PROCUREMENT OF GOODS

WHAT ARE GOODS? (Section 5.k)

Items, supplies, materials and general support services, except consulting services and
infrastructure projects

Non-personal and contractual services (e.g. janitorial, security and

other related or similar services)
Does not require external technical and professional expertise

FOR COMMON-USE SUPPLIES

All ordinary and regular office supplies and equipment shall be

produced from the DBM-Procurement service (e.g., ballpen, copy
paper, computer)
 Standard Bidding
Procedures for Goods
Pre-Procurement Pre-Bid
Conference Advertisement/Posting
Conference

Submission of Opening of Opening of Opening of

Eligibility Eligibility Envelope Technical Financial
Requirements and & Eligibility Check Envelope & Envelope
Bid Preliminary Exam

Bid Evaluation Post-qualification Award of Contract

& Ranking

PRE-PROCUREMENT CONFERENCE
(Section 20)
• Undertaken prior to Advertising of Invitation of Bid
• To be attended by: BAC, Secretariat, TWG, consultants and relevant officials
• Ensure that the procurement is in accordance with the project and agency
procurement plan
• Determine readiness of procurement and criteria
• NOT REQUIRED for GOODS Costing P2M and BELOW
 INVITATION TO APPLY
FOR ELIGIBILITY AND TO BID
(Section 21)
1. Advertised at least once in one newspaper of general nationwide circulation
- For priority provincial projects, additional publication in a local
newspaper of general circulation is discretionary

OPTIONAL for goods costing P2M and below

2. Posted in website of agency (if any) and its service provider (if any)
3. Posted in the G-EPS
4. Posted in a conspicuous place in the agency premises

BIDDING DOCUMENTS
(Section 17)
• Bidding documents are made available on the first day it was posted and/or
advertised (cost of bid documents included in Advertisement)
(Section 17.5)

• Reference to brand names not allowed (Section 18)

PRE-BID CONFERENCE
(Section 22)
• At least 1 required for bids with ABC of P1M or more
• OPTIONAL for contracts costing less than P1M
• Held at least 12 days before deadline for submission of Bids
• Attendance of bidders not mandatory
 SUPPLEMENTAL BULLETINS
(Section 22.5)
• Request for clarification must be in writing and submitted at least 10 days before
deadline for submission of bids
• Supplemental Bulletins shall be issued at least 7 calendar days before deadline
for submission of bids
• Supplemental Bulletins posted in agency’s website, and in G-EPS

ELIGIBILITY DOCUMENTS
(Section 23.6)
CLASS A Documents
• DTI Business name registration or SEC registration certificate
• Valid or current Mayor’s permit
• Taxpayer’s Identification Number
• Tax Returns filed through EFPS
• Tax Clearance Certificate from BIR
• Statement by the prospective bidder that is not blacklisted or barred from bidding
by any government agency
• Statement of completed and on-going contracts (government and private) within
the specified period
• Audited financial statements for the immediately preceding year
• Posting of a cash deposit certificate or commitment to provide credit line in an
amount not lower than 10% of the ABC, or computation of Net Financial
Contracting Capacity

ELIGIBILITY DOCUMENT
NFCC = [(Current Assets-Current Liabilities) x K] – value of all outstanding projects
under ongoing contracts, including awarded contracts yet to be started

K Contract duration
10 One year or less
15 More than one year up or two years
20 More than two years
 ELIGIBILITY DOCUMENT
(Section 23.6)
CLASS B Documents

• Valid joint venture agreement, if any

• Letter authorizing the BAC to verify all submitted documents
• Statement of compliance with a bidder’s responsibilities under the IRR-A

Note: Submission of a notarized statement that submitted documents (Class A&B) are
original or true copy, complete and the information provided therein are correct.

ELIGIBILITY CRITERIA
(Section 23.11.1)
• At least 60% Filipino ownership
• If goods are not available locally at prescribed Government minimum specs
and/or ABC, foreign suppliers/manufacturers may participate provided that:
- Head of the procuring entity shall certify that the goods are not available
from domestic sources
- DTI must confirm certification made by head of the procuring entity
- Foreign entity that would participate in the said bidding must prove that
his country of origin grants reciprocal through Filipino citizens ( pursuant
to RA No. 5183)
• Value of largest single similar contract completed within the specified period,
adjusted to current prices using wholesale consumer price index, must be at least
50% of ABC
• When a failure of bidding has occurred because no single bidder has compiled
with the 50% single largest similar contract requirement or imposing such would
be tantamount to monopoly that will defeat the purpose of public bidding, the
Procuring Entity may require the following:
1. The prospective bidder should have completed at least 3 similar contracts
and that the aggregate contracts amount must be at least 50% of the ABC
of the project
2. The largest of these similar contracts must be equivalent to at least 25% of
the ABC of the project to the bid; and
3. The prospective bidder has been in existence for the past 3 years prior to
the advertisement of the project
 If the item to be procured is novel or the procurement of such is
unprecedented/unusual, wherein compliance on the largest similar contract is
impossible, the bidder must be the existence for at least the past 3 years

SUBMISSION AND OPENING

OF ELIGIBILITY AND BID
ENVELOPES
Single-Stage Bidding Two-Stage Bidding
(Section 23.1 & 25.1) (section 30.4)

Simultaneously submit 3 sealed envelopes.
The 1st contains the Eligibility
Requirements. The 2nd and 3rd contain the
Technical and Financial Proposals,
respectively.
1st Stage – Prospective bidders submit their
Eligibility Requirements and initial
Technical Proposals (no price tenders)
2nd Stage – Eligible bidders submit their
revised Technical Proposals and their
Financial Proposals in two (2) separate
sealed envelopes

MODIFICATION AND
WITHDRAWAL OF BIDS
(Section 26)
MODIFICATION
• Bids may be modified before the deadline for submission and receipt of bids
• No retrieval or original bid
• Send another bid equally sealed, properly identified and marked “Modification”

WITHDRAWAL
• Bids may be withdrawn in writing before the deadline for the receipt of bids.
Withdrawal after deadline shall be subject to sanctions.
• Bidder shall not be allowed to submit another bid for the same contract
• Bidder may also express non-participation through a letter
 ELIGIBILITY CHECK
(Section 24.12)
• Presence or absence of required documents
• If all documents are present - passed – ELIGIBLE
• If one or more documents missing or submission is incomplete or patently
insufficient – failed – INELIGIBLE

Eligible Documents Bidder Bidder Bidder Bidder Bidder Bidder Bidder

DOCUMENTS 1 2 3 4 5 6 7

Legal Documents for Eligibility

Check (Sec. 23.6)

√ √ √ √ ⊗
1. SEC or DTI Registration

√ √ √ √
2. Mayor’s Permit

⊗ √ √ √
3. TIN

√ √ √
4. Bidder’s statement that he
is not “blacklisted”

√ √ √
5. Other licenses as may be
required by procuring entity

OPENING OF BID ENVELOPES

(Section 30.1)
PRELIMINARY EXAMINATION OF TECHNICAL PROPOSAL
 • Opening the Technical Documents to ascertain compliance with the submission
requirements
• A non-discretionary “pass/fail” criteria shall be used
• A checklist of required documents shall be used
TECHNICAL ENVELOPE
(Section 25.3)
• Bid Security as to form (as specified by the BAC), amount (must be at least equal
to a % of the ABC, as advertised (Section 27.2) and validity period;
• Authority of Signatory;
• Production/Delivery Schedule;
• Manpower Requirements;
• After-sales service/parts
• Technical Specifications
• Commitment from licensed bank to extend credit line or cash deposit certificate
(at least 10% of ABC)
• Certificate under oath of compliance with labor laws
• Sworn statement attesting compliance with responsibilities of bidder
• Disclosure affidavit

FINANCIAL ENVELOPE
(Section 25.4)
Financial proposal/bid prices

1. Bid prices in the Bill of Quantities in the prescribed Bid Form

2. The recurring and the maintenance costs, if applicable

BID EVALUATION
(Section 32)
DETAILED EXAMINATION
• Determine the lowest Calculated Bid (LCB), by:
1. Establishing correct calculated prices of bids; and
 2. Ranking calculated total bid prices from lowest to highest
• A non-discretionary criteria shall be used, which shall include consideration
of: (a) completeness of bids,; and (b) minor arithmetical corrections (Section
32.4.1)
• Prohibition on communication between BAC, Secretariat and TWG with
bidders until issuance of Notice of Award (Section 32.3)
• Bid Evaluation to be completed within 7 days
• In case of discrepancies, the following shall prevail (Section 32.4.3):
- words over figures
- unit prices over total prices
- bill of quantities over detailed estimate

POST-QUALIFICATION
(Section 34)

• Determine whether bidder with LBC complies with and is responsive to all
requirements and is responsive to all requirements and conditions of eligibility
and the bidding of the contract – to be declared the Lowest Calculated and
Responsive Bid (LCRB)
• To be accomplished within 7 calendar days form determination of LCB
• Legal Requirements – to verify, validate licenses/ permits
• Technical Requirements – to verify, validate experience of bidder
• Financial Requirements – to verify and validate the bank commitment to provide
credit line or cash deposit certificate.

GUIDELINES ON THE USE OF NON-DISCRETIONARY

SELECTION CRITERIA AS TIE-BREAKING METHOD
(GPPB Circular No. 06-2005)

 Procuring entity required to include in the bidding documents a clear measure

to be used in case of a tie after post-qualification

 Measure shall be non-discretionary and non-discriminatory and shall be based

on sheer luck or chance

 Procuring entity may opt to bring the concerned bidders to agree on a better
selection criteria which shall also be non-discretionary and shall be based on
sheer luck or chance
 AWARD OF CONTRACT
(Section 37)

 Award is made to the LOWEST CALCULATED AND RESPONSIVE BID

(LCRB) at submitted price or calculated price, whichever is lower (Section
37.1)

 Notice of Award should be issued by Head of the Procuring Entity within 7

days from date of determination of LCRB; for GOCCs and GFIs, within 15
days

Submitted Price

 Submitted price

No. of pieces Unit Price Total Price

1,000 P9, 000 P8, 500,000

 Calculated Price
No. of Pieces Unit Price Total Price
1,000 P9, 000 P9, 000,000

Contract Price = P8.5 million

Calculated Price

 Submitted price

No. of pieces Unit Price Total Price

1,000 P9, 000 P9, 500,000

 Calculated Price
No. of Pieces Unit Price Total Price
1,000 P9, 000 P9, 000,000

Contract Price = P9 million

CONTRACT SIGNING (Section 37.3) AND

PERFORMANCE SECURITY (Section 39)

 Contract shall be signed by the winning bidder and head of agency within
10 days from receipt by the winning bidder of the notice of award.
 Winning bidder posts performance security. The form of performance
security shall be specified by the BAC.

NOTICE TO PROCEED
(Section 37.5)

 Notice to proceed together with copy of approved contract to be issued to

successful bidder within 3 days from date of approval of contract.

 Terms of contract become effective at time of receipt of contract or as

provided in the notice to proceed.

SINGLE CALCULATED RESPONSIVE BID

(Section 36)

 Shall be considered for award if:

1. After advertisement only 1 applies for eligibility

2. More than 1 applies for eligibility but only 1 meets the
requirements
3. More than 1 meets the eligibility requirements but only 1
submits a bid

 Bid should be responsive

 ABC should reflect most advantageous prevailing price for Government

SINGLE CALCULATED RESPONSIVE BID

(Section 36)

 Shall be considered for award if:

1. Only 1 applies for eligibility, meets the requirements and

submits a bid
2. More than 1 applies for eligibility but only 1 meets the
requirements, and submits a bid
3. More than 1 meets the eligibility requirements but only 1
submits a bid

 Bid should be responsive to bidding requirements

 ABC should reflect most advantageous prevailing price for Government

 WHEN A FAILURE OF BIDDING OCCURS
(GPPB Resolution no. 07-2005, 1 April 2005)

 A re-bidding with re-advertisement/re-posting shall be conducted

 If failure of bidding is due to the fact that all bids exceed the ABC, the ABC shall
still be maintained as the ceiling for the re-bidding. The BAC shall modify terms,
specifications and scope of work.

 Should a 2nd failure of bidding occur, negotiated procurement may be considered;

OR

 ABC may be revised and a re-bidding with re-advertisement and re-posting shall
be conducted

BIDDING OF PROVINCIAL PROJECTS

(Section 44)

 For priority programs and infra projects funded out of GAA and identified in
consultation with members of Congress

 Provincial bidder – principal office is within the same province

 Lowest provincial bidder has right to match LCB within 48 hours, if

submitted by an outside bidder

 Only available within 5 years from effectivity of R.A. 9184

 Not applicable to projects within Metro Manila

PROVINCIAL BIDDER

Medicine Procurement in Bohol

Bidder from Bohol P13.6 million

Bidder from Bohol P13.5 million
Bidder from Cebu P13.2 million
Bidder from Iloilo P13.0 million
 ALTERNATIVE METHODSA OF PROCUREMENT
(Section 49 to 54)

1. Limited Source Bidding

2. Direct Contracting

3. Repeat Order

4. Shopping

5. Negotiated Procurement

Subject to prior approval of the head of the procuring entity and upon
recommendation by the BAC.

LIMITED SOURCE BIDDING

(Section 49)

 For procurement of highly-specialized types of goods and major plant

components

 Direct invitation to a set of pre-selected suppliers with known experience and

proven capability

 Pre-selected suppliers to come from list maintained by relevant government

authority submitted to and maintained updated by GPPB

DIRECT CONTRACTING
(Section 50)

 For procurement of items and proprietary nature

 For procurement of critical plant components

 For items sold by an exclusive dealer with no sub-dealers selling at lower prices
and no suitable substitute can be obtained

REPEAT ORDER
(Section 51)
 Original contract was awarded through competitive bidding

 Contract prices of repeat order must be the same or lower than those in the
original contract

 Shall be availed of within six (6) months from date of Purchase Order

SHOPPING
(Section 52)

 For unforeseen contingency requiring immediate purchase, the amount not

exceeding P50, 000

 For ordinary office supplies/ equipment not available in Procurement Service, the
amount not exceeding P250, 000. At least 3 price quotations shall be obtained

NEGOTIATED PROCUREMENT
(Section 53)

 Two failed biddings

 There is imminent danger to life or property during state of calamity or when time
is of the essence or where immediate action is necessary to prevent damage to or
loss of life or property or to restore vital public services or utilities

The procuring entity shall be drawn up a list of at least 3 suppliers that will be
invited to submit bids.

NEGOTIATED PROCUREMENTS
(Section 53)

 Take-over of contracts that were rescinded or terminated, where immediate action

is necessary to prevent damage to or loss of life or property, or to restore vital
public service or utilities.

 Purchase of goods from another agency of government such as Procurement

Service

NEGOTIATED PROCUREMENTS
(Section 53)
 Major defense equipment for use by the AFP with prior approval by the President,
where DND negotiates directly with foreign agency and contract is covered by a
foreign government guarantee covering 100% of the contract price

 Small value procurements (P50, 000 and below) not falling under Shopping

 Lease of office space

CONTRACT WARRANTIES
(Section 62)

 For goods:

o To assure that supplier corrects manufacturing defects for a specific period

after performance of contract
o 3 months for supplies
o 1 year for equipment
o The form of warranty security shall be specified by the BAC
CONTRACT IMPLEMENTATION

 No incentive bonus is allowed (section 42.4)

 Liquidated damages computed at 1/10 of 1% of cost of delayed goods for every

day of delay until acceptance (Annex D)

PROCUREMENT PROCESS

From Opening of Bids to Award of Contract shall NOT EXCEED

3 MONTHS (Section 38)

KULANG UG ISA KA SLIDE