What is
Procurement?
refers to the acquisition
of goods, consulting
services, and the
contracting for
infrastructure projects by
procuring entity. (Sec.
5(aa), IRR, R.A. 9184)
Goods and Services
Items, supplies, materials & general support
services, except consulting services & infra
projects, which may be needed in the
transaction of public businesses or in the
pursuit of any government undertaking.
Includes, but is not limited to the following:
a) equipment,
b) furniture,
c) stationery,
d) materials for construction,
e) personal property of any kind,
f) non-personal or contractual services,
i. repair & maintenance of equipment
and furniture
ii. trucking, hauling, and courier
iii. janitorial, security and manpower
Goods and Services
Related or analogous services shall
include, but not limited to the
following:
a) lease or purchase of office space
b) media advertisements
c) health maintenance services
d) other services essential to the
operation of the procuring entity
i. rental of venues and facilities
ii. catering services
iii. lease of computers, copiers and
other information technology
equipment
Infrastructure Projects
Construction
Improvement
Rehabilitation
Demolition
Repair
Restoration
Maintenance
Roads and bridges
Railways
Airports and
seaports
• Communication
facilities
• Civil works
components of IT
projects
• Irrigation
•
•
•
•
•
•
•
•
•
•
• Flood control and
drainage
• Water supply
• Sanitation
• Sewerage and solid
waste
management
systems
• Shore protection
• Energy/power and
electrification
facilities
• Buildings
(National, School,
Hospital)
• Other related
construction
projects
What is Consulting Service?
Services for infrastructure projects and
other types or activities of the
Government
requiring
adequate
external, technical and professional
expertise that are beyond the capability
and/or capacity of the Government to
undertake, such as:
a)
b)
c)
d)
e)
f)
advisory and review services;
pre-investment or feasibility studies;
design;
construction supervision;
management and related services; or
other technical services or special
studies.
When Consulting Service
is needed?
Projects or related
activities of such
magnitude and/or
scope as would require
a level of expertise or
attention beyond the
optimum in-house
capability
Why is procurement planning
important?
to avoid:
wastage of government funds
 possible criminal liabilities
procurement delays
 possible COA disallowances
suspension of officials
The Commission on Audit has noted that “shopping” was
frequently used in the procurement of goods and services in the
City Government of Bogo (Cebu) due to the absence of an
Annual Procurement Plan in violation of Republic Act 9184.
COA, in its 2012 audit report on the financial transactions of the
city, said that the LGU made procurements in violation of the
Section 7 of the IRR of the law.
Audit disbursements for various procurement of the city
revealed the non-use of an APP. COA recommended that the
City Administrator direct the BAC Secretariat to consolidate the
procurement plans of all the departments in accordance with
the provisions of the law.
(Source: The Freeman, September 1, 2013)
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The Office of the Ombudsman has found 3 Comelec
officials guilty of simple neglect of duty, simple
misconduct and conduct prejudicial to the best interest of
the service in connection with the planned purchase of
P690 million worth of ballot secrecy folders in 2010. They
were ordered suspended for six months without pay.
The Ombudsman said as a general rule there should be
public bidding, and this could only be done away with if
several conditions are met. In awarding the contract to
OTC, the BAC had said there was already a delay in the
procurement of non-accountable forms, which was why no
public bidding was held.
(Source: The PDI online, August 25, 2011)
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PNP chopper mess: Ombudsman affirms ruling dismissing
14 police officers, suspending 6 others who participated
in the whole procurement process.

The Office of the Ombudsman's Special Investigating Panel found among other things that:

(i) MAPTRA did not possess the technical and financial eligibility required by law;

(ii) MAPTRA delivered only one brand new Robinson Raven II LPOH while the two delivered Robinson
Raven I LPOHs were actually pre-owned by the former FG Arroyo, and/or non-compliant with the set
requirements such as endurance/ventilating system and valid/existing engine warranties, causing
undue injury to the government in the amount of at least P34,632,187.50 representing the overpriced
figure;

(iii) PNP entered into the helicopter supply contract with MAPTRA even before the completion of the
post-qualification process; and

(iv) MAPTRA was just a marketing arm and not the authorized dealer of brand new R44 Raven 1
units.
Aside from administrative sanctions, the respondents are also facing criminal charges before the
Sandiganbayan.
(Source:By: Jaime Sinapit, InterAksyon.com November 22, 2012)
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The Sandiganbayan has sentenced a town mayor of Davao
del Sur to a maximum of 10 years in jail for purchasing a
generator worth more than P1.6 million that later proved
to be useless.
The machine valued at P1,694,787.30 was supposed to
supply electricity to the Municipal Hall of Jose Abad
Santos but it was never used because its features were
found to be incompatible with the building’s existing
electrical wirings.
The Office of the Ombudsman filed charges against the
mayor for making the purchase without the conduct of a
technical engineering study or a project design to
determine its viability.
(Source: PhilStar.com, Oct. 13, 2009)
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Two lawmakers have sought to stop the bidding for the supply of
eight fire trucks valued at P50 million even as they have point to
the alleged anomaly in the Bureau of Fire Protection’s plan to
purchase 150 more fire trucks that will entail billions of pesos in
public funds.
Cong. Palmones, whose party advocates the promotion of
science and local inventions to include Philippine-made fire
trucks, earlier filed a resolution calling for an investigation on
the fire bureau’s “questionable circumstance behind the change
of the technical specifications” of the trucks to be bidded out
and which allegedly tended to favor foreign-made fire trucks.
(Source: Manila Standard Today, Jul 25, 2011)
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Allegations of government officials asking for
kickbacks from ZTE officials hounded the awarding of
the $329-million construction contract to the Chinese
telecommunications firm in 2007 for the proposed
government-managed National Broadband Network
(NBN). Then-President Gloria Macapagal-Arroyo had to
cancel the contract after the issue broke out and
became the subject of congressional inquiries.
(Source: GMA News Online Sept 1, 2011)
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Section 7, R.A. No. 9184:
All procurement should be within the
approved budget of the Procuring Entity;
Should be meticulously and judiciously
planned by the Procuring Entity concerned;
Only those considered crucial to the
efficient discharge of governmental
functions shall be included in the Annual
Procurement Plan (APP).
Section 7, R.A. No. 9184 (cont.):
No government Procurement shall be
undertaken unless it is in accordance with
the approved APP of the Procuring Entity;
•
The APP shall be approved by the Head of
the Procuring Entity (HOPE) and must be
consistent with its duly approved yearly
budget;
•
The APP shall be formulated and revised
only in accordance with the guidelines set
forth in the IRR.
•

APP should be maintained and updated regularly

In the consolidation of PPMPs, the BAC may adopt a
strategy through which similar items of procurement
are packaged into one procurement undertaking and
under a single PPMP, in which the original PPMPs shall
be consolidated and revised.

A review and updating of the individual PPMPs and the
APP shall be done regularly, at least once every 6 mos.
or as often as necessary;
End-user
Units
Budget
Office
• At the start of budget preparation period, prepare respective
proposed budgets for the budget year;
• Prepare respective PPMPs for different programs, activities, and
projects (PAPs) and submit to the procuring entity’s Budget Office.
• Evaluates each end-user’s submitted PPMP and, if warranted, include
in the budget proposal for approval by the HOPE;
• Furnish copy of budget proposal, after HOPE approval, and
corresponding PPMPs to the BAC Secretariat for review and
consolidation into proposed APP.
• Consolidates the different PPMPs into the proposed APP;
• Finalize the APP, including the modes of procurement, as soon as the
GAA, corporate budget, or appropriation ordinance is approved, for
BAC/
Secretariat approval by the HOPE.
*PPMP – Project Procurement Management Plan
*APP – Annual Procurement Plan
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PROCUREMENT PLANNING
End User
Budget Office
Prepare
PPMP
Evaluate PPMP
and include in
budget
proposal
Revise
PPMP
BAC Sec /
BAC
Approving
Authority
Review and
consolidate
PPMP into APP
Approve
GAA/
Corporate
Budget/
Ordinance
Finalize
procurement
mode
HOPE or 2nd
in rank
approves APP
*PPMP – Project Procurement Management Plan
*APP – Annual Procurement Plan
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 Form
A
Procurement of common use Supplies, Materials and
Equipment (SME) from Procurement Service, DBM
(PS,DBM)
 Form B
Procurement of SMS not available from PS, DBM
 Form C
Goods and Services for Programmed Projects
Procurement
Planning Reminders:
Must be in
accordance with the
existing accounting
and auditing rules
and regulations.
Procurement
Planning Reminders:
Guidelines for the Prevention and
disallowance of
 Irregular
 Unnecessary
 Excessive
 Extravagant or
 Unconscionable
(IUEEU) expenditures or uses of
government funds and properties (COA
Circular 2012-003 dated 11/29/2012
Irregular
Expenditures
The term “irregular expenditure” signifies
 an expenditure incurred without adhering to
established rules, regulations, procedural
guidelines, policies, principles or practices that have
gained recognitions in laws.
 incurred if funds are disbursed without
conforming with prescribed usages rules and
discipline.
 A transaction conducted in a manner that
deviates or departs from, or which does not comply
with standards set
Guidelines for the Prevention and disallowance of Irregular, Unnecessary, Excessive, Extravagant or
Unconscionable (IUEEU) expenditures or uses of government funds and properties (COA Circular
2012-003 dated 11/29/2012
GAAM , NGAS, PD1445
Unnecessary
Expenditures
The term pertains to expenditures which could not
pass the test of prudence or the diligence of a good
father of a family. Thereby denoting nonresponsiveness to the exigencies of the service.
Unnecessary expenditures are those not supportive
of the implementation of the objectives and missions
of the agency relative to the nature of its operation.
An expenditure that is not essential or that which can
be without loss or damage to property. The mission
and the thrusts of the agency incurring the
expenditures must be considered in determining
whether or not an expenditure is necessary.
Guidelines for the Prevention and disallowance of Irregular, Unnecessary, Excessive, Extravagant or
Unconscionable (IUEEU) expenditures or uses of government funds and properties (COA Circular 2012-003
dated 11/29/2012
GAAM , NGAS, PD1445
Excessive
Expenditures
The term “excessive expenditures”
signifies unreasonable expense or
expenses incurred at an immoderate
quantity and exorbitant price. It also
includes expenses which exceeds what
is usual or proper, as well as expenses
which are unreasonable high and
beyond just measure or amount. They
also include expenses in excess of
reasonable limits.
Guidelines for the Prevention and disallowance of Irregular, Unnecessary, Excessive, Extravagant or
Unconscionable (IUEEU) expenditures or uses of government funds and properties (COA Circular
2012-003 dated 11/29/2012
GAAM , NGAS, PD1445
Extravagant
Expenditures
The term “ extravagant” signifies
those incurred without restraint,
judiciousness and economy.
Extravagant expenditures exceed
the bounds of propriety. The
expenditures are immoderate,
prodigal, lavish, luxurious, grossly
excessive and injudicious.
Guidelines for the Prevention and disallowance of Irregular, Unnecessary, Excessive, Extravagant or
Unconscionable (IUEEU) expenditures or uses of government funds and properties (COA Circular
2012-003 dated 11/29/2012
GAAM , NGAS, PD1445
Unconscionable
Expenditures
The term “unconscionable
expenditures” pertains to
expenditures which are
unreasonable and immoderate, and
which no man in his right sense
would make, nor a fair and honest
man would accept as reasonable,
and those incurred in violation of
ethical and moral standards.
Guidelines for the Prevention and disallowance of Irregular, Unnecessary, Excessive, Extravagant or
Unconscionable (IUEEU) expenditures or uses of government funds and properties (COA Circular
2012-003 dated 11/29/2012
GAAM , NGAS, PD1445
Cases that are
considered “Irregular”
Honoraria paid to member of Bids and
Awards (BAC) Committe and Technical
Working Group (TWG) in excess of the
rates provided under DBM Circular No.
2004-5A dated October 7, 2005 and for
the procurement activities pertaining to
the contracts not yet awarded to the
winning bidder (Joseph Peter Sison,
et.al. Vs. Rogelio Tablang, et al.. . . GR
No. 177011 dated June 5, 2009)
Guidelines for the Prevention and disallowance of Irregular, Unnecessary, Excessive, Extravagant or
Unconscionable (IUEEU) expenditures or uses of government funds and properties (COA Circular
2012-003 dated 11/29/2012
GAAM , NGAS, PD1445
Cases that are considered
“Irregular expenditure”
Expenses for advertisements of
anniversaries, etc. In news papers,
TV or radio merely for publicity or
propaganda purposes except when
the nature of the agency’s mission
would require such expenses as in
the case of promotion of trade and
business
Cases that are considered
“Unnecessary expenditure”
Hiring of consultants rendering services not
aligned/related to the mandate/thrusts of the hiring
Agency and/or the agreed consultancy period
including renewals.
Construction of buildings and/or procurement of
equipment not actually needed or without any
intended purpose, not completed and could not be
properly maintained or operations sustained.
Continuous repair of vehicles and equipment
already considered beyond economical repair as
evidenced by frequent breakdown and non-use
after repair.
Cases that are considered
“Excessive expenditure”
Overpricing of purchases, characterized by
grossly exaggerated or inflated quotations, in
excess of the current and prevailing market price
by a 10% variance from the purchased item.
Payment of repair of government equipment at a
cost exceeding 30% of the current market price of
the same or similar equipment.
Provision of mobile phone, whether postpaid
line subscription or prepaid, in excess of one unit
for each entitled officials which should not be
lower than Division Chief rank.
Cases that are considered
“Extravagant expenditure”
Purchase of wines, liquors, cigars and
cigarettes, except when served during state
functions and government-sponsored international
conferences and conventions.
Payment for rent of expensive halls or rooms in
luxury hotels or restaurant used for
meetings/seminars and other official functions.
Conduct out -of-town meeting which can be
made within the office premises.
Procurement and use of luxury vehicles by
government officials, except those allowed under
Section 6 of AO No.3 issued February 27, 2001
Cases that are considered
“Unconscionable expenditure”
Live-in seminar in five star hotels
which significant number of
participants and unreasonable
period of time.
Overpricing in significant amount
exceeding 100% of the current and
prevailing market value
What do we do if we
don’t know the
specifications of the
item we need to
procure?
The End-user is
responsible for the
terms of reference,
specifications and all
the details about the
item they needed.
The end-user may request
assistance from the
people who have
knowledge about the
item/project. The
Technical Working Group
(evaluators) that could
share their expertise and
knowledge.
The Procurement
Office can also
recommend possible
sources or suppliers
who have expertise
about the item.
The procurement office must maintaine
suppliers registry
Whatever the end-user and
TWG have agreed upon:
prepare Market Analysis (Supported by at least
three quotations) then attach it to your Project
Procurement Management Plan (PPMP).

indicate
the general description of the item that you
are requesting for. Major Specifications, such as
product usage, size, features that you are looking for,
number of people who will use it and where the item
will installed or connected, must be indicated in the
PPMP. The Procurement Office will use this
information in preparation of Annual Procurement
Plan (APP).
Dr. Carina S. Cruz
caring_momwid6kids@yahoo.com
926.62.56
23rd Floor DILG NAPOLCOM Center
Edsa corner Quezon Avenue, West
Triangle, Quezon City