MODES OF

PROCUREMENT
ALTERNATIVE METHODS OF
PROCUREMENT

ALTERNATIVE

METHODS

General Rule: Public Bidding APP provides sufficient lead time for bidding Resort to Alternative Methods allowed Highly exceptional cases To promote economy and efficiency Justified by conditions specified in IRR Types of Alternative Methods Limited Source Bidding Direct Contracting Repeat Order Shopping Negotiated Procurement

LIMITED SOURCE BIDDING

Applicability: Goods Consulting services Conditions: Highly specialized types where only a few bidders are known to be available Major plant components beneficial to limit bidding to known qualified bidders to maintain uniform quality and performance of the plant

LIMITED SOURCE BIDDING

Pre-selection Procedure
(GPPB Res. 05-2011, dated 25 February 2011)

BAC shall prepare a list of suppliers/consultants which must include all the industry players on the goods/consulting service to be procured.

In preparing the list, BAC, with the TWG assistance, shall adopt a set of criteria to be used as basis in evaluating the capability of the entities taking into consideration the following:
Capability and resources to perform the contract taking into account their experience and past performance on similar contracts; Capabilities with respect to personnel, equipment, or manufacturing facilities; and Financial position.

LIMITED SOURCE BIDDING

Pre-selection Procedure
BAC shall evaluate and submit the recommended pre-selected list to the HOPE for approval.
The pre-selected list shall include:
a) Technical specifications/TOR, and b) Criteria used by the PE for the evaluation of the pre-selected suppliers /consultants.

Pre-selected list shall be considered specific to the project unless adopted by other procuring entities for their respective procurement activities.

LIMITED SOURCE BIDDING

Pre-selection Procedure
Upon HOPE approval, PE shall transmit the preselected list to the GPPB. The list must be accompanied with a HOPE certification:
a) justifying the resort to Limited Source Bidding, and b) verifying the compliance with the criteria previously set.

GPPB-TSO shall acknowledge receipt of the preselected list and shall post it in the GPPB or PhilGEPS website for the purpose of transparency. Upon receipt of the GPPB acknowledgement letter, PE shall post the procurement activity to be undertaken through Limited Source Bidding in the PhilGEPS website.

LIMITED SOURCE BIDDING

Pre-selection Procedure
PE shall then conduct competitive bidding, except advertisement of the bid opportunity in a newspaper of general nationwide circulation.
Notwithstanding the pre-selected list, prospective bidders not included in the list are not precluded from participating in the conduct of Limited Source Bidding. GPPB-TSO will not validate the qualifications of the suppliers/consultants contained in the list. Concerns on the propriety of the list shall be directed to the PE that issued/adopted the list for a particular procurement activity following the protest mechanism under Section 55 of the IRR of RA 9184.

DIRECT CONTRACTING

Applicability: Goods Conditions: Items of proprietary nature from proprietary source Critical components from a specific supplier to hold a contractor to guarantee its project performance Items sold by an exclusive manufacturer or dealer no other suppliers selling it at lower prices no suitable substitute can be obtained at more advantageous terms to the Government

Deleted the word plant Resolution No. 11 - 2009

REPEAT ORDER

Applicability: Goods

Conditions: o Same or lower unit prices, provided that such prices are still the most advantageous to the GOP after price verification
o o No splitting of contracts Availed of w/in 6 mos. from the contract effectivity date stated in the NTP arising from the original contract, except in cases duly approved by the GPPB Not to exceed 25% of the quantity of each item Original contract awarded through competitive bidding

o o

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)

SHOPPING & SMALL VALUE

Applicability of Shopping [52.1(a) and (b)]: Goods Conditions [Shopping under 52.1(a)]: 1. There is an unforeseen contingency requiring immediate purchase

2. Amount does not exceed the threshold

Conditions [Shopping under 52.1(b)]: 1. Procurement of ordinary or regular office supplies and equipment not available in PS-DBM 2. Amount does not exceed the threshold

SHOPPING & SMALL VALUE

Applicability of Small Value Procurement [53.9]: ALL Conditions: o Procurement does not fall under Shopping [52]

Amount does not exceed the threshold

SHOPPING & SMALL VALUE

Resolution No. 09 2009, dated 17 Dec. 2009

General Guidelines:
Decision to resort to shopping/small value procurement done in context of APP Splitting of contracts is strictly prohibited After approval, BAC may delegate execution to the appropriate bureau, committee or support unit.

SHOPPING & SMALL VALUE

Procedural Guidelines Send RFQ to at least 3 suppliers [may be 1 in case of 52.1(a)]

Prepare RFQ

Prepare Abstract of Quotations

Extend deadline if no quotation is received

Award to LCB/HRB that complies with specs and ABC

SHOPPING & SMALL VALUE

Resolution No. 09 2009, dated 17 Dec. 2009

Procedural Guidelines: RFQ should indicate the following: a. Specification; b. Quantity; c. ABC; d. Terms and conditions of the item to be procured; and e. Manner by which price quotation must be submitted (i.e. open or sealed quotations)

SHOPPING & SMALL VALUE

Procedural Guidelines Information relating to examination, evaluation & comparison of quotations shall be kept confidential Post RFQs for 7 cd in the following: a) website of PhilGEPS and procuring entity, and b) any conspicuous place Except: When there is an unforeseen contingency requiring immediate purchase under Sec. 52.1(a) RFQs with ABCs < PhP. 50,000

SHOPPING & SMALL VALUE

Procedural Guidelines:
Post awards in the following: a) website of PhilGEPS and procuring entity, if available, and b) any conspicuous place
Except: RFQs with ABCs < PhP. 50,000 Procuring entity must validate whether it is entering into a contract with a technically, legally and financially capable supplier, contractor or consultant by requiring the submission of relevant documents or through other means.

SMALL VALUE

NPM No. 16-2011

Whether award of the contract can be made to the sole supplier who submitted a quotation/proposal for a procurement activity through Small Value Procurement (SVP)?

SMALL VALUE

NPM No. 16-2011

Award of the contract may be made even if only one supplier submitted a quotation/proposal, provided that the procuring entity invited at least 3 suppliers to submit a quotation and provided further that the submission complies with the specifications and terms and conditions required by the PE.

NEGOTIATED PROCUREMENT
Format changes Alignment with international best practices & addresses concerns raised by stakeholders Clearer rules on Negotiated Procurement due to 2Failed Biddings. Recognized additional instances of Negotiated Procurement

NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS

Applicability: ALL Conditions: 1. Two failed biddings 2. Mandatory review of the following: Minimum technical specifications ABC, which may be adjusted up to 20% from last bidding

Invite sufficient number to ensure competition

Information communicated on an equal basis

NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS

Simultaneous negotiations Submission of best and final offer on a specified date Successful offer to be selected: Meet minimum technical specifications Does not exceed ABC Observers shall be invited in all stages

NEGOTIATED PROCUREMENT
EMERGENCY CASES

Applicability: ALL Any of the following conditions: Imminent danger to life or property during a state of calamity When time is of the essence arising from natural or man-made calamities Other causes where immediate action is necessary: To prevent damage to or loss of life or property To restore vital public services, infrastructure facilities, and other public utilities Negotiate with any supplier, contractor, or consultant with technical, legal, and financial capability

NEGOTIATED PROCUREMENT
TAKE

OVER OF CONTRACTS

Applicability: ALL

Conditions: Rescinded or terminated contract Immediate action is necessary: To prevent damage to or loss of life or property To restore vital public services, infrastructure facilities, and other public utilities
Negotiate starting with the 2nd LCB/HRB at the bidders original bid price, then to the next if negotiation fails If negotiation fails, invite a short list of at least 3 to submit bids and negotiate starting with the LCB or HRB

NEGOTIATED PROCUREMENT
ADJACENT OR CONTIGUOUS

Applicability: Infra and Consulting Conditions: o Subject contract is adjacent or contiguous to an ongoing infra or consulting o Original contract is a result of competitive bidding o Subject contract has similar/related scopes of work o Within the contractors/consultants capacity o Same prices or lower unit prices as the original contract less mobilization cost o Amount does not exceed amount of the on-going project o No negative slippage o Negotiations commenced before expiry of original contract

NEGOTIATED PROCUREMENT
AGENCY TO AGENCY

Applicability: ALL Conditions: o Cost-benefit analysis indicating A-to-A is more efficient and economical o A-to-A does not exceed 25% of PEs total budget for each category (goods, infra, consulting) o Servicing agency has mandate to undertake the project o Servicing agency owns or has access to necessary tools required for the project Other requirements provided in Implementing Guidelines on Agency-to-Agency Arrangements (GPPB Resolution 18-2007)

NEGOTIATED PROCUREMENT
AGENCY TO AGENCY

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-toAgency Agreement)] of the revised IRR) of RA 9184?

NEGOTIATED PROCUREMENT
AGENCY TO AGENCY

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.

NEGOTIATED PROCUREMENT
AGENCY TO AGENCY
Conduct cost-benefit analysis

Secure SAs certificate of compliance with requirements

BAC recommendation & HOPE approval Enter into MOA

Award posted in PhilGEPS, PE website, and conspicuous place

NEGOTIATED PROCUREMENT
PROCUREMENT AGENTS

Applicability: ALL Condition: HOPE has determined that PE does not have procurement proficiency or capability to undertake a particular procurement Actions available: Request other GOP agencies to undertake such procurement for them Recruit and hire consultants or procurement agents to assist them directly and/or train their staff in the management of the procurement function

NEGOTIATED PROCUREMENT
HIGHLY TECHNICAL CONSULTANTS

Applicability: Consulting Services

Conditions: o Individual consultant

o Primary consideration for hiring the individual is trust and confidence Work involves: o Highly technical or proprietary o Primarily confidential or policy determining Term is, at the most, 6 months, renewable at the option of the appointing HOPE, but in no case to exceed the term of the latter

NEGOTIATED PROCUREMENT
LEASE OF REAL PROPERTY/VENUE

Applicability: Goods (Real estate and Venue)

Conditions: o Cost-benefit analysis indicating leasing privatelyowned real estate or venue is more efficient and economical o
o

APP reflect the proposed lease

Selection to follow the guidelines (GPPB Resolution 08-2009)

Eligibility documents need not be submitted, but PE must validate whether lessor is technically, legally, and financially capable through other means Lease contracts costing > PhP50,000 should be posted in the PhilGEPS

NEGOTIATED PROCUREMENT
LEASE OF REAL PROPERTY/VENUE
Implementing Guidelines for Lease of PrivatelyOwned Real Estate and Venue (Resolution No. 08 2009, dated November 2009) Guiding Principles:

More preferred to lease from government Meticulous selection of location taking into consideration the ff: Need for prudence and economy in government service Suitability of area (level of security/nature of event)

NEGOTIATED PROCUREMENT
LEASE OF REAL PROPERTY/VENUE
Implementing Guidelines for Lease of PrivatelyOwned Real Estate and Venue (Cont.) Guiding Principles: Rental Rates should be : Reasonable (Lessor gets an equitable return of capital or investment. of what the Lessee gets in terms of accommodation, facility, amenities, and convenience) Within prevailing market prices

NEGOTIATED PROCUREMENT
LEASE OF REAL PROPERTY/VENUE
Implementing Guidelines for Lease of PrivatelyOwned Real Estate and Venue (Cont.) Guiding Principles: Objectives and purpose of the lease contract do not constitute an unnecessary, excessive, extravagant, or unconscionable expenditure.

NEGOTIATED PROCUREMENT
LEASE OF REAL PROPERTY/VENUE
Implementing Guidelines for Lease of Privately-Owned Real Estate and Venue (Cont.) Procedural Requirements: Conduct of a cost-benefit analysis

Select location End-users recommendation, justifications, prevailing rates of lease/rent within vicinity

Set ABC Midpoint of range based on prevailing lease rates

NEGOTIATED PROCUREMENT
LEASE OF REAL PROPERTY/VENUE

Implementing Guidelines for Lease of PrivatelyOwned Real Estate and Venue (Cont.)
Procedural Requirements: Update APP, if necessary

Delegate (or not) selection of lessor to a bureau, committee or support unit duly authorized by the BAC

NEGOTIATED PROCUREMENT
LEASE OF REAL PROPERTY/VENUE

Implementing Guidelines for Lease of PrivatelyOwned Real Estate and Venue (Cont.)
Procedural Requirements: Eligibility documents need not be submitted . Validate whether Lessor is technically, legally and financially capable through other means.

Post award Except lease contracts amounting to Php. 50,000 and below

NEGOTIATED PROCUREMENT
LEASE OF REAL PROPERTY/VENUE

Implementing Guidelines for Lease of PrivatelyOwned Real Estate and Venue (Cont.)
Specific Requirements for Venue: Technical specifications shall be prepared taking into consideration rating factors provided under Appendix C (availability, location and site condition, venue and neighborhood data)

At least 3 quotations shall be obtained within the vicinity of the selected location.

NEGOTIATED PROCUREMENT
LEASE OF REAL PROPERTY/VENUE

Implementing Guidelines for Lease of Privately-Owned Real Estate and Venue (Cont.)
Specific Requirements for Venue:

Award of contract shall be given to the lessor having the LCRB; Compliance rating with technical specifications may be conducted through ocular inspection, interviews, or other forms of due diligence.

NEGOTIATED PROCUREMENT
NGO PARTICIPATION

Applicability: ALL Condition: o Appropriation law or ordinance earmarks an amount to be contracted to NGOs PE may opt to conduct public bidding or negotiated procurement for the selection of NGO, subject to the rules provided in the guidelines (GPPB Resolution 122007)

NEGOTIATED PROCUREMENT
COMMUNITY PARTICIPATION

Applicability: ALL Conditions: o In the interest of project sustainability or to achieve certain specific social objectives

PE to propose procedures, specifications, and contract packaging for GPPB approval

NEGOTIATED PROCUREMENT
UN AGENCIES

Applicability: ALL Conditions: o Procure from UN Agencies

Small quantities of off-the-shelf goods, primarily in the fields of education and health
Specialized products where the number suppliers is limited (e.g., vaccines or drugs) of

BY ADMINISTRATION

Applicability: Infrastructure Projects Conditions: o Implementing Agency (IA) must have a track record of having completed or supervised a project by admin or by contract, similar to and with a cost of at least 50% of the project at hand, and o IA owns or has access from other government agencies to necessary tools and construction equipment required for the project

Other requirements provided in Guidelines for the Implementation of Infrastructure Projects By Administration(GPPB Resolution 18-2006, as amended by GPPB Resolution No. 07 2009)

BY ADMINISTRATION

Increase in thresholds in the 2009 & 2010 GAA

Any project costing < PhP. 20,000,000.00 may be undertaken by administration or force account
Project costing > PhP. 20,000,000.00 should obtain the ff: Authority from the DPWH Secretary 20,000,000.00 - PhP. 50,000,000.00) PhP.

Authority from the President of the Philippines, upon the DPWH Secretarys favorable recommendation - > PhP. 50,000,000.00.

ALTERNATIVE METHODS
Other Terms and Conditions:

Most advantageous price for government should be obtained (Sec. 48.1)

Splitting of contracts strictly prohibited (Sec. 54.1) Posting NOT necessary, except: Shopping [Sec. 52.1(b)] Except: PhP. 50,000 and below Small Value Procurement [Sec. 53.9] Except: PhP. 50,000 and below Two Failed Biddings [Sec. 53.1] Lease of Real Property [Sec. 53.10], if > PhP50,000 NGO Participation

ALTERNATIVE METHODS

ALL awards should be posted, except Shopping and Small Value Procurement with an ABC of PhP50,000 and below Lease Contracts with an ABC of PhP50,000 and below Bid security NOT necessary, except in Limited Source Bidding Performance and warranty securities necessary, except: Shopping [Sec. 52] Emergency Cases [Sec. 53.2] Small Value Procurement [Sec. 53.9] Lease of Real Property [Sec. 53.10] NGO Participation Procurement from UN agencies [Sec. 53.13]

THANK YOU
Comments, questions?