One UP.

One University.
One Procurement System.

Isagani L. Bagus
Acting Chief, UP System SPMO

UP Manila
25 November 2014

1
 House Rules

Turn off or put in silent mode all mobile phones

Take phone calls outside the Conference Room

Address questions/clarifications to the speaker

Active participation is highly encouraged

Stay awake

2
 Training Objectives
• Train the UP Manila personnel on procurement
process as per Republic Act 9184 Implementing
Rules and Regulations;
• To have a uniform interpretation on the procurement
process and procedures; and
• Gather feedback that shall serve as a guide to help
UP improve the system on procurement in all
aspects and improve the quality of service that
University is providing.

3
 Question?

Is Procurement a
Problem in UP
Manila?
4
 Answer

proCUREment

5
 Common Questions
in all CUs
• Why procurement process is very long?
• Why it took procurement more than a
year?
• Why specifications is wrong?
• Why failed bid?
• Why wrong posting in
PhilGEPS.Announcement?
• Why … Why …. Why
6
 Solution to the
Questions?
• B. L. A. M. E.
• Bakit
• Lagi
• Ako ang
• Mali
• Eh di naman
7
 P.B.B. on Procurement

P P B
Procurement Process Best

PRACTICE 8
 P.B.B. on Procurement

P P B
Procurement Process Bad

PRACTICE
9
Q and A

10
 Present Status on
Procurement of UP:
Policy Implementation

11
 Constituent U’s of UP

UPD

UPOU UPM
UP UP UP
Min System Cebu
UPB UPLB

UPV

12
UP: One UP. One University. One
Procurement System

UPD

UPOU UPM
UP UP UP
Min System Cebu
UPB UPLB

UPV

13
 Republic Act 9184?
• Procurement Law of the Philippines
• Includes the following:
– Implementing Rules and Regulations on Procurement
– Procurement Policy and Procedures of the Philippines
– Executive Orders
– Govt. Procurement Policy Board (GPPB) Resolutions
– PhilGEPS Requirements
– Others: COA, UP, DBM, Procurement Service

14
Nature of Procurement

15
 Nature of
Procurement
•
• Example: equipment, furniture, stationery, materials for construction, or personal property
of any kind, including non-personal or contractual services, such as repair and
maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security,
Goods procurement of supplies and materials, etc.

• Example: 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, etc.

• Example: requiring adequate external technical and professional expertise that are
beyond the capability and/or capacity of the GOP to undertake such as, but not limited to:
advisory and review services; pre-investment or feasibility studies; design; construction
supervision; management and related services; and other technical services or special
Services studies.

16
Q and A

17
Major Stakeholders of
Procurement in UP

18
 Major Stakeholders of
Procurement
Budget SPMO/BAC
End-User
Officers Secretariat

BAC TWG
Accountant
Members Members

Observers /
Internal
Resource H.O.P.E.
Auditor
Persons

19
Functions of
Stakeholders

20
 End-User
• Prepare the following:
– PPMP
– Technical Specifications
Particulars Remarks
Specifications • Complete and generic (No brand
- Consult the expert please/equivalent)
• Do not copy brochure/catalogue
being issued by supplier
• Range for minimum and maximum
After Sales • Warranty
• Insurance
• Training of personnel
Delivery period • Be realistic
21
 End-User
• Approved Budget Ceiling
Particulars Remarks

Cost Do not copy the brochure/catalogue

provided by supplier

Value Added Tax Included 12% VAT

Additional Warranty Request for a costing if there is

additional warranty
Bid Documents Cost of Bid documents might also
consider in computing ABC
Value for Money Do not delay payment to supplier/s

22
 Budget Officer
• Issue Budget Clearance / Availability of
Funds
– DBM Funds, UP Funds, or other source of
funds
– Expiration / End of Life of SARO / Budget
Clearance

23
 SPMO / BAC Secretariat
– Assist the BAC in the conduct of its functions
– Serve as the main support unit of BAC
– Post the Invitation to Bid in PhilGEPS, Bulletin Board,
Website, and Newspaper (if necessary)
– Receive suppliers queries/questions and other
documents address to BAC
– Prepare the bidding documents (before and after
procurement)

24
 Members of the BAC
• Advertise and/or post the Invitation to Bid
• Conduct pre-procurement and pre-bid
conferences
• Determine the eligibility of prospective bidders
• Receive bids
• Conduct the evaluation of bids
• Undertake post qualification proceedings
• Recommend award of contracts the event to the
HOPE
25
 Technical Working
Group
• Review the specifications submitted by
end-user during pre-procurement
conference
• Conduct evaluation on the specifications
submitted by end-user
• Evaluate the proposal of supplier on
technical specifications
• Conduct ocular inspection if necessary
26
 Accountant
• Issued Availability of Funds
• Evaluate the NFCC submitted by bidder/s
• Obligate the funds after delivery
• Prepare other COA requirements

27
 Internal Auditor
• Serve as observer of the Public Bidding
• Re-examined the procurement if compliant
with Republic Act 1984 and COA
provisions

28
 Observers
• To enhance the Transparency of the
procurement process, the BAC shall in all
stages of the procurement process, invite,
in addition to the representative of the
COA at least two (2) observers to sit in
procurement proceedings
• The observer should meet the criteria of
observer as set forth in the IRR

29
 Head of Procuring Entity
• Approved or Disapprove the
recommendation of the BAC
– Constitution of BAC members
– to award the contract to the winning bidder
– BAC Resolutions

30
 Delineation of Authority
Delegated Approval Ceilings
Board of Regents
- Construction and repair, including Above Php75M
construction management services
- Purchase of equipment, materials,
supplies, and services
President
- Construction and repair, including Php75M
construction management services
- Purchase of equipment, materials,
supplies, and services
- Chancellors UPD, UPLB, UPM, UPV:
- Construction and repair, including Php25M
construction management services UPB, UPMin, UPOU, and UP Cebu
- Purchase of equipment, materials, Php15M
supplies, and services
31
Q and A

32
Mode of Procurement

33
 Mode of Procurement
Shopping
•
Public Bidding
AMP: Negotiated
AMP: Repeat Order
AMP: Emergency Pucrhase
AMP: Others

34
 What is Small Value
Procurement?
• Where the procurement does not fall
under Shopping in Section 52 of the IRR
and the amount involved does not exceed
the thresholds prescribed in IRR
• Requirements: Three (3) quotations from
Bona fide Suppliers
• Thresholds: Below Php50,000.00 and
below

35
 Flow Chart for Small
Value P50,000 and below

Purchase Budget Posting to

Request Clearance PhilGEPS
End-User Budget Office SPMO/BAC Sec.

Delivery and Preparation of

Procurement
Payment Documents
End-User SPMO

36
 NEW Flow Chart for
Shopping P50,000 and below

Purchase Budget Posting to

Request Clearance PhilGEPS
End-User Budget Office SPMO/BAC Sec.

Delivery and Preparation of Request for

Procurement
Payment Documents 3-Quotations
End-User SPMO End-User

37
Q and A

38
 Shopping
• Shopping is a method of procurement of goods
whereby the procuring entity simply request for the
submission of price quotations for readily available off
the-self goods or ordinary/regular equipment to be
procured directly from the supplier of know
qualifications
– Requirements: at least three (3) price quotations from bona fide
suppliers; Purchase Request, Budget Clearance, Complete
specifications (note: no brand name, and lock-in to a certain
brand/specifications)

39
 Shopping PRESENT Flow Chart for
P100,000 up to P499,999.99

Purchase
Budget Posting to
Request Clearance PhilGEPS
End-User End-User (at least 2 SPMO (at least 7 – 9
days) days)

Delivery and Preparation of

Payment Procurement
End-User Documents
SPMO (within 3 days)

40
Q and A

41
 Public Bidding
• All procurement shall be done through competitive bidding,
except as provided in Rule XVI of RA 9184 – IRR
• Amount subject to Public Bidding: Php500,000.00 and above
• Requirements:
– Budget Clearance (dont use catalogue price as much as possible, includes
cost of bid documents, value added tax)
– Purchase Request (conduct intial canvass from bonafide supplier)
– Complete Specifications (dont copy the catalogue specifications, no lackin)
– If infrastructure/renovation: plans are needed, bill of quantities of materials,
complete specifications)
– If services (Terms of Reference)
– PhilGEPS posting (Newspaper posting if Php2M and above)

42
 Public Bidding:
ABC Php500 to P2 Million

Posting to Pre- Public

Pre-Proc. Phil GEPS Bidding Bidding
Purchase Budget Conf.
Conf.
Request Clearance

SPMO SPMO SPMO

BAC
End- Budget
User Office 3-days 1-day (7-days) (12
days)

43
 Public Bidding:
ABC Php2 Million and Above

Purchase Request Budget Clearance Pre-Proc.

• Specifications • BUS/BUR • SPMO/BAC Sec.
• Proposed Budget • Availability of Funds • BAC

Pre-Bidding PhilGEPS/
Public Bidding
Conference Newspaper/
- BAC/BAC Sec. Bulletin Board
- BAC/BAC Sec.
TWG/E.U/Observer - SPMO/BAC Sec
TWG/E.U/Observer

44
 Simple Question and
Answer
• Question:
• Can we bid less than Php500,000.00?
• Answer:
• Yes
• Why?
• The Default of procurement is public
bidding, when in doubt ….. Public bid

45
Q and A

46
 Negotiated
• Procuring entity directly negotiates a contract with a technical.
Legally and financially capable supplier, contractor or consultant
• Cases to undergo Negotiated:
– Two Failed Bidding
– Emergency cases
– Take-over of contracts
– Adjacent or contiguous
– Agency to Agency
– Procurement Agent
– Highly Technical Consultants

47
 Repeat Order
• Procurement of goods from the previous winnig bidder
– Unit price of the repeat order must be the same as or lower
than those in the original contract
– Not result to splitting of contracts
– Within six (6) months from the effectivity of the contract stated
in the NTP
– Not to exceed 25% of the quantity of each item in the original
contract

48
 Emergency
Purchase
• In case of imminent danger to life or property during a state of
calamity, or when the time is of the essence arising from natural
or man-made calamities or other causes, where immediate
action is necessary
• Actors in Emergency Purchase: Argentinian and Russian

49
 Flow Chart

End-User SPMO BAC

Chair Accounting

• Write a letter
of Request • Recommen • Approve or
for d or not to dis-approve
Emergency recommend the request
Purchase the request for
after for emergency
purchasing of emergency purchase
Goods, purchase
Transportatio
n,
And other
expenses

50
 New Flow Chart:
Emergency Purchase
End-User Prepare for Voucher with
supporting documents

Accounting Office Evaluate the

reimbursement

Cash Office Payment

51
Q and A

52
Annual Procurement Plan
(APP)

Procurement Planning and the

Preparation of the Annual
Procurement Program/Plan and
Amendatory/Supplementary
Program/Plan

53
 Annual Procurement Plan
• Procurement Planning is the first step in the
procurement process. This may consist of the
preparation of a procurement plan or
procurement program.
• An APP refers to the itemized list prepared by
the Head of the Agency showing the kind,
estimated quantity, estimated cost, description of
supplies together with the balance on hand, if
any, required by the agency for the ensuing
fiscal year.
54
 Applicable Laws
on APP
• Section 3.2 of the IRR of E.O No. 302 dated Feb. 19,
1996. (Procurement Planning)
– Procurement of goods shall be undertaken according to a
procurement plan that the agency concerned shall
formulate to ensure that the goods to be procured are
available when needed.
• Section 424 of GAAM
– An Annual Procurement Program showing itemized
quantity, description and estimated cost of
supplies/materials/equipment required for a fiscal year shall
be prepared by all agencies of the national government

55
– The APP shall include provisions forforeseeable
emergencies based on historical records
– No procurement shall be undertaken unless it is in
accordance with the approved APP
– The end-user units shall prepare the respective
Project Procurement Management Plan (PPMP) for
the different programs, activities, and projects
(PAPs)
– Updating of the PPMPs and the consolidated APP
shall be undertaken every 6 mons or as often as may
be required by the HOPE.

56
 Forms of PPMP and APP
• PPMP PPMP.doc
• APP APP Format.xls

57
UP System APP and
PPMP

58
UP System APP
and PPMP

59
UP System APP
and PPMP

60
UP System APP
and PPMP

61
 UP System APP
and PPMP

UPS Office Goods Service Infra l

TOTAL 72,752,671.33 3,528,666.70 27,000.000.00

Php103,281,338.03 62
 Illustrative Case

• Nature:
Purchase of medicines Annual
Procurement Program
• Decision No.:
COA Decision No. 2606 dated Dec. 1, 1992.

63
 Illustrative Case
• Particulars: This is an appeal dated January 20, 1992 of
the Executive Director, Philippine Trade Training Center
(PTTC) to lift the disallowance on the purchase of
medicines amounting to P4,687.05. The amount was
disallowed by the Auditor for lack of legal basis for the
charging of the expenditure to Fund 101 object codes
07(supplies) and 19(representation expenses). The
Executive Director, in his appeal cited the provision of
Occupational Safety and Health Standards Law which
states that every employer including the government
shall keep in the workplace a minimum medical facilities
listed in Table 47 of the law.
64
 Illustrative Case
• The facilities listed therein maybe substituted with other comparable
medicines. The appeal was granted. The cost of the
medicines/medicinal supplies purchased can be validly charged
against the allotment for supplies and materials (07) under Fund 101
as long as these medicinal supplies are included in the Annual
Procurement Program of the agency in support of the Work and
Financial Plan of the agency as approved by the Department of
Budget and Management (DBM) or to the allotment for extraordinary
and miscellaneous expenses (18) authorized under Section 26 of
the 1991 General Appropriations Act.

65
 Benefits of PPMP
and APP
• An effective plan saves time and money
• An effective plan serves as a conduit to
achieving entity’s objectives
• An effective plan ensures compliance with
regulatory policies
• An effective plan provides a framework to
guide procurement officers in the
achievement of their tasks and duties.
66
Q and A

67
Updates on the Revised
Implementing Rules and
Regulations (IRR) of
Republic Act No. 9184

2012 - 2013

68
Guidelines on Ordering
Agreement

69
 Guidelines on
Ordering Agreement
• GPPB Resolution 01-2012 dated 27
January 2012

• Expands the application of Ordering Agreements to the

following:
 Expendable and Non-expendable Goods
 Services for Hotel Accomodation, Air Travel, and
Repair and Maintenance

70
 Guidelines on
Ordering Agreement
• Ordering Agreement – written agreement in the
nature of an option contract between the PE and
the winning bidder granting the PE the option to
either place an order for any of the Goods
identified in the Order Agreement List or not buy at
all, within a given period of time.

• Order Agreement List (OAL) – list of Goods, and

their corresponding technical specifications, scope
of work, projected quantities, and fixed prices,
subject of the Ordering Agreement.
71
 Guidelines on
Ordering Agreement
• Delivery Order Contract – contract that
authorizes and obligates a supplier/service
provider to deliver certain quantity or
render a particular service within an
agreed period and at a fixed price per unit,
item or identified service pursuant to an
Ordering Agreement.

72
 Guidelines on
Ordering Agreement

Competitive
PPMP APP
Bidding

Delivery
Ordering
Termination Order
Agreement
Contract

73
 Policy relative to
DOLE DO 18-A
• DOLE DO 18-A (14 November 2011)

 Issued to address unscrupulous undercutting

of contract rate by service providers (e.g.,
security and janitorial)

 Requires that administrative cost should not

be less than 10% of the total contract cost

74
 Sample
STANDARD COMPUTATION
Payable Directly to Servicemen: 6,500.00
a. Basic Salary
b. Night Differential
c. Emergency COLA
d. 13th Month Pay
e. Service Incentive Leave Pay

Payable as Employee’s Share: 500.00

a. Social Security Premiums
b. Philhealth Premiums
c. ECC Insurance Premiums
d. Pag-ibig Fund Contribution
Total Cost 6,000.00
10% Administrative Cost 600.00
Possible Bid Price 6,600.00
75
 Policy relative to
DOLE DO 18-A

• GPPB PM 03-2012 dated 30 November 2012

 Section 9 (b) (ii) of DOLE DO 18-A prohibits bidders from offering

bids lower than the sum of the Total Reimbursable Costs and 10%
Administrative Cost.

 Scenario results in the imposition of floor in bid prices.

 Runs counter to Section 31 of RA 9184.

 GPPB is of the view that Section 9 (b) (ii) of DOLE DO 18-A should
be considered INVALID, and thus, cannot be a source of any right,
duty, obligation, or power.

 Reiterated in GPPB PM 02-2013 dated 11 April 2014 76

Bid Securing Declaration

77
 Bid Securing Declaration
• GPPB Resolution 03-2012 dated 27
January 2012

• Adopts Bid Securing Declaration as an

additional form of bid security
 A document/undertaking signed by the bidder committing
to pay the corresponding fine and be suspended for a
period of time from being qualified to participate in any
government activity in the event of violation of any of the
conditions stated therein as required by the GPPB
Guidelines.

78
 Bid Securing Declaration
• Section 27, RA 9184

 All Bids shall be accompanied by a Bid Security,

which shall serve as a guarantee that, after receipt of
the Notice of Award, the winning bidder shall enter
into contract with the Procuring Entity within the
stipulated time and furnish the required performance
security. The specific amounts and allowable
forms of the Bid security shall be prescribed in
the IRR.

79
 Bid Securing Declaration
• Existing forms
 Have substantial monetary value.
 Increases transactional costs and bid prices.

• Bid Securing Declaration

 Insignificant monetary value
 Increases bidder’s participation
 Decreases the transactional costs
 Reduces bid prices
80
 Bid Securing Declaration
• Period of Effectivity

 Reasonable period determined by the HOPE

 Not to exceed 120 calendar days from the date of

opening of bids (unless duly extended by the bidder
upon the request of the HOPE)

81
 Bid Securing Declaration
• Automatic Expiration

 Bid validity period or any extension expires

 All bidders are declared ineligible or post-disqualified

(no request for reconsideration filed/waiver is filed)

 LCRB/HRRB furnishes the Performance Security and

signs the contract

82
 Bid Securing Declaration
• Grounds for Enforcement

 Withdraws bid during bid validity period; or

 Fails or refuses to accept award and enter into

contract or perform any and all acts necessary to the
execution of the contract, in accordance with the
bidding documents, after having been duly notified of
the acceptance of its bid during the bid validity period

83
 Bid Securing Declaration

• Penalties

 Automatic blacklisting for 2 years in ALL government

procurement activities, and

 Payment of fine

• For multiple bidders: difference between the evaluated bid

prices of LCRB/HRB with the next LCRB/HRB.

In case bidder is the LCRB/HRB, the amount shall be based on

the difference between the evaluated bid price and ABC.

• For a single bidder: difference between the evaluated bid price

and ABC.
84
 Payment of Fine
Approved Budget for the
Contract
Penalty of 3rd Lowest or Single
Third Lowest or Single
Penalty of 2nd Lowest
Second Lowest
Penalty of Lowest
Lowest

PhP 10,300,000.00
PhP 700,000.00
PhP 9,600,000.00
PhP 400,000.00
PhP 9,200,000.00
Back
PhP 99,001.00
PhP 9,100,999.00 85
Sale of Bidding Documents

86
 Sale of Bidding Documents
• GPPB Resolution 04-2012 dated 24
February 2012
• Provides standard rates for the sale of
bidding documents
 Rationalizes the fees
 Regulates price of Bidding Documents
 Lessens the exercise of discretion of PEs
 Encourages market participation and competition
87
 Sale of Bidding Documents

Maximum Cost of Bidding

Approved Budget for the Contract
Documents in PhP
500,000 and below 500.00
More than 500,000 up to 1 Million 1,000.00
More than 1 Million up to 5 Million 5,000.00
More than 5 Million up to 10 Million 10,000.00
More than 10 Million up to 50 Million 25,000.00
More than 50 Million up to 500 Million 50,000.00
More than 500 Million 75,000.00
88
Policy on TWG Membership

89
 Policy on TWG
Membership
• GPPB Resolution 07-2012 dated 27 April 2012

• Adopts an official position relative to HB 5366

 HB 5366 seeks to amend RA 9184 by appointing a “third party” from

either a recognized academic institution or from a government office
that is not part of the organizational structure of the procuring entity as a
BAC member with respect to the procurement of highly technical
equipment by the AFP and the PNP

 “Third party” seen to help in evaluation of eligibility of bidders and

technical specifications imposed by the bidding documents

90
 Policy on TWG
Membership
• GPPB Circular 02-2012 dated 3 August 2012

• Section 12.1 of the revised IRR of RA 9184 allows the BAC to create
a TWG from a pool of technical, financial, and/or legal experts to
assist in the procurement process

• TWG need not be limited to the employees or officials of the PE

• BAC may engage the assistance of other government personnel and

officials, and consultants from the private sector and academe with
proven expertise

91
 Eligibility Criteria on
Infrastructure Projects

92
Submission of Letter of
Intent

93
Submission of Letter of Intent

• GPPB Resolution 27-2012 dated 23 November 2012

• Deletes Sections 23.4.3 and 24.4.3 of the Revised IRR of R.A.

9184

 Provisions requiring the submission of a written LOI and/or

application of eligibility together with the latest Class “A”
Documents in case the procuring entity maintains a registry
system using the PhilGEPS or its own electronic system.

• Rationale:
 Harmonize with the rules on the use of the GOP-OMR
 Prevent collusion among bidders
94
Submission of Statement of
Ongoing and Completed
Contracts

95
 Submission of Statement of
Ongoing and Completed Contracts

• GPPB Resolution 29-2012 dated 23 November 2012

• Amends Section 23.1(a)(iii)

 Statement of the prospective bidder of all its ongoing

government and private contracts, including contracts awarded
but not yet started, if any, whether similar or not similar in
nature and complexity to the contract to be bid, within the
relevant period as provided in the Bidding Documents

 Statement identifying the bidder’s single largest completed

contract similar to the contract to be bid, except under the
conditions provided for in Section 23.5.1.3 of the IRR, within the
relevant period as provided in the Bidding Documents in the
case of goods.
96
Financial Eligibility
Requirement

97
 Financial Eligibility Requirement

• GPPB Resolution 20-2013 dated 30 July 2013

• Amends Secs. 23.1(a)(vi), 23.5.1.4, and 23.5.2.6 of the GPRA

IRR

 Credit line commitment (CLC) is NO longer an acceptable financial

eligibility requirement

 ONLY the computation of the NFCC will now be accepted

 The values of the current assets and current liabilities shall be

based on the data submitted by the bidder to the BIR through its
EFPS
98
Submission of Tax
Clearance

99
 Submission of Tax Clearance

• GPPB Resolution 21-2013 dated 30 July 2013

• Amends Secs. 23.1(a) and 24.1(a) of the GPRA IRR, ITB Clause
12.1(a) of both the PBDs for Goods and Infrastructure Projects,
and Eligibility Documents Clause 2.1 of the PBDs for Consulting
Services

 Tax clearance per Executive Order 398, Series of 2005, as

finally reviewed and approved by the BIR.

• Amends Sec. 34.2 of the GPRA IRR, ITB Clause 29.2 of the PBDs
for Goods, ITB Clause 28.2 of PBDs for Infrastructure Projects, ITB
Clause 27.2 of the PBDs for Consulting Services to delete the tax
clearance requirement
100
OPTIONS FOR BID SECURITY

101
 Options for Bid Security

• GPPB Resolution 25-2013 dated 30 August 2013

• Amends Secs. 27.2, 27.5 and 39.2 of the GPRA IRR and the
corresponding Clauses in the PBDs

 The procuring entity shall indicate in the Bidding Documents

the acceptable forms of bid security that bidders may opt to
use, which shall include the Bid Securing Declaration
provided in Section 27.5 of this IRR and at least one (1)
other form, the amount of which shall be equal to a
percentage of the ABC in accordance with the following
schedule:
102
 Maraming Salamat

25 November 2014 103