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
UP
Min
UPM
UP
System
UP
Cebu
UPLB
UPB
UPV
12
UP: One UP. One University. One
Procurement System
UPD
UPOU
UP
Min
UPM
UP
System
UP
Cebu
UPLB
UPB
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
•
Goods
• 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,
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.
Services
• 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
studies.
16
Q and A
17
Major Stakeholders of
Procurement in UP
18
Major Stakeholders of
Procurement
End-User
Budget
Officers
SPMO/BAC
Secretariat
BAC
Members
TWG
Members
Accountant
Internal
Auditor
Observers /
Resource
Persons
H.O.P.E.
19
Functions of
Stakeholders
20
End-User
• Prepare the following:
– PPMP
– Technical Specifications
Particulars
Specifications
- Consult the expert
Remarks
•
•
Complete and generic (No brand
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
construction management services
- Purchase of equipment, materials,
supplies, and services
President
- Construction and repair, including
construction management services
- Purchase of equipment, materials,
supplies, and services
- Chancellors
- Construction and repair, including
construction management services
- Purchase of equipment, materials,
supplies, and services
Above Php75M
Php75M
UPD, UPLB, UPM, UPV:
Php25M
UPB, UPMin, UPOU, and UP Cebu
Php15M
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
Request
Budget
Clearance
Posting to
PhilGEPS
End-User
Budget Office
SPMO/BAC Sec.
Delivery and
Payment
Preparation of
Procurement
Documents
End-User
SPMO
36
NEW Flow Chart for
Shopping P50,000 and below
Purchase
Request
Budget
Clearance
Posting to
PhilGEPS
End-User
Budget Office
SPMO/BAC Sec.
Delivery and
Payment
Preparation of
Procurement
Documents
Request for
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
Request
End-User
Budget
Clearance
Posting to
PhilGEPS
End-User (at least 2
days)
SPMO (at least 7 – 9
days)
Delivery and
Payment
End-User
Preparation of
Procurement
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
Purchase
Request
EndUser
Budget
Clearance
Budget
Office
Pre-Proc.
Conf.
Posting to
Phil GEPS
PreBidding
Conf.
SPMO
SPMO
SPMO
3-days
1-day
(7-days)
Public
Bidding
BAC
(12
days)
43
Public Bidding:
ABC Php2 Million and Above
Purchase Request
Budget Clearance
Pre-Proc.
• Specifications
• Proposed Budget
• BUS/BUR
• Availability of Funds
• SPMO/BAC Sec.
• BAC
Public Bidding
- BAC/BAC Sec.
TWG/E.U/Observer
Pre-Bidding
Conference
- BAC/BAC Sec.
TWG/E.U/Observer
PhilGEPS/
Newspaper/
Bulletin Board
- SPMO/BAC Sec
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
• Write a letter
of Request
for
Emergency
Purchase
after
purchasing of
Goods,
Transportatio
n,
And other
expenses
SPMO
BAC
Chair
Accounting
• Recommen • Approve or
dis-approve
d or not to
the request
recommend
for
the request
emergency
for
purchase
emergency
purchase
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
TOTAL
72,752,671.33
Service
Infra
l
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
PPMP
APP
Competitive
Bidding
Termination
Delivery
Order
Contract
Ordering
Agreement
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
Approved Budget for the Contract
Maximum Cost of Bidding
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