Alternative Methods of Procurement

Presentation for Regional Visits

Modes of procurement

alternative methods of procurement

General Rule: Public BiddingAPP provides sufficient lead time for bidding

Resort to Alternative Methods allowed -Highly exceptional casesTo promote economy and efficiencyJustified by conditions specified in IRR

Types of Alternative Methods Limited Source BiddingDirect ContractingRepeat OrderShoppingNegotiated Procurement

alternative MethodsLimited Source BiddingApplicability:GoodsConsulting services

Conditions:Highly specialized types where only a few bidders are known to be available

Major plant components beneficial to limit bidding to known qualified bidders to maintain uniform quality and performance of the plant3Limited Source BiddingPre-selection Procedure (GPPB Res. 05-2011, dated 25 February 2011)

BAC shall prepare a list of suppliers/consultants which must include all the industry players on the goods/consulting service to be procured.

In preparing the list, BAC, with the TWG assistance, shall adopt a set of criteria to be used as basis in evaluating the capability of the entities taking into consideration the following:Capability and resources to perform the contract taking into account their experience and past performance on similar contracts;Capabilities with respect to personnel, equipment, or manufacturing facilities; andFinancial position.

4Limited Source BiddingPre-selection Procedure

BAC shall evaluate and submit the recommended pre-selected list to the HOPE for approval.

The pre-selected list shall include: Technical specifications/TOR, and Criteria used by the PE for the evaluation of the pre-selected suppliers /consultants.

Pre-selected list shall be considered specific to the project unless adopted by other procuring entities for their respective procurement activities.

5Limited Source BiddingPre-selection Procedure

Upon HOPE approval, PE shall transmit the pre-selected list to the GPPB. The list must be accompanied with a HOPE certification:justifying the resort to Limited Source Bidding, andverifying the compliance with the criteria previously set.

GPPB-TSO shall acknowledge receipt of the pre-selected list and shall post it in the GPPB or PhilGEPS website for the purpose of transparency.

Upon receipt of the GPPB acknowledgement letter, PE shall post the procurement activity to be undertaken through Limited Source Bidding in the PhilGEPS website.6Limited Source BiddingPre-selection Procedure

PE shall then conduct competitive bidding, except advertisement of the bid opportunity in a newspaper of general nationwide circulation.

Notwithstanding the pre-selected list, prospective bidders not included in the list are not precluded from participating in the conduct of Limited Source Bidding.

GPPB-TSO will not validate the qualifications of the suppliers/consultants contained in the list.

Concerns on the propriety of the list shall be directed to the PE that issued/adopted the list for a particular procurement activity following the protest mechanism under Section 55 of the IRR of RA 9184.

7Direct ContractingApplicability:Goods

Conditions:Items of proprietary nature from proprietary source

Critical components from a specific supplier to hold a contractor to guarantee its project performance

Items sold by an exclusive manufacturer or dealerno other suppliers selling it at lower pricesno suitable substitute can be obtained at more advantageous terms to the Government

Deleted the word plant Resolution No. 11 - 20098Repeat OrderApplicability:Goods

Conditions:Same or lower unit prices, provided that such prices are still the most advantageous to the GOP after price verification

No splitting of contracts

Availed of w/in 6 mos. from the contract effectivity date stated in the NTP arising from the original contract, except in cases duly approved by the GPPB

Not to exceed 25% of the quantity of each item

Original contract awarded through competitive bidding9NPM No. 03-2010

What stage in the procurement process can repeat order be considered to be within the reglamentary period of 6 mos. as provided under Section 51 (c) of the of the revised IRR) of RA 9184?

Repeat OrderNPM No. 03-2010

The reckoning period for computing the 6 mo. period is the effectivity date of the contract as stated in the Notice to Proceed (NTP) Sec. 51, IRR of R.A. 9184.

The contract effectivity date, as provided in the NTP, shall not be later than 7 cd from its issuance (Sec. 37.4.1 of the IRR)Repeat OrderShopping & Small ValueApplicability of Shopping [52.1(a) and (b)]:Goods

Conditions [Shopping under 52.1(a)]:There is an unforeseen contingency requiring immediate purchase

Amount does not exceed the threshold

Conditions [Shopping under 52.1(b)]:Procurement of ordinary or regular office supplies and equipment not available in PS-DBM

Amount does not exceed the threshold12Applicability of Small Value Procurement [53.9]: ALL

Conditions:Procurement does not fall under Shopping [52]

Amount does not exceed the threshold

Shopping & Small Value13Resolution No. 09 2009, dated 17 Dec. 2009

General Guidelines:

Decision to resort to shopping/small value procurement done in context of APP

Splitting of contracts is strictly prohibited

After approval, BAC may delegate execution to the appropriate bureau, committee or support unit.Shopping & small valueProcedural GuidelinesShopping & Small Value15Resolution No. 09 2009, dated 17 Dec. 2009

Procedural Guidelines:

RFQ should indicate the following:a. Specification; b. Quantity; c. ABC; d. Terms and conditions of the item to be procured; ande. Manner by which price quotation must be submitted (i.e. open or sealed quotations)

Shopping & Small ValueProcedural Guidelines

Information relating to examination, evaluation & comparison of quotations shall be kept confidential

Post RFQs for 7 cd in the following:a) website of PhilGEPS and procuring entity, and b) any conspicuous place

Except:When there is an unforeseen contingency requiring immediate purchase under Sec. 52.1(a)

RFQs with ABCs < PhP. 50,000

Shopping & Small Value17Procedural Guidelines:

Post awards in the following:a) website of PhilGEPS and procuring entity, if available, and b) any conspicuous place

Except: RFQs with ABCs < PhP. 50,000 Procuring entity must validate whether it is entering into a contract with a technically, legally and financially capable supplier, contractor or consultant by requiring the submission of relevant documents or through other means.

Shopping & Small ValueNPM No. 16-2011

Whether award of the contract can be made to the sole supplier who submitted a quotation/proposal for a procurement activity through Small Value Procurement (SVP)?

Small ValueNPM No. 16-2011

Whether award of the contract can be made to the sole supplier who submitted a quotation/proposal for a procurement activity through Small Value Procurement (SVP)?

Small ValueNPM No. 16-2011

Award of the contract may be made even if only one supplier submitted a quotation/proposal, provided that the procuring entity invited at least 3 suppliers to submit a quotation and provided further that the submission complies with the specifications and terms and conditions required by the PE.

Small ValueFormat changes

Alignment with international best practices & addresses concerns raised by stakeholders

Clearer rules on Negotiated Procurement due to 2-Failed Biddings.

Recognized additional instances of Negotiated Procurement

Negotiated ProcurementNegotiated ProcurementTwo Failed BiddingsApplicability: ALL

Conditions:Two failed biddingsMandatory review of the following:Minimum technical specificationsABC, which may be adjusted up to 20% from last bidding

Invite sufficient number to ensure competition

Information communicated on an equal basis23Simultaneous negotiations

Submission of best and final offer on a specified date

Successful offer to be selected:Meet minimum technical specificationsDoes not exceed ABC

Observers shall be invited in all stagesNegotiated ProcurementTwo Failed Biddings24Applicability: ALL

Any of the following conditions:Imminent danger to life or property during a state of calamityWhen time is of the essence arising from natural or man-made calamitiesOther causes where immediate action is necessary:To prevent damage to or loss of life or propertyTo restore vital public services, infrastructure facilities, and other public utilities

Negotiate with any supplier, contractor, or consultant with technical, legal, and financial capability

Negotiated Procurementemergency cases25Applicability: ALL

Conditions:Rescinded or terminated contractImmediate action is necessary:To prevent damage to or loss of life or propertyTo restore vital public services, infrastructure facilities, and other public utilities

Negotiate starting with the 2nd LCB/HRB at the bidders original bid price, then to the next if negotiation fails

If negotiation fails, invite a short list of at least 3 to submit bids and negotiate starting with the LCB or HRB

Negotiated Procurementtake over of contracts26Applicability: Infra and Consulting

Conditions:Subject contract is adjacent or contiguous to an on-going infra or consultingOriginal contract is a result of competitive biddingSubject contract has similar/related scopes of workWithin the contractors/consultants capacitySame prices or lower unit prices as the original contract less mobilization costAmount does not exceed amount of the on-going projectNo negative slippageNegotiations commenced before expiry of original contractNegotiated Procurementadjacent or contiguous27Applicability: ALL

Conditions:Cost-benefit analysis indicating A-to-A is more efficient and economicalA-to-A does not exceed 25% of PEs total budget for each category (goods, infra, consulting)Servicing agency has mandate to undertake the projectServicing agency owns or has access to necessary tools required for the project

Other requirements provided in Implementing Guidelines on Agency-to-Agency Arrangements (GPPB Resolution 18-2007)Negotiated Procurementagency to agency28NPM No. 04-2010

Can a GOCC having its own charter, directly engage its wholly-owned subsidiary created under the Corporation Code under Section 53.5 [Negotiated Procurement (Agency-to-Agency Agreement)] of the revised IRR) of RA 9184?

Negotiated Procurementagency to agencyNPM No. 04-2010

As a general rule, GOCCs formed under the Corporation Code cannot enter into Agency-to-Agency Agreements

Except when a parent-subsidiary relationship exists between the 2 GOCCs. As long as the parent GOCC owns directly or indirectly more than half of the voting power of its subsidiary, then it may directly engage the services of said subsidiary.Negotiated Procurementagency to agencyNegotiated Procurementagency to agency31Applicability: ALL

Condition:HOPE has determined that PE does not have procurement proficiency or capability to undertake a particular procurement

Actions available:Request other GOP agencies to undertake such procurement for them

Recruit and hire consultants or procurement agents to assist them directly and/or train their staff in the management of the procurement function

Negotiated Procurementprocurement agents32Applicability: Consulting Services

Conditions:Individual consultant

Primary consideration for hiring the individual is trust and confidence

Work involves:Highly technical or proprietaryPrimarily confidential or policy determining

Term is, at the most, 6 months, renewable at the option of the appointing HOPE, but in no case to exceed the term of the latterNegotiated Procurementhighly technical consultants33Applicability: Goods (Real estate and Venue)

Conditions:Cost-benefit analysis indicating leasing privately-owned real estate or venue is more efficient and economical

APP reflect the proposed lease

Selection to follow the guidelines (GPPB Resolution 08-2009)

Eligibility documents need not be submitted, but PE must validate whether lessor is technically, legally, and financially capable through other means

Lease contracts costing > PhP50,000 should be posted in the PhilGEPSNegotiated Procurementlease of real property/venue34Implementing Guidelines for Lease of Privately-Owned Real Estate and Venue(Resolution No. 08 2009, dated November 2009)

Guiding Principles:

More preferred to lease from government

Meticulous selection of location taking into consideration the ff:Need for prudence and economy in government serviceSuitability of area (level of security/nature of event)

Negotiated Procurementlease of real property/venueImplementing Guidelines for Lease of Privately-Owned Real Estate and Venue (Cont.)

Guiding Principles:Rental Rates should be :Reasonable (Lessor gets an equitable return of capital or investment. of what the Lessee gets in terms of accommodation, facility, amenities, and convenience)

Within prevailing market prices


Guiding Principles:Objectives and purpose of the lease contract do not constitute an unnecessary, excessive, extravagant, or unconscionable expenditure.


Procedural Requirements:Conduct of a cost-benefit analysis

Select locationEnd-users recommendation, justifications, prevailing rates of lease/rent within vicinity

Set ABCMidpoint of range based on prevailing lease rates


Procedural Requirements:Update APP, if necessary

Delegate (or not) selection of lessor to a bureau, committee or support unit duly authorized by the BAC


Procedural Requirements:Eligibility documents need not be submitted . Validate whether Lessor is technically, legally and financially capable through other means.

Post awardExcept lease contracts amounting to Php. 50,000 and below


Specific Requirements for Venue:Technical specifications shall be prepared taking into consideration rating factors provided under Appendix C (availability, location and site condition, venue and neighborhood data)

At least 3 quotations shall be obtained within the vicinity of the selected location.


Specific Requirements for Venue:

Award of contract shall be given to the lessor having the LCRB; Compliance rating with technical specifications may be conducted through ocular inspection, interviews, or other forms of due diligence.

Negotiated Procurementlease of real property/venueApplicability: ALL

Condition:Appropriation law or ordinance earmarks an amount to be contracted to NGOs

PE may opt to conduct public bidding or negotiated procurement for the selection of NGO, subject to the rules provided in the guidelines (GPPB Resolution 12-2007)Negotiated Procurementngo participation43Applicability: ALL

Conditions:In the interest of project sustainability or to achieve certain specific social objectives

PE to propose procedures, specifications, and contract packaging for GPPB approvalNegotiated Procurementcommunity participation44Applicability: ALL

Conditions:Procure from UN Agencies

Small quantities of off-the-shelf goods, primarily in the fields of education and health

Specialized products where the number of suppliers is limited (e.g., vaccines or drugs)Negotiated Procurementun agencies45Applicability: Infrastructure Projects

Conditions:Implementing Agency (IA) must have a track record of having completed or supervised a project by admin or by contract, similar to and with a cost of at least 50% of the project at hand, and

IA owns or has access from other government agencies to necessary tools and construction equipment required for the project

Other requirements provided in Guidelines for the Implementation of Infrastructure Projects By Administration(GPPB Resolution 18-2006, as amended by GPPB Resolution No. 07 2009)By administration46Increase in thresholds in the 2009 & 2010 GAA

Any project costing < PhP. 20,000,000.00 may be undertaken by administration or force account

Project costing > PhP. 20,000,000.00 should obtained the ff:

Authority from the DPWH Secretary - PhP. 20,000,000.00 - PhP. 50,000,000.00)

Authority from the President of the Philippines, upon the DPWH Secretarys favorable recommendation - > PhP. 50,000,000.00.By administration47Other Terms and Conditions:

Most advantageous price for government should be obtained (Sec. 48.1)

Splitting of contracts strictly prohibited (Sec. 54.1)

Posting NOT necessary, except:Shopping [Sec. 52.1(b)]Except: PhP. 50,000 and belowSmall Value Procurement [Sec. 53.9]Except: PhP. 50,000 and belowTwo Failed Biddings [Sec. 53.1]Lease of Real Property [Sec. 53.10], if > PhP50,000 NGO Participation

Alternative Methods48ALL awards should be posted, exceptShopping and Small Value Procurement with an ABC of PhP50,000 and belowLease Contracts with an ABC of PhP50,000 and below

Bid security NOT necessary, except in Limited Source Bidding

Performance and warranty securities necessary, except:Shopping [Sec. 52]Emergency Cases [Sec. 53.2]Small Value Procurement [Sec. 53.9]Lease of Real Property [Sec. 53.10]NGO Participation Procurement from UN agencies [Sec. 53.13]

Alternative Methods49Thank YouComments, questions?

50

Documents

Alternative Methods of Procurement