Government Procurement

Reform Act (Rep. Act 9184)

“Not just doing the right things,

but doing it right”
 PROBLEM AREAS AND REFORM
MEASURES

PROBLEMS REFORMS
• Confusion caused by Uniform applicability of
fragmented legal the law to both national
system government agencies and
local government units
 ENACTMENT OF GPRA

Implementing Executive Orders Memorandum

Administrative
Rules and Circulars
Issuances
Regulations

over 100 procurement rules & regulations

R.A. 9184
10 January 2003
Goods, Infrastructure,
Consulting Services
Coverage: NGAs and LGUs
 PROBLEM AREAS AND REFORM
MEASURES

PROBLEMS REFORMS
• Confusion caused by • Creation of the
inconsistent rules and Government
regulations Procurement Policy
Board (GPPB) as sole
• Inconsistent policies, procurement authority
rules, and regulations
due to lack of standards

• Outdated procurement
rules and regulations
 CREATION OF GPPB
Inter-Agency Body

 Big procuring entities (defense, education,

health, public works, transportation and
communications)

 Oversight agencies (budget, planning,

finance, trade, science and technology,
interior and local government, energy)

 Private Sector

 Resource Persons (audit, anti-corruption

agencies)
 GPPB Functions
 Policy-Making
 Amend implementing rules & regulations of
procurement law (quasi-legislative function)
 Prepare generic procurement manual and

standard bidding forms

 Capacity Development
 Establish a sustainable training program

 Monitoring
 Assist procuring entities improve their
compliance
 Review effectiveness of procurement law
 PROBLEM AREAS AND REFORM
MEASURES
PROBLEMS REFORMS

Collusion and lack of Approved Budget for the

transparency Contract as ceiling for bid
prices

Delays, collusion, and lack Simplification of Pre-

of competition qualification and stronger
post-qualification

Abuse of discretion Use of objective non-

discretionary criteria
 PROBLEM AREAS AND REFORM
MEASURES

PROBLEMS REFORMS
• Lack of transparency Use of Electronic
Procurement

www.philgeps.net
 PROBLEM AREAS AND REFORM
MEASURES

PROBLEMS REFORMS

• Lack of checks and Civil society

balance organization
observance of bidding
process and result
reporting
 GOVERNING PRINCIPLES
 Transparency
◦ Wider dissemination of bid opportunities

 Competitiveness
◦ Equal opportunity to all eligible bidders

 Streamlined Process
◦ Uniformly applicable to all government agencies
◦ Effective and efficient method

 System of Accountability
◦ “Answerable”

 Public Monitoring
◦ Awareness and vigilance
 COVERAGE
 R.A. 9184 applies to all branches and/or instrumentalities
of the government:

a) National Government Agencies (NGAs)

b) State Universities and Colleges (SUCs)
c) Government Owned or Controlled Corporations
(GOCCs)
d) Government Financial Institutions (GFIs)
e) Local Government Units (LGUs)
 SCOPE AND APPLICATION

 R.A. 9184 governs the procurement of:

 Goods (Supplies & General Support Services)

 Infrastructure Projects
 Consulting Services

 All domestically-funded procurement activities

 All foreign-funded procurement activities, unless

otherwise stated in the treaty or international or
executive agreement
 SCOPE AND APPLICATION

 Exceptions:

 Procurement funded from Foreign Grants [R.A. 8182,

as amended by R.A. 8555 (ODA Law)];

 Acquisition of Real Property (R.A. 8974);

 Public-Private Sector Infrastructure or Development

Projects [R.A. 6957, as amended by R.A. 7718 (BOT
Law)];

 Disposal of government properties (rules on budget,

accounting and audit)

 JV Partnerships (NEDA Guidelines)

DEFINITION (GOODS)
Items, supplies, materials & general support services, except
consulting services & infra projects, which may be needed in
the transaction of public businesses or in the pursuit of any
government undertaking.

Includes, but is not limited to the following:

a) equipment,
b) furniture,
c) stationery,
d) materials for construction,
e) personal property of any kind,
f) non-personal or contractual services,
i. repair & maintenance of equipment and furniture
ii. trucking, hauling, and courier
iii. janitorial, security and manpower
DEFINITION (GOODS)

Related or analogous services shall include, but not limited to

the following:
a) lease or purchase of office space
b) media advertisements
c) health maintenance services
d) other services essential to the operation of the procuring
entity
i. rental of venues and facilities
ii. catering services
iii. lease of computers, copiers and other information
technology equipment
 DEFINITION (INFRASTRUCTURE PROJECTS)

Include
• Construction • Roads and bridges
• Improvement • Railways
• Rehabilitation • Airports and seaports
• Demolition • Communication facilities
• Repair • Civil works components of IT projects
• Restoration • Irrigation
• Maintenance • Flood control and drainage
• Water supply
• Sanitation
• Sewerage and solid waste management
systems
• Shore protection
• Energy/power and electrification
facilities
• Buildings (National, School, Hospital)
• Other related construction projects
DEFINITION (CONSULTING SERVICES)

Services for infrastructure projects and other types of projects

or activities requiring adequate external technical and
professional expertise that are beyond the capability and/or
capacity of the GOP, such as:
a) Advisory and review services
b) Pre-investment or feasibility studies
c) Design
d) Construction supervision
e) Management and related services
f) Other technical services or special studies
PROCUREMENT ORGANIZATIONAL
STRUCTURE
Head of the
Procuring Entity

BAC BAC Secretariat

Observers TWG
 PROCUREMENT ORGANIZATION
Head of the Procuring Entity (HOPE)

 Establish BAC and appoint its members

◦ Ensure BAC members give utmost priority to
assignments
◦ Ensure professionalization of procurement
organization

 Approve the Annual Procurement Plan (APP) &

Procurement Monitoring Report

 Promptly act on BAC recommendations, i.e., award of

the contract and mode of procurement

 Approve/Disapprove Contract Award

 Resolve Protests
 PROCUREMENT ORGANIZATION
Head of the Procuring Entity (HOPE)

 Ensure that the procurement officials and personnel

receive ample training and proper incentives

 Impose the necessary administrative sanctions to errant

procurement officials and bidders – issues blacklisting
orders

 In case of consulting services, approves the method of

evaluation, short-listed bidders and bidder having the
Highest Rated Bid.
 PROCUREMENT ORGANIZATION
Bids and Awards Committee

 General Rule:
Single BAC

 Exception:
Expedite the procurement process for practical intents
and purposes where the number and complexity of the
items to be procured warrants

 HOPE designates the BAC members, including the Chair

and Vice-Chair
 PROCUREMENT ORGANIZATION
Bids and Awards Committee

 Composition: FIVE (5) but not more than SEVEN (7)

MEMBERS designated by the HOPE

 Members of the local sanggunian.

 PROCUREMENT ORGANIZATION
Bids and Awards Committee
Major Functions:

 Recommend Procurement Method

 Create TWG

 Conduct the bidding activities

 Resolve Requests for Reconsideration

 Prepares the APP and PMR

 Recommend Imposition of Sanctions vis-à-vis process

blacklisting proceedings
 PROCUREMENT ORGANIZATION
Bids and Awards Committee
Other Responsibilities:

 Invite Observers during all stages of the procurement

process

 Conduct due diligence review or verifications of the

qualifications of observers

 Prepare Procurement Monitoring Report

 Suspend or blacklist bidders

 PROCUREMENT ORGANIZATION
Bids and Awards Committee

 Prohibited Members:

 Head of the Procuring Entity

 Approving Authority

 Chief Accountant (Head of the

Provincial/City/Municipal Accounting Office) and
his/her staff, unless any of the former were
designated as end-user of the project (COA Circular
2003-04)
 PROCUREMENT ORGANIZATION
Technical Working Group

Created by the BAC from a pool of legal, technical and

financial experts

Functions:

 Assist BAC in the following activities:

• Preparing bidding documents
• Eligibility check/short-listing
• Bid evaluation and preparation of reports
• Post-qualification
• Preparation of post-qualification summary report

 Assist BAC and BAC Secretariat in preparing BAC

Resolutions
 PROCUREMENT ORGANIZATION
BAC Secretariat

HOPE may create a new office or designate an existing

organic office to act as BAC Secretariat

Functions:

 Provide administrative support to the BAC

 Organize BAC meetings and conferences
 Take custody of procurement documents and other
records
 Manage the sale and distribution of bidding documents
 PROCUREMENT ORGANIZATION
BAC Secretariat

Functions:

 Advertise/post bidding opportunities and notices of

awards

 Assist in managing the procurement process

 Monitor procurement activities and milestones

 Consolidate PPMPs

 Act as central channel of communications

 OBSERVERS
 Who are the Observers?
 Representative from COA
 Representative from a duly recognized private
group in a relevant sector or discipline
 Representative from an NGO

 Qualifications:
 Organization duly registered with the SEC or CDA
 With knowledge, experience or expertise in
procurement or in the subject matter of the
contract to be bid
 Without actual or potential conflict of interest in
the contract to be bid
 Any other relevant criteria that may be
determined by the BAC
 OBSERVERS

 Invited at least 3 cd prior to the procurement

stage/activity to enhance transparency of the process

 Responsibilities:
 Prepare report (jointly or separately) indicating
their observations on the procurement activities
 Submit report to the PE and furnish a copy to the
GPPB and the Office of the Ombudsman/Resident
Ombudsman
 Immediately inhibit and notify in writing the PE of
any actual or potential conflict of interest

 Allowed access to documents upon signing of a

confidentiality agreement
 BAC INCENTIVES

 Honoraria
 Legal Basis:
 DBM Budget Circular 2007-3, dated 20
November 2007
 DBM Budget Circular 2004-5A, dated 7 October
2005

 Paid only for successfully completed procurement

projects
 Procurement contract has been awarded
 Applies every procurement project that has been
identified, described, detailed, scheduled and
budgeted in the APP
 Limited to procurement that involves competitive
bidding
 BAC INCENTIVES

 Honoraria: Ceiling

BAC Chair Php. 3,000

BAC Members 2,500
TWG Chair & Members 2,000

Average amount of honoraria per month over one year

should not exceed 25% of the basic monthly salary
 BAC INCENTIVES
 Honoraria: Funding Source:

 Collections from successfully completed project

• proceeds from sale of bid documents

• fees from contractor/supplier registry
• fees charged for copies of:
1. minutes of bid openings,
2. BAC resolutions, and
3. other BAC documents
• Protest fees
• Proceeds from bid security forfeiture

• Savings from the DBM approved corporate operating

budget
 BAC INCENTIVES

 Honoraria: BAC Secretariat

 Ad hoc: paid honoraria at the same rate as the TWG
chair and members
 Procurement Unit: Overtime services

 Those who are receiving honoraria shall no longer be

entitled to overtime pay

 Administrative staff, such as clerks, messengers and

drivers supporting the BAC, the TWG and the Secretariat
entitled to payment of overtime services
 PHILIPPINE PROCUREMENT
PARADIGM
HOPE Assess • Review studies • Post/Advertise
Procure HOPE
• Consolidate into APP opportunity
• Decide procurement • Open and evaluate
BAC BAC
method bids
• Approve APP • Post-qualify
BAC Sec • Determine readiness • Award and enter into TWG
contract
Budget BAC Sec

End User End User

Identify • Cost-benefit analysis • Oversee Implement

• Feasibility study implementation
• Market study • Inspect and accept
• PPMP deliveries
• Release payment

NEEDS SATISFACTION
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 PROCUREMENT PLANNING
 Procurement planning involves resource allocation and
scheduling.

 Involves identifying which project/program/activity

needs of the procuring entity can best be met by
procuring products or services. It includes deciding:
 Whether to procure
 What to procure
 How to procure
 Where to procure
 How much to procure
 When to procure
 PROCUREMENT PLANNING

Why Conduct Procurement Planning?

 Overall goal of the particular project will be effectively and

efficiently achieved

 Precludes occasions for unnecessary government purchases

and circumventions of the prescribed procurement
procedures.

Examples:
 Advance deliveries;
 Suki” system, or
 Unwarranted resort to alternative methods
procurement.

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 PROCUREMENT PLANNING

Why Conduct Procurement Planning?

 Done w/in budgetary context reflecting the LGU’s priorities

and objectives for the budget period.

 Government has the fiduciary responsibility to protect the

taxpayers’ interests and safeguard the resources allotted to
each department

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 PROCUREMENT PLANNING

 The following competencies are required:

 knowledge of the items to be procured

 accounting,
 warranty and contract laws, and
 scheduling.
 PROCUREMENT PLANNING

 All procurement shall be within the approved budget of

the procuring entity and should be meticulously and
judiciously planned by procuring entity

 Only those considered crucial to the efficient discharge of

governmental functions shall be included in the Annual
Procurement Plan (APP).

 A procurement project shall be considered crucial to the

efficient discharge of governmental functions if it is
required for the day-to-day operations or is in pursuit of
the principal mandate of the procuring entity concerned.
(Sec. 7.1, Revised IRR)

 No procurement shall be undertaken unless it is in

accordance with the approved APP (Sec. 7.1, Revised IRR)
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 PROJECT PROCUREMENT
MANAGEMENT PLAN
 What is a PPMP?

PPMP is the document reflecting the different programs,

activities and projects (PAPs) of the various end-user units or
Project Management Offices (PMOs) of the procuring entity.

 When is the PPMP prepared?

PPMP is prepared simultaneously with the budget proposal to

provide details on the mode and schedule of procurement,
technical description and specification of goods, equipment
and civil works to be procured and their proposed budgets.

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 PROJECT PROCUREMENT
MANAGEMENT PLAN
 Who prepares the PPMP?

The end-user units or the Project Management Office (PMO)

shall prepare their respective PPMP for their PAPs.

 Why is the PPMP prepared?

PPMP is an important factor in determining and projecting

the quantity and quality of the expected outputs of the
PAPs.

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 PROJECT PROCUREMENT
MANAGEMENT PLAN
 Factors to consider in preparing the PPMP?

o Assess the Needs

 Strategize procurement of Needs

 Consolidate identified Needs

 Review studies and justifications for the Needs

 Ascertain reasonableness of Needs

 Prioritize acquisition of Needs

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 PROJECT PROCUREMENT
MANAGEMENT PLAN
Project Procurement Management Plan

Name of the Project or Procurement

General Description of the Project

Extent/Size of Contract Scopes/Packages

Contents

Procurement Method

Time Schedule / Procurement Milestones

Estimated Budget for the Contract

 ANNUAL PROCUREMENT PLAN
 What is an APP?

APP is the document that consolidates the various PPMPs

submitted by the various procuring entity’s end-user
units/PMOs.

 Who prepares the APP?

APP is prepared by the BAC, through the BAC Secretariat

 Who approves the APP?

APP should be approved by the HOPE or its duly authorized

2nd ranking official
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 ANNUAL PROCUREMENT PLAN

 How is the APP prepared & maintained?

 APP should be maintained and updated regularly

 In the consolidation of PPMPs, the BAC may adopt a

strategy through which similar items of procurement
are packaged into one procurement undertaking and
under a single PPMP, in which the original PPMPs shall
be consolidated and revised.

 A review and updating of the individual PPMPs and the

APP shall be done regularly, at least once every 6 mos.
or as often as necessary;

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 ANNUAL PROCUREMENT PLAN

 Factors to consider in developing an APP?

 Inclusion of all procurement activities planned for the

year;
 Include provisions for a lump sum to cover foreseeable
emergencies or contingencies usually indicated by
historical records;
 Scheduling of procurement activities in the APP should
be done in such a manner that the BAC and the other
offices/units involved in the procurement process in the
procuring entity are able to efficiently manage the
conduct of procurement transactions.

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 PROCUREMENT PLANNING

Budget BAC Sec / Approving

End User
Office BAC Authority

Evaluate Approve
PPMP and Review and GAA/
1 Prepare PPMP include in consolidate Corporate
budget into APP Budget/
proposal Ordinance

Finalize HOPE or 2nd

2 Revise PPMP procurement in rank
mode approves APP
 ANNUAL PROCUREMENT PLAN

Annual Procurement Plan

Name of the Project

PMO or End-user Unit

General Description of the Project

Contents

Procurement Method

Time Schedule of each Procurement Activity

Approved Budget for the Contract (ABC)

 PROCUREMENT PLANNING
 In preparing the APP, use the GPPB prescribed
format

 Post a copy of the APP in the PE’s website and

the On-Line Monitoring Evaluation System
(OMES) in the GPPB website

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 PROCUREMENT MONITORING
 What is a PMR?

PMR is the document that reflects all of the procurement

activities undertaken by the procuring entity, whether
completed or on-going

 Who prepares the PMR?

PMR is prepared by the BAC, through the BAC Secretariat

 Who approves the APP?

PMR shall be approved by the HOPE & submitted to the

GPPB.

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 PROCUREMENT MONITORING
 What does the PMR cover?

PMR shall cover all procurement activities specified in the

APP, whether on-going and completed from holding of the
pre-procurement conference to the issuance of the notice of
award and approval of the contract, including the actual time
for each major procurement activity.

 When will the PMR be submitted?

After HOPE approval, the PMR shall be submitted to the

GPPB in printed & electronic format w/in 14 cd after the end
of each semester.

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 PROCUREMENT MONITORING
 Why is the PMR prepared?

 Monitoring entails tracking of inputs, activities, outputs,

and outcomes of the procurement activity

 It monitors the results of current operations on a regular

basis.

 Ex-post evaluation examines the project outcomes and

impacts. It is a determination of the benefits derived
from the project, the attainment of specific targets for
key indicators, and the sustainability of the project.

 BAC shall ensure that the procuring entity abides by the

standards set forth under R.A. 9184 and its IRR.

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