RA 9184 or

The Government Procurement

Reform Act of 2003:
Boon or Bane?
ACA Nimfa Cuesta Vilches*

The procurement (acquisition of goods, services, and contracting for infrastructure projects) law was
enacted to lay down rules and regulations to modernize, standardize, and regulate the procurement of
domestically-funded activities of the government. It is a response to the clamor of the citizenry to provide
value for taxpayer money (PhP147.662 billion capital outlay in the PhP1.227 trillion national budget this
year) and show Government commitment to good governance and deter corruption.

To fully comply with RA 9184, otherwise known as the Government Procurement Reform Act of 2003, a
branch or agency of the government through the head of a procurement entity (HOPE) forms a bids and
awards committee (BAC) to conduct competitive and transparent purchases by means of public bidding.
The threshold amount required for public bidding is more than PhP250,000.00. Splitting of contract is
not allowed. An Approved Budget for the Contract (ABC) is indicated as the ceiling or upper limit for bid
prices that is within the approved Annual Procurement Plan (APP). A formal invitation to bid (ITB) is
posted and in the preliminary examination of bids, the BAC uses non-discretionary “pass/fail” criteria. As
a rule, price is the single determinant in the award. Where all technical standards are met, the award is
made to the lowest bidder.

Alternative ways to make purchases are resorted to only in extraordinary situations. Thus, limited source
bidding, direct contracting, and negotiated procurement are justified in the acquisition of sophisticated
defense equipment or critical plant components; in cases when there is imminent danger to life and
property as in man-made or natural calamity; or after two failed biddings. Shopping, on the other hand, is
good for procurements not exceeding PhP250,000.00, while repeat orders are done within six months
from notice to proceed and are not to exceed 25% of the quantity of each item in the original contract.

Other policy considerations in procurement are openness and predictability in the process. RA 9184
prescribes generic procurement manuals, standard bidding documents, and tendering forms. No bidder
who is related to the HOPE or any member of the BAC up to the third civil degree can participate in the
tendering process and procurement by brand name is prohibited. Non-government organizations may be
invited as observers.

The law uses technology to promote transparency and efficiency by having a single portal called the
Government Electronic Procurement System (G-EPS) as the primary and definitive source of information
on government procurement. Advertising and posting in a newspaper of general circulation, with the G-
EPS including posting of invitations to bid in the premises of the procuring agency for 14 days, are
required. A contract award that violates the applicable minimum time for posting is void.

For violations of the law, an imprisonment in the maximum period of 15 years may be imposed without
prejudice to prosecution under RA 3019, or the Anti-Graft and Corrupt Practices Act, and the warranted
administrative sanctions or civil liability in the form of damages.

Is anyone complaining? Lately, legislators have introduced bills to amend RA 9184: first, to place under
its coverage procurements funded by foreign loans or credit under RA No. 8182 or the Official
Development Assistance Act (ODA), as amended; second, to strengthen transparency by posting the
criteria, ratings, and calculations of bids used by the BAC on the procuring agency’s website or that of the
Government Procurement Policy Board (GPPB), and last, to lessen the discretion of a procuring agency in
the consideration of single calculated/rated and responsive bid submissions.

Conversely, some sectors feel that there are many legal traps in the law. Quality and delivery take a back
seat when buying decisions are focused on purchase cost and lengthy procurement processes. Hence,
some government agencies have low satisfaction with the worth of procured products and services. The
problem is compounded by lack of an organic procurement planning body in the agency; small vendor
turnout due to the inability of the procurement entity to advertise regularly bidded contracts ahead of
time; and absence of contract administration mechanism within the solicitation system itself.

A procurement system that is inefficient sends a strong signal to the business community that the
government is unable or unwilling to compete in today’s fast-paced economy. As some affected agencies
observe, without spending, crucial infrastructures are not built and basic services are not delivered.
Moreover, the long-drawn-out bidding process – on the average six months even for a simple, low-
budgeted contract including turn-around time for vendors to comply with overly detailed terms of
reference and for procurement agencies to process voluminous bid documents – hampers the
performance of government functions. To court users, it simply means: “justice delayed is justice denied.”

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*Assistant Court Administrator Nimfa Cuesta Vilches is Chairperson of the Bids and Awards Committee
(BAC) for Goods and Services, Supreme Court of the Philippines and BAC Office Uniforms for Lower
Courts, Office of the Court Administrator (OCA), Supreme Court.

The Government Procurement Reform Act of 2003 link: http://www.gov.ph/laws/ra9184.doc