TERMS OF REFERENCE

CONSULTING SERVICES FOR THE DEVELOPMENT OF

PROCUREMENT GUIDELINES FOR THE REGULATED
TRANSMISSION AND DISTRIBUTION ASSETS APPLICABLE
TO REGULATED ENTITIES

A. RATIONALE

The Energy Regulatory Commission (ERC) is the independent,

quasi-judicial regulatory body created under the Republic Act No. 9136,
otherwise known as the “Electric Power Industry Reform Act of 2001”. It
is mandated, among others, in the public interest, to establish and enforce
a methodology for the setting of transmission and distribution wheeling
rates and retail rates in the Philippine electric power industry.

There are twenty (20) regulated entities, nineteen (19) of which are
privately-owned distribution utilities (DUs) and one (1) transmission
company. The acquisition cost of regulated assets used for regulated
distribution and transmission services form part of the rates of these
service providers.

Considering the significant amount of regulated assets being

acquired by the regulated entities, the Commission resolves to prescribe
policies and methods governing the acquisition of regulated transmission
and distribution assets for the regulated entities.

With its existing organizational structure vis-à-vis its mandates over

regulated entities, the ERC will require the assistance of a Consultant, who
may be a person/s or entity engaged in consulting services, that has the
technical expertise and capability to develop procurement guidelines
applicable to regulated entities.

B. OBJECTIVE

In this context, the development of procurement guidelines for

transmission and distribution assets specifically aims to:
1. Assist the regulated entities in understanding the regulations
applicable to regulated entities’ acquisitions for regulated
transmission and distribution assets;

2. To develop the process and standards necessary to obtain a

reasonable and prudent cost for the regulated entities when
procuring regulated transmission and distribution assets;

3. To have an objective assessment on the regulated entities’

acquisitions of regulated transmission and distribution assets and
provide the ERC an informed decision on the appropriate course/s of
action and/or corrective measure that may be adopted, if necessary;
and

4. To capacitate ERC personnel on the development of the guidelines.

C. SCOPE OF WORK

The development of procurement guidelines for transmission and

distribution assets will be designed based on the objectives of the project.
The scope of work is consistent with the ERC’s issuances such as the
RTWR, RDWR, Issues Paper, Position Paper. It is therefore essential that
all parties are familiar with these documents before submitting their
proposals.
The Consultant must provide a detailed description of the scope of
services offered, demonstrating clear understanding of the requirements
of the Commission and the Regulatory Reset Process. The Consultant
must propose further activities that may be undertaken to successfully
deliver the required review outputs.
The scope should specifically address the proposed:
1. Data gathering from privately-owned electricity distribution and
transmission utilities of their existing procurement process when
procuring regulated transmission and distribution assets;
2. Analyze and propose a common procurement process that are
applicable to all;

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 3. Proposed a form/template of the follow-up engagement with the
regulated entities (e.g. written responses, clarificatory meetings,
etc.);
4. Development of the Procurement Guidelines for Privately-Owned
Electricity Distribution and Transmission utilities; and
5. Attend the public consultations;

The Consultant is expected to provide the following:

1. Reports
1.a. An inception report that reviews the relevant information to be
provided by the regulated entities on their existing procurement
process, identifies the issues to be validated and discusses the
approach that the Consultant proposes to use to complete the
procurement guidelines in accordance with the ERC’s requirements.
The report should identify any required information that should be
provided in the submission, including a timeline that the Consultant
will follow to complete the review.
The inception report is to be presented to the ERC prior to the first
clarificatory meeting;
1.b. Submission of monthly progress report outlining work undertaken
and discussing and problems or issues encountered; and
1.c. Compilation of dataset and the final edit and lay-out of the printable
version of the final report;
2. Presentation and Meetings
2.a. Preparation and presentation to the ERC of a detailed report
(initial/draft report) presenting the findings of the Consultant with
regard to his/her development of the procurement guidelines for
transmission and distribution assets. The report must highlight the
procurement process, with the reasons for these recommendations,
and clearly show the steps and standards recommended as a result of
the review and how these were derived; and
2.b. Attendance at clarificatory meetings, explanatory public consultation
sessions, expository and evidentiary hearings where the procurement
guidelines are further explained and defended.
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3. Documentation
3.a. Documentation of all the functions performed in developing the
guidelines and of the reasons for coming up with the
recommendations, including full details of the steps and standards on
the procurement process; and
3.b. Maintenance of detailed documentation used in developing the
guidelines, data used, modifications made to the data, the
justification for these modifications, the basis used to develop
procurement guidelines, data used to develop the guidelines, and the
justification for the final recommendations.
An electronic copy of all relevant documents gathered in this project
must be contained/stored on a USB flash drive (in MS Word and MS Excel
format) and must be delivered to the Commission, while reports can be
submitted via email. The Commission shall also be provided with the
detailed spreadsheets containing the Consultant’s analyses.

D. RESPONSIBILITIES OF THE CONSULTANT

a. Close Cooperation with the ERC
Close coordination and regular liaison with the ERC Commission en
Banc, official and/or staff will therefore be an integral part of the scope of
work including the conduct of regular meetings, physically or virtually,
regarding the subject matter. A progress report shall be furnished on a
monthly basis, to apprise the ERC of the development of the project. The
Consultant/s shall attend Commission meetings, if necessary, to present
matters to the ERC including but not limited to, issues arising from work,
and shall be recommended with appropriate action. Likewise, the
Consultant/s shall accompany the ERC representative, from time to time,
in meetings with the regulated entities, physically or virtually, regarding
the matter.
The Commission and the ERC shall have full access to any
information, data, documents or working records acquired or used by the
Consultant during the course of the project.
The Commission or any of its authorized representatives may
participate on project meetings and join the Consultant during onsite
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inspections or meetings with the regulated entities. Communication with
the regulated entities shall be conducted through the ERC.
b. Knowledge Transfer
The project requires that knowledge about the procurement
guidelines (either or both the ERC and the regulated entities) be
transferred either through workshop or training using either actual
presence or webinar to the ERC. All costs related to the conduct of physical
or webinar workshop or training shall be for the account of the Consultant.
The Consultant shall submit knowledge transfer program/plan to
the ERC. In the event that the ERC may be required to travel to the office
of the Consultant, the full transport, accommodation and subsistence
costs associated therewith are to be included in this proposal.
The training/workshop may also involve regulated entities to ensure
their sufficient compliance to the technical requirements of the ERC in
accordance to its framework. However, any related cost on the aforesaid
activities shall be on the account of the regulated entities.
Equipment used during the review process may be transferred
through donation to the ERC.
c. Data Gathering
The Consultant shall conduct actual and on-site gathering of relevant
data; and ensure data consistency and interpretation of the results.

For activities involving actual physical presence, the ERC may consider
alternative means in consideration of the current state of health
emergency and adherence to the prescribed health protocols.

d. Confidentiality
The Consultant shall not release any information or data obtained
in the course of this project to any person without written consent from
the ERC.
e. Intellectual Property
All intellectual property, including studies, reports or other
materials, models, spreadsheets or otherwise, prepared, developed or
produced by the Consultant shall belong to and remain the property of the

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ERC. The Consultant should not retain a copy of such documents and
software, for any purposes.

E. RESPONSIBILITIES OF ERC

The ERC shall facilitate development of procurement guidelines by

providing the following:

a. Assistance in coordinating with the regulated entities to solicit

comments and inputs related to the work;
b. Technical and Secretariat support to the work such as but not limited
to, coordinating meetings and public consultation; and
c. Determine the acceptability of the deliverables and shall be the
approving authority for all operations-related activities.

F. EXPECTED OUTPUTS
a. Work Plan / Methodology
b. Monthly Progress Report
c. Draft Report on Factual Findings
d. Final Report on Factual Findings

G. TIMELINES/DELIVERABLES

1. Deliverables and Timelines.

The project shall be completed within one hundred fifty (150) days,
commencing from the date of the NTP to the Consultant. An Inception
report shall be submitted by the Consultant within fifteen (15) days and
final outputs shall be submitted at the end of one hundred fifty (150) days.
Except specifically provided in the Terms of Reference or Contract, the
Consultant shall be released from its commitment to the contract not
more than fourteen (14) days upon acceptance of the final outputs by ERC.

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 The Consultant shall adhere to the following timelines:

Outputs/Deliverables Timeline

Inception Report (4 hard copies Within fifteen (15) days from

with electronic copy), which the date of receipt of the NTP.
includes, among others, the work
plan that identifies in detail the
design and procedures/processes to
be utilized for the project

Submission of Initial/Draft Within thirty (30) days from the

Procurement Guidelines date of the receipt of the NTP

Expository Presentation on the Within forty-five (45) days from

Draft Procurement Guidelines to the date of the receipt of the
the Commission and during the NTP
Expository Hearing/Public
Consultation

Delivery of Consultant’s Within sixty (60) days from the

recommendations on the comments date of receipt of the NTP
submitted by the stakeholders

Attendance to the Public Within ninety (90) days from

Consultation/s and provide position the date of receipt of the NTP
on the issues raised during the
public consultations

Presentation on the Final Within one hundred twenty

Procurement Guidelines to the (120) days from the date of
Commission and ERC technical staff receipt of the NTP

Submission of Final Procurement Within one hundred fifty (150)

Guidelines days from the date of the receipt
of the NTP

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 H. QUALIFICATION REQUIREMENTS

1. Qualification Requirement. The validation shall be

undertaken by a reputable Consultant, who may be a person/s or
entity engaged in consulting services. The Consultant shall
mobilize key personnel, i.e., a principal/lead consultant and at
least five (5) experts. The Consultant, as well as the
principal/lead consultant and experts, must meet the following
qualifications:

QUALIFICATION MINIMUM REQUIREMENTS

Quality of the Professional Experience

Consultancy
Firm ● It is strongly encouraged that
the Consultants are composed of
local(Filipino) and/or foreign
consultants in the team, both with
the view to support the project at
hand, but also as part of an action to
establish local sources of experts
that can become involved with
regulatory activities in the future
● Must have been engaged in similar
or relevant professional and consulting
services
● Must be highly competent in
development of processes related to
procurement of goods/services in the
Philippines or of other jurisdiction.

● Knowledgeable in the utility

rate setting or regulatory reset
process in the Philippines or of other
jurisdiction.

● The Consultants must have

extensive knowledge with the
Republic Act 9136 or the Electric
Power Industry Reform Act (EPIRA)
and its Implementing Rules and
Regulations (IRR), or of the Utility
rate setting;

● The Team Leader and at least

one (1) Key Personnel must have
previous exposure to regulatory ● Lead Consultant: At least three (3)
practices of developing procurement years of experience in the development of
guidelines for the last five (5) years. procurement guidelines or similar
projects.

● Experts: At least two (2) years of

experience the development of
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 procurement guidelines or other similar
projects.

● Firm: Must have been involved in

similar or related work engagement with
at least one (1) Certificates of Satisfactory
Service from completed similar or related
projects.

● Firm: At least one (1) similar or

related work engagement.

Education
● Educational attainment in
law, accounting, economics, finance,
engineering and/or related fields,
with strong background in ● Lead Consultant: At least an
procurement process MA/MS degree holder, PhD will be an
advantage.

● Experts: At Least BS/BA degree

holder, MS/MA an advantage.

Training

Lead Consultant: Must have at least 24

hours training on the development of
procurement process and/or other similar
and/or relevant trainings

Experts: At least 8 hours training on the

development of procurement process
and/or other similar and/or relevant
trainings

The shortlisting and selection of qualified candidates is rated based

on the attached criteria in ANNEX A and B, respectively.

2. Criteria for Selection. The consultant shall be selected using

the Quality Based Selection Criteria/Evaluation (QBE)
procedure as prescribed under Section 33 of the 2016 Revised
Implementing Rules and Regulations (IRR) of Republic Act (RA)
No. 9184 and based on the following criteria:

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 a. Quality of personnel to be assigned to the project which
covers suitability of key staff to perform the duties of the
particular assignments and general qualifications and
competence including education and training of the key
staff;

b. Experience and capability of the consultant which include

records of previous engagement and quality of performance
in similar and in other projects; relationship with previous
and current clients; and, overall work commitments,
geographical distribution of current/impending projects
and attention to be given by the consultant. The experience
of the consultant to the project shall consider both the
overall experiences of the firm and the individual
experiences of the principal and key staff including the times
when employed by other consultants; and

c. Plan of approach and methodology with emphasis on the

clarity, feasibility, innovativeness and comprehensiveness of
the plan approach, and the quality of interpretation of
project problems, risks, and suggested solutions.

Experience Factors: 30%

Firm Factors: 30%
Technical Factors: 40%

I. MODE OF PROCUREMENT

The procurement of the consulting services shall be

undertaken though competitive bidding pursuant to. RA No. 9184
and its 2016 Revised IRR.

J. FUND SOURCE AND APPROVED BUDGET FOR THE

CONTRACT (ABC)

1. Fund for this engagement shall be sourced from the General

Appropriation Act (GAA) for the fiscal year 2021 of the ERC.

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 2. The ABC for the project is TWO MILLION TWO HUNDRED
THOUSAND PESOS (PhP2,200,000.00), inclusive of all
government taxes, fees and charges, and other incidental and
administrative costs, which shall be paid on an output basis (e.g.,
meetings, consultations, materials, etc.)

3. Note that this consulting contract shall be a fixed price contract.

Any extension of contract time shall not involve any additional
cost to the ERC except due to the fault of the latter.

4. All manuals, reports, materials, databases, references, etc.

acquired through the conduct of the project shall be turned over
to ERC at the conclusion of the undertaking and shall not be
released to any person without prior written consent from ERC.

K. PAYMENT SCHEME/SCHEDULE

1. An amount of TWO MILLION TWO HUNDRED

THOUSAND AND 00/100 PESOS (PhP2,200,000.00)
shall be allocated for the cost of conducting the project, including
remuneration of the consultant. This shall be in accordance with
the following delivery schedule and subject to the usual
government accounting and auditing requirements:

Payment
DELIVERABLES Allocation and
Amount
Upon submission and acceptance of
15%
Final Inception Report/ Work Plan
Upon Submission and Acceptance of
25%
Initial/Draft Procurement Guidelines

Upon Submission of position on the

comments submitted by the 25%
stakeholders

Upon Presentation during the 20%

Expository Hearings and Public

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 Consultations on the Procurement
Guidelines
Upon Submission and Acceptance of
15%
Final Procurement Guidelines

2. Since all the above payments shall be subject to the usual

government accounting and auditing requirements, the
Consultant is expected to be familiar with the Government
Accounting and Auditing Manual (GAAM).

3. The Consultants shall have the flexibility to allocate the budgets

for expenditures made in the performance of the Services but
shall not exceed the ABC.

L. LIQUIDATED DAMAGES

1. Where the Contractor refuses or fails to satisfactorily complete

the work within the specified contract time, plus any extension
time duly granted, and is thereby in default under the contract,
the Contractor shall pay ERC for liquidated damages, and not by
way of penalty, an amount, as provided in the conditions of the
contract, equal to one tenth (1/10) of one percent (1%) of the cost
of the unperformed portion for every day of delay. Once the
cumulative amount of liquidated damages reaches ten percent
(10%) of the amount of the contract, the ERC may rescind or
terminate the contract, without prejudice to other courses of
action and remedies available under the circumstances such as
but not limited to forfeiture of performance security and/or
blacklisting of the latter.

2. Entitlement to such liquidated damages, ERC need not prove the

damages actually incurred. Said damages in any amount shall be
deducted from any money due or which may become due the
Contractor under the Contract and/or collect such liquidated
damages from the retention money or other securities posted by
the Contractor at the ERC’s convenience.

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M. RESERVATION CLAUSE

The ERC reserves the right to reject any and all bids, declare a
failure of bidding or not award the contract at any time prior to
contract award in accordance with Section 41 of R.A. 9184 and its
IRR, without thereby incurring any liability to the affected bidder or
bidders.

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ANNEX A: CRITERIA FOR SHORTLISTING OF PROSPECTIVE
BIDDERS FOR THE PROCUREMENT OF CONSULTING
SERVICES FOR DEVELOPMENT OF PROCUREMENT
GUIDELINES FOR THE REGULATED TRANSMISSION AND
DISTRIBUTION ASSETS APPLICABLE TO REGULATED
ENTITIES

CRITERIA/PARTICULARS POINTS
I. Applicable Experience of the Firm 50
Prior involvement in reports or studies related
to development of procurement process
II. Qualification of Officers, Key/Organic 30
Personnel who may be assigned for the
study
Education, training and years of professional
experience
III. Current Workload relative to job 20
capacity
GRAND TOTAL 100
Hurdle Rate 70

Note: only the top five (5) ranked consultancy firms with at least 70% rating based
on the short listing criteria will be invited to submit the Technical and Financial Proposals.

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QBE Criteria for Eligibility Short listings

Consultancy Services for the Development of Procurement Guidelines for the Regulated Transmission and
Distribution Assets Applicable to Regulated Entities

SHORTLISTING CRITERIA FACTORS CONSIDERED:

Points Multiplier
I. APPLICABLE EXPERIENCE OF CONSULTANT 50%
A) OVERALL EXPERIENCE OF THE FIRM/CONSULTANCY 10%
1. Knowledge of utility rate setting or Regulatory reset process
Yes 100 10%
No 0 10%
B) INDIVIDUAL EXPERIENCE OF THE PRINCIPAL AND KEY STAFF 20%
1. Been involved in the projects on procurement process in the Philippines or in other jurisdiction
Yes 100 10%
No 0 10%
2) Knowledgeable with the different methodology used in procurement process of goods and services
of an electric utilities or of similar nature of project with other company
Yes 100 10%
No 0 10%
Number of times the consultants/firm been involved in the procurement process and drafting of
C) 20%
guidelines
5 or more times 100 20%
1- 4 times 50 20%

II. QUALIFICATION OF PERSONNEL TO BE ASSIGNED TO THE JOB 30%

Knowledge in fields of accountancy, economics, finance, law, engineering or other related disciplines to
A) 10%
undetake the tasks

College Graduate 50 10%

with Masteral 75 10%
with Ph Degrees 100 10%
Consultant must be involved in the determination and drafting of guidelines on procurement policies,
process and rules. Previous clients satisfactory acceptance of consultancy services rendered by the
B) 10%
firm and its experts (must present at least one Certificate of Satisfactory Services from completed
similar or related projects)
Yes 100 10%
No 0 10%
C) Number of years with the firm/consultancy service 10%
5 year or more 100 10%
1 - 4 years 50 10%
III. Current workload relative to job capacity 20%
1. Number of all on-going projects (awarded) where listed members of the project are currently
50 20%
involved
2. Number of working hours involved on current on-going projects of the consultant/firm 50 20%

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ANNEX B. QBE Criteria for Technical Proposal

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