updates on the revised implementing rules and regulations of r.a. 9184 association of government...

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 1

What is Procurement?

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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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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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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


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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Value for Money – is the optimum combination of whole of life costs and quality to meet the customer’s requirements… (P. G.)

It must be government’s 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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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-à-vis “C to C”

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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 RevisionsForm of Bid and

Performance SecurityAmt of Bid Security

(% = ABC)Amt of Performance

Security (% = Contract Price)

a) Cash, cashier’s/manager’s check (issued by Universal/Commercial Bank

2%5% (Goods & Consulting)

10% (Infra)

b)Bank guarantee/draft or irrevocable LC

c) Surety bond callable upon demand

5% 30%

d) Combination of the foregoing

Proportionate to share of form with respect to

the total amount of security

Proportionate to share of form with respect to the total amount of 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

Bidder’s response to the BAC’s 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.


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.


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. Children’s

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

COA’s 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: [email protected]

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