Updates on the Revised

Implementing Rules and

Regulations of R.A. 9184
Association of Government
Accountants
of the Philippines (AGAP)
The Legend Palawan
Puerto Princesa, Palawan
21 October 2011
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What is Procurement?

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 What is Procurement?
Procurement refers to the acquisition of
goods, consulting services, and the
contracting for infrastructure projects by
procuring entity. (Sec. 5(aa), IRR, R.A. 9184)

Procurement means the acquisition by any

means of goods, construction or services.
(UNCITRAL Model Law on Procurement)

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 What is Procurement?
Acquisition means the acquiring by contract
with appropriated funds of supplies or
services (including construction) by and for
the use of the Federal Government through
purchase or lease, whether the supplies or
services are already in existence or must be
created, developed, demonstrated, and
evaluated. (FAR, US)

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 What is Procurement?
Procurement encompasses the whole process
of acquiring property or services. It begins when
an agency has identified a need and decided on
its procurement requirement. Procurement
continues through the processes of risk
assessment, seeking and evaluating alternative
solutions, contract award, delivery of and
payment for the property or services and, where
relevant, the ongoing management of a contract
and consideration of options related to the
contract. (CPG, 2008) 5
 What is Procurement?
Procurement we define as the whole of life-
cycle process of acquisition of goods,
services and works from third parties
beginning when a requirement is first defined
and ending with the ultimate disposal of an
asset or end of a service contract. (P.
Gershon, OGC, UK)

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 What is Procurement?
Value for Money is the optimum
combination of whole of life costs and quality
to meet the customers requirements (P.
G.)

It must be governments policy that all public

procurement, should be based on value for
money, having due regard to propriety and
regularity. (P.G.)
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 What is Procurement?
LCC Life Cycle Costing

Cost should consider all costs throughout

the life-cycle acquisition cost, utility costs
(energy/water consumption, maintenance),
and disposal costs.

C to G vis--vis C to C
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 What is Procurement?
5 Rights in Public Procurement:
Right Source
Right Quality Satisfaction of End-User?
Quality may refer to the overall relationship and
integration of effects of performance, lifespan,
integrity, durability, and conformity of the goods
with the technical requirements of the project.
Right Quantity (J.I.T / Lean Procurement)
Right Price
Right Time/Delivery
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Updates on the IRR

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IRR Revisions
Background

Harmonization
Alignment with International Best Practices

Address the Needs of PEs

Concerns raised by procuring entities, bidders and
observers

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IRR Revisions
Scope and Application (Sec. 4)

All domestically-funded procurement activities

All foreign-funded procurement activities, unless

otherwise stated in the treaty, international or
executive agreement
But procurement funded thru foreign grants are
excluded

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IRR Revisions
Scope and Application (Sec. 4)

GOP negotiating panels shall:

Default position - use of the IRR or selection thru

competitive bidding
Explain in writing if treaty, international or executive
agreement states otherwise

Revised IRR defines treaty, international or

executive agreements, foreign loans & grants
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IRR Revisions
Procurement Planning (Sec. 7)
No procurement shall be undertaken unless it is in
accordance with the approved APP

End-user units shall prepare their PPMP which shall be

submitted to the budget office

Budget office shall evaluate and include in budget proposal

for approval of HOPE

Upon approval by HOPE, budget office shall furnish a copy

of budget proposal and PPMP to BAC Secretariat

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IRR Revisions
Procurement Planning (Sec. 7)
BAC Secretariat shall review and consolidate into the
proposed APP

Upon approval of GAA/corporate budget/ordinance, end-

user shall revise/adjust PPMP and submit to BAC
Secretariat

BAC shall finalize modes of procurement under the

proposed APP

APP shall be approved by HOPE or 2nd ranking official

designated by HOPE 15
IRR Revisions
Bids and Awards Committee (Sec. 11)

Alternate BAC member allowed:

Same qualification and term as principal
Attend meetings and receive honoraria
Accountability limited to their acts and decisions

Honoraria for BAC Secretariat subject to DBM

Rules

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IRR Revisions
Observers (Sec. 13)

Allows observers from cooperatives

Requires 3 days prior written notice for invitation of

observers

Requires observers to inhibit in case of actual or potential

conflict of interest

Access to documents upon signing of a confidentiality

agreement
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IRR Revisions
Advertising of Invitation to Bid (Sec. 21)

IAEB to Invitation to Bid (goods and infra) or

Request for Expression of Interest (consulting)

Includes posting in the website prescribed by the

foreign government/foreign or international
financing institution, for foreign-funded
procurement

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IRR Revisions
Pre-Bid Conference (Sec. 22)

May be extended at least 30 cd before bid

submission
Method, nature and complexity of contract
Encourage international participation

At the option of procuring entity, only

bidders who purchased bid documents are
allowed to attend or ask questions

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IRR Revisions
Eligibility Requirements (Secs. 23 & 24)

Reduced to 5-6 documents

Others to be submitted during

Post-qualification

Prior to Award of Contract

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IRR Revisions
Submission and Receipt of Bids (Sec. 25)

Two-Envelope System (Eligibility requirements included

in the Technical Proposal)

Documentary requirements trimmed down

Project related documents lumped into one document

In Infrastructure Projects, Technical (incl. eligibility

requirements) and Financial Proposals will now be
submitted at the same time 21
IRR Highlights
Bid & Performance Securities (Secs. 27 & 39)

Deleted certified check from acceptable forms

In general, bank issued securities must be issued

by a universal/commercial bank

However, in biddings conducted by LGUs, securities

may be issued by banks certified by BSP as
authorized to issue said instruments

Surety Bonds must be accompanied by certification from

Insurance Commission that issuer is authorized to issue
such security
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IRR Revisions
Form of Bid and Amt of Bid Security Amt of Performance
Performance Security (% = ABC) Security
(% = Contract Price)
a) Cash, cashiers/managers
check (issued by 5% (Goods & Consulting)
Universal/Commercial 2% 10% (Infra)
Bank
b)Bank guarantee/draft or
irrevocable LC
c) Surety bond callable upon 5% 30%
demand
d) Combination of the Proportionate to share Proportionate to share of
foregoing of form with respect to form with respect to the
the total amount of total amount of security
security

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 IRR Revisions
Bid & Performance Securities (Secs. 27 & 39)

Bidder has option to choose among acceptable

forms of security

Procuring entity may not limit options available to

bidders

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IRR Revisions
No Contact Rule (Sec. 32)

BAC, thru Secretariat, may request for clarification

of bid as long as it is in writing

Bidders response to the BACs inquiry must also

be in writing

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IRR Revisions
Post-qualification (Sec. 34)

3 cd from notice of LCB, submit the ff:

Tax clearance
Latest income and business tax returns
Certificate of PhilGEPS registration
Other appropriate licenses and permits required by
law and stated in the Bidding Documents.
Failure to submit on time / dubious veracity =
forfeiture of Bid Security / disqualification for
award 26
IRR Revisions
Notice of Award (Sec. 37)

Conditioned on the following:

If joint venture, submission of JVA
Posting of Performance Security
Signing of Contract
If required, approvals by higher authority

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IRR Revisions
Disclosure of Relations (Sec. 47)

Relatives within the 3rd civil degree of the

following shall be disqualified:
Head of the procuring entity
Members of the BAC, Secretariat and TWG
Head of the end-user unit or project management
office
Project consultants

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IRR Revisions
Alternative Methods of Procurement (Secs.
48 to 53)

Alignment with international best practices

Recognized additional instances of Negotiated
Procurement (e.g., procurement from UN Agencies,
Community Participation)
Increase in shopping/small value procurement
thresholds

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IRR Revisions
Alternative Methods of Procurement (Secs.
48 to 53)
Address concerns raised by stakeholders
Clearer rules on negotiated procurement due to 2-failed
bidding submission of BAFO
Increase in thresholds
Lease of venue
Distinguishes Agency-to- Agency Agreements from
Procurement Agents

Shopping clarified Only 52.1(b) needs 3

quotations. 30
IRR Revisions
Effectivity
2 September 2009
30 days from publication in the Official Gazette (3
August 2009)

Transitory
When was Invitation to Bid/Request for
Expression of Interest published?

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GPPB Issuances

GPPB Resolution No. 08-2009 (Implementing

Guidelines for Lease of Privately-owned Real Estate and
Venue)

GPPB Resolution No. 09-2009 (Guidelines for

Shopping and Small-Value Procurement)

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GPPB Issuances

GPPB Resolution No. 05-2010 (Approving the

Guidelines on the Procurement of Printing
Services)

GPPB Resolution No. 06-2010 (Approving and

Adopting the 4th Edition of the Philippine Bidding
Documents for Goods and Infrastructure Projects (As
Harmonized with Development Partners) and Consulting
Services)
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GPPB Issuances

GPPB Resolution No. 04-2011 (Approving

Amendments to the Guidelines on the
Procurement of Printing Services)

GPPB Resolution No. 05-2011 (Approving the

Pre-selection Procedure in the conduct of Limited
Source Bidding under Section 49 of Republic Act 9184
and its Revised Implementing Rules and Regulations)

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Non-Policy Matter
Opinions

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Repeat Order
NPM No. 03-2010

What stage in the procurement process can repeat

order be considered to be within the reglamentary
period of 6 mos. as provided under Section 51 (c) of
the of the revised IRR) of RA 9184?
Repeat Order
NPM No. 03-2010

The reckoning period for computing the 6 mo. period is

the effectivity date of the contract as stated in the
Notice to Proceed (NTP) Sec. 51, IRR of R.A. 9184.

The contract effectivity date, as provided in the NTP,

shall not be later than 7 cd from its issuance (Sec.
37.4.1 of the IRR)
Agency-to-Agency Agreements
NPM No. 04-2010

Can a GOCC having its own charter, directly engage its

wholly-owned subsidiary created under the Corporation
Code under Section 53.5 [Negotiated Procurement
(Agency-to-Agency Agreement)] of the revised IRR) of
RA 9184?
Agency-to-Agency Agreements
NPM No. 04-2010

As a general rule, GOCCs formed under the

Corporation Code cannot enter into Agency-to-Agency
Agreements

Except when a parent-subsidiary relationship exists

between the 2 GOCCs. As long as the parent GOCC
owns directly or indirectly more than half of the voting
power of its subsidiary, then it may directly engage the
services of said subsidiary.
Post-qualification Requirement
NPM No. 06-2010

Whether all the requirements under Section 34.2 of the

IRR would have to be submitted by all the parties to a
joint venture, for purposes of post-qualification, viz:
1. Tax clearance;
2. Latest income and business tax returns;
3. PhilGEPS registration certificate; and
4. Other appropriate licenses and permits required
by law and stated in the bidding documents.
Post-qualification Requirement
NPM No. 06-2010

The principle that all the parties to a joint venture were

required to submit all legal requirements provided
under the previous IRR-A is still applicable under the
revised IRR.

All the parties to a joint venture must still submit all the
legal documents, regardless of the time/stage when
these documents are required to be submitted.
Post-qualification Requirement
NPM No. 06-2010

The documents enumerated under Section 34.2 of the

revised IRR would have to be complied with not only by
one but by all the parties to a joint venture for purposes
of passing the post-qualification.
Surety Bonds as Bid and
Performance Securities
NPM No. 13 & 24-2010

What is the correct form of certification that should

accompany the surety bond which is submitted as a bid
or performance security?
Surety Bonds as Bid and
Performance Securities
NPM No. 13 & 24-2010

The certification which must be submitted must :

i. Unequivocally state that the surety /insurance
company is specifically authorized to issue surety
bonds callable on demand, and

ii. Issued by the Insurance Commission

Bidding Documents
NPM No. 14-2010

Whether a procuring entity may set a deadline for the

availability of bid documents at a date earlier than the
deadline for the submission and receipt of bids?
Bidding Documents
NPM No. 14-2010

No. Sec. 17.3 of the revised IRR of RA 9184 mandates

the BAC to make available the bid docs from the time
the invitation to bid is first advertised/posted until the
deadline for the submission and receipt of bids.
Bidding Documents
NPM No. 14-2010

Whether a procuring entity may be allowed to partially

upload bidding documents in its website and the
PhilGEPS considering the large sizes of the files and
the high degree of security and discretion which BSP
infrastructure projects require?
Bidding Documents
NPM No. 14-2010

No. Pursuant to Sec. 17.5 of the IRR, it is mandatory

for procuring entities to post all its bidding documents
on both its website and the PhilGEPS.
 Survey of Supreme
Court Decisions
on Public Procurement

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Section 4, R.A. 9184
Abaya vs. Ebdane
14 February 2007

DBM-PS vs. Kolonwel Trading

8 June 2007

Loan Agreement, through Exchange of Notes,

executed by the President with an IFI is an
Executive Agreement and must be observed
pursuant to pacta sunt servanda.
Protest
Phil. Pharmawealth, Inc. v. Phil. Childrens
Medical Center BAC, et. al.
26 June 2006
The doctrine of exhaustion of administrative
remedies calls for resort first to the appropriate
administrative authorities to accord them the prior
opportunity to decide controversies within their
competence before the same may be elevated to
the courts of justice for review.
Protest Mechanism under R.A. 9184 and its IRR
must be observed.
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Protest
DBM-PS vs. Kolonwel Trading
8 June 2007

Three elements of a Protest:

In writing, in the form of a verified position paper
Submitted to the head of the procuring entity
Payment of a non-refundable protest fee

Protest mechanism applies to foreign-funded

projects
Protest
First United Constructors Corp. vs. Poro
Point Management Corp.
19 June 2009

Petitioner violated doctrine of judicial hierarchy in

directly filing its petition for Certiorari before the
Supreme Court
One must first invoke special and important reasons
Technical Specifications
COA vs. Link Worth Int., Inc.
13 March 2009

Procuring entity must verify, inspect and test

whether the technical specifications comply with
its requirements

It does not give occasion for procuring entity to

arbitrarily exercise its discretion and brush aside
the very requirements it specified
Honoraria
Sison vs. Tablang
5 June 2009

Section 15 of R.A. 9184 authorizing grant of honoraria is

not self-executing. It still needs an implementing guideline.

Honorarium is something given not as a matter of

obligation but in appreciation for services rendered.
Section 15 uses the word may.
Splitting of Contracts
Balderbin v. Sandiganbayan
22 March 2007

- Supreme Court cited COA Circular No. 76-41

in defining and identifying forms of splitting of
contracts.

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Discretion to Accept or Reject
A Bid
Albay Accredited Constructors
Association v. Ombudsman
30 January 2006

The discretion to accept or reject a bid and award

contracts is vested in the government agencies
entrusted with that function. The discretion given
to authorities to accept or reject a bid is of such
wide latitude that courts will not interfere, unless
it is apparent that it is exercised arbitrarily, or,
used as a shield to a fraudulent award. 57
COAs Presence in Public
Bidding
Villanueva v. COA
18 March 2005
Upon the agency that called for the bidding, therefore,
rests the burden of ensuring that the process
undertaken is above-board and that the outcome
thereof is most advantageous to the government. The
presence of the COA representative, as witness or
observer, on the other hand, is fundamental only to
the extent of guaranteeing documentary integrity and
transparency in the bidding process.

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Perfection of Contract
Insular life Assurance Co., Ltd. v. Asset
Builders Corp.
5 February 2004

The effect of giving the Notice of Award would

have been the perfection of the contract. No such
acceptance was communicated to respondent;
therefore, no consent was given. Without that
express manifestation, as required by the terms of
its proposal, there was no contract.
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Thank you
Comments, questions?

Telephone/Fax: (+632) 900-6741 to 44

Website: http://www.gppb.gov.ph
Email: gppb@gppb.gov.ph
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