PHILIPPINE

GOVERNMENT
PROCUREMENT
GOVERNMENT PROCUREMENT REFORM ACT

• Republic Act 9184

• An act providing for the modernization, standardization and
regulation of the procurement activities of the government and for
other purposes
ACRONYMS

• GOP
• Government of the Philippines
• SUCs
• State Universities and Colleges
• GFIs
• Government Financial Institutions
• GOCCs
• Government Owned and/or Controlled Corporations
• LGUs
• Local Government Units
DEFINITION OF TERMS

• Approved Budget for the Contract (ABC)

• Refers to the budget for the contract duly approved by the Head of the
Procuring Entity, as provided for in the General Appropriations Act and/or
continuing appropriations
• BAC
• Bids and Awards Committee
• Bid
• Refers to a signed offer or proposal submitted by a supplier, manufacturer,
distributor, contractor or consultant in response to the Bidding Documents
DEFINITION OF TERMS

• Bidder
• Refers to an eligible contractor, manufacturer, supplier, distributor and/or
consultant competing for the award of a contract in any procurement by the
GOP
• Bidding Documents
• Refers to the documents issued by the Procuring Entity as the basis for Bids,
furnishing all information necessary for a prospective bidder to prepare a bid
for the Goods, Infrastructure projects and Consulting Services to be provided
DEFINITION OF TERMS

• Blacklisting
• An administrative penalty disqualifying a person or an entity from
participating in any government procurement for a given period
• Common - Use Supplies
• Refers to those goods, materials and equipment that are used in the day – to
– day operations of the Procuring Entities in the performance of their
functions
DEFINITION OF TERMS

• Competitive Bidding
• Refers to a method of procurement which is open to participation by any
interested party and which consists of the following processes:
• Advertisement
• Pre – Bid conference
• Eligibility screening or prospective bidders
• Receipt and opening of bids
• Evaluation of bids
• Post – qualification
• Award of contract
DEFINITION OF TERMS

• Consulting Services
• Refers to the services for Infrastructure Projects and other types of projects
or activities of the Government requiring adequate external technical and
professional expertise that are beyond the capability and/or capacity of the
government such as, but not limited to:
• Advisory and review services
• Pre – investment or feasibility studies
• Design
• Construction supervision
• Management and related services
• Other technical services or special studies
DEFINITION OF TERMS

• Domestic Bidders
• Refers to any person or entity offering unmanufactured articles, materials, or
supplies of the growth or production of the Philippines, or manufactured
articles, materials or supplies manufactured or to be manufactured in the
Philippines substantially from articles, materials or supplies of the growth,
production or manufacture, as the case may be, of the Philippines
DEFINITION OF TERMS

• Domestic Entity
• Refers to an individual or sole proprietor who is a citizen of the Philippines or
a partnership, corporation, cooperative or association duly organized under
the laws of the Philippines ad of which at least 75% of the interest or
outstanding capital stocks belong to citizens of the Philippines, habitually
established in business and habitually engaged in the manufacture or sale of
merchandise covered by his bid, and the business has been in existence for
at least 5 consecutive years prior to the advertisement and/or posting of the
Invitation to Bid
DEFINITION OF TERMS

• Executive Agreements
• International agreement except that they do not require legislative
ratification
• Expandable Supplies
• Refers to articles which are normally consumed in use within 1 year or
converted in the process of manufacture or construction or those having a
life expectancy of more than 1 year but which shall have decreased
substantially in value after being put to use for only 1 year (medicines,
stationery, fuel, spare parts)
DEFINITION OF TERMS

• Foreign Bid
• Refers to any offer of articles, materials or supplies not manufactured or not
to be manufactured in the Philippines, substantially from articles, materials
or supplies of the growth, production or manufacture, as the case ma be, of
the Philippines
• Foreign – Funded Procurement
• Refers to the acquisition of goods, consulting services, and the contracting
for infrastructure projects by the GOP which are wholly or partly funded by
Foreign Loans or Grants pursuant to Treaty or International or Executive
Agreement
DEFINITION OF TERMS

• Foreign Grants
• Refers to grants with no repayment obligations and are provided in monetary
form, goods, works and consultancy services, among others
• Foreign Loans
• Refers to loans, credits, indebtedness with private foreign banks or with
foreign governments, agencies, or instrumentalities of such foreign
governments, foreign financial institutions or other international organization
DEFINITION OF TERMS

• G-EPS
• Refers to the Government Electronic Procurement System
• Goods
• Refers to all items, supplies, materials and general support services, except
consulting services and infrastructure projects, which may be needed in the
translation of public businesses or in the pursuit of any government
undertaking, project or activity
DEFINITION OF TERMS

• GPPB
• Refers to the Government Procurement Policy Board
• Head of the Procuring Entity
• Head of the agency or his duly authorized official (for national government
agencies)
• The governing board or its duly authorized official (for government owned
and/or controlled corporations)
• The local chief executive (for LGU’s)
• Infrastructure Projects
• Include the construction, improvement, rehabilitation, demolition, repair,
restoration or maintenance of roads and bridges, railways, airports, seaports,
etc.
DEFINITION OF TERMS

• IRR
• Refers to the Implementing Rules and Regulation of this Act
• Portal
• Refers to the website that aggregates a wide variety of content for the
purpose of attracting a large number of users
• Procurement
• Refers to the acquisition of Goods, Consulting Services and the contracting
for Infrastructure Projects by the Procuring Entity
DEFINITION OF TERMS

• International Agreement
• Refers to a contract or understanding, regardless of nomenclature, entered
into between the GOP and other government or foreign or international
financing institution in written form and governed by international law
• Non – expandable Supplies
• Refers to articles which are not consumed in use and ordinarily retain their
original identity during the period of use, whose serviceable life is more than
1 year and which add to the assets of the GOP
DEFINITION OF TERMS

• Procuring Entity
• Refers to any branch, department, office, agency or instrumentality of the
government, including SUCs, GOCCs, GFIs and LGUs procuring Goods,
consulting Services and Infrastructure Projects
DEFINITION OF TERMS

• Suspension
• The administrative penalty imposed for infractions committed by a
contractor during the competitive bidding stage, whereby such contractor is
prohibited from further participation in the bidding process of an agency
ALTERNATIVE METHODS OF PROCUREMENT

• Subject to the prior approval of the Head of the Procuring Entity in

order to promote economy and efficiency
• Limited Source Bidding
• Direct Contracting
• Repeat Order
• Shopping
• Negotiated Procurement
LIMITED SOURCE BIDDING

• Also known as selective bidding

• Method of procurement that involves direct invitation to bid by the
Procuring Entity from a set of pre – selected suppliers or consultants
with known experience and proven capability relative to the
requirements of a particular contract
DIRECT CONTRACTING

• Also known as Single Source Procurement

• A method of procurement that does not require elaborate bidding
documents because the supplier is simply asked to submit a price
quotation or a pro – forma invoice together with the condition of
sale, which offer may be accepted immediately or after some
negotiation
REPEAT ORDER

• Method of procurement that involves a direct procurement of goods

from the previous winning bidder, whenever there is a need to
replenish goods procured under a contract previously awarded
through a competitive bidding
• Unit price equal or less than the provided original contract
• Shall not exceed 25% of the quantity of each item of the original contract
SHOPPING

• Method of procurement whereby the Procuring Entity 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 qualification
NEGOTIATED PROCUREMENT

• Method of procurement that may be resorted under the

extraordinary circumstances and instances, whereby the Procuring
Entity directly negotiates a contract with a technically, legally and
financially capable supplier, contractor or consultant
• 2 failed biddings
• Imminent danger to life or property during a state of calamity
BIDDING

• Bid Security shall be in an amount equal to a percentage of the ABC

• Cash / Manager’s Check issued by the Universal or Commercial Bank = 2%
• Bank Draft or Bank Guarantee or Irrevocable letter of credit issued by
Universal or Commercial Bank = 2%
• Surety Bond callable upon demand issue by a surety or insurance company
duly certified by the Insurance Commission = 5%
BIDDING

• BID VALIDITY
• Bids and bid securities shall be valid for a reasonable period, but in no case
shall the period exceed 120 calendar days from the opening of bids.
BID EVALUATION

• Lowest Calculated Bid

• Highest Rated Bid
POST QUALIFICATION

• Declaration to award the contract if the prospective bidder passed all

the qualifications
• Failure to qualify, the next lowest calculated bid will be processed.
FAILURE OF BIDDING

• No bids are received

• All prospective bidders are declared ineligible
• All bids fail to comply with all the bid requirements or fail post –
qualification or no successful negotiation
• The bidder with the Lowest Calculated Bid / Highest Rated
Responsive Bid refuses, without justifiable cause, to accept the award
of contract, and no award is made
AWARD AND IMPLEMENTATION

• Contract Award
• Contract Signing
• Contract Approval
• Notice to Proceed
PERFORMANCE SECURITY

• To guarantee the faithful performance by the winning bidder of its

obligation under the contract in accordance with the Bidding
Documents, it shall post a performance security prior to the signing
of contract
PERFORMANCE SECURITY

• Cash or Manager’s Check issued by issued by the Universal or

Commercial Bank
• Goods & Consulting Services = 5% of Contract Price
• Infrastructure Projects = 10% of Contract Price
• Bank Draft or Bank Guarantee or Irrevocable letter of credit issued by
Universal or Commercial Bank
• Goods & Consulting Services = 5% of Contract Price
• Infrastructure Projects = 10% of Contract Price
• Surety Bond callable upon demand issue by a surety or insurance
company duly certified by the Insurance Commission = 30% of
contract price
WARRANTY

• Warranty against Structural Defects and Failures shall cover the

following periods from final acceptance, except those occasioned by
force majeure:
• Permanent Structures (15 years)
• Semi – Permanent Structures (5 years)
• Other Structures (2 years)
PERMANENT STRUCTURES

• Buildings of Types 4 and 5 classified under the National Building Code

of the Philippines and other structures made of steel, iron or
concrete which comply with relevant structural codes
• Bridges
• Flyovers
• Aircraft movement areas
• Ports
• Dams
• Tunnels
• Etc.
SEMI – PERMANENT STRUCTURES

• Buildings of Types 1, 2 and 3 of the National Building Code of the

Philippines
• Concrete / Asphalt Roads
• Concrete River Control
• Drainage, Irrigation Lined Canals
• Deep Wells
• Etc.
OTHER STRUCTURES

• Bailey and wooden bridges

• Shallow wells
• Spring development
• Other similar structures