Transcription
VOLUME 1Guidelines on the Establishmentof Procurement Systems andOrganizations
2Guidelines on Establishing Procurement Systems and Organizations
iGUIDELINES ON THE ESTABLISHMENT OF PROCUREMENT SYSTEMS ANDORGANIZATIONSABBREVIATIONS AND ACRONYMS . VGENERAL PROVISIONS 1LEGAL BASIS FOR THE PROCUREMENT MANUAL . 3Legal Reference . 3COVERAGE, SCOPE, AND APPLICATION .4Legal Reference.4Coverage . 4Scope . 5Application . 5PRINCIPLES OF GOVERNMENT PROCUREMENT .7Legal Reference . 7Transparency . 7Competitiveness . 7Streamlining and use of technology in procurement . 7Accountability. 7Public Monitoring . 7PROCUREMENT ORGANIZATIONS . .9THE ORGANIZATIONAL STRUCTURE .11Legal Reference . 111.The Procuring Entity and the Procurement Unit / Office . 112.The Bids and Awards Committee (BAC) . 123.BAC Members . 134.The Technical Working Group (TWG) . 205.Observers . 20ROLES AND RESPONSIBILITIES .22Legal Reference . 221.The Procuring Entity and the Procurement Unit/Office . 222.The BAC . 243.The TWG. 264.The Observers . 26CONDITIONS FOR GRANTING HONORARIA .29Legal Reference . 29PROFESSIONALIZATION OF PROCUREMENT UNITS, BAC, TWG .33Legal Reference . 33PROCUREMENT PLANNING . INKAGE . 37Legal Reference . 37PROCUREMENT PLANNING – PREPARATION OF THE PROJECT PROCUREMENTMANAGEMENT PLAN (PPMP) .39Legal Reference . 391.The PPMP . 392.Developing the Project Requirements . 393.Writing the Technical Specifications, Scope of Work and Terms of Reference . 394.Determining the Approved Budget for the Contract . 425.Procurement Milestones . 426.Method of Procurement . 427.Format of the PPMP (prepared by the PMO/end-user unit) . 43Guidelines on Establishing Procurement Systems and Organizations
iiPROCUREMENT PLANNING – PREPARATION OF THE ANNUAL PROCUREMENT PLAN(APP) . .451.2.3.The Annual Procurement Pla . 45Procurement Strategy . 46Format of the APP . 48VARIOUS METHODS OF PROCUREMENT . .51COMPETITIVE BIDDING . 53Legal Reference.53ALTERNATIVE METHODS OF PROCUREMENT .54Legal Reference.541.Conditions for Use of Alternative Methods of Procurement.542.The Different Alternative Methods.54PROTEST MECHANISM . 57PROTEST MECHANISM . 59Legal Reference.591.Remedy of an affected bidder against anunfavorable decision from the BAC.592.Remedy of an affected bidder in caserequest for reconsideration is denied.593. Filing and Resolving requests for reconsiderationand protests.594.Resorting to court action.60PROCUREMENT MONITORING .63PROCUREMENT MONITORING . 65Legal Reference.65Agency Procurement Compliance and Performance Indicators.65Procurement Monitoring Report.68PROCUREMENT BY ELECTRONIC MEANS AND THE PHILGEPS . .69PROCUREMENT BY ELECTRONIC MEANS AND THE PHILIPPINE GOVERNMENT ELECTRONICPROCUREMENT SYSTEM .71Legal Reference . 711.The PhilGEPS . 712.Features of the PhilGEPS . 71USE OF PROCUREMENT SERVICE PROVIDERS 74Legal Reference . 74Minimum Requirements for Service Providers . 74FOREIGN ASSISTED PROJECTS . .75FOREIGN ASSISTED PROJECTS .77PENAL, CIVIL AND ADMINISTRATIVE LIABILITIES AND SANCTIONS .79STANDARD OF ETHICS .81Definition of Corrupt, Fraudulent, Collusive, and Coercive Practices . 81Applicable penalty for fraud, misrepresentation and collusion . 82CONFLICT OF INTEREST 83PENAL LIABILITIES AND SANCTIONS 85PenalPenalPenalPenalLiabilities of Public Officers . 85Sanctions for Public Officers . 85Liabilities of Private Individuals . 85Sanctions for Private Individuals . 86CIVIL LIABILITY 87Civil Liability in Case of Conviction . 87Liquidated Damages . 87Guidelines on Establishing Procurement Systems and Organizations
iiiADMINISTRATIVE LIABILITIES AND SANCTIONS .88Administrative Liabilities . 88Administrative Sanctions . 88BLACKLISTING GUIDELINES 90Prohibition on blacklisted persons/entities to participate in the bidding of GovernmentProjects/Contracts . 90Sanctions and Grounds for Blacklisting . 90LEGAL ASSISTANCE AND INDEMNIFICATION . .95GENERAL CONDITIONS .97Free Legal Assistance . 97Liability Insurance . 97Medical Assistance . 99PROCEDURE FOR GRANTING LEGAL ASSISTANCE AND INDEMNIFICATION .100ANNEX . 101GLOSSARY .103Guidelines on Establishing Procurement Systems and Organizations
ivGuidelines on Establishing Procurement Systems and Organizations
vABBREVIATIONS AND ACRONYMSABCApproved Budget for the ContractADBAsian Development BankAFPArmed Forces of the PhilippinesAFSAudited Financial StatementAPCPIAgency Procurement Compliance and Performance IndicatorAPPAnnual Procurement PlanBACBids and Awards CommitteeBRSBureau of Research and StandardsBSPBangko Sentral ng PilipinasCAFCertificate of Availability of FundsCDACooperatives Development AuthorityCIAPConstruction Industry Authority of the PhilippinesCIFCost, Insurance and FreightCIPCarriage and Insurance Paid to (named place of destination)COACommission on AuditCOFILCOConfederation of Filipino Consulting OrganizationsCSOCivil Society OrganizationCSCCivil Service CommissionDBMDepartment of Budget and ManagementDBM-PS/PS-DBMDepartment of Budget and Management-Procurement ServiceFAPsForeign Assisted ProjectsFDAFood and Drug AdministrationFMISFinancial Management Information SystemGAAGeneral Appropriations ActGCCGeneral Conditions of ContractGFIGovernment Financial InstitutionGOCCGovernment-Owned or –Controlled CorporationGoPGovernment of the PhilippinesGPPBGovernment Procurement Policy BoardGPPB-TSOGovernment Procurement Policy Board – Technical Support OfficeGPRAGovernment Procurement Reform ActHoPEHead of the Procuring EntityHRBHighest Rated BidHRRBHighest Rated and Responsive BidIBInvitation to BidICTInformation and Communications TechnologyIFIInternational Financing InstitutionIPRIntellectual Property RightsGuidelines on Establishing Procurement Systems and Organizations
viITBInstruction to BiddersITRIncome Tax ReturnJVAJoint Venture AgreementJICAJapan International Cooperation AgencyLCLetter of CreditLCBLowest Calculated BidLCRBLowest Calculated and Responsive BidLGULocal Government UnitMOOEMaintenance and Other Operating ExpensesNACAPNational Constructors Association of the PhilippinesNCBNational Competitive BiddingNFCCNet Financial Contracting CapacityNGANational Government AgencyNGONon-Government OrganizationNTPNotice to ProceedOPCCBOrganization, Position Classification and Compensation BureauPAProfessionals AssociationPAGASAPhilippine Atmospheric, Geophysical and Astronomical Services AdministrationPBDsPhilippine Bidding DocumentsPCAPhilippine Constructors Association, IncorporatedPCABPhilippine Contractors Accreditation BoardPhilGEPS/G-EPSPhilippine Government Electronic Procurement SystemPICEPhilippine Institute of Civil EngineersPICPAPhilippine Institute of Certified Public AccountantsPMOProject Management OfficePMRProcurement Monitoring ReportPNPPhilippine National PolicePAPsPrograms, Activities and ProjectsPPMPProject Procurement Management PlanPRCProfessional Regulation CommissionR.A.Republic ActR.A. 9184Republic Act No. 9184, otherwise known as the “Government ProcurementReform Act”REIRequest for Expression of InterestRFQRequest for QuotationROWRight-of-WaySECSecurities and Exchange CommissionSMESmall and Medium EnterprisesSOWScope of WorkSUCState Universities and CollegesSWAStatement of Work AccomplishedGuidelines on Establishing Procurement Systems and Organizations
viiTORTerms of ReferenceTSOTechnical Support OfficeTWGTechnical Working GroupUNDBUnited Nations Development BusinessVATValue-Added TaxWBThe World BankGuidelines on Establishing Procurement Systems and Organizations
Guidelines on Establishing Procurement Systems and Organizations
Page 1 of 120SECTION 1General ProvisionsGuidelines on Establishing Procurement Systems and Organizations
Page 2 of 120Guidelines on Establishing Procurement Systems and Organizations
Page 3 of 120Legal Basis for the Procurement ManualLegal Reference2016 IRR, Section 6 provides for the legal basis for this Procurement Manual.The Government Procurement Manual was developed pursuant to R.A. 9184, otherwise knownas the “Government Procurement Reform Act” and its IRR. The section provides for thedevelopment of generic procurement manuals and standard bidding documents and formsthat all Procuring Entities must use, once issued.This Manual aims to standardize the procurement process, in effect preventing confusion,ensuring transparency, and enabling procuring entities to conform to the principles thatgovern all government procurement activities. However, whenever necessary to suit theparticular needs of the Procuring Entity, particularly for major and specialized procurement, itmay be modified subject to the approval of the GPPB.The GPPB will review this Manual periodically, and whenever necessary, ensure itsapplicability to existing conditions. Procuring Entities may submit to the GPPB itsrecommendations for specific revisions to the Manual. Any such revisions must be approvedby the GPPB and must be consistent with existing procurement laws, rules, regulations, andpolicies.In case of an inconsistency or conflict between this Manual and R.A. 9184 and/or its IRR, thelatter shall govern.Guidelines on Establishing Procurement Systems and Organizations
Page 4 of 120Coverage, Scope, and ApplicationLegal Reference2016 IRR, Section 4 provides the legal reference for the coverage, scope and application ofthe Procurement Manual.CoverageThis Manual must be used for all procurement activities by the Government of the Philippinesand all its branches and instrumentalities, as follows:1.the Legislative Branch and its instrumentalities;the Senate, the House ofRepresentatives, and all the offices and committees under them;2.the Judiciary and its instrumentalities; the Supreme Court, the Court of Appeals, theSandiganbayan, the Court of Tax Appeals, the lower courts and all other bodies thatform part of the Judiciary;3.the Office of the President proper as described by E.O. No. 292 or the 1987Administrative Code of the Philippines; the Executive Office, the Common StaffSupport System, and the Office of the Presidential Special Assistants/AdvisersSystem;4.departments, bureaus, offices that form part of the Executive Branch;and/or local offices;5.Constitutional Commissions or Offices, and all instrumentalities/offices under them;6.department offices and bureaus in the autonomous regional government;7.GOCCs and GFIs;8.SUCs;9.LGUs; and10.all other instrumentalities/agencies/offices/units of the Governmentits regionalConsistent with National Budgeting and Accounting practice, the above mentionedoffices/instrumentalities of government may also be classified into the following and shall bereferred to as such throughout this Manual:1.NGAs, which refer to items 1-5 above;2.Autonomous Regional Government, which refers to item 6 above;3.GOCCs;4.GFIs;5.SUCs; and6.LGUsGuidelines on Establishing Procurement Systems and Organizations
Page 5 of 120ScopeThe provisions of R.A. 9184 shall apply to the procurement of goods, infrastructure projects,and consulting services, regardless of source of funds, whether local or foreign. However, anyTreaty or International or Executive Agreement to which the GoP is a signatory, affectinggovernment procurement transactions, shall be observed. Thus, procurements funded partlyor fully by IFIs shall follow the procurement procedures and guidelines specified under theloan or grant, or technical assistance agreement; provided that in the event no suchprocurement guidelines are specified, R.A. 9184 and its 2016 IRR will apply.How are Executive Agreements distinguished from Treaties?“Executive Agreements” is a term commonly used to designate international agreements,entered into by the President without the concurrence of the Senate, and embodyingadjustments of detail carrying out well-established national policies and traditions and thoseinvolving arrangements of a more or less temporary nature. (DOJ Opinion No. 46 seriesof 2007 citing USAFFE Veterans Association Inc. v The Treasurer of the Philippines105 Phil 103, 1959)International agreements involving political issues or changes of national policy and thoseinvolving international arrangements of a permanent character usually take the form oftreaties. But international agreements embodying adjustments of detail carrying out wellestablished national policies and traditions and those involving arrangements of a more orless temporary nature usually take the form of executive agreements. (Ibid. citingCommissioner of Customs v Eastern Sea Trading, 3 SCRA 351, 1961)How are loans, or grant agreements classified?In several instances, the DOJ had the occasion to rule that commercial agreementsconcerning loans, guarantees or other credit accommodations are in the nature of anexecutive agreement because they embody arrangements of a more or less temporarynature, that is they become functus oficio upon settlement of the obligors’ liabilities. (Ibid.citing Op. No. 70 s 1987; Op. No. 147, s of 1994; Op. No. 102, s of 2004.)In view of the above, and in due regard to the harmonization efforts among GOP, WB, ADB,and JICA, this Manual will not only cover R.A. 9184 and its 2016 IRR, but the harmonizedprocedures found in the PBDs as well. Unless otherwise indicated herein, the manuals shallapply to foreign-assisted projects as well.ApplicationThe procurement procedures provided in this Manual shall apply to the following:1.Goods and Services;2.Infrastructure Projects; and3.Consulting ServicesThis Manual shall be used together with the PBDs prescribed by the GPPB.On the other hand, this Manual shall not apply to the following activities:1.Procurement of Goods, Infrastructure Projects and Consulting Services funded fromForeign Grants covered by R.A. 8182, as amended by R.A. 8555, unless the GoP andthe foreign grantor/foreign or international financing institution agree otherwise;2.Acquisition of right-of-way site or location for infrastructure projects;Guidelines on Establishing Procurement Systems and Organizations
Page 6 of 1203.Private sector infrastructure or development projects, such as the build-operatetransfer scheme and its variants.4.Direct financial or material assistance given to beneficiaries in accordance withexisting laws, rules and regulations, and subject to the guidelines of the concernedagency;5.Participation in local or foreign scholarships, trainings, conferences, seminars orsimilar activities governed by applicable COA, CSC and DBM rules;6.Leasing out of government-owned property for private use;7.Hiring of Job Order Workers;8.Joint Venture under the revised NEDA Guidelines, and JV Agreements by LGU withprivate entities; and9.Disposal of property and other assets of the government.For application of procurement methods needed to address peculiar situations, agencies areadvised to consult the GPPB.Guidelines on Establishing Procurement Systems and Organizations
Page 7 of 120Principles of Government ProcurementLegal Reference2016 IRR, Section 3 provides the legal reference for the principles of governmentprocurement.Government procurement shall be governed by the following principles:TransparencyThe procurement process and the implementation of procurement contracts must betransparent. Procuring entities must ensure the widest dissemination of bid opportunities andthe participation of pertinent non-government organizations. Towards this end, except forcertain alternative methods of procurement where the posting requirement may be dispensedwith, posting in the Procuring Entity’s website, in the PhilGEPS website, in the websiteprescribed by the foreign government/foreign or IFI, if applicable, and in a conspicuous placewithin the premises of the Procuring Entity is required for all procurements. Moreover, inaddition to the COA representative, the BAC of the Procuring Entity is required to inviteobservers coming from eligible and qualified PAs and NGOs to observe any or all stages of theprocurement process. Finally, each procurement transaction must be properly documentedand such records must be maintained and made available to proper parties.CompetitivenessPublic procurement must be competitive and, as a rule, be conducted through public bidding,except as otherwise provided for under the GPRA, its IRR and this Manual. A competitivebidding process treats bidders equitably and provides fair grounds for competition amongthemselves, thereby ensuring that no single bidder significantly influences the outcome of thebidding. Competition among proponents will urge them to offer more beneficial terms to thegovernment. Hence, the alternative methods of procurement must only be resorted to whencompetitive bidding is not a feasible option, in accordance with the conditions laid down inR.A. 9184, its 2016 IRR and this Manual.Streamlining and use of technology in procurementA streamlined procurement process that will uniformly apply to all government procurementmust be adopted. The procurement process must be simple and made adaptable to advancesin modern technology in order to ensure an effective and efficient method. The GPPB conductsa periodic review of government procurement procedures, and whenever necessary,formulates and implements changes thereto.AccountabilityA system of accountability must be established. Thus, both the public officials directly orindirectly involved in the procurement process as well as in the implementation ofprocurement contracts, and the private parties that deal with government are, whenwarranted by circumstances, investigated and held liable for their actions relative thereto. Inrelation to this, the heads of the procuring entities are responsible for establishing andmaintaining a transparent, effective, and efficient procurement system in their respectiveagencies. Hence, the responsibilities of each official involved in the procurement processmust be clear and legally identifiable.Public MonitoringPublic monitoring of the procurement process and the implementation of awarded contractsare provided for in R.A. 9184, with the end in view of guaranteeing that these contracts areawarded pursuant to the provisions of the R.A. 9184 and its 2016 IRR, and that all theseGuidelines on Establishing Procurement Systems and Organizations
Page 8 of 120contracts are performed strictly according to specifications. A system of reporting to theGPPB is provided for, while eligible and qualified CSOs such as NGOs, PAs, academicinstitutions, and religious groups are allowed to observe and monitor the procurement processand contract implementation.To fully abide by these principles, Procuring Entities shall consistently follow the proceduresprescribed in this manual.Guidelines on Establishing Procurement Systems and Organizations
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Page 10 of 120SECTION 2Procurement OrganizationsGuidelines on Establishing Procurement Systems and Organizations
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Page 12 of 120The Organizational StructureLegal Reference2016 IRR, Sections 5(f) and (bb) 11, 13, and 14 provide for the legal reference for theorganizational structure.1.The Procuring Entity and the Procurement Unit / Officea.The Procuring EntityA Procuring Entity shall be the central office, or, when duly authorized toprocure independently, the regional office or any decentralized, local or lowerlevel agency/bureau/office of an NGA, GOCC, GFI, SUC or LGU. However, theauthority to procure independently of the central office must not bepresumed, as the entire structure of the organization would have to beconsidered to determine whether or not such regional, decentralized, local orlower level agency/bureau/office is authorized to undertake procurementactivities. Additionally, the existence of directives from the central officedelegating such authority to procure to its regional, decentralized, and local orlower level agency / bureau / office would have to be determined.b.The Head of the Procuring Entity (HOPE)The HOPE refers to: (i) the head of the agency or body, or his duly authorizedofficial, for NGAs and the constitutional commissions or offices, and otherbranches of government; (ii) the governing board or its duly authorizedofficial, for GOCCs, GFIs and SUCs; or (iii) the local chief executive, for LGUs:Provided, however, That in an agency, department, or office where theprocurement is decentralized, the head of each decentralized unit shall beconsidered as the HoPE, subject to the limitations and authority delegated bythe head of the agency, department, or office.The powers, duties, and responsibilities of the duly authorized official of theHOPE shall be confined within the limits of the delegation expressed through adepartment/office order, board resolution, or other equivalent documents.c.The Procurement Unit / Office and the BAC SecretariatThe Head of the Procuring Entity should create a permanent BAC Secretariatto ensure continuity as well as professionalization of the procurementfunction, subject to existing guidelines, e.g. DBM National Budget Circular No.2015-558 dated 04 June 2015, explained below, or an ad hoc BAC Secretariat.With respect to the latter case, the Head of the Procuring Entity shall assignfull-time support staff to the BAC Secretariat, or designate an organic office,or the existing Procurement Unit/Office as the BAC Secretariat, because thisoffice is best equipped for the task.The term “Procurement Unit” shall refer to the organic office of the ProcuringEntity that carries out the procurement function.The Head of the Procuring Entity should consider the following factors inselecting the personnel who will be assigned to the BAC Secretariat, amongothers:i.Integrity;ii.Procurement proficiency, as shown by experience and trainingsattended;iii.The appropriate Civil Service qualification standards;iv.The appropriate rank of the head of the BAC Secretariat, which shouldbe:Guidelines on Establishing Procurement Systems and Organizations
Page 13 of 120v. At least a fifth ranking permanent employee, in Central/HeadOffices of NGAs, GOCCs and GFIs, as well as SUCs and LGUs;or At least a third ranking permanent employee, inbureaus/regional offices and sub-regional/district offices; or A permanent official of a lower rank, if the fifth or thirdranking permanent employee is not available.Full-time support staff for an existing ad hoc Secretariat.In designating members of the Procurement Unit / Office and the BACSecretariat, the Head of the Procuring Entity must ensure that check andbalance is maintained, and procurement personnel are not given assignmentsthat may conflict with their designation as such.Under the Guidelines in the Organization and Staffing of Procurement Units,issued by DBM through National Budget Circular No. 2015-558 on 04 June2015 (See Section 3), the organizational level of the procurement unit shall bedetermined by:(a)The organizational level of the procuring entity; and(b)The average procurement budget of the agency for the last three (3)years.For this purpose, the procurement budget shall refer to the sum of theallocations of the central office, staff bureaus, and regional offices of theagency for repair and maintenance, supplies and materials, rents, professionalservices, buildings and structures outlay, office equipment, furniture andfixtures, transportation equipment, machineries and equipment, publicinfrastructures, and other expense items which are subject of procurement, asreflected in the approved APP, and its supplements, for the covered years.The organizational level of procurement unit shall be as follows:AnnualProcurementBudgetDepartmentlevel AgencyBureau-levelAgencyGOCC/GFIPhP 5 Bil
Page 3 of 120 Guidelines on Establishing Procurement Systems and Organizations Legal Basis for the Procurement Manual Legal Reference 2016 IRR, Section 6 provides for the legal basis for this Procurement Manual.
