CAPACITY DEVELOPMENT DIVISION GOVERNMENT PROCUREMENT POLICY BOARD TECHNICAL SUPPORT OFFICE (GPPB-TSO) 1 Historical Background Early laws on Procurement In 1900, the United States Philippine Commission introduced the American practice of public bidding in procurement in the Philippines Act No. 22 – Chief Engineer of US Army acted as the purchasing agent of government Act No. 74 (1901) – mandated contracts for purchase of school supplies thru invitation to bid and the awarded to the lowest responsive bidder 2 Historical Background Act No. 82 (1901) – Provincial Governors and Municipal Mayors to enter into contracts for public works and purchase of office supplies thru competitive bidding Act No. 146 – creating Bureau of Supply (supplies, materials, equipment etc) EO 16 (1936) – No contract shall be entered into or renewed without public bidding 3 Historical Background The Administrative Code of the Philippines (1917) Procurement – acquisition of supplies, materials and equipment for the various offices and branches of Government (Supply Law) Bureau of Public Works – award of contracts for the construction and repair of national public works and improvements Procurement and Supply Law Office of Insular Purchasing Agent (1910) Division of Purchase and Supply (1932) The Procurement Office (1947) Bureau of Supply under Department of General Services (1958) 4 Historical Background Pre-Reform Procurement Legal Structures 1. Procurement of Civil Works – Presidential Decree No. 1594 (1978) 2. Procurement of Goods – EO No. 302 (1996), EO No. 201 (2000), as amended by EO 262 (2000) 3. Procurement of Consulting Services – NEDA guidelines (1998) 4. Procurement among LGUs – RA No. 7160 (1990) 5. EO 40 (2001) – Consolidated procurement rules and regulations for NGAs, GOCCs and GFIs 5 Enactment of GPRA Implementing Rules and Regulations Executive Orders Administrative Issuances Memorandum Circulars Over 100 Procurement Rules and Regulations Government Procurement Reform Act 10 January 2003 Implementing Rules and Regulations (IRR) Part A 8 October2003 Revised IRR 2 September 2009 6 Procurement Reforms PROBLEMS REFORMS • Confusion caused by fragmented legal system • Enactment of the Government Procurement Reform Act (GPRA) • Inconsistent policies, rules, and regulations due to lack of standards • Creation of the Government Procurement Policy Board (GPPB) • Lack of transparency • Use of PhilGEPS • Lack of check and balance • Participation of civil society 7 Enactment of GPRA Consolidation of House Bill 4809 and Senate Bill 2248 Signed into law on 10 January 2003 Published on 11 January 2003 Took effect on 26 January 2003 IRR Part A took effect on 8 October 2003 Revised IRR took effect on 2 September 2009 8 Key Features of GPRA Covers procurement of all government agencies General Rule is Public/Competitive Bidding Alternative Methods exceptional cases of Procurement allowed in highly Use of the Approved Budget for the Contract (ABC) as ceiling for the bid price Use of transparent, objective, and non-discretionary criteria Increased transparency in the procurement process Professionalization of procurement officials Inclusion of Penal and Civil Liabilities 9 GPPB as an Inter-Agency Body Big procuring entities - defense, education, health, public works, transportation and communications Oversight agencies - budget, planning, trade, science and technology, interior and local government, energy Private Sector Representative Resource agencies) Persons (audit, anti-corruption 10 GPPB Functions Policy-Making Amend implementing rules & regulations of procurement law (quasi-legislative function) Prepare generic procurement manual and standard bidding forms Capacity Development Establish a sustainable training program Monitoring Assist procuring entities improve their compliance Review effectiveness of procurement law 11 GPPB Functions GPPB has no jurisdiction to rule over actual controversies with regard to the conduct of the bidding since it has no quasi-judicial functions under the law. It is the prerogative and discretion of the procuring entity through its BAC to come up with the declaration since they are in the best position to determine the details of their Project. (NPM 56-2013) 12 GPPB Website 13 Philippine Government Electronic Procurement System (PhilGEPS) Serves as the primary and definitive source of information on all government procurement Utilized for the procurement of common-use supplies to take advantage of bulk purchasing Features of the PhilGEPS Electronic Bulletin Board Electronic Registry Electronic Catalogue Virtual Store Electronic Payment Electronic Bid Submission 14 PhilGEPS Registration §8.5.1 RA 9184 IRR requires suppliers, contractors, consultants to register with PhilGEPS. It does not qualify based on threshold. Inapplicability of the posting requirement is not tantamount to a situation where PhilGEPS registration may also be dispensed with since the amount of the project is not a factor for the condition to apply. Registration with PhilGEPS is absolute, and must be complied with regardless of the cost of procurement. Reference: NPM 34-2013 15 PhilGEPS Registration Sections 23.4 and 24.4.3 allows the BAC of a procuring entity to “maintain a registry system using the PhilGEPS or its own manual or electronic system that allows submission and/or recording of eligibility requirements simultaneously with registration.” However, Prospective bidders not included in the registry system should not be precluded from participating in any procurement opportunity. 16 PhilGEPS Registration This should not be considered an accreditation system, and is not tantamount to a finding of eligibility, nor a guarantee that the registered supplier, contractor, or consultant will be eligible for any particular procurement activity or contract award. (NPM 16-2013) 17 Participation of CSOs During Public Bidding Participates as Observer in all stages of the procurement process During Contract Implementation National Text Book Delivery Program “Text Book Count 1-2-3” Medicine Monitoring by NAMFREL 18 JSDFand PROJECT Scope Coverage R.A. 9184 applies to all branches instrumentalities of the government: and/or 1. National Government Agencies (NGAs) 2. State Universities and Colleges (SUCs) 3. Government Owned or Controlled Corporations (GOCCs) 4. Government Financial Institutions (GFIs) 5. Local Government Units (LGUs) 19 Scope and Coverage It shall apply to all procurement activities involving: 1. Goods and Services 2. Infrastructure Projects 3. Consulting Services 20 Scope and Coverage Section 4, Revised IRR All fully domestically-funded procurement activities All foreign-funded otherwise provided agreement procurement activities, unless in a treaty or int’l/executive As may be agreed upon by the GOP and IFI in their treaty or int’l/executive agreement • • • Projects funded from foreign grants Projects for International Competitive Bidding Consulting Services for National Competitive Bidding 21 Scope and Coverage EXCEPT: Procurement for goods, infrastructure projects, and consulting services funded from Foreign Grants covered by R.A. 8182, as amended by R.A. 8555, entitled “An Act Excluding Official Development Assistance (ODA) from the Foreign Debt Limit in order to Facilitate the Absorption and Optimize the Utilization of ODA Resources, Amending for the Purpose Paragraph 1, Section 2 of Republic Act No. 4860, as amended”, unless the GOP and the foreign grantor/foreign or international financing institution agree otherwise; Acquisition of real property which shall be governed by R.A. 8974, entitled “An Act to Facilitate the Acquisition of Right-of-Way Site or Location for National Government Infrastructure Projects and for Other Purposes,” and other applicable laws; 22 Scope and Coverage Public-Private sector infrastructure or development projects and other procurement covered by R.A. 6957, as amended by R.A. 7718 (BOT Law), entitled “An Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector, and for Other Purposes,” as amended; Disposal of government properties; 1. Commission on Audit Circular No. 86-264 2. National Budget Circular No. 425 23 Scope and Coverage Leasing out of publicly-owned real property for private use - Transactions where a government agency leases out its real property for private use, such as in the case of a canteen or food concessionaire, are governed by Executive Order 301 (Series of 1987), particularly Section 7 thereof, and its associated guidelines. - Implementing Guidelines for Lease of Privately-Owned Real Estate guidelines will only apply to lease of privatelyowned real estate by government agencies for official use. (NPM 50-2013) [ Consignment; and, 24 Scope and Coverage Formation of Joint Venture Partnerships between government corporations and private entities. - Where a project pertains to a JV between a GOCC and a private entity in pursuit of development goals, the rules for such transaction are either covered by the Joint Venture Guidelines issued by NEDA pursuant to §8 of EO 423 (s. 2005); or by RA 6957 (BOT Law), as amended by RA 7718. RA 9184 and its IRR, including its associated guidelines, such as the Guidelines on the Sale of Bidding Documents, do not apply. (NPM 28-2013) 25 DEFINITION OF TERMS 26 What is PROCUREMENT? 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) 27 GOODS Refer to – All items, supplies and materials Including general support services Which may be needed in the project or activity, whether in the nature of equipment, furniture, stationery, or contractual services, such as: 1. repair and maintenance of equipment and furniture 2. trucking, hauling, janitorial and security and other related and analogous services. EXCEPT: consulting services and infrastructure projects 28 INFRASTRUCTURE PROJECTS Refer to construction, improvement, rehabilitation, repair /restoration of civil works components of : 1. 2. 3. 4. 5. 6. IT projects Irrigation flood control and drainage water supply sanitation, sewerage and solid waste management national buildings, hospital buildings, and other related constructions projects of the Government. RA 9184 and its IRR does not apply to Public/Private Sector Infrastructure Projects under RA 6957 (Act Authorizing Financing, Construction, Operation and Maintenance of Infra Projects by the Private Sector.) as amended by R.A. 7718 (BOT Law) 29 CONSULTING SERVICES Refer to services for Infrastructure Projects and other types of projects or activities of the Government requiring external technical and professional expertise that are capability and/or capacity of the Government to undertake but not limited to: (i) advisory and review services; (ii) pre-investment or feasibility studies; (iii) design; (iv) construction supervision; (v) management and related services; and (vi) other technical services or special studies. 30 MIXED PROCUREMENT In case of projects involving mixed procurements, the nature of the procurement, shall be determined based on the primary purpose of the contract. Determination shall procuring entity. be made by the 31 DETERMINATION OF TYPE OF PROCUREMENT Classification of ICT Services PE is in the best position to determine the correct classification of its procurement based on its identified needs and the best way by which these needs may be addressed, managed, and satisfied. It is the motivation or intention of the PE in pursuing the project that will determine the primary purpose of a project. 32 DETERMINATION OF TYPE OF PROCUREMENT Classification of ICT Services PE should be guided by the parameters and conditions in the relevant provisions of RA 9184 and its IRR on what should be considered as Goods, Infrastructure Projects or Consulting Services procurement. (NPM 11-2013) 33 PRINCIPLES OF PUBLIC PROCUREMENT 34 Governing Principles ublic Monitoring Awareness and vigilance ccountability Responsibility over actions/decisions (“Answerable”) ompetitiveness Equal opportunity to all eligible bidders ransparency Wider dissemination of bid opportunities treamlined Process Uniformly applicable to all government agencies Effective and efficient method 35 Essence of PUBLIC MONITORING 1. Allows public involvement of qualified and eligible Civil Society Organizations (NGOs, PAs, academic institutions, and religious groups) to observe and monitor the procurement process until contract implementation. 2. Increased transparency of procurement transactions. 36 ACCOUNTABILITY OF PUBLIC OFFICIALS Pertinent laws and the prescribed procedures must be faithfully complied with in the discharge of functions in all stages of the procurement process as well as the implementation of contracts. Private parties that deal with government should also be held accountable for their actions. 37 How to ensure COMPETITIVENESS As a rule, procurement must be conducted through competitive bidding process, unless otherwise under GPRA, its IRR and this Manual, then the Alternative Methods of Procurement can be This is to guarantee: 1. Equitable and fair grounds for competition among bidders. 2. That no single bidder significantly influences the outcome of the bidding. 38 How to ensure TRANSPARENCY 1. Posting in the Procuring Entity’s website, 2. Posting in the PhilGEPS website, and 3. Posting in a conspicuous place within the premises of the PE is required for all procurements. 4. Each procurement transaction must be properly documented and such records must be maintained and made available to proper parties. 39 Essence of STREAMLINED PROCUREMENT SYSTEM 1. Uniform application to all government procurements. 2. Simple and adaptable to advances in modern technology in order to ensure an effective and efficient method of procurement. GPPB conducts a periodic review of government procurement procedures, and whenever necessary, formulates and implements changes thereto. 40 PROCUREMENT METHODS AND PROCEDURES 41 Procurement Methods All Procurement shall be done through competitive bidding except as provided in R.A. 9184. Resort to alternative methods shall be made: Only in highly exceptional cases To promote economy and efficiency Justified by conditions specified in R.A. 9184 and its IRR 42 Procurement Methods 43 Bidding Process (Goods & Infra) PreProcurement Conference Bid Submission Bid Evaluation Advertisement and/or Posting Opening of Technical Proposal (incl. eligibility docs) Post-qualification Pre-Bid Conference Opening of Financial Proposal Contract Award 44 Bidding Process (Consulting) PreProcurement Conference Pre-Bid Conference Bid Evaluation (QBE or QCBE) Advertisement and/or Posting Bid Submission Post-qualification Eligibility and Shortlisting Opening of Bids (QBE or QCBE) Contract Award Negotiation 45 PROCUREMENT ORGANIZATIONS 46 HEAD OF PROCURING ENTITY (HOPE) FUNCTIONS AND RESPONSIBILITIES: 1. Establishes BAC and appoints its members Ensures that BAC members give their utmost priority to duties Ensures professionalization of members of the procurement organization 2. Approves the Annual Procurement Plan (APP) 3. Approves/Disapproves the Contract Award 4. Resolves Protests 47 BIDS AND AWARDS COMMITTEE (BAC) As a general rule, HOPE must create a single BAC. However, separate BACs may be created under any of the following conditions: 1. The items to be procured are complex or specialized; 2. If the single BAC cannot reasonably manage the procurement transactions as shown by delays beyond the allowable limits; or 3. If the creation is required according to the nature of the procurement. 48 BIDS AND AWARDS COMMITTEE (BAC) PE’s creation of sub-BACs to be placed under a main BAC is not in compliance with the requirements under Sec 11 of the IRR of RA 9184. PE may, however, establish separate BACs with the composition of the BAC members subject to the qualifications under Section 11.2.2 of the IRR of RA 9184. Each BAC shall not be considered as decentralized committees pursuant to Section 11.1.2 of the IRR since it will be headed by a single HOPE. (NPM 74-2013) 49 BIDS AND AWARDS COMMITTEE (BAC) FUNCTIONS AND RESPONSIBILITIES: Recommends Procurement Method Creates a Technical Working Group (TWG) Conducts the bidding activities Resolves Requests for Reconsideration Recommends Imposition of Sanctions Invites Observers during all stages of the procurement process Conducts due diligence review or verifications of the qualifications of observers Prepares Procurement Monitoring Report 50 BIDS AND AWARDS COMMITTEE (BAC) MEMBERSHIP AND QUALIFICATIONS: BAC members should occupy plantilla positions with with the procuring entity concerned. All members are regular members except the enduser member who is considered as a provisional member. The members, whether regular or provisional, are equally entitled to participate and to vote during deliberations. 51 BIDS AND AWARDS COMMITTEE (BAC) 5 but not more than 7 MEMBERS designated by the HOPE COMPOSITION: 1. Regular Members: Chairperson (3rd Ranking Permanent Official); Member representing the Legal or Administrative areas (5th or 3rd Ranking Permanent Personnel); Member representing the Finance Area (5th or 3rd Ranking Permanent Personnel); 2. Provisional Members Officer possessing Technical expertise relevant to the procurement. End user unit Representative. 52 BIDS AND AWARDS COMMITTEE (BAC) HOPE 2nd 3rd 3rd 3rd 4th 5th 6th 53 BAC for NGAs, GOCCs, GFIs and SUCs The members including the Chairman shall be designated by the Head of the Procuring Entity. Regular Members 1. Chairman (At least 3rd Ranking Permanent Official); 2. Member representing the Legal or Administrative areas of the procuring entity; 3. Member representing the Finance Area of the Procuring Entity. Provisional Members 1. An officer who has Technical expertise relevant to the procurement. 2. Representative from the end user unit. 54 Alternate BAC Members Same qualifications as their principals. Same term as the principal. Presence of alternate BAC members in BAC meetings are considered for purposes of quorum. The relationship of the principal and the alternate is of co-equal nature, rather than hierarchical. Accountability shall be limited to their respective acts and decisions. Shall be entitled to the corresponding honoraria for for attendance in meetings. 56 BIDS AND AWARDS COMMITTEE (BAC) TERMS OF MEMBERSHIP: The BAC members shall be designated for a term of one (1) year only, reckoned from the date of designation. However, the HOPE may renew or terminate such designation at his discretion. Upon expiration of the terms of the current members, they shall continue to exercise their functions until new BAC members are designated. 57 BIDS AND AWARDS COMMITTEE (BAC) TERMS OF MEMBERSHIP: In case of resignation, retirement, separation, transfer, transfer, re-assignment, or removal of a BAC member, the HOPE shall designate a replacement that has similar qualifications as the official replaced. The replacement shall serve for the unexpired term. In case case of leave or suspension, the replacement shall serve only for the duration of the leave or suspension. 58 PROHIBITED BAC MEMBERS 1. Head of the Procuring Entity 2. Official who approves procurement contracts; Designation of the HOPE’s Executive Assistant (EA) as Provisional Member of the BAC - only when the EA is an approving authority that it is disqualified under §11.2.5 of the IRR of RA 9184 from becoming a BAC member. (NPM 32-2013) 59 PROHIBITED BAC MEMBERS 3. Chief Accountant or Head of the Provincial/City/Municipal Accounting Office his/her staff, unless the Accounting Department is the end-user unit, in which case the Chief Accountant, Head of the Accounting Department or his/her staff may be designated as an end-user member. (COA Circular Letter No. 2004 – 3) 60 CONFLICT OF INTEREST Conflict of interest arises when, in the case of the subject matter of the inquiry, the Chairman of the BAC that conducted the earlier procurement was eventually designated as OICHOPE. The subject procurement is deprived of checks and balances as one of the persons conducting the bid evaluation and postqualification, who is no less than the BAC Chair, may have that degree of proclivity towards the recommended action of the BAC; thus, the subsequent award of contract may no longer enjoy the cold neutrality of an impartial HOPE. (NPM 14-2013) 61 BAC SECRETARIAT HOPE may create a new office or designate an existing organic office to act as BAC Secretariat There is no minimum or maximum number of members of the BAC Secretariat. Head of the BAC SEC must be at least a 5th or ranking permanent employee or, if not available, permanent official of the next lower rank 62 BAC SECRETARIAT FUNCTIONS: Provide administrative support to the BAC Organize BAC meetings and conferences Take custody of procurement documents and other records Manage the documents sale and distribution of bidding Advertise/post bidding opportunities and notices of awards 63 BAC SECRETARIAT FUNCTIONS: Assist in managing the procurement process Monitor procurement activities and milestones Consolidate PPMPs Act as central channel of communications 64 BAC SECRETARIAT FUNCTIONS: Assist in managing the procurement process Monitor procurement activities and milestones Consolidate PPMPs Act as central channel of communications 65 BAC SECRETARIAT BAC Secretariat Head cannot notarize resulting contract of the procurement activities. (NPM 66-2013) - The BAC Sec provides a vital supporting role for the PE in the procurement process. If the BAC Sec Head is to notarize the resulting contract, she would then take on a more central role by bestowing upon the contract the imprimatur of a legal attestation by a third person. - This may invite suspicion of unfaithfulness, conflict of interest, which may cast doubt on the contract in particular, and the entire procurement activity as a whole. 66 BAC SECRETARIAT • BAC Secretariat Head’s authority to sign procurement- related documents should be confined to those that are within the scope of her duties and responsibilities under RA 9184 and its IRR, and should exclude those that require the exercise of discretion, consent or approval on matters under the jurisdiction of a different authority. (NPM 66-2013) 67 BAC SECRETARIAT Section 14 of RA 9184 and its IRR limits the responsibilities of the BAC Secretariat to administrative support functions and primarily ministerial duties. Since the BAC Secretariat is limited to these functions, the conduct of opening and preliminary examination of bids, where discretion and sound judgment is required, cannot be considered as clerical or secretariat nature; therefore, outside the functions of the BAC Secretariat. (NPM 692013) 68 TECHNICAL WORKING GROUP (TWG) Created by the BAC from a pool of legal, technical and financial experts - those experts outside the procuring entity concerned may be included, i.e. government personnel and officials and consultants from the private sector and academe with proven expertise on the sourcing of goods, works or consulting services. (GPPB Resolution No. 07-2012, GPPB Circular No. 02-2012) BAC may create separate TWGs to handle different procurements 69 TECHNICAL WORKING GROUP (TWG) FUNCTIONS: 1. Assist BAC in the following activities: Preparation of bidding documents Eligibility check/short-listing Bid evaluation and preparation of reports Post-qualification Preparation of post-qualification summary report 2. Assist BAC and BAC Secretariat in preparing BAC Resolutions 70 OBSERVERS Observers represent the public, the taxpayers who are interested in seeing to it that procurement laws are observed and irregularities are averted. In all stages of procurement process BAC must in writing, at least three (3) Observers, at least 3 calendar days before the date of the procurement stage/activity, who shall be: Representative from COA Duly recognized private group in the sector or discipline of the particular type of procurement involved Non-Government Organization (NGO) 71 OBSERVERS BAC is mandated to invite Observers in all stages of the procurement process, including post-qualification stage. (See §13 of RA 9184) GPM enumerates the parties who are to conduct postqualification. Although Observers do not conduct postqualification of the bidder, they are not precluded from being invited and be present in the meeting. (NPM 052013) 72 OBSERVERS Observers shall be allowed access to the following documents upon their request, subject to signing of a confidentiality agreement: 1. Minutes of BAC meetings; 2. Abstract of Bids; 3. Post-qualification summary report; 4. APP and related PPMP; and 5. Opened proposals 73 OBSERVERS RESPONSIBILITIES: 1. Prepare report (jointly or separately) indicating their observations on the procurement activities 2. Submit report to the PE and furnish a copy to the GPPB and the Office of the Ombudsman/Resident Ombudsman 3. Immediately inhibit and notify in writing the PE of any actual or potential conflict of interest 74 GRANT OF HONORARIA PE is authorized to grant honoraria to the members of the BAC, the TWG, and the BAC Secretariat provided the amount so granted does not exceed twenty-five percent (25%) of their respective basic monthly salary, subject to the following conditions: • funds are available for the purpose; and • the grant of honoraria conforms to the guidelines promulgated by the DBM. (Section 15, IRR of R.A. 9184) 75 GUIDELINES ON THE GRANT OF HONORARIA Budget Circular No. 2004-5A, dated 7 October 2005 As amended by Budget Circular No. 2007-3, dated 29 November 2007. Only for successfully completed procurement projects Limited to procurement that involves competitive bidding. Granted to Chair or Members of the BAC or the TWG by the LCE concerned. 76 GUIDELINES ON THE GRANT OF HONORARIA BAC Secretariat performing attendant functions in addition to their regular duties and functions may be paid honoraria at the same rate as the TWG Chair and Members Those who are receiving honoraria shall no longer be entitled to overtime pay for procurement-related services rendered. Payment of overtime services may be allowed for the administrative staff, (clerks, messengers and drivers supporting the BAC, the TWG and the Secretariat), for procurement activities rendered in excess of official working hours. 77 FUNDING SOURCE Collections from successfully completed procurement projects, limited to activities prior to the awarding of contracts to winning bidders: proceeds from sale of bid documents; fees from contractor/supplier registry; fees charged for copies of minutes of bid openings, BAC resolutions and other BAC documents; protest fees; liquidated damages; and proceeds from bid security forfeiture 78 CEILING FOR HONORARIA Maximum Honorarium rate per procurement project BAC Chair Php 3,000.00 BAC Members Php 2,500.00 BAC Secretariat TWG Chair and Members Php 2,000.00 Members of the BAC Secretariat whose positions are in the Procurement Unit of the agency shall not be entitled to honoraria although the payment of overtime services may be allowed, subject to existing policy on the matter. 79 THANK YOU!! Contact us at: Unit 2506 Raffles Corporate Center F. Ortigas Road, Ortigas Center Pasig City, Philippines 1605 TeleFax: (632)900-6741 to 44 Email address: gppb@gppb.gov.ph 80