Republic Act No. 9184 For LGUs

Republic Act No.
9184
Government Procurement
Reform Act
Republic Act No. 9184

Significance of RA 9184 in this seminar
Aims of this portion
Salient features of RA 9184
Effectivity
Governing Principles of Procurement
Coverage & Procedure
Alternative Procurement Methods
Sanctions

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

Effectivity: 26 January 2003 (RA 9184)
18 October 2003 (IRR)
Amended RA 7160 (Local Government
Code of 1991) accordingly

Governing
Procurement
Principles
of
Transparency
Equal Opportunity (through standardization)
Streamlined Process
Accountability
Public Monitoring

Coverage:
Goods:
Items
Supplies
Materials
needed in
Transaction of public business
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

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
professional expertise
technical
and
beyond the capability and/or capacity of the

Government to undertake

Infrastructure 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 bids
Evaluation of bids
Post-qualification
Award of contract

Bid and Awards Committee (BAC)
Formation
BAC Structure:
Amended RA 7160 BAC formation as shall
be stated later

BAC Composition:
Head of Procuring Entity

(Local Chief Executive)
Now forbidden as Chairperson or
member of BAC

BAC Composition:
One (1) representative each
From the regular offices under the office of
the local chief executive (e.g., Office of the
Provincial/City/Municipal
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-Procurement
Conf.
2-wk advertisement
Pre-Bid
Conference
Submission of
Opening of
Opening of
Opening of
Eligibility
Eligibility Env. & Tech. Env. &
Req. & Bid
Financial Env.
Eligibility Check Prel. Exam.
Bid Evaluation
& Ranking
Postqualification
Award of
Contract

Pre-Procurement Conference
Purposes:
1. Ensure that the procurement is in

accordance with the project and
annual procurement plans;

Purposes:
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

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;

Purposes:
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 Conference
Purposes:
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.
2.
3.
Publication
Website
Posting

Publication:
Twice:
1. Minimum 6 days maximum 14 days in
between publication
2. Newspaper of general nationwide
circulation
3. Newspaper published at least 2 years
prior to advertisement

Posting @ Website
1. Website of the procuring entity
2. Website of the service provider of the
procuring entity, if available
3. Maximum period of 14 days

Posting at premises
1.
2.
3.
Conspicuous place
Reserved for the purpose
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
bidders
eligibility
requirements or statements against a
checklist of requirements
Using a non-discretionary pass/fail criteria

Eligibility Documents:
Class A Documents
Class B Documents

Class A Documents:
May be maintained in a file with the BAC
Suppliers maintain this file current and updated at
least once a year, or more frequently when needed
BAC 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
applicable
2. Mayors Permit/Municipal Licenses
3. Non-blacklisting statements
4. TIN
5. 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
bidders total and current assets and
liabilities

Financial Documents:
2. Bidders 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 Existence
2. Prospective bidders largest single
contract
3. NFCC or credit line/cash commitment

1. Nationality/Proof of Existence
a. Duly licensed Filipino citizens/sole proprietorships
b. 60% Duly organized and existing Filipino
Partnerships
c. 60% Duly organized and existing Filipino
Corporations
d. Joint Venture with 60% Filipino interest
e. Duly registered cooperatives
Not Applicable for foreign procurement

2. Prospective Bidders largest single
contract
adjusted to current prices

completed within time period specified
in
Invitation
similar to the contract to be bid
at least fifty percent (50%) of the ABC

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.
2.
3.
In the prescribed Bid Form

On or before the specified deadline
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 accepted
2. Opening of Technical Envelopes
3. Counter-checking compliance of
Technical Envelope with requirements
4. Opening of Financial Envelope
5. Counter-checking compliance of
Financial Envelope with requirements

Procedure:
6.
7.
8.
Bid Evaluation
Ranking
Lowest Calculated Bid

Note:
Bids above the ABC are
automatically disqualified
No Floor Prices
If failed Technical Envelope, cannot
open the Financial Envelope
Bid shall include all taxes

Post-Qualification
Purpose:
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-Qualification
Method:
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-Qualification
Period:
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. Approve
2. 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

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 eligibility
Must 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.
2.
3.
Valid Philippine Contractors Accreditation

Board (PCAB) license and registration for the
type and cost of the contract to be bid
Prospective bidders statement of availability of
key personnel and equipment
On-going and completed government and
private projects

1.
2.
3.
4.
Nationality/Existence
PCAB License
Bidders largest single completed contract
Satisfactory CPES rating and/or certificate of
completion and owners acceptance of the
contract

Eligibility Check
Entire process shall not exceed fifteen (15) days
Issuance of Bid Documents

Within 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 days
Above twenty five (25) million up to fifty (50) million15 to 45 calendar days
Above fifty (50) million up to two hundred (200) million30 to 60 calendar days
Above two hundred (200) million- 60 to 90 calendar days

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 eligibility
Must 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

Notes 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

Services:
Short listing Criteria:
1. Specified in the Invitation to Bid
2. Includes:
a. Applicable experience
b. Qualification of personnel who may be assigned
to the job vis--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

Services:
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

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.

1.
2.
3.
Bid Evaluation Criteria:

Quality of personnel
Experience and capability of the
consultant
Plan of approach and methodology

Services:
BAC assigns numerical weights to
criteria
Criteria as indicated in bid documents
BAC recommends to Head
Head has two (2) calendar days to
approve

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

3. Negotiation
4. Issues of Negotiation
Contract amount
Other technical issues as stated in the
notification letter

5. In case of Failure, Negotiation with Next
Highest Rated Bid
Time period: Fourteen (14) calendar
days for any one consultant except for
meritorious reasons

Failure of Bidding:
1. No Bids are received
2. 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 Process
2. 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 procedures
3. 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.
2.
Acquisition of Real Property

BOT Law

Alternative Modes of Procurement
General Rule: Public Bidding
Procurement
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

Limited Source Bidding
Direct Contracting
Repeat Order
Shopping
Negotiated Procurement

Limited 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

Limited Source Bidding or Selective Bidding
Procurement of highly specialized types of
goods and consulting services
Procurement of major plant components to
maintain uniform quality and performance of
the plant as a whole

Direct Contracting or Single Source
Procurement
Applies only to procurement of goods
Does not require elaborate bidding documents
Supplier is simply asked for a price quotation or
a pro-forma invoice with the conditions of sale
Offer may be accepted immediately or after some
negotiations

Direct Contracting or Single Source
Procurement
1. Proprietary items
2. Critical plant components from a
specific manufacturer
3. Sold by an exclusive dealer or
manufacturer with no suitable substitute

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

Repeat Order
1. Same contract prices
2. Not a result of splitting
3. Within six (6) months from the date of the
Notice to Proceed of the original contract
4. Not to exceed twenty-five percent (25%)
of the quantity of each item in the original
contract

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

Shopping
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

Shopping
Not as a result of splitting
Amounts subject to periodic review
by the GPPB

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 Failure
2. Imminent danger to life or property during a state
of calamity
3. 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 goods
7. Individual consultants that are highly
technical or primarily confidential
8. 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)

Criminal/Administrative
Sanctions
For Bidders
1. Rigging
2. Misrepresentation

Criminal/Administrative Sanctions
For Head/BAC/TWG
1. Premature Opening of Sealed Bid
2. Delaying screening eligibility, opening of
bids, evaluation and post evaluation of
bids, and awarding of contracts beyond
the prescribed periods

Criminal/Administrative Sanctions
For Head/BAC/TWG
3. Unduly influencing or exerting undue
pressure
4. Splitting
5. Abuse of power to reject bids
Republic Act No.

9184
Thank you!

Republic Act No. 9184 For LGUs

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beyond the capability and/or capacity of the

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Head of Procuring Entity

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Standardized Bidding Procedures

Eligibility Check Prel. Exam.

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1. Ensure that the procurement is in

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at hand, including, among other aspects,

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Held at least 12 days before the receipt and opening

Any statement made at the pre-bid conference shall

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Not Applicable for foreign procurement

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adjusted to current prices

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In the prescribed Bid Form

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