be published in a newspaper of general circulation, at least once. It must also be posted continuously for seven (7) calendar days in the website of the procuring entity, if there is any, and in PhilGEPS, as well as in a public place within the procuring entity.

d. No pre-bid conference Pre-bid conference is required for purchases of Php1M pesos and above for goods, 2M pesos for consulting services and Php5M pesos for infrastructure. It is held at least twelve (12) calendar days before the deadline for the submission of bids. If no pre-bid conference is conducted as required, there is a violation of procurement laws and the bidders do not get the chance to clarify any items in the bidding documents. Any person observing the bidding can ask for information if this has been done. At the PhilGEPS website, observers can check whether a pre-bid conference has been indicated by looking at the procuring agencys site at least twelve (12) days before the
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indicated deadline for submission of bids.

A bid bulletin, if any, shall be

posted/issued within this period but not later than seven (7) calendar days before the deadline for submission of bids. e. No bidders and observers in the opening of bids Transparency is demonstrated through the presence and participation of observers in all stages of the procurement process. Opening of sealed bids is one of the most important steps in the bidding process because it shows who among the bidders complied with the requirements. If the opening of bids is done privately, there is no transparency and this may make the bidding questionable. f. No announcement of award An announcement tells all bidders who won the bids and how much the contract price is. It allows the bidders to verify on the spot whether their respective bids are indeed higher than the declared lowest bidder and if the lowest bidder met the minimum requirements under the law. g. Award of contract to relative or favored person of the head of the procuring entity, BAC chair or members, members of the technical working group (TWG), BAC secretariat, members of the project management office (PMO) and designers of the project The law prohibits the award of contract to the relative of the BAC member within the fourth civil degree. Awards to a favored person limit competition. Contracts awarded to those who are close to officers and employees of the procuring entity who have direct access to information may substantially affect the results of the bidding. This limits competition and increases the risk of corruption. h. Winning bid substantially too low The reason a government agency must come up with the Approved Budget for the Contract (ABC) is to set the reasonable amount that it can pay for its projects. It reflects the most advantageous price for the government and makes sure that

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taxpayers money is spent wisely. When the bid becomes too low, the quality of the project may suffer.

i.

Bids accepted after deadline of bid submission Acceptance of bids after the deadline of bid submission creates that suspicion that the contractor who submitted it is favored. The deadline for submission determines the closure of the bids, where no one is allowed to submit anymore. Qualified bidders, in the case of procurement of infrastructure and consulting services, are already determined even before the bids are closed. Only they can submit their respective bids. If anyone is allowed to submit a bid after the deadline, his eligibility was surely not evaluated beforehand. The integrity of the entire bidding process will be compromised.

j.

Always shopping Shopping is an alternative mode of procurement used when there is an unforeseen contingency requiring immediate purchase for an amount that shall not exceed fifty thousand pesos (P50,000) or for procurement of ordinary or regular office supplies and equipment not available in the Procurement Service involving an amount not

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exceeding two hundred fifty thousand pesos (P250,000). The law prohibits the use of this mode to split huge contracts. When a government agency frequently resorts to shopping, it creates a suspicion that there are certain contracts that have been split to favor certain contractors.

VI. Penalties for violations of transparency What are the penalties for violations of R.A. 9184? Public officers who commit any of the acts prohibited by R.A. 9184 can be imprisoned for six (6) to fifteen (15) years. They can also be punished under other laws like the Anti-Graft and Corrupt Practice Act (RA 3019). Aside from staying in prison, they will be required to pay the government for the profit they derived from the transaction. In addition, a violator may be suspended from work for one (1) year if he committed the offense for the first time, and suspensions of two (2) years for the second offense. Can procuring entities be held liable if they decide not to enter into a contract? No, the procuring entity reserves the right to reject any bid, declare a failure of bidding, or not award the contract: a) when the BAC failed to follow the applicable procurement laws; b) when there is collusion (a connivance between the BAC and a bidder); or, c) when the project is no longer needed. When can a member of the BAC be held liable, before or after the award of the contract? A BAC member can be held liable before and after the award of the contract.

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VII. NGOS and government agencies where citizens can assist in promoting transparency in public procurement There are citizens who have formed groups to help fight corruption in public procurement. You can join any of them. 1. Procurement Watch Incorporated Procurement Watch Incorporated (PWI) is a civil society organization that was formed to fight graft and corruption in public procurement. PWI does this through advocacy, research, training, and partnerships. PWI helped to lobby for important laws like the Procurement Reforms Act. Today, PWI monitors public biddings of various national government agencies and submits their observations to the appropriate government offices. Their website is www.pwi.org. 2. G-Watch G-Watch, or Government Watch, is an anti-corruption organization based in the Ateneo School of Government. They monitor the contract implementation side of procurement by the different departments of the government. Their website is www.gwatch.org. 3. Coalition Against Corruption The Coalition Against Corruption is a group composed of church, business, professional and civil society organizations. It aims to implement counter-corruption projects, initially in the area of procurement and delivery of essential public services. One of the initial projects of the coalition is the training of Bids and Awards Committee observers. 4. Transparency and Accountability Network The Transparency and Accountability Network (TAN) is a civil society coalition formed for the purpose of exchanging information about developments and initiatives in transparency and accountability. It has a membership base of 25 organizations composed

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of the academe, private sector, professional and civil society groups with strong interest in anti-corruption and good governance. Their website is www.tan.org.

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GLOSSARY OF ACRONYMS USED

WB-KDC BAC PhilGEPS GPPB R.A. NGO COA IAEB HRRB LCRB HRB LCB TWG PMO PWI G-Watch TAN

World Bank-Knowledge for Development Center Bids and Awards Committee Philippine Government Electronic Procurement System Government Procurement Policy Board Republic Act Non-Governmental Organization Commission on Audit Invitation to Apply for Eligibility to Bid Highest Rated Responsive Bid Lowest Calculated Responsive Bid Highest Rated Bid Lowest Calculated Bid Technical Working Group Procurement Management Office Procurement Watch Incorporated Government-Watch Transparency and Accountability Network

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