Laws and Rules on

Government Expenditures

Purchase of Inventory Items

 General guidelines in procuring
inventories

Alternative methods of procurement

 At the end of the session, the participants
are able to:

 Apply the rules governing the purchase of

inventories

 Identify the documentary requirements

IPSAS
12
Materials or supplies

Consumed in the production process

Consumed or distributed in rendering

services

Held for sale or distribution

In the process of production

Invty • Merchandise
Inventory
held
for
sale
Inventory held for distribution
Food Supplies for Distribution
Welfare Goods for Distribution
Drugs & Medicines for Distribution
Med, Dental & Lab Supplies for Distribution
Agricultural & Marine Supp for Distribution
Agricultural Produce for Distribution
Textbooks & Instructional Mats for Distribution
Construction Materials for Distribution
Property and Equipment for Distribution
Property and Equipment for Distribution
 Raw Materials Inventory
Inventory held for
manufacturing

Work-in-Process Inventory

Finished Goods Inventory

Office Supplies Inventory Fuel, Oil & Lubricants Inventory

Accountable Forms, Plates and Agricl & Marine Supplies Inventory

Stickers Inventory

Textbooks & Instructional

Non-Accountable Forms Inventory Materials Inventory

Animal/Zoological Supp Inventory Mil, Police & Traffic Supp Invty

Food Supplies Inventory Chem & Filtering Supp Inventory

Drugs and Medicines Inventory Construction Materials Inventory

Medical, Dental & Lab Supp Inventory Other Supplies & Materials Inventory
All costs of purchase

Costs of conversion (L, M, OH)

Other costs incurred

Less trade discounts, rebates, etc.

 Costs of prior purchases +
Weighted Cost of current purchase
=
average cost Total number of units
available
 JEV Receipt Issuance Balance
Date
Number Qty Unit Cost Total Cost Qty Qty Unit Cost Total Cost

01/01/14 Beginning Balance 200 100.00 20,000.00

01/10/14 000356 400 130.00 52,000.00 600 120.00 72,000.00

01/15/14 000357 500 100 120.00 12,000.00

01/20/14 000358 300 110.00 33,000.00 400 112.50 45,000.00

02/01/14 003449 200 200 112.50 22,500.00

02/10/14 005454 100 120.00 12,000.00 300 115.00 34,500.00

02/21/14 005668 100 125.00 12,500.00 400 117.50 47,000.00

 JEV Receipt Issuance Balance
Date
Number Qty Unit Cost Total Cost Qty Qty Unit Cost Total Cost

01/01/14 Beginning Balance 200 100.00 20,000.00

01/10/14 000356 400 130.00 52,000.00 600 120.00 72,000.00

01/15/14 000357 500 100 120.00 12,000.00

01/20/14 000358 300 110.00 33,000.00 400 112.50 45,000.00

02/01/14 003449 200 200 112.50 22,500.00

02/10/14 005454 100 120.00 12,000.00 300 115.00 34,500.00

02/21/14 005668 100 125.00 12,500.00 400 117.50 47,000.00

 SUPPLIES LEDGER CARD

Entity Name : ____________________________ Fund Cluster : _____________

Item : Item Code :

Description : Re-order Point :
Unit of Measurement :
Receipt Issue Balance No. of
Date Reference Unit Total Unit Total Unit Total Days to
Qty. Qty. Qty.
Cost Cost Cost Cost Cost Cost Consume
 STOCK CARD

Entity Name: Fund Cluster:

____________________________ _________________

Item : Stock No. :

Description : Re-order Point :
Unit of Measurement :
Receipt Issue Balance No. of Days
Date Reference
Qty. Qty. Office Qty. to Consume
Tangible items costing below ₱15,000

Recognized as PPE shall be

reclassified

Recognized as expenses upon issue

 INVENTORY CUSTODIAN SLIP

Entity Name: ______________________

Fund Cluster : _____________________ ICS No : ___________
Amount
Inventory Estimated
Quantity Unit Unit Total Description
Item No. Useful Life
Cost Cost

Received from: Received by:

__________________________________
Signature Over Printed Name
__________________________________
Position/Office
__________________________________
Date
________________________________
Signature Over Printed Name
________________________________
Position/Office
________________________________
Date
Procurement
Service

DBM CL
2013-14
Effective October 28, 2016
All procurement shall be done through
Competitive Bidding

Preference given to materials produced,

made & manufactured in the Philippines

Bid not more than

DTI certified
15% in excess
 Preparation
Procurement
Requisitioning of Obligation
planning
Request

Payment Delivery,
Preparation
for items inspection,
of contract
delivered acceptance
 Section 7, 2016 IRR, RA 9184

All No procurement
shall be APP shall
procurement
undertaken bear the
shall be within unless in approval of
approved accordance with the HoPE
budget approved APP
 End-user units prepares respective PPMPs

Budget Office evaluates PPMPs

BAC Secretariat consolidates PPMPs into APP

BAC recommends procurement modality

HoPE approves APP

APP submitted to GPPB by end of January of budget year

 (Name of Agency) Annual Procurement Plan for FY ______

Schedule for Each Procurement Activity Estimated Budget (PhP)

Procurement PMO/ Remarks
Code Advertisem e Subm ission/ Source
Program/ End- Mode of Procurement Notice of Contract (brief description of
(PAP) nt/Posting of Opening of of Funds Total MOOE CO
Project User Aw ard Signing Program/Activity/Project)
IB/REI Bids
Competitive Bidding Indicate Date Indicate Date Indicate Date Indicate Date 0
Limited Source Bidding Indicate Date Indicate Date Indicate Date Indicate Date 0
Direct Contracting N/A N/A Indicate Date Indicate Date 0
Repeat Order N/A N/A Indicate Date Indicate Date 0
Shopping Indicate Date N/A Indicate Date Indicate Date 0
NP-53.1 Tw o Failed Biddings Indicate Date N/A Indicate Date Indicate Date 0
NP-53.2 Emergency Cases N/A N/A Indicate Date Indicate Date 0
NP-53.3 Take-Over of Contracts N/A N/A Indicate Date Indicate Date 0
NP-53.4 Adjacent or Contiguous N/A N/A Indicate Date Indicate Date 0
NP-53.5 Agency-to-Agency N/A N/A Indicate Date Indicate Date 0
N/A
NP-53.6 Scientific, Scholarly, Artistic Work, Exclusive Technology Indicate Date
N/Aand Media Services Indicate Date 0
NP-53.7 Highly Technical Consultants N/A N/A Indicate Date Indicate Date 0
NP-53.8 Defense Cooperation Agreement N/A N/A Indicate Date Indicate Date 0
NP-53.9 - Small Value Procurement Indicate Date N/A Indicate Date Indicate Date 0
NP-53.10 Lease of Real Property and Venue N/A N/A Indicate Date Indicate Date 0
NP-53.11 NGO Participation Indicate Date N/A Indicate Date Indicate Date 0
NP-53.12 Community Participation N/A N/A Indicate Date Indicate Date 0
N/A
NP-53.13 UN Agencies, Int'l Organizations or International N/A Institutions Indicate Date
Financing Indicate Date 0
 GUIDE TO PREPARE APP APP COLUMN HEADER/S
In the Code (PAP) column, kindly indicate the Procuring Entity's (PEs) internal numbering system or use the Unified
Account Codes (UACS) may be used as PAP Codes. Please refer to Joint Circular No.2013-1 COA-DBM-DOF-Unified Code (PAP)
STEP 1 Accounts Code Structure.

Procurement
For the Procurement Program/Project column, please align descriptions of program/projects with budget documents and Program/Project
STEP 2 ensure clarity and accuracy in describing each procurement program/project.

For PMO/End-User, please indicate the PMO/End-User unit who will implement/utilize the procurement program/project.
Multiple end-user units are allowed only if the procurement activity was consolidated by the BAC to procure requirements of PMO/End-User
STEP 3 the end-user units.

For Mode of Procurement and Schedule for Each Procurement Activity, all modes of procurement are available as a
dropdown list and requirements for a specific schedule for Ads/Post of IB/REI, Sub/Open of Bids, Notice of Award, and/or
Contract Signing are automatically identified thru the MS Excel formula. Note that for Foreign-funded procurement, please Schedule for Each Procurement Activity
use Others - Foreign-funded procurement as the Mode of Procurement.

Kindly indicate a specific period (dates, month, quarter) when each Procurement Activity will be done. Please refer to our Mode of Procurement
website: http://www.gppb.gov.ph/timelines/timelines.htm for the specific periods for each activity.

Note: For SVP, IB/REI is similar to RFQ. Ads/Post Sub/Open Notice of Contract
Ads/Post of IB/REI for Shopping 52.1(b) and NP-SVP (53.9) needs to be posted in PhilGEPS for ABCs above 50k. Notice of of IB/REI of Bids Aw ard Signing
Award posting in PhilGEPS is mandatory for all Alternative Modes only for ABCs above 50k.
STEP 4

For Source of Funds, a dropdown list is available. If the Source of Funds the PE will use is not included, please indicate Source of Funds
STEP 5 "Others" and specify under the Remarks column.
For Estimated Budget (PhP), kindly fill out either MOOE or CO columns only. Total ABC column is not editable, but will
automatically compute for the total MOOE and CO components of the project. This breakdown is needed for tracking Estimated Budget (PhP)
STEP 6 purposes. Finally, please ensure that amounts indicated are aligned with budget documents.
STEP 7 Before submission to the GPPB, ensure that the Head of the Procuring Entity (HoPE) approves/signs the APP.
RIS Requisition and Issue
Slip

PR
Purchase Request
 REQUISITION AND ISSUE SLIP

Entity Name : __________________________________ Fund Cluster : ______________________

Division : _______________________________________________ Responsibility Center Code : ______________________

Office : ________________________________________________ RIS No. : _____________________________________
Requisition Stock Available? Issue
Stock No. Unit Description Quantity Yes No Quantity Remarks

Purpose:

Requested by: Approved by: Issued by: Received by:

Signature :
Printed Name :
Designation :
Date :
 PURCHASE REQUEST

Entity Name: _______________________ Fund Cluster: __________________

Office/Section : _____________ PR No.: ______________ Date: ____________
_________________________ Responsibility Center Code : ___________
Stock/ Property Unit
Unit Item Description Quantity Total Cost
No. Cost

Purpose: ____________________________________________________________
_______________________________________________________________

Requested by: Approved by:

Signature : _________________________ ___________________________
Printed Name : _________________________ ___________________________
Designation : _________________________ ___________________________
 PURCHASE REQUEST
____________________________________
LGU

Department : PR No.: ____________ Date: _________

SAI No.:_____________ Date: _________
Section : ALOBS No.:__________ Date:_________

Item Unit of Estimated Estimated

Item Description
No. Quantity Issue Unit Cost Cost

Purpose:

Requested by: Cash availability: Approved by:

Signature:
Printed Name:
Designation:
Specifications

Performance

Design

Purchase
 2017-12-20
NPM No. 050-2017
Requesting Entity: GLOBAL MARKETING &
CONSTRUCTION CORPORATION (GMCC)
Issues Concern: Change in Specifications

Details

Clarification on the compliance with the minimum requirements based on the Terms of Reference (TOR) and
whether one can change the specifications therein after the contract was awarded.

Public bidding will cease to be competitive if Procuring Entities will be permitted to make substantial variance between
the conditions under which the bids are invited and the contract executed after the award. In effect, bidders will no longer
bid on the basis of the prescribed terms and conditions in the bid documents but will formulate their bid in anticipation of
the execution of a future contract containing new and better terms and conditions that were not previously available at the
time of the bidding.

Section 37.2.3(c) of the revised Implementing Rules and Regulations (IRR) of RA 9184 in relation to Section 25.2(a)(iii)
provides that the technical specifications and offer of the winning bidder forms part of the contract. The inclusion of these
documents in the contract created an obligation on the part of the contractor to deliver the specific goods that it offered.
The General Conditions of Contract (GCC) of the Philippine Bidding Documents (PBDs) for the Procurement of Goods
categorically states that the goods to be provided by the contractor to the PE shall be as specified in the Schedule of
Requirements and shall conform with the standards mentioned in the Technical Specifications.

Anent the above-cited earlier opinion, we would like to reiterate that public bidding contracts require strict compliance
with the specifications or minimum requirements prescribed in the bidding documents. On the part of the Procuring Entity,
it cannot make substantial changes in the specifications of the contract, after it was awarded, without violating the
principle of competition and fairness. On the other hand, the supplier is similarly duty-bound to comply with the
specifications it had indicated in its offer as this forms part of the contract with the Procuring Entity, not to mention that
upon which promise or offer, the Procuring Entity based its decision to award the contract.
 Obligation Request and
1 Status (ORS)

Budget Utilization Request

2 and Status (BURS)

3 Obligation Request (ObR)

 OBLIGATION REQUEST AND STATUS Serial No. : _____________________
_____________________________________ Date : _________________________
Entity Name Fund Cluster : ___________________
Payee
Office
Address
UACS Object
Responsibility Center Particulars MFO/PAP Amount
Code

Total
A. Certified: Charges to appropriation/alloment are B. Certified: Allotment available and obligated
necessary, lawful and under my direct supervision;and for the purpose/adjustment necessary as
supporting documents valid, proper and legal indicated above

Signature : ___________________________________ Signature : ______________________________

Printed Name: ____________________________________ Printed Name:______________________________
Position : ____________________________________ Position : ______________________________
Head, Requesting Head, Budget Division/Unit/Authorized
Office/Authorized Representative Representative
Date : ___________________________________ Date : ____________________________
 No.
OBLIGATION REQUEST
Payee
Office
Address
Responsibility Account
Particulars F.P.P Amount
Center Code

Total
A. Certified B. Certified

Charges to appropriation/allotment necessary, lawful Existence of available appropriation

and under my direct supervision

Supporting documents valid, proper and legal

Signature Signature

Printed Printed
Name Name

Position Position
Head, Requesting Office/Authorized Representative Head, Budget Unit/Authorized Representative

Date Date
 • Contract entered into by state officers
Public acting on behalf of the state, and in
Contract which the entire people of the state
are directly interested

• Used to support the purchase of

Purchase
property, supplies and materials,
Order etc.
 PURCHASE ORDER
______________________
Entity Name
Supplier : _____________________________________________ P.O. No. : ____________________________
Address : _____________________________________________ Date : _______________________________
TIN : ________________________________________________ Mode of Procurement : _________________
Gentlemen:
Please furnish this Office the following articles subject to the terms and conditions contained herein:

Place of Delivery : ___________________________________ Delivery Term : ________________________

Date of Delivery : ____________________________________ Payment Term : ________________________
Stock/
Unit Description Quantity Unit Cost Amount
Property No.

(Total Amount in Words)

In case of failure to make the full delivery within the time specified above, a penalty of one-tenth (1/10) of one percent for
every day of delay shall be imposed on the undelivered item/s.
Conforme: Very truly yours,
__________________________ ______________________________________
Signature over Printed Name of Supplier Signature over Printed Name of Authorized Official
___________________________ _____________________________
Date Designation

Fund Cluster : ___________________________________ ORS/BURS No. : ______________________

Funds Available : _________________________________ Date of the ORS/BURS: _______________
________________________________________ Amount : ____________________________
Signature over Printed Name of Chief Accountant/Head
of Accounting Division/Unit
 Procurement Approving
EO No.
Method Authority
423, s. 2005 Public bidding HoPE
34, s. 2017 Alternative methods HoPE
Authority may be delegated in writing

 Head of the Procuring Entity certifies under oath

that the contract has been entered into in faithful
compliance with all applicable laws and
regulations (contracts amounting to at least P500M)
 Head of the Procuring Entity

GOCCs,
NGAs LGUs
GIFs, SUCs

Head of the Governing Local chief

agency board executive
General Procedures in Inspection

Upon receipt of request for inspection

Check Conduct inspection, and

completeness testing, if applicable
and authenticity
• Contract or PO Prepare inspection report
immediately after
• Delivery Receipt
 Supply Officer signs
Inspection committee
“Received” portion of
inspects and verifies
the DR and prepares
IAR

Supply Officer Accounting Div/unit

acknowledge receipt.
Posts necessary info Posts in the SLC,
to the SC. prepares JEV

Supply Officer
prepares DV
 INSPECTION AND ACCEPTANCE REPORT

Entity Name : ______________________________ Fund Cluster : ___________

Supplier : ______________________________________________IAR No. : _______________

PO No./Date : ___________________________________________
Date : _________________
Requisitioning Office/Dept. : _______________________________Invoice No. : ____________
Responsibility Center Code : _______________________________ Date : _________________
Stock/
Description Unit Quantity
Property No.

INSPECTION ACCEPTANCE

Date Inspected : ________________________ Date Received : _____________________

Inspected, verified and found in order as to Complete

quantity and specifications
Partial (pls. specify quantity)

____________________________________________ ___________________________________
Inspection Officer/Inspection Committee Supply and/or Property Custodian
 Basic Documentary Requirements

1 Purchase Request

2 Purchase Order or Contract

3 Supplier’s Invoice (original)

4 Inspection and Acceptance Report

5 Obligation Request

6 Result of test by proper agency, if applicable

 Limited Source Bidding
Competitive Bidding
Direct Contracting

Alternative Methods Repeat Order

Shopping

Negotiated Procurement
 Approved Contract and
Supporting Documents

Form of Contract Agreement

THIS AGREEMENT, made this [insert date] day of [insert month], [insert year]
between [name and address of PROCURING ENTITY] (hereinafter called the“Entity”) and
[name and address of Contractor] (hereinafter called the “Contractor”).

WHEREAS, the Entity is desirous that the Contractor execute [name and
identification number of contract] (hereinafter called “the Works”) and the Entity has
accepted the Bid for [insert the amount in specified currency in numbers and words] by the
Contractor for the execution and completion of such Works and the remedying of any defects
therein.

NOW THIS AGREEMENT WITNESSETH AS FOLLOWS:

1. In this Agreement, words and expressions shall have the same meanings as are
respectively assigned to them in the Conditions of Contract hereinafter
referred to.
Bidding Documents
Invitation to Bid

Minutes of pre-bid conference

Supplemental bid bulletin, if any

Bidders Technical and Financial Proposals

Checklist of required documents

Minutes of bid opening

Abstract of bids

Post-qualification report of the TWG

Notice of post-disqualification

Resolution of the BAC recommending award

Notice to all bidders of BAC recommendation

Notice of Award
Performance Security

Notice to Proceed
Dealer’s/Supplier’s invoice showing quantity, description of
articles, unit and total value (original)

Results of test analysis, if applicable

IAR

Warranty security
For MV – authority to purchase – from DBM or OP depending on the
type of vehicle (AO 223 dtd 8/1/08)

For Drugs & Medicines – Cert of product reg. from FDA, Cert of
good manufacturing practice from FDA, Certificate of good
manufacturing practice from FDA, Batch release certificate from
FDA, If the supplier is not the manufacturer, cert from the
manufacturer that the supplier is an authorized distributor/dealer

Other documents peculiar to the contract considered necessary in the

auditorial review and tech eval thereof
 Two Failed
Biddings

UN Agencies, Emergency
IOs/IFIs Cases

Small Value Take-Over of

Procurement Contracts

Agency-to-
Agency
 Procurement of

Highly specialized
Major plant component
types of goods
PRE-SELECTION PROCEDURES
GPPB Resolution 06-2012

PE through BAC
Acquires/Issues a
identifies LSB as
Pre-selected List
applicable mode

HOPE transmits list

to the GPPB

GPPB-TSO
PE posts
acknowledges
procurement
receipt and posts the
opportunity and
list in the website
conducts LSB
(ministerial)
PRE-SELECTION PROCEDURES
GPPB Resolution 06-2012

Relevant Y Request for a

Government
List
Authority?

N
PE represents
itself as the Y Limited Source
Issues a List?
RGA (self- Bidding
generated list

Competitive
Bidding
 Procurement of
Those sold
critical components
Goods of from a specific by an
supplier is a exclusive
proprietary
condition precedent dealer
nature to hold a contractor
or
to guarantee its
project performance
manufacturer
Unit prices Not result Not to
of repeat in splitting Availed of exceed
order the of contracts only within 25% of
same or or 6 months quantity of
lower requisitions each item
 When there is unforeseen contingency
52.1.a
requiring immediate purchase

Procurement of ordinary or regular office

52.1.b supplies and equipment not available in
the PS
Unforeseen contingency thresholds
Supplies and equipment not in PS thresholds
Threshold
Every officer accountable for government property
shall be liable for its money value in case of improper
or unauthorized used or misapplication thereof, by
himself or any person for whose acts he may be
responsible.

He shall likewise be liable for all losses, damages, or

deterioration occasioned by negligence in the keeping
or use of the property whether or not it be at the time
in his actual custody.
 The Stolen Ink Cartridges

1) Discuss the case among the members

of your group.

2) Answer the questions in the exercise.

3) Write your outputs in a manila paper.

4) Time allotted: 30 minutes

Records show that Ms. Rosal Asst Depot Supervisor, received anonymous text messages regarding the theft of ink
cartridges by a certain Ms. Dee, Job Order employee of PS Reg. Y. Sometime in March 2018, Ms. Rosal ordered an
on-the-spot inventory of ink cartridges. The inventory showed that ink cartridges with estimated cost of
P2,000,000.00 were missing, thus, the matter was reported to Dir. Salee, who then directed Ms. Rosal to conduct a
thorough investigation and request the help of the NBI.

The CCTV installed at PS Reg. Y showed footages of Ms. Dee stealing ink cartridges on July 29, 30, 31, August 10
and 11, 2018. Subsequently, the NBI conducted an entrapment operation and caught Ms. Dee with two ink cartridges
in her possession. She was then arrested and 5 counts of Qualified theft was filed against her before the RTC.

In her letter dated August 13, 2018, Dir. Salee, Depot Supervisor, informed the ATL, of the loss of the ink cartridges
due to theft. A request for relief from property accountability was then filed on February 23, 2019 by Dir. Salee. After
initial evaluation, the request was returned for the submission of the complete requirements prescribed under COA
Memorandum No. 92-751 dated Feb. 24, 1992. Thus, on March 15, 2019, Dir. Salee resubmitted her request for relief
from property accountability—this time with the required documents.

The investigation report dated June 8, 2019 of the ATL noted that the office supplies were easily accessible by
anyone. There was no adequate safeguard in the warehouse to restrict the unauthorized entry, & those who entered
were not subjected to inspection when they leave. Employees took turns in acctg & keeping records of inventories.

ISSUE: Whether or not the request for relief from property accountability may be granted.
Facts of the Case:
• At 12 midnight of December 15, a man approached the gate of the NFA warehouse
and asked permission to park his truck in front of the warehouse.
• When the lone security guard of the Security Services approached the gate, he was
accosted by 3 men who were already inside the NFA compound. The men took his
firearm, cellphone and blindfolded and hogtied him and took the palay in the
warehouse.
• After the robbers left the premises, he was able to free himself, drove his motorcycle to
the nearest NFA warehouse to ask assistance from fellow guards and reported the
incident to the police.
• At the time of the incident, Ms. Oliva, Warehouse supervisor was on official travel to
Metro Manila.
• On December 19, Ms Oliva filed before the COA ATL a request for relief from property
accountability for the loss of the palay worth P661,644.56, due to robbery. She also
reported the incident to the PNP.
• The ATL conducted an investigation and found the security guard negligent. She
recommended that the latter’s negligence cannot be imputed to Ms. Oliva. The COA
Director concurred.
• The PNP investigation report showed that the robbery was well planned by the
perpetrators.
Issue:
Should the request for relief from accountability of Ms Oliva be granted?
Rules governing the purchase of inventories

Alternative methods of procurement

Applied the rules through exercises

Thank You