Alternative Methods of Procurement

MODES OF MODES OF PROCUREMENTPROCUREMENT

ALTERNATIVE METHODS ALTERNATIVE METHODS OF PROCUREMENTOF PROCUREMENT

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

ALTERNATIVE METHODSALTERNATIVE METHODS

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


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.


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.



◦ Upon HOPE approval, PE shall transmit the pre-selected list to the GPPB. The list must be accompanied with a HOPE certification:

a) justifying the resort to Limited Source Bidding, andb) verifying the compliance with the criteria previously

set.

◦ GPPB-TSO shall acknowledge receipt of the pre-selected 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.



◦ 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 No splitting of contracts

o 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

o Not to exceed 25% of the quantity of each item

o Original contract awarded through competitive bidding

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)

REPEAT ORDER

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

Applicability of Small Value Procurement [§53.9]: ALL

Conditions:o Procurement does not fall under Shopping [§52]

o 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.


Procedural Guidelines


◦ 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)


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


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.


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.

SMALL VALUE

◦ Format changes

◦ Alignment with international best practices & addresses concerns raised by stakeholders

Clearer rules on Negotiated Procurement due to 2-Failed Biddings.

Recognized additional instances of Negotiated Procurement

NEGOTIATED PROCUREMENT

NEGOTIATED PROCUREMENTTWO FAILED BIDDINGS

Applicability: ALL

Conditions:1. Two failed biddings2. 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

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 PROCUREMENTTWO FAILED BIDDINGS

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 PROCUREMENTEMERGENCY CASES

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 bidder’s 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 PROCUREMENTTAKE – OVER OF CONTRACTS

Applicability: Infra and Consulting

Conditions:o Subject contract is adjacent or contiguous to an on-

going infra or consultingo Original contract is a result of competitive biddingo Subject contract has similar/related scopes of worko Within the contractor’s/consultant’s capacityo Same prices or lower unit prices as the original contract

less mobilization costo Amount does not exceed amount of the on-going projecto No negative slippageo Negotiations commenced before expiry of original

contract

NEGOTIATED PROCUREMENTADJACENT OR CONTIGUOUS

Applicability: ALL

Conditions:o Cost-benefit analysis indicating A-to-A is more efficient

and economicalo A-to-A does not exceed 25% of PE’s total budget for

each category (goods, infra, consulting)o Servicing agency has mandate to undertake the projecto 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 PROCUREMENTAGENCY 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-to-Agency Agreement)] of the revised IRR) of RA 9184?


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.


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 PROCUREMENTPROCUREMENT AGENTS

Applicability: Consulting Services

Conditions:o Individual consultant

o Primary consideration for hiring the individual is trust and confidence

o Work involves:o Highly technical or proprietaryo Primarily confidential or policy determining

o 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 PROCUREMENTHIGHLY TECHNICAL CONSULTANTS

Applicability: Goods (Real estate and Venue)

Conditions:o Cost-benefit analysis indicating leasing privately-owned

real estate or venue is more efficient and economical

o APP reflect the proposed lease

o 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 PROCUREMENTLEASE OF REAL PROPERTY/VENUE

Implementing Guidelines for Lease of Privately-

Owned 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)



Owned 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




Guiding Principles: Objectives and purpose of the lease contract do not

constitute an unnecessary, excessive, extravagant, or unconscionable expenditure.


Implementing Guidelines for Lease of Privately-Owned

Real Estate and Venue (Cont.)

Procedural Requirements: Conduct of a cost-benefit analysis

Select location◦ End-user’s recommendation, justifications, prevailing rates of

lease/rent within vicinity

Set ABC◦ Midpoint of range based on prevailing lease rates




Procedural Requirements: Update APP, if necessary

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




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




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.


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.


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 12-2007)

NEGOTIATED PROCUREMENTNGO PARTICIPATION

Applicability: ALL

Conditions:o In the interest of project sustainability or to achieve

certain specific social objectives

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

NEGOTIATED PROCUREMENTCOMMUNITY PARTICIPATION

Applicability: ALL

Conditions:o Procure from UN Agencies

o Small quantities of off-the-shelf goods, primarily in the fields of education and health

o Specialized products where the number of suppliers is limited (e.g., vaccines or drugs)

NEGOTIATED PROCUREMENTUN AGENCIES

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 - PhP. 20,000,000.00 - PhP. 50,000,000.00)

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

BY ADMINISTRATION

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


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 YOUTHANK YOU

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Alternative Methods of Procurement

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