Republic Act No. 9184

Republic Act No.
9184
Government Procurement Reform Act
Republic Act No. 9184

Simplification of pre-qualification and the strengthening of post-qualification Use of the Lowest Calculated and Responsive Bid for goods, supplies, materials and related services; and Highest Rated and Responsive Bid for consulting services Use of the Approved Budget for the Contract (ABC) as ceiling for the bid price Use of transparent, objective and nondiscretionary criteria Increased transparency in the procurement process Professionalization of procurement officials Inclusion of Penal and Civil Liabilities

Effectivity: 26 January 2003 (RA 9184) 18 October 2003 (IRR)

In cases where the advertisements or invitations for bids were issued after the effectivity of the Act but before the effectivity of this IRR-A, procuring entities may continue adopting the procurement procedures, rules and regulations provided in E.O. 40 and its IRR, P.D. 1594 and its IRR, R.A. 7160 and its IRR, or other applicable laws, as the case may be.

Hence, between 26 January and 18 October 2003, the Procuring Entity may use the law governing prior to RA 9184

Governing Procurement Principles of
Transparency Equal Opportunity (through standardization) Streamlined Process Accountability

Coverage:
Goods:
Items Supplies Materials needed in Transaction of public business Pursuit of any government undertaking, project or activity

Still considered as goods:
Services that are not consulting services
General Support Services (e.g. Janitorial, Security, Repair and Maintenance Services) Related or Analogous Services (e.g. Lease of Office Space) Materials and supplies needed for such services

Consulting Services:
services for Infrastructure Projects and other types of projects or activities of the Government requiring adequate external professional expertise technical and
beyond the capability and/or capacity of the Government to undertake

Infrastructure projects/Civil Works:
Construction, Improvement, Rehabilitation, Demolition, Repair, Restoration or Maintenance of:
roads and bridges, railways, airports, seaports, communication facilities, civil works components of information technology projects, irrigation, flood control and drainage, water supply, sanitation, sewerage and solid waste management systems, shore protection, energy/power and electrification facilities, national buildings, school buildings, hospital

General Rule (section 10, RA 9184):
Competitive Bidding!

What is Competitive Bidding?
[Section 5 (e), RA 9184]
Method of procurement Open to participation by any interested party Consists of the following processes: advertisement, pre-bid conference, eligibility screening of prospective bidders, receipt and opening of bids, evaluation of bids, postqualification, and award of contract, Specific requirements and mechanics of which shall be defined in the IRR to be promulgated under this Act

The General Processes of Competitive Bidding:
Advertisement Pre-bid conference Eligibility screening of prospective bidders Receipt and opening of bids Evaluation of bids Post-qualification

Bid and Awards Committee (BAC) Formation
BAC Structure:
Geographical Nature of Procurement

BAC Composition:
Head of Procuring Entity forbidden as Chairperson or member of BAC

BAC Composition:
(for Agencies, GOCCs, SUCs, GFIs,etc.) Regular Members: 1. Chairman- at least third ranking permanent official of procuring entity 2. Member- procurement/legal/ administrative expertise and at least fifth ranking permanent official 3. Member- finance expertise and at least fifth ranking permanent official

BAC Composition:
Provisional Members: Member- technical expertise in relevant to the procurement 2. Member- end user unit
1.

BAC Composition:
(for LGUs)
One (1) representative each From the regular offices under the office of the local chief executive (e.g., Office of the Administrator, Budget Office, Legal Office, General Services, Engineering Service) To be appointed by the local chief executive

BAC Composition: Observers: Two (2)
At least one (1) shall come from a duly recognized private group in a sector or discipline relevant to the procurement at hand 2. The other from a non-governmental organization (NGO)
1.
COA Representative

BAC Composition: No. of Members: At least Five (5) but not more than Seven (7) COA Representative & Observers (non-members)

BAC Composition: Now more professionalized!
honoraria to the BAC members in an amount not to exceed twenty-five percent (25%) of their respective basic monthly salary subject to availability of funds (Section 15) Private Legal Assistance as part of indemnification package of BAC Member (Section 72)

Bid Documents Preparation: Prepared by procuring entity Following the standard forms and manuals prescribed by the GPPB

Technical Working Group
from a pool of technical, financial and/or legal experts assist in the procurement process particularly in the eligibility screening, evaluation of bids and postqualification
Standardized Bidding Procedures for Goods

Pre-Procurement Conf. 2-wk advertisement Pre-Bid Conference
Submission of Opening of Opening of Opening of Eligibility Eligibility Env. & Tech. Env. & Req. & Bid Financial Env.
Eligibility Check
Prel. Exam.
Bid Evaluation & Ranking
Postqualification
Award of Contract

Pre-Procurement Conference Purposes: 1. Ensure that the procurement is in accordance with the project and annual procurement plans;

Pre-Procurement Conference Purposes:
2. Determine the readiness of the procurement at hand, including, among other aspects, confirmation of the availability of ROW, the ownership of affected properties, availability of appropriations and programmed budget for contract, and adherence of bidding documents, technical plans, specifications, scope of work, and/or TOR, and other related matters, to relevant general procurement

Pre-Procurement Conference Purposes: 3. Review, modify and agree on the criteria for eligibility screening to ensure their fairness, reasonableness and that they are of the pass/fail type and are written in such manner; 4. Review, modify and agree on the criteria for the evaluation of bids/proposals to ensure their fairness, reasonableness and applicability to the

Pre-Procurement Conference Purposes: 5. Clarify that the specifications and other terms in the bidding documents are minimum requirements and that the bidder may submit an offer which provides for superior specifications and/or better terms and conditions to the Government at no extra cost, without any bonus, credit or premium in the bid evaluation; and

Pre-Bid Conference Purposes: 6. Reiterate and emphasize the importance of confidentiality during the bid evaluation process, and the applicable sanctions and penalties, as well as agree on measures to ensure compliance with the foregoing.

Invitation to Bid
1. Publication 2. Website 3. Posting

Publication:
Twice: 1. Minimum 6 days maximum 14 days in between publication 2. Newspaper of general nationwide circulation 3. Newspaper published at least 2 years prior to advertisement

Posting @ Website
Website of the procuring entity 2. Website of the service provider of the procuring entity, if available 3. Maximum period of 14 days
1.

Posting at premises
Conspicuous place 2. Reserved for the purpose 3. Certified by the BAC Secretariat of the procuring entity
1.

Pre Bid Conference:
Less than P1M, discretionary for BAC to conduct. Held at least 12 days before the receipt and opening of bids. Any statement made at the pre-bid conference shall not modify the terms of the bidding documents, unless such statement is specifically identified in writing as an amendment thereto and issued as a Supplemental/Bid Bulletin.

Eligibility Check:
BAC determines if each prospective bidder is eligible to participate By examining the completeness of each prospective bidders eligibility requirements or statements against a checklist of requirements Using a non-discretionary pass/fail criteria
Republic Act No. 9184 Eligibility Documents:

Class A Documents Class B Documents

Eligibility Documents: Class A Documents:
May be maintained in a file with the BAC Suppliers maintain this file current and updated at least once a year, or more frequently when needed BAC certification to that files are current and updated submitted to the procuring entity concerned in lieu of the foregoing Class A documents

Eligibility Documents:
Class B Documents: Submitted per bidding activity

What are these Class A Documents?
Legal Documents: 1. DTI/SEC registration documents, as applicable 2. Mayors Permit/Municipal Licenses 3. Non-blacklisting statements 4. TIN 5. Other appropriate Licenses/Permits

Technical Documents: 1. Statement of the prospective bidder of all its ongoing and completed government and private contracts within the relevant period, including contracts awarded but not yet started, if any

Financial Documents: 1. Audited financial statements, stamped received by the BIR or its duly accredited and authorized institutions, for the immediately preceding calendar year, showing, among others, the prospective bidders total and current assets and liabilities

Financial Documents: 2. Bidders Computation of Net Financial Contracting Capacity (NFCC); or a commitment from a licensed bank to extend to it a credit line if awarded the contract to be bid, or a cash deposit certificate, in an amount not lower than that set by the procuring entity in the Bidding Documents, which shall be at least equal to ten percent (10%) of the approved budget for the contract to be bid

What are these Class B Documents?
Valid joint venture agreement, in case of a joint venture 2. Letter authorizing the BAC or its duly authorized representative/s to verify any or all of the documents submitted for the eligibility check
1.

Eligibility Criteria:
Nationality/Proof of Existence 2. Prospective bidders largest single contract 3. NFCC or credit line/cash commitment
1.

1.
Nationality/Proof of Existence
a. Duly licensed Filipino citizens/sole proprietorships b. 60% Duly organized and existing Filipino Partnerships c. 60% Duly organized and existing Filipino Corporations d. Joint Venture with 60% Filipino interest e. Duly registered cooperatives
Not Applicable for foreign procurement

2.
Prospective Bidders largest single contract adjusted to current prices completed within time period specified in Invitation similar to the contract to be bid at least fifty percent (50%) of the ABC

3. NFCC or credit line/cash commitment NFCC at least equal to the approved budget for the contract to be bid

Eligibility Criteria: 3. NFCC or credit line/cash commitment
Computation of the NFCC: NFCC = [(Current assets minus current liabilities) * (K)] minus the value of all outstanding projects under ongoing contracts, including awarded contracts yet to be started.

3. NFCC or credit line/cash commitment Computation of the NFCC Where: K = 10 for a contract duration of one year or less, 15 for a contract duration of more than one year up to two years, and 20 for a contract duration of more than two years.

Receipt and Opening of Bids:
Requisites for an acceptable bid: In the prescribed Bid Form 2. On or before the specified deadline 3. In two (2) separate sealed bid envelopes, Technical component of the bid and the Financial component of the bid
1.

Procedure:
1. 2. 3. 4. 5.
Late bids shall not be accepted Opening of Technical Envelopes Counter-checking compliance of Technical Envelope with requirements Opening of Financial Envelope Counter-checking compliance of Financial Envelope with requirements

Procedure:
6. Bid Evaluation 7. Ranking 8. Lowest Calculated Bid

Note:
Bids above the ABC are automatically disqualified No Floor Prices If failed Technical Envelope, cannot open the Financial Envelope Bid shall include all taxes

Post-Qualification Purpose: To determine whether the bidder concerned complies with and is responsive to all the requirements and conditions for eligibility, the bidding of the contract, as specified in the bidding documents

Post-Qualification Method: BAC shall verify, validate and ascertain all statements made and documents submitted by the bidder with the Lowest Calculated Bid/Highest Rated Bid, using a non-discretionary criteria, as stated in the Invitation to Apply for Eligibility and to Bid and the Instructions to Bidder

Post-Qualification Period: Within seven (7) calendar days from determination of the Lowest Calculated Bid In exceptional cases, the seven (7) calendar day period may be extended by the GPPB

Result: Lowest Calculated Bid becomes Lowest Calculated and Responsive Bid

Recommendation of the Award to the Head of the Procuring Entity Action of Head on Recommendation:
1. Approve 2. Disapprove

Action of Head on Recommendation: Disapproval based only on valid, reasonable and justifiable grounds to be expressed in writing, copy furnished the BAC.

Action of Head on Recommendation: If approval: Head issues the Notice of Award BAC notifies the losing bidders of the decision

Action of Head on Recommendation: Time period for this step:
15 Calendar Days from determination of Lowest Calculated and Responsive Bid 30 Calendar Days for GOCCs and GFIs

Contract Preparation and Signing
Time Period: Ten (10) days from receipt of Notice of Award by Winning Bidder

Approval of Contract:
Only in cases where approval of higher authority is needed Maximum of twenty (20) calendar days from receipt of approving higher authority In case of GOCCs the board or approving higher authority is given thirty (30) calendar days

Notice to Proceed:
Given to successful bidder together with a copy or copies of the approved contract to the within seven (7) calendar days from the date of approval of the contract by the appropriate government approving authority

Notice to Proceed:
All notices called for by the terms of the contract shall be effective only at the time of receipt thereof by the successful bidder Unless specified in the Notice to Proceed itself

Notes on Procedure for Infrastructure Projects:
Observer: representative from National Constructor Associations duly recognized by the Construction Industry Authority of the Philippines (CIAP)

Letter of Intent:
Submit a written LOI to BAC together with its application for eligibility Must be received not later than seven (7) calendar days after the last day of the period for advertising and/or posting of the Invitation to Apply for Eligibility and to Bid

Additional Class A Documents:
1.
2. 3.
Valid Philippine Contractors Accreditation Board (PCAB) license and registration for the type and cost of the contract to be bid Prospective bidders statement of availability of key personnel and equipment On-going and completed government and private projects

1. 2. 3. 4.
5.
Nationality/Existence PCAB License Bidders largest single completed contract Satisfactory CPES rating and/or certificate of completion and owners acceptance of the contract NFCC or credit line/cash commitment

Eligibility Check
Entire process shall not exceed fifteen (15) days
Issuance of Bid Documents

Within thirty (30) calendar days from the last day of the period of advertising and/or posting of the Invitation to Apply for Eligibility and to Bid

Opening of Bids conducted within the following periods from the last day of the issuance of the bidding documents:
Up to twenty five (25) million- 15 to 30 calendar days Above twenty five (25) million up to fifty (50) million15 to 45 calendar days Above fifty (50) million up to two hundred (200) million30 to 60 calendar days

Notes on Procedure for Consultancy Services:
Observer:
Project-related professional organization accredited or duly recognized by the Professional Regulation Commission (PRC) or the Supreme Court (SC)

Letter of Intent:
Submit a written LOI to BAC together with its application for eligibility Must be received not later than seven (7) calendar days after the last day of the period for advertising and/or posting of the Invitation to Apply for Eligibility and to Bid

Eligibility Envelopes: Shall be opened before the dates of the pre-bid conference and bid opening to determine eligibility of prospective bidders Only then shall they be allowed to acquire or purchase the relevant bidding documents from the procuring entity

Short listing:
Three (3) to seven (7) consultants, with five (5) as the preferable number Number as determined in the pre-procurement conference

Short listing Criteria:
1. Specified in the Invitation to Bid 2. Includes: a. Applicable experience b. Qualification of personnel who may be assigned to the job vis--vis extent and complexity of the undertaking c. Current workload relative to capacity

The BAC recommends the short list of consultants to the head of the procuring entity for consideration and approval The entire process of eligibility check and short listing shall not exceed thirty (30) calendar days

A maximum period of ninety (90) calendar days from the last day of the period of advertising and/or posting of the Invitation to Apply for Eligibility and to Bid up to the opening of bids

Bid Opening:
Opening of the Technical Proposal at opening dated only to determine compliance to formal requirements

Bid Evaluation:
Objective: Highest Rated Bid to be determined by in two steps: a) The detailed evaluation of the bids of the short listed bidders using numerical ratings based on either the quality-based evaluation/selection procedure or the quality-cost based

Bid Evaluation:
Objective: Highest Rated Bid to be determined by in two steps: b) The ranking of the bidders based on the numerical ratings from the highest to the lowest. The bid with the highest rating shall be identified as the Highest Rated Bid.

Bid Evaluation Criteria: 1. Quality of personnel 2. Experience and capability of the consultant 3. Plan of approach and methodology

BAC assigns numerical weights to criteria Criteria as indicated in bid documents BAC recommends to Head Head has two (2) calendar days to

Negotiation with Highest Rated Bid 1. BAC shall within seven (7) calendar days notify and invite the consultant with the Highest Rated Bid for negotiation 2. Financial proposal of the consultant with the Highest Rated Bid shall then be opened by the BAC in the presence of the consultant

Negotiation with Highest Rated Bid 3. Negotiation 4. Issues of Negotiation Contract amount Other technical issues as stated in the notification letter

Negotiation with Highest Rated Bid 5. In case of Failure of Negotiation with Highest Rated Bid Time period: Fourteen (14) calendar days for any one consultant except for meritorious reasons

Failure of Bidding:
No Bids are received 2. No bid qualifies as the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid 3. Refusal of winning bidder to accept the award of contract
1.

Failure of Bidding:
Consequence: Second Bidding Process 2. If this still fails, BAC may resort to negotiated procurement
1.

Reservation Clause:
Head of Agency may Reject any and all bids or Declare a Failure of Bidding for: 1. Prima facie evidence of collusion 2. BAC failed in following bidding procedures 3. Any justifiable and reasonable ground where the award of the contract will not redound to the benefit of the Government

Observations on Failure of Bidding:
No more reservation to waive any formalities or defects of bid(s) 2. No more failure of bid for single calculated/rated and responsive bid
1.
*Philippine Star, 30 May 2004
These reservation clauses are already illegal Cannot be used to justify any waiver of bid formality

Exceptions to Competitive Bidding:
Alternative Modes of Procurement 1. Outside the Coverage of RA 9184
1.
1. 2.
Acquisition of Real Property BOT Law

Alternative Modes of Procurement
General Rule: Public Bidding Procurement program should allow sufficient lead time for public bidding
Hence, procuring entity cannot intentionally delay procurement program to give ground to resort to alternative modes
Resorted to only in highly exceptional cases as recommended by the BAC

Alternative Modes of Procurement Limited Source Bidding Direct Contracting Repeat Order Shopping Negotiated Procurement

Limited Source Bidding or Selective Bidding
A method of procurement of goods and consulting services, that involves direct invitation to bid by the concerned procuring entity from a set of pre-selected suppliers or consultants with known experience and proven capability on the requirements of the particular contract

Limited Source Bidding or Selective Bidding
Procurement of highly specialized types of goods and consulting services Procurement of major plant components to maintain uniform quality and performance of the plant as a whole

Direct Contracting or Single Source Procurement
Applies only to procurement of goods Does not require elaborate bidding documents Supplier is simply asked for a price quotation or a pro-forma invoice with the conditions of sale Offer may be accepted immediately or after some negotiations

Direct Contracting or Single Source Procurement Proprietary items 2. Critical plant components from a specific manufacturer 3. Sold by an exclusive dealer or manufacturer with no suitable substitute
1.

Alternative Modes of Procurement Repeat Order
Need to replenish goods Procured under a contract previously awarded through Competitive Bidding

Alternative Modes of Procurement Repeat Order
1. 2. 3. 4.
Same contract prices Not a result of splitting Within six (6) months from the date of the Notice to Proceed of the original contract Not to exceed twenty-five percent (25%) of the quantity of each item in the original contract

Alternative Modes of Procurement Shopping
Submission of price quotations Readily available off-the-shelf goods or ordinary/regular equipment Procured directly from suppliers of known qualifications

Alternative Modes of Procurement Shopping
Unforeseen contingency requiring immediate purchase but not to exceed P50,000.00 2. Ordinary or regular office supplies and equipment not available in the Procurement Service not to exceed P250,000.00
1.

Alternative Modes of Procurement Shopping Not as a result of splitting Amounts subject to periodic review by the GPPB

Alternative Modes of Procurement Negotiated Procurement
Directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant Conditions in law and IRR are exclusive

1. 2. 3.
Second Bid Failure Imminent danger to life or property during a state of calamity Time is of the essence arising from natural or man-made calamities or other causes where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities

Take-over of contracts where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities 5. Adjacent or Contiguous contract to an on-going infrastructure project
4.

Inter-agency purchase of goods 7. Individual consultants that are highly technical or primarily confidential 8. Major defense equipment for use by the AFP
6.

Outside the Coverage of RA 9184
1. Acquisition of Real Property (RA
8974) 2. BOT Law (RA 6957, as amended by RA 7718)

G-EPS Single Portal General Features

Remedies and Judicial Review
1. 2. 3. 4. 5.
Ineligibility Failed Bid or Unaccepted Bid Post-Disqualification Defective Conduct of Bidding Judicial Review

Criminal/Administra tive Sanctions For Bidders Rigging 2. Misrepresentatio n
1.

Criminal/Administrative Sanctions For Head/BAC/TWG
Premature Opening of Sealed Bid 2. Delaying screening eligibility, opening of bids, evaluation and post evaluation of bids, and awarding of contracts beyond the prescribed periods
1.

Criminal/Administrative Sanctions For Head/BAC/TWG
Unduly influencing or exerting undue pressure 4. Splitting 5. Abuse of power to reject bids
3.

Republic Act No. 9184

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Republic Act No. 9184

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Republic Act No.

Government Procurement Reform Act