The Government Procurement Reform ActOverview of the Revised IRR of Republic Act No. 9184

*

Procurement Principles

Coverage, Scope and Application

Procurement Organizations *OUTLINE OF PRESENTATION

Enactment of GPRAGPRA on 10 January, 2003IRR- Part A effective on 8 October 2003Revised IRR on 2 September 2, 2009Best practiceProblems & experiences*

*

What is Procurement?

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)

Procurement means the acquisition by any means of goods, construction or services. (UNCITRAL Model Law on Procurement)

What is Procurement?*Acquisition means the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. (Federal Acquisition Regulation, USA)

What is Procurement?*Procurement encompasses the whole process of acquiring property or services. It begins when an agency has identified a need and decided on its procurement requirement. Procurement continues through the processes of risk assessment, seeking and evaluating alternative solutions, contract award, delivery of and payment for the property or services and, where relevant, the ongoing management of a contract and consideration of options related to the contract. (Commonwealth Procurement Guidelines, 2008, )

What is Procurement?*Procurement - is the whole of life-cycle process of acquisition of goods, services and works from third parties beginning when a requirement is first defined and ending with the ultimate disposal of an asset or end of a service contract. (Sir Peter Oliver Gershon, Office of Government Commerce UK,2005)

What is Procurement?*Value for Money is the optimum combination of whole of life costs and quality to meet the customers requirements (P. Gershon.)

Governments policy must be that all public procurements should be based on value for money, having due regard to propriety and regularity. (P.Gershon.)

What is Value for Money?Is not achieving the lowest price but about achieving the optimum combination ofwhole life costsandquality. Traditionally VfM - was getting the right quality, in the right quantity, at the right time, from the right supplier at the right price. Updated VfM - obtaining better quality of goods or services in more suitable quantities, just in time when needed, from better suppliers at prices that continue to improve.*

5 Rights in Public Procurement*

What is Value for Money?Often described in terms of the 3 Es economy, efficiency and effectiveness:ECONOMY minimizing the cost of resources for an activity (doing things at a low price)EFFICIENCY performing tasks with reasonable effort (doing things the right way)EFFECTIVENESS the extent to which objectives are met (doing the right things).To help achieve VfM, goods and services should be acquired bycompetitionunless there are convincing reasons not to do so.*

What is Procurement?*LCC Life Cycle Costing

Cost should consider all costs throughout the life-cycle acquisition cost, utility costs (energy/water consumption, maintenance), and disposal costs.

C to G vis--vis C to C Crade to Grave (disposal ) Cradle to Cradle (recycled)

Procurement Principles*

*RA 9184Philippine Procurement Paradigm

Problem Areas and Reform Measures*

PROBLEMSConfusion caused by fragmented legal systemInconsistent policies, rules, and regulations due to lack of standardsLack of transparencyLack of check and balance

REFORMSEnactment of the Government Procurement Reform Act (GPRA)Creation of the Government Procurement Policy Board (GPPB)Use of PhilGEPS, agency website, manual posting +Participation of Civil Society

Declaration of Policy

Governments commitment to good governance

Adherence to the principles of transparency, accountability, equity, efficiency and economy

Procurement must be competitive and transparent Public Bidding unless provided for in the IRR

*Section 2

Good GovernanceGovernance is process of decision-making and the process by which decisions are implemented or not implemented

8 CHARACTERISTICS*

Procurement PrinciplesTRANSPARENCY COMPETITIVENESS STREAMLINED PROCUREMENT PROCESS SYSTEM OF ACCOUNTABILITY PUBLIC MONITORING*Section 3

TRANSPARENCY in the procurement process and the implementation of procurement contractsthrough wide dissemination of bid opportunities and participation of pertinent NGOsposting in PEs website, PhilGEPS website, and in conspicuous place within the PEs premises BAC is required to invite observers coming from eligible and qualified GOs, PAs and NGOs to observe any or all stages of the procurement process. proper documentation of each procurement transaction, records must be maintained and made available to proper parties.

*

STREAMLINED PROCUREMENT PROCESS that is uniformly applicable to all government procurements must be simple and made adaptable to advances in modern technology in order to ensure an effective and efficient method GPPB conducts a periodic review of government procurement procedures, and whenever necessary, formulates and implements changes thereto.*

COMPETITIVENESSextending equal opportunity to enable eligible and qualified private contracting parties to participate in public biddingBasic rule to conduct public bidding, except as otherwise provided for under the GPRA, its revised IRR Treats bidders equitably and provides fair grounds for competition among themselves, thereby ensuring that no single bidder significantly influences the outcome of the bidding. Competition among proponents will urge them to offer more beneficial terms to the government. Alternative methods of procurement only be resorted to when competitive bidding is not a feasible option, in accordance with the conditions laid down in R.A. 9184, its revised IRR

*

ACCOUNTABILITYAnswerable A system of accountability must be established Both the public officials directly or indirectly involved in the procurement process as well as in the implementation of procurement contracts, and the private parties that deal with government are, when warranted by circumstances, investigated and held liable for their actions relative thereto.HOPE is responsible for establishing and maintaining a transparent, effective, and efficient procurement system. Responsibilities of each official involved in the procurement process must be clear and legally identifiable.*

PUBLIC MONITORING In the procurement process & implementation of awarded contractsThat PEs consistently follow procedures prescribed in RA 9184 and its revised IRRTo guarantee that these contracts are awarded pursuant to R.A. 9184 and its revised IRR and that all these contracts are performed strictly according to specifications. Eligible and qualified CSOs such as NGOs, PAs, academic institutions, and religious groups are to observe and monitor the procurement process and contract implementation.System of reporting to GPPB - eq. APP publication, Procurement Monitoring Report, Agency Procurement Index

*

Scope and CoverageR.A. 9184 Governs the Procurement of:a.Infrastructure Projectsb.Goods, Supplies, Materials andRelated Servicesc.Consulting Services

R.A. 9184 Covers Procurement Planning up to Contract Implementation *

GOODSItems, supplies, material and general support servicesIncludes, but not limited to the following:EquipmentFurnitureStationeryMaterials for constructionPersonal property of any kindNon-personal or contractual services such as:Repair & maintenance of equipment and furnitureTrucking, hauling and courierJanitorial, security and manpower Related or analogous service shall include, but not limited to the ff: g:Lease or purchase of office spaceMedia advertisementsHealth maintenance servicesOther services essential to the operation of the procuring entityRental of venues and facilitiesCatering servicesLease of computers, copiers and other IT equipment

*

INFRASTRUCTURE PROJECTS*

or civil works or works.ConstructionImprovementRehabilitationDemolitionRepairRestorationMaintenanceRoads and bridgesRailwaysAirports and seaportsCommunication facilitiesCivil works components of IT projectsIrrigationFlood control and drainageWater supplySanitationSewerage and solid waste management systemsShore protectionEnergy/ power and electrification facilitiesBuildings (National, School, HospitalOther related construction projects

CONSULTING SERVICESServices for infrastructure projects and other types of projects or activities requiring adequate external technical and professional expertise that are beyond the capability and/or capacity of the PE to undertake such as, but not limited to: advisory and review services; pre- investment or feasibility studies; design; construction supervision; management and related services; and other technical services or special studies. Annex B *

Scope & ApplicationApply to all procurements of any branch, agency, department, bureau, office, or instrumentality of the GOP, including government-owned and/or -controlled corporations (GOCCs), government financial institutions (GFIs), state universities and colleges (SUCs), and local government units (LGUs)*

SCOPE & APPLICATION

Domestically-funded (GOP) procurementsForeign-funded procurements unless otherwise specified in treaty stipulationsPacta sunt servanda - Any treaty or international or executive agreement shall be observed

NOTE: Negotiating panel members default position - use of the IRR, or at least, selection through competitive bidding.

*

EXCEPTIONSProcurement of Goods, Infrastructure Projects, and Consulting Services funded from foreign Grants covered by RA 8182/RA 8555 , 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 unless the GOP and the foreign grantor/foreign or international financing institution agree otherwiseAcquisition of real property based on RA 8974, An Act to Facilitate the Acquisition of Right-of-Way Site or Location for National Government Infrastructure Projects and for Other Purposes)Public-Private sector infrastructure or development projects covered by R.A. 6957/ R.A. 7718, An Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector, and for Other Purposes, except for the portions financed by the GOP*

Standardization of Procurement Process & Formsto systematize procurement process, avoid confusion and ensure transparency, GPPB pursues development and approval of: Generic procurement manuals (GPM) Standard bidding documents (PBD) and forms including those to be used for major procurement like drugs and textbooks. use is mandatory upon all PEs once issued by the GPPBmodifications may be made to suit the particular needs of PEs particularly for major and specialized procurement, subject to the approval of the GPPB*

Key Features of R.A. 9184Simplification of pre-qualification (eligibility check) and the strengthening of post-qualification

Use of the Lowest Calculated and Responsive Bid for goods, supplies, materials and related services; and Highest Rated and Responsive Bid for consulting services

Use of the Approved Budget for the Contract (ABC) as ceiling for the bid price *

Key Features of R.A. 9184Use of transparent, objective and non-discretionary criteria

Increasing transparency in the procurement process

Professionalization of procurement officials

Inclusion of Penal and Civil Liabilities

*

Government Procurement Policy BoardInter-agency Body composed of: Big Procuring Entities - defense, education, health, public works, transportation and communicationsOversight Agencies - budget, planning, finance, trade, science and technology, interior and local government, energyPrivate SectorResource Persons - audit, anti-corrupt agencies (COA & DOJ)

*

Government Procurement Policy BoardPolicy-MakingAmend implementing rules and regulations of procurement law (quasi-legislative function)Prepare generic procurement manual and standard bidding formsCapacity DevelopmentEstablish a sustainable training programMonitoringAssist procuring entities improve their complianceReview effectiveness of procurement law

*

Technical Support Office, GPPBProvides research, technical and administrative support to the GPPB(Sec. 63.3, IRR of RA 9184) Research-based procurement policy recommendations and rule-drafting;Development and updating of generic procurement manuals and standard bidding documents/forms;Management and conduct of training on procurement systems and procedures;Evaluation of the effectiveness of the government procurement system and recommendation of improvements in systems procedures;Monitoring the compliance to the Act and assisting procuring entities improve their compliance;Monitoring the effectiveness of the Government Electronic Procurement System (G-EPS); andSecretariat support.

*

PROCUREMENT ORGANIZATIONSHead of the Procuring EntityBids and Awards Committee (BAC)BAC SecretariatTechnical Working GroupObserversEnd-UsersPROCURING ENTITYProcurement Unit *

Head of the Procuring EntityHOPE

Establishes BAC and appoint its membersEnsures BAC Members give utmost priority to assignmentsEnsures professionalization of procurement organizationApproves the Annual Procurement Plan Approves/Disapproves Contract AwardResolves Protests*

PROCURING ENTITY (PE)PE shall be the central office (CO) , or when duly authorized to procure independently, the regional office or any decentralized, local or lower level agency/bureau/office

Authority to procure independently of CO must not be presumed, as the entire structure of the organization would have to be considered to determine whether or not such regional, decentralized, local or lower level agency/bureau/ office is authorized to undertake procurement activities.

Existence of directives from the central office delegating such authority to procure to its regional, decentralized, and local or lower level agency / bureau / office would have to be determined.*

General Rule: Single BAC in Head OfficeException: to expedite the procurement process for practical intents and purposes, HOPE may create separate BACs where the number and complexity of the items to be procured warrantsBACs may be organized either according to: (a) geographical location of PMO or end-user units of the PE; or (b) nature of procurement. Similar committees for decentralized and lower level offices may also be formed when deemed necessary by the HOPE

Bids and Awards Committee (BAC)*

Procurement Organization Example )RA 9184HOPESec. Janette Loreto GarinBAC Secretariats( CO -Dir. Ma. Theresa Vera) RO, Hospitals, Bureaus, Attached Agencies Technical Working GroupsCOBAC AChairperson: Usec. Nemesio T. GakoVice-Chair: Dir. Crispinita ValdezMembers: Dir. Maylene BeltranDir. Lyndon Lee Suy Dir. Ivanhoe Escartin FDA BACBOQ BACPITACH BACPOPCOM BACsNNC BAC etcBACs

16 Regional Offices

72 Hospitals

COBAC BChairperson: Asec. Gerardo BayugoVice-Chair: Dir. Angelina Del Mundo Members: Dir. Ma.Rebecca PeafielDir. Ferchito Avelino Dir. Mario Baguilod

HOPERO Director IV , Chief of Hospital, Executive Director or Director IV, Asec *Procurement Service/Units ( CO -Dir. Ma. Theresa Vera) RO, Hospitals, Bureaus, Attached Agencies

COMPOSITIONat least five (5) but not more than seven (7) members of unquestionable integrity and procurement proficiency. Regular Members: Chairman -- at least a 3rd ranking permanent official

Officers -- at least a 5th ranking permanent official, with knowledge, experience and/or expertise in procurement who, to the extent possible, represents the legal or administrative area, and financial area In the case of bureaus, regional offices and sub-regional/district offices, -- at least a 3rd permanent personnel;

NOTE: Permanent shall refer to a plantilla position within the PE

Bids and Awards Committee*

COMPOSITION

Provisional Members: An officer who has technical expertise relevant to the procurement at hand, and, to the extent possible, has knowledge, experience and/or expertise in procurement; and A representative from the end user unit who has knowledge of procurement laws and procedures.

Chairman and the Vice-Chairman shall also be designated by the HOPE

Vice-Chairman shall be a regular member

Bids and Awards Committee *

BAC for NGAs, GOCCs, GFIs & SUCs

- Members including the Chairman are designated by HOPE Regular Members - 1. Chairman - at least 3rd Ranking Permanent Official; 2. Member - at least 5th ranking representing the Legal or Administrative areas 3. Member at least 5th ranking representing the Finance Area Provisional Members - 1. An officer who has Technical expertise relevant to the procurement. 2. Representative from end user unit.

BAC for Local Government Units

- The Local Chief Executive designates members The BAC members shall elect among themselves who shall act as the Chairman and Vice-Chairman

- Members:1. Administrators Office2. Budget Office3. Legal Office4. Engineering Office 5. General Services Office 6. End User Office Procurement Organization Comparison *

Bids and Awards CommitteeProhibited Members

Head of the Procuring Entity

Approving Authority

Chief Accountant (Head of the Provincial, City, Municipal Accounting Office) and his/ her staff, unless any of the former were designated as end-user of the project (COA Circular 2003-04*

Bids and Awards CommitteeAlternate Members HOPE may designate alternate BAC members who shall have the same qualification as their principal. Accountability of the principal and the alternate shall be limited to their respective acts and decisions.

Term a fixed term of ONE (1) YEAR, renewable at the discretion of HOPE & shall continue to exercise their functions until new BAC is designated

Quorum majority is required presence of the Chairman or Vice-Chairman is required.

*

Bids and Awards Committee- Upon Expiration of the terms of current members, they shall continue to exercise their functions until new BAC members are designated.- Succession - in case of resignation, retirement, separation, transfer, re-assignment, removal or death, the replacement shall serve only for the unexpired term.- Leave or Suspension - In case of leave or suspension, the replacement shall serve only for the duration of the leave or suspension.- Checks and Balances - In no case shall the approving authority be the Chairman or a member of the BAC.- Jury Duty - BAC members shall give utmost priority to BACassignments over all other duties and responsibilities.

*

Functions of the BAC1. Advertise/Post Invitation to Bid2. Conduct pre-procurement / pre-bid conference3. Determine eligibility of bidders4. Receive bids5. Conduct evaluation of bids6. Undertake post-qualification7. Resolve motions for reconsideration8. Recommend award of contracts9. Recommend imposition of sanctions10.Recommend use of Alternative Methods11. Perform such other related functions*

BAC Secretariat Created by HOPE from an existing ORGANIC office or create a Procurement Unit to serve concurrently as BAC Secretariat

Main support unit of the BAC

Head:Central Offices - 5th ranking permanent official Bureaus/Regional Offices cs. - 3rd ranking permanent employee If not available, a permanent employee of the next lower rankCriteria- integrity and proficiency*

BAC Secretariat Functions Provide administrative support for the BAC Organize and make all necessary arrangements for BAC meetings Attend BAC meetings Prepare minutes of the BAC meeting Take custody of procurement documents Manage the sale and distribution of bidding docs. Advertise/Post Bid Opportunities, Bid Docs and NOA Assist in managing the procurement processes Monitor procurement activities and make proper report Consolidate PPMPs from various units of PE Central channel of communication*

Procurement Unit the organic office of PE that carries out the procurement functions: Procurement planning and purchasing Contract implementation and management Monitoring of procurement milestones

*

Determinants in the establishment

Average procurement budget based on preceding three (3) years of historical data

Organizational level of the PEProcurement Unit *

Procurement Unit Establishment *

ANNUAL PROCUREMENT BUDGET*DEPARTMENTBUREAUGOCC/GFIP 5B and aboveServiceDivisionDepartmentP 1B to less than P 5BDivisionSectionDivisionLess than P 1BSectionUnitSection*Average for the past three (3) years

HEAD OF PROCURING ENTITYRESIDENT OMBUDSMAN BIDS AND AWARDS COMMITTEEINTEGRITY MANAGEMENT COMMITTEEINTERNAL OBSERVER EXTERNAL OBSERVER END-USER TECHNICAL WORKING GROUPBAC SECRETARIAT DOH Central Office PROCUREMENT STRUCTURE*OFFICE FOR ADMINIISTRATION & FINANCIAL MANAGEMENT PROCUREMENT SERVICE

TECHNICAL WORKING GROUPCreated by the BAC from a pool of technical, financial and/or legal experts.

Assist in the eligibility screening, evaluation of bids and post-qualification.

Jury Duty *

OBSERVERS Enhance transparencyCOA Representative Two (2) more from: 1. Duly recognized private sector association 2. Non-government organization (NGO)Organization duly registered with the SEC or CDAHave knowledge, experience or expertise in procurement;Absence of actual or potential conflict of interest in the contract to be bid;Comply with other criteria determined by the BAC.Invited IN ALL STAGES of the procurement process Invited at least three (3) calendar days before the date of the procurement stage/activity. Have no right to voteAbsence will not nullify the BAC proceedings, provided that they have been duly invited in writing

*

OBSERVERS: Duly recognized private sector association

INFRASTRUCTURE PROJECTS, national associations of constructors duly recognized by the Construction Industry Authority of the Philippines (CIAP), such as, but not limited to the following:

(1) Philippine Constructors Association, Inc.; (2) National Constructors Association of the Philippines, Inc.; and (3) Philippine Institute of Civil Engineers (PICE).

GOODS, a specific relevant chamber-member of the Philippine Chamber of Commerce and Industry.

CONSULTING SERVICES, a project-related professional organization accredited or duly recognized by PRC or SC such as, but not limited to:

(1) Philippine Institute of Civil Engineers (PICE) (2) Philippine Institute of Certified Public Accountants (PICPA) (3) Confederation of Filipino Consulting Organizations

*

OBSERVERS RESPONSIBILITIES Prepare the report either jointly or separately indicating their observations made on the procurement activities conducted by the BAC for submission to the HOPE, copy furnished the BAC Chairman. The report shall assess the extent of the BACs compliance with the provisions of the IRR and areas of improvement in the BACs proceedings;

Submit their report to the PE and furnish a copy to the GPPB and Office of the Ombudsman/Resident Ombudsman. If no report is submitted by the observer, then it is understood that the bidding activity conducted by the BAC followed the correct procedure; and

Immediately inhibit and notify in writing the PE concerned of any actual or potential interest in the contract to be bid

*

OBSERVERS access to documents:Upon their request, subject to signing of a confidentiality agreement:

Minutes of BAC meetings; Abstract of Bids; Post-qualification summary report; APP and related PPMP; and Opened proposals.

*

Honoraria of BAC, Secretariat & TWG PE may grant payment of Honoraria to the BAC members in an amount not exceeding TWENTY FIVE PERCENT (25%) of their respective monthly salary SUBJECT TO AVAILABILITY OF FUNDS.PE may grant payment of Honoraria to BAC Secretariat and TWG membersDBM Budget Circular 2004-5A dated October 7, 2005

*

Procurement Team MembersMaximum /Project BAC ChairPhP 3,000BAC MembersPhP 2,500TWG Chair & MembersPhP 2,000

Honoraria of BAC, Secretariat and TWG membersUSec & ASec in the BAC not entitled in successfully completed procurement projects (awarded)Limited to procurement that involves competitive bidding. Competitive bidding activities are present only in: Open and competitive bidding; Limited Source bidding; , Negotiated procurement under Section 53.1 (a) where there has been failure of bidding for the 2nd time; Negotiated procurement under Section 53 (b)[emergency cases] following the procedures under Section 54.2 (b) thereof, whereby the PE draws up a list of at least (3) suppliers or contractors, which will be invited to submit bids. *Honoraria of BAC, Secretariat & TWG

NO Honoraria Direct contracting; Repeat order; Shopping; Negotiated procurement under Section 53.2 (b) [emergency cases] following the procedures under-Section 54.2 whereby PE directly negotiates with previous supplier; contractor or consultant; or when the project is undertaken by administration or thru the AFP, in case of infrastructure projects; All other negotiated procurements:*

Honoraria & Overtime Pay of BAC Secretariat

Only for those performing the attendant functions in addition to their regular duties in other non-procurement units Same rate as the TWG Chair and Members subject to the same regulations. No honoraria for BAC Secretariat whose positions are in the Procurement Unit Payment of overtime services may be allowed, subject to existing policyHonoraria or Overtime Pay only *

Overtime Pay of Admin Staff Clerks, messengers and drivers supporting the BAC, the TWO and the Secretariat for procurement activities rendered in excess of official working hours. Payment of overtime services shall be in accordance with existing policy Those who are receiving honoraria for their participation in procurement activities shall no longer be entitled to overtime pay for procurement-related services rendered in excess of official working hours.*

Honoraria & Overtime Funding SourceProceeds from sale of bid documentsFees from contractor/supplier registryFees charged for copies of minutes of bid openings, BAC resolutions and other BAC documentsProtest feesLiquidated damagesProceeds from bid/performance security forfeiture Treated as Trust Receipts for honoraria & over-time pay onlyCan use 100%; excess remitted to Treasury*

Professionalization BAC, BAC Secretariat & TWGGPPB establishes a sustained training program

*

Legal Assistance & Indemnification- The GPPB shall establish an equitable indemnification package for BAC, BAC Secretariat & TWG Members, thus:a. Legal Assistance (Private Counsel)b. Liability Insurancec. Medical Assistanced. Other forms of indemnification for all reasonable costs and expenses incurred by the official.- PROVIDED the legal assistance and indemnification shall NOT be available if the official is finally adjudged to be liable for gross negligence, misconduct or grave abuse of discretion, or otherwise held liable or guilty of the complaints or charges. *

*THANK YOU!!

United Nations commission on International Trade Law*Joined UK gov in 200 under tony blair. 2004 public procurement study, 2005 start of reform. 2007/2008 start reaping benefits*Correctness, aptness, appropriateness, decency suitability/// promptness, reliability (opposite-lateness*Whole life costing takes account of the total cost of a product or service over its life from determining the need for it through to its eventual disposal and replacement.

Quality in procurement terms reflects the need for the goods or service to be appropriate to the task they are to perform. While it is important that products are of a high enough standard to carry out the required tasks, it is also important not to over-specify what you need as this can lead to waste and, in some cases, products that will not work.*Cradle to grave or womb to tomb (end is disposal) Cradle to Cradle ( end is recycling) **