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Alternative Methods of Procurement

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Renato De Vera

on 17 October 2016

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Transcript of Alternative Methods of Procurement

Alternative Methods of Procurement
Default Mode
Competitive Public Bidding
Section 49
Limited Source Bidding
Section 50
Direct Contracting
Section 51
Repeat Order
Section 52
All procurement shall be done
thru competitive public bidding...

Sec.10, R.A. 9184
General Rule:
(Optional) use of the Alternative Methods of Procurement.
Section 53
Negotiated Procurement
Conditions for Use
Conditions for Use:
Included in the APP
Recommended by BAC
Approved by HOPE
Splitting of Contracts not allowed
Only in highly exceptional cases
Justified by conditions provided
Promote economy and efficiency
Most advantageous price obtained
(Selective Bidding)
Method of Procurement of
Consulting Services

Direct invitation to bid
to pre-selected suppliers or consultants
of known experience and proven capability
on the requirements of the particular contract
Advertisement Posting
Situations when may be used:
Procurement of
highly specialized
types of goods (e.g., sophisticated defense equipment, complex air navigation systems, coal) and consulting services;
Procurement of
major plant components
where it is deemed advantageous to limit the bidding to known qualified bidders to maintain uniform quality and performance of the plant as a whole.
BAC shall
directly invite
all the suppiers or consultants appearing in the
pre-selected list
The pre-selection shall be
based upon
of the bidders to perform the contract taking into account:
experience and past performance on similar contracts;
capabilities with respect to personnel equipment or manufacturing facilities; and
financial position
Pre-selection Procedure
BAC prepares a
list of pre-selected suppliers/consultants
appearing in a list maintained updated by
relevant government authority
If there is no list, PE requests identified relevant govt authority for its issuance; otherwise, public bidding shall be done;
If PE is the relevant govt authority, it may
prepare a self-generated list
of suppliers/ consultants with known experience and proven capability;
Procedure in Preparing a Pre-Selected List
BAC shall adopt the ff
criteria for evaluation of capability of entities
Experience and past performance;
Personnel, equipment or manufacturing facilities; and
Financial positions
BAC evaluates and submits recommended pre-selected list to
Upon approval,
HOPE transmits pre-selected list to GPPB
GPPB-TSO acknowledges receipt of pre-selected list and posts it in GPPB or PhilGEPS website;
TSO approval is not necessary
Other provisions for public bidding
(Single Source Procurement)
Applicable for procurement of Goods only;

Supplier is simply asked to submit price quotation or pro-forma invoice together with the conditions of sale;

Offer may be accepted immediately or after some negotiations.
Maybe resorted under any of the ff procurement situations:

Procurement of Goods of
proprietary nature
which can be obtained only from proprietary source;

Procurement of
critical components
from a specific supplier is a condition precedent to hold a contractor to guarantee its performance in accordance with the conditions of its contract;

Those sold by an
exclusive dealer or manufacturer
which does not have sub-dealers selling at lower prices and for which no suitable substitute can be obtained at more advantageous terms.

A method for procurement of GOODS from previous winning bidder

when there is a need to REPLENISH goods procured under a contract

previously awarded thru COMPETITIVE BIDDING

Unit prices must be the same or lower than those in the original contract;

Will not result to splitting of contracts;

Shall be availed of within six (6) months, except in cases duly approved by the GPPB, from contract effectivity date stated in the NTP arising out of original contract; and

Shall not exceet 25% of the quantity of each item in the original contract.

A method for procurement of GOODS only;

whereby the PE simply requests for submission of price quotations

for readily available off-the-shelf goods or ordinary/regular equipment

to be procured directly from suppliers of known qualifications.
Shall be employed in any of the ff cases:

When there is unforeseen contingency requiring immediate provided the amount does not exceed P100,000.
What is "Ordinary or Regular Office Supplies "?

Shall be understood to include those supplies, commodities or materials which, depending on the PE's mandate and nature of operations, are necessary in the transaction of its official businesses, and consumed in the day-to-day operations of said PE.

Shall not include services, such as repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security and related or analogous services.
Guidelines for Shopping:
Conduct of Shopping may be delegated by the BAC to an appropriate bureau, office or support unit;
Prepare RFQ indicating the specs, quantity, ABC, manner/deadline of submission, and other terms and conditions;
If ABC is above P50,000, post RFQ in PhilGEPS, agency website and conspicuous place for a period of 7 calendar days;
Send RFQ to at least three (3) suppliers, except for unforeseen contingency where RFQ may be sent to only one (1) supplier;
If less than 3 quotations are received, extend the deadline for submission;
Prepare Abstract of Quotation;
Award to the lowest responsive quotation;
Require submission of relevant documents or thru other means to validate qualifications of supplier;
Post award in the PhilGEPS.
Negotiated Procurement:

A method of procurement of Goods, Infrastructure Projects, and Consulting Services, whereby the PE directly negotiates a contract with a
technically, legally and financially capable
supplier, contractor, or consultant in any of the 13 cases of Negotiated Procurement.
Section 53.1
Two-Failed Biddings
(Failure of Public Bidding
for the 2nd time as
provided under
Sec. 35)
Section 53.2
Emergency Cases
Take-over of contracts...

which have been rescinded or terminated for causes provided for in the contract and existing laws,

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.
Procedure for NP-Take-Over of Contract:

Negotiate starting with the 2nd lowest calculated/highest rated bidder at his original price;
If negotiation fails, negotiate with the 3rd lowest calculated/highest rated at his original price;
If negotiation fails again, a shortlist of at least 3 eligible bidders shall be invited to submit bids;
Negotiate starting with the lowest calculated/ highest rated bidder.
When is NP-Emergency Cases allowed?
In case of imminent danger to life or property during a state of calamity;
When 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.
Procedure for NP-2-Failed Biddings:
Conduct mandatory review of the terms, conditions, specifications, and cost estimates as prescribed under Sec. 35;
BAC shall revise and agree on minimum technical specs;
If necessary, BAC shall adjust the ABC (not more than 20% of last ABC), subject to required approvals;
BAC shall invite (posting in PhilGEPS, website, conspicuous places) and engage in negotiations with a sufficient number of suppliers, contractors, or consultants to ensure competition.
Procedure for NP-2-Failed Biddings (cont.):
Any requirements, guidelines, documents, clarifications, or other information relative to negotiations shall be communicated on an equal basis to all those which responded to the invitations;
After completion of negotiations, the PE shall request all remaining in the proceedings to submit, on a specified date, a best and final offer;
PE shall select the best and final offer which meets the PE's minimum technical requirements not exceeding the ABC.
Observers shall be invited in all stages of negotiations.
Section 53.4
Adjacent or Contiguous
Adjacent or Contiguous:

Where the subject contract is adjacent or contiguous to an on-going Infrastructure project or Consulting Service where the consultants have unique experience and expertise to deliver the required service.

"Adjacent or contiguous", in the case of Infrastrucure projects refers to projects that are in actual physical contact with each other.

In the case of Consulting Services, it shall refer to the necessary connection between the subject matters, outputs, components, or deliverables of the ongoing contract and the contract to be negotiated for purposes of project continuity
Conditions for use:
Original contract is a result of Competitive Bidding;
Subject contract to be negotiated has similar or related scopes of work;
It is within the contracting capacity of the contractor/consultant;
Contractor/consultant uses the same prices or lower unit prices as in the original contract less mobilization cost;
No negative slippage or delay;
Amount involved does not exceed the amount of ongoing project; and
Negotiations started before expiry of original contract.
Section 53.5

Procurement of Infrastructure Projects, Consulting Services, and Goods from another agency of the government, such as the PS-DBM
Guidelines on A2A
Section 53.6
Procurement Agent
Procurement Agent:

In order to hasten project implementation,
PEs which may not have proficiency or capability to undertake a particular procurement as determined by the HOPE,
May request other agencies to undertake procurement for them, or
Recruit and hire consultants or procurement agents to assist them directly and/or train their staff in the management of procurement function.
Section 53.7
Highly-Technical Consultants
Conditions for Use:

Applies to individual consultants only;
Individual consultant is hired to do work that is:
highly technical or proprietary, or
primarily confidential or policy determining, where trust and confidence are the primary consideration for the hiring of the consultant;
The term of the individual consultant shall, at the most, be on a six month basis, renewable at the option of the appointing HOPE, but in no case to exceed the term of the HOPE.
Section 53.9
Small-Value Procurement
Small-Value Procurement:

Where the procurement does not fall under Shopping under Section 52 of the IRR and the amount involved does not exceed P500,000.
Guidelines on Conduct of Small-Value Procurement:
BAC may delegate responsibility to an appropriare bureau, office, or support unit;
PE shall draw up a list of at least three (3) suppliers, contractors or consultants of known qualifications which will be invited to submit proposals or curriculum vitae;
If ABC is above P50,000, the invitation or RFQ shall be posted in the PhilGEPS, agency website, and conspicuous places for a period of 7 calendar days;
If less than the required number submits proposals, the BAC may already consider the same or extend the deadline for submission;
Prepare Abstract of Quotations;
Require submission of relevant documents or thru other means to validate qualifications of supplier, contractor, or consultant;
Award to the best quotations/proposals;
Post award in the PhilGEPS.
Section 53.10
Lease of Real Property
(Lease of privately owned
real property or venue
for official use)
Guidelines on Lease of Real Property and Venue:
Section 53.11
NGO Participation
NGO Participation:

When an appropriation law or ordinance earmarks an amount to be specifically contracted out to NGOs, the PE may enter into a MOA with an NGO, subject to the guidelines issued by the GPPB.
Section 53.12
Community Participation
Section 53.13
United Nations Agencies
Community Participation:

Where, in the interest of project sustainability, or to achieve certain specific social objectives,

it is desirable in selected projects to call for the participation of local communities

in the delivery of goods, including non-consulting services, and simple infrastructure projects, subject to the guidelines issued by the GPPB.
United Nations Agencies:

Procurement from specialized agencies of the UN of any of the following:

small quantities of off-the-shelf goods, primarily in the field of education and health; and
specialized products where the number of suppliers is limited, such as vaccines and drugs.
Posting of Awards:

In all instances of alternative methods of procurement, the BAC, thru the Secretariat, shall post, for information purposes, the notice of award (NOA) in the PhilGEPS, website of the PE, if any, and at any conspicuous place reserved for the purpose in the premises of the PE.
Performance Security and Warranty Security:
No need to require in the ff:
NP-Emergency Cases
Small Value Procurement
Lease of Real Property
Community Participation
UN Agencies
Registration in PhilGEPS and submit PhilGEPS Registration Number:
Necessary as a condition for award of contract in the following alternative methods of procurement:
Limited Source Bidding
Direct Contracting
Repeat Order
Shopping for Ordinary Supplies in Equipment not available in PS
Two-Failed Biddings
Take Over of Contracts
Adjacent and Contiguous
Small Value Procurement
Lease of Real Property
NGO Participation
Section 53.3
Take-Over of Contract
Dir. Renato M. de Vera, MNSA, CESO III
Procurement of ordinary or regular office supplies and equipment not available in the PS involving an amount not exceeding P500,000.
Conduct cost-benefit analysis indicating that A2A is more efficient and economical;
Total amount of all Goods, Infra, and Consulting Services to be undertaken by A2A shall not exceed 25% of the PE's total budget for each category;
Servicing Agency (SA) has mandate to deliver the goods/services, undertake infra or consulting services;
SA owns or has access to necessary tools and equipment required for the project.
*Does not apply to procurement of Goods from PS
End-user unit shall conduct Cost-Benefit Analysis to assess feasibility of leasing from privately-owned as against purchasing or leasing from government-owned
Recommendation of end-user unit to lease shall also indicate proposed location, the justifications, and result of market analysis of prevailing rental rates in vicinity of selected location;
Set ABC using mid-point of the range obtained from results of market analysis on the prevailing rental rates within vicinity of selected location;
Reflect in the APP the proposed lease of real estate or venue;
Selection of Lessor may be delegated by the BAC to an appropriate bureau, committee, or support unit;
Eligibility documents need not be submitted by prospective Lessor.
Whether the minimum requirement for a contractor to be eligible to participate in negotiation is the same as that of public bidding.
GPPB Opinion:
Except those where competitive bidding or semblance thereof is present (LSB and NP-2-Failed Bidding), the PE has the discretion as to what legal, technical and financial documents to require; however, requiring too many eligibility documents may, in the process, defeat the very purpose of the alternative method modalities have been introduced and institutionalized.
Whether the requirement of at least three (3) quotations in Shopping is met when only one (1) supplier offerred a price while the other two (2) indicated "NONE" in the RFQ.
GPPB Opinion:
A response of "NONE" in the RFQ is not considered a price quotation for the purpose of complying with the minimum three (3) quotations in Shopping for ordinary and regular office suppliers/equipment not available in the Procurement Service.
NPM 127-2014
Whether the MWSS RO can resort to Direct Contracting for the procurement of the subscription to Bloomberg Professional Service
GPPB Opinion:
For the 1st and 3rd conditions of Sec. 50 of the IRR to apply, it is encumbent upon the PE to ensure that based on the technical specs of the goods, only one supplier can supply and deliver the goods. The PE shall conduct a market survey of the industry and determine the supply source to confirm the exclusivity of the source of goods to be procured. Mere presence of Cert. of Exclusive Distributorship by one company does not sanction to resort to Exclusive Distributorship.
NPM 110-2014
Whether it is necessary to obtain three (3) price quotations for SVP.
GPPB Opinion:
In SVP, award of contract may be made even if only one (1) supplier submitted proposal/quotation, provided that the PE invited at least three (3) suppliers to submit quotations, and provided that the submission complies with the requirements and terms and conditions required by the PE.
NPM 097-2014
Clarification on the submission of relevant documents for Shopping and SVP.
GPPB Opinion:
COA Circular 2012-001 mandates the PE to submit specific documents in case of Shopping and SVP.

To harmonize these policies, PE may, for purposes of determining what constitutes relevant documents, consider the two (2) documentary requirements mentioned in Sec. 9.2 of the COA circular for submission by suppliers in the case of Shopping or SVP.
NPM 068-2014
Whether the BAC can evaluate a lone contractor which responded to the invitation to participate in Negotiation due to 2-Failed Biddings.
GPPB Opinion:
Sec. 53.1.2 of the IRR provides that where there has been failure of public bidding for the 2nd time, the BAC shall invite and engage in negotiation with a "sufficient number" of contractors, suppliers or consultants. That refers to a minimum number to be invited for the purpose of negotiation. Accordingly, if only bidder responded, the PE may already proceed with the NP provided it has invited contractors of a number sufficient to ensure competition.
NPM 136-2013
Whether LRTA may request DOTC to be its Procurement Agent
GPPB Opinion:
Resort to Sec. 53.6 of the IRR is couched upon the condition that there is a general determination of lack of proficiency or capability by the PE to undertake a particular procurement. It does not qualify or limit the lack of proficiency or capability to specific circumstances. In the conduct of procurement the PA should strictly apply the rules and procedures under RA 9184 and its IRR.
NPM 038-2013
Whether the immediate resort to DC in the procurement of books authored by a particular author is justified by the fact that they are published and distributed by an exclusive distributor.
GPPB Opinion:
The fact alone that Good Governance Books is the publisher and exclusive distributor of all the books authored by a particular author does not sanction the immediate resort to DC. The PE must first justify the necessity for procuring copyrighted books, and must be able to prove that there are no suitable substitute in the market that can be procured at more advantageous terms.
NPM 116-2012
When is there Splitting of Contract?
GPPB Opinion:
The concept of splitting presupposes the singularity of a particular project but which, by the act of the PE, was divided or broken into small quantities and/or amounts, or divided into artificial phases or stages.

Said act must have been done for the purpose of circumventing or evading legal and procedural requirements. The project, by its nature, must have been considered as one project and therefore must have been captured in a single PPMP so that to divide it must have been unreasonable.
NPM 033-2005
NPM 022-2012
Threshholds for NGAs, GOCCs, GFIs, and SUCs:

a) Procurement of Goods and
Services - P 2 Million

b) Infrastructure Projects -
P 5 Million

Posting of Invitation or RFQ:
Shopping under Sec. 52.1(b)
Negotiated Procurement:
Two-failed Biddings (Sec. 53.1)
Small Value Procurement (Sec. 53.9)
NGO Participation (Sec. 53.10)
Except for ABCs P50,000 or less
(Except Shopping and SVP w/ 50,000 or less ABC)
Specific Guidelines: Lease of Venue
Prepare technical specifications taking into consideration the rating factors under Appendix C of the guidelines;
Obtain at least three (3) price quotations within the vicinity of the selected location;
After receipt of quotations, rate the venues being offerred in accordance with the technical specifications prepared pursuant to Appendix C;
Conduct ocular inspection and/or interviews or other forms of due deligence to validate compliance with technical specifications;
Determine the lowest quotation and determine if it is responsive to the technical specifications (Note: An offer is responsive if the rating is equal to or higher than the passing rate.) to be declared the LCRQ.
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