THE BARANGAY AND THE GOVERNMENT PROCUREMENT REFORM ACT

(Republic Act No.9184 s. 2003)

ARCHIMEDES C. ARTICULO, M.B.A., Ll. B., D.P.L.A.
Dean, College of Arts & Sciences
Vice-Chairman, University Bids & Awards Committee
Con-current Head, Bids & Awards Committee Secretariat
Cagayan State University
Andrews & Carig Campus
1. Introduction
The call for the Philippine government to rationalize and harmonize its
procurement system with international standards and best practices was
positively, and finally, responded to by the government in January, 2003 with the
passage of the Government Procurement Reform Act (GPRA) or Republic Act
No. 9184 (RA 9184).
The new procurement law espoused the principles of transparency,
competitiveness and accountability. It also mandates the use of streamlined
procurement processes and monitoring of government procurement activities
by the public.
One important breakthrough in the Government Procurement Reform Act
is the provision mandating all government agencies to utilize the Government
Electronic Procurement System (now the PhilGEPS http://www.philgeps.net) as
the single portal that shall serve as the primary source of information on all
government procurement.1 The procurement process across all government
agencies, from all branches of government, to local government units and
public schools and universities, now involves announcing and advertising all
procurement opportunities, inviting qualified parties to bid, evaluation of bids,
awarding of contracts, monitoring of delivery and performance and payment.
The whole process is recorded and posted electronically for others to see.

Sec. 8.1.1. on PROCUREMENT BY ELECTRONIC MEANS AND THE PHILIPPINE GOVERNMENT

ELECTRONIC PROCUREMENT SYSTEM (PHILGEPS), the law states that to promote transparency
and efficiency, information and communications technology shall be utilized in the conduct of
procurement procedures. Accordingly, there shall be a single portal that shall serve as the
primary source of information on all government procurement. The PhilGEPS shall serve as the
primary and definitive source of information on government procurement.

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On July 28, 2011, President Benigno S. Aquino III, issued Administrative

Order No. 17 on Directing the Use of the Procurement Service and the
Philippine Government Electronic Procurement System in Procurement Activities
in Accordance With Republic Act No. 9184, And Improving the Operation of the
Procurement Service. AO 17 prescribes coverage and compliance of
procurement rules even by Local Government Units.
We quote DBM Secretary Florencio B. Abad, when he announced the
savings and efficiencies that the government realized through Procurement
reforms:
With our present fiscal state, every peso should count. We are
encouraging all government departments and agencies, as well
as the local government units up to the barangay level, to use PS
and PhilGEPS so that their procurement will be cost-efficient, he
said.
But more than the cost benefits, PhilGEPS will enshrine
transparency and accountability in all government procurement
and minimize human intervention and discretion in the bidding
process. Technology will empower us to fulfil the promise of kung
walang corrupt, walang mahirap, he said. (DBM Press Release
Feb. 8, 2011)

While it is true that most Barangays have small procurements, nevertheless, the
reach of the procurement law covers even the smallest local government unit.
It is therefore important to understand the salient features of the Procurement
Law as they relate to the procurement activities of the Barangay.
2. SCOPE AND COVERAGE OF RA 9184

REPUBLIC ACT NO. 9184

GOVERNMENT PROCUREMENT REFORM ACT

REVISED RULES & REGULATIONS

OF R.A. No. 9184

SEC. 4. Scope and Application. This Act shall

apply to the Procurement of Infrastructure
Projects, Goods, and Consulting Services,
regardless of source of funds, whether local or
foreign, by all branches and instrumentalities of
government, its department, offices and
agencies,
including
government-owned

Section 4. Scope and Application of the IRR

4.1. This IRR shall apply to all procurement of
any
branch,
agency,
department,
bureau, office, or instrumentality of the
GOP,
including
government-owned
and/or controlled corporations (GOCCs),

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and/or controlled corporations and local

government units, subject to the provisions of
Commonwealth Act No. 1382. Any treaty or
international or executive agreement affecting
the subject matter of this Act to which the
Philippine government is a signatory shall be
observed.

government financial institutions (GFIs),

state universities and colleges (SUCs), and
local government units (LGUs).

3. PROCUREMENT PRINCIPLES
Why do we need to observe the new rules on government procurement?
The answer is enshrined in Section 3 of the rules as it declares that government
procurement must be guided by specific, to wit:
a) Transparency in the procurement process and in the implementation of
procurement contracts through wide dissemination of bid opportunities
and participation of pertinent non-government organizations.
b) Competitiveness by extending equal opportunity to enable private
contracting parties who are eligible and qualified to participate in public
bidding.
c) Streamlined procurement process that will uniformly apply to all
government procurement. The procurement process shall be simple and
made adaptable to advances in modern technology in order to ensure
an effective and efficient method.
d) System of accountability where 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 GOP are, when warranted by circumstances, investigated and
held liable for their actions relative thereto.
e) Public monitoring of the procurement process and the implementation of
awarded contracts with the end in view of guaranteeing that these
contracts are awarded pursuant to the provisions of the Act and this IRR,
and that all these contracts are performed strictly according to
specifications.

COMMONWEALTH ACT NO. 138 - AN ACT TO GIVE NATIVE PRODUCTS AND DOMESTIC ENTITIES
THE PREFERENCE IN THE PURCHASE OF ARTICLES FOR THE GOVERNMENT

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4. TERMS TO REMEMBER
Goods. Refer to all items, supplies, materials and general support services,
except consulting services and infrastructure projects, which may be
needed in the transaction of public businesses or in the pursuit of any
government undertaking, project or activity, whether in the nature of
equipment, furniture, stationery, materials for construction, or personal
property of any kind, including non-personal or contractual services, such
as, the repair and maintenance of equipment and furniture, as well as
trucking, hauling, janitorial, security, and related or analogous services, as
well as procurement of materials and supplies provided by the procuring
entity for such services. The term related or analogous services shall
include, but not be limited to, lease or purchase of office space, media
advertisements, health maintenance services, and other services
essential to the operation of the procuring entity.
Infrastructure Projects. Include the construction, improvement, rehabilitation,
demolition, repair, restoration or maintenance of roads and bridges,
railways, airports, seaports, communication facilities, civil works
components of information technology projects, irrigation, flood control
and drainage, water supply, sanitation, sewerage and solid waste
management
systems,
shore
protection,
energy/power
and
electrification facilities, national buildings, school buildings, hospital
buildings, and other related construction projects of the government. For
purposes of, and throughout this IRR, the term Infrastructure Projects
shall have the same meaning as, and shall be used interchangeably
with, civil works or works.
Consulting Services. Refer to services for infrastructure projects and other types
of projects or activities of the GOP requiring adequate external technical
and professional expertise that are beyond the capability and/or
capacity of the GOP to undertake such as, 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. General principles on
consulting services are provided for in Annex B of this IRR.
Procurement. Refers to the acquisition of goods, consulting services, and the
contracting for infrastructure projects by the procuring entity. In case of
projects involving mixed procurements, the nature of the procurement,
i.e., goods, infrastructure projects, or consulting services, shall be
determined based on the primary purpose of the contract. Procurement
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shall also include the lease of goods and real estate. With respect to real
property, its procurement shall be governed by the provisions of R.A. 8974
and other applicable laws, rules and regulations.
Procuring Entity. Refers to any branch, constitutional commission or office,
agency, department, bureau, office, or instrumentality of the GOP
(NGA), including GOCC, GFI, SUC and LGU procuring goods, consulting
services and infrastructure projects.
5. BAC COMPOSITION
Are the provisions of R.A. 9184 pertaining to BAC composition also
applicable to barangay units? Are all barangays obliged to create their own
BAC? Who are to be members of the barangay BAC?
Under R.A. 9184 and its IRR, all procuring entities, including barangays are
mandated to create at least one (1) BAC.
In relation to this, the GPPB has issued a resolution regarding the
composition of the BAC in the barangay level. According to Resolution 01 2004
that was issued by the GPPB, the BAC in barangay levels shall be composed of
five (5), but not more than seven (7) regular members of the Sangguniang
Barangay, except the Punong Barangay. The Punong Barangay, being the local
chief executive, shall designate the members of the BAC. The members shall
elect among themselves who shall act as the Chairman and Vice-Chairman.
In no case shall the Head of the Procuring Entity and/or the approving
authority be the Chairman or a member of the BAC (Read Sec. 11.2.5. of the
Revised IRR).
The Punong Barangay may suspend or remove a member of the BAC for
justifiable causes, including, but not limited to, violations of the provisions of the
R.A. 9184 or its IRR-A and the Anti-Graft and Corrupt Practices Act. The following
officials are disqualified from membership in the BAC:3
1) The Punong Barangay;
2) The Barangay Treasurer;
3) Other appointive barangay officials.

VOLUME 1. Guidelines on the Establishment of Procurement Systems and Organizations

download copy at http://www.gppb.gov.ph/downloadables/forms/GPM%20-%20Vol.1.pdf

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6. FUNCTIONS OF THE BAC

Sec. 12.1. of the Revised IRR provides following functions of the BAC:
1. advertise and/or post the invitation to bid/request for expressions of
interest;
2. conduct pre-procurement and pre-bid conferences;
3. determine the eligibility of prospective bidders;
4. receive bids;
5. conduct the evaluation of bids;
6. undertake post-qualification proceedings;
7. resolve motions for reconsideration;
8. recommend award of contracts to the Head of the Procuring Entity
or his duly authorized representative:
9. recommend the imposition of sanctions in accordance with Rule
XXIII;
10. recommend to the Head of the Procuring Entity the use of
Alternative Methods of Procurement as provided for in Rule XVI
hereof; and
11. perform such other related functions as may be necessary,
including the creation of a Technical Working Group (TWG) from a
pool of technical, financial, and/or legal experts to assist in the
procurement process, particularly in the eligibility screening,
evaluation of bids, and post-qualification.
As to Quorum during BAC meeting, the rule provides, a majority of the total
BAC composition as designated by the Head of the Procuring Entity shall
constitute a quorum for the transaction of business, provided that the presence
of the Chairman or Vice-Chairman shall be required (Read, Sec. 12.3. revised
IRR).
The Chairman or, in his absence, the Vice-Chairman, shall preside at all
meetings of the BAC. The decision of at least a majority of those present at a
meeting at which there is quorum shall be valid and binding as an act of the
BAC: Provided, however, That the Chairman or, in his absence, the ViceChairman, shall vote only in case of a tie. (See Sec. 12.4. of the Revised IRR).
7. THE BAC SECRETARIAT
The Head of the Procuring Entity shall create a Secretariat which will serve
as the main support unit of the BAC. In the Barangays, the Treasurer shall serve
as the Head of the Procurement Unit/Office.4
VOLUME 1. Guidelines on the Establishment of Procurement Systems and Organizations
download copy at http://www.gppb.gov.ph/downloadables/forms/GPM%20-%20Vol.1.pdf
4

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The Secretariat shall have the following functions and responsibilities:

(Read Sec. 14.1. of the Revised Rule)
1. Provide administrative support to the BAC;
2. Organize and make all necessary arrangements for BAC meetings and
conferences;
3. Prepare minutes of meetings and resolutions of the BAC;
4. Take custody of procurement documents and other records;
5. Manage the sale and distribution of Bidding Documents to interested
bidders;
6. Advertise and/or post bidding opportunities, including Bidding
Documents, and notices of awards;
7. Assist in managing the procurement processes;
8. Monitor procurement activities and milestones for proper reporting to
relevant agencies when required;
9. Consolidate PPMPs from various units of the procuring entity to make them
available for review; and
10. Act as the central channel of communications for the BAC with end users,
PMOs, other units of the line agency, other government agencies,
providers of goods, infrastructure projects, and consulting services,
observers, and the general public.
8. OBSERVERS
To enhance the transparency of the process, the BAC shall, in all stages of
the procurement process, invite, in addition to the representative of the COA, at
least two (2) observers, who shall not have the right to vote, to sit in its
proceedings.5
If this provision is violated, the entire BAC proceeding is invalid. However,
the absence of observers will not nullify the BAC proceedings, provided that
they have been duly invited in writing.6

13.1. of the Revised IRR. According to the rules, at least one (1) shall come from a duly
recognized private group in a sector or discipline relevant to the procurement at hand, for
example: For 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). For goods, a specific
relevant chamber-member of the Philippine Chamber of Commerce and Industry. For
consulting services, a project-related professional organization accredited or duly recognized
by the Professional Regulation Commission or the Supreme Court, such as, but not limited to:
(1) PICE; (2) Philippine Institute of Certified Public Accountants (PICPA); and (3) Confederation
of Filipino Consulting Organizations; and b) The other observer shall come from a nongovernment organization (NGO). Sec. 13 of the Revised Rule.
Sec. 13.1. of the Revised Rule

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9. PROCUREMENT PLANNING
Sec. 7.2. of the Revised IRR of R.A. 9184 states:
No procurement shall be undertaken unless it is in accordance
with the approved APP of the procuring entity. The APP shall bear
the approval of the Head of the Procuring Entity or second-ranking
official designated by the Head of the Procuring Entity to act on
his behalf, and must be consistent with its duly approved yearly
budget.[emphasis added]

How does the Annual Procurement Plan (APP) prepared? Section 7 of the
Revised IRR details the procedure, covering both procurement planning and
Budgeting Linkage. The rule states that the APP shall be formulated and revised
only in accordance with the following guidelines7:
1. At the start of every budget period, the procuring entity shall prepare its
proposed budget for the succeeding calendar year, taking into
consideration the budget framework for that year in order to reflect its
priorities and objectives for the budget period.8
2. The end-user units of the procuring entity shall prepare their respective
Project Procurement Management Plan (PPMP) for their different
programs, activities, and projects (PAPs). The PPMP shall include (See Sec.
7.3.2.):
a) information on whether PAPs will be contracted out,
implemented by administration in accordance with the
guidelines issued by the GPPB, or consigned;9
b) the type and objective of contract to be employed;
c) the extent/size of contract scopes/packages;

See Sec. 7.3.

See Sec. 7.3.1. Consistent with government fiscal discipline measures, only those considered
crucial to the efficient discharge of governmental functions shall be included in the Annual
Procurement Plan (APP). For purposes of this IRR, a procurement project shall be considered
crucial to the efficient discharge of governmental functions if it is required for the day-to-day
operations or is in pursuit of the principal mandate of the procuring entity concerned.
9 For purposes of this Section, consignment refers to an arrangement where the following
requisites are present: (a) delivery of goods by their owner (consignor), without sale, to a
government agency (consignee); (b) consignee must try to sell the goods and remit the price
of the sold goods to the consignor; (c) consignee accepts without any liability except for
failure to reasonably protect them from damage; (d) no disbursement of government funds is
involved; and (e) at terms not disadvantageous to the GOP.
7
8

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d) the procurement methods to be adopted, and indicating if the

procurement tasks are to be outsourced as provided in Section
53.6 of this IRR;
e) the time schedule for each procurement activity and for the
contract implementation; and
f) The estimated budget for the general components of the
contract.
Note that the term end-user units refer to sub-offices of the Barangay,
for instance, the Barangay council, the Lupon, the Office of the Barangay
Captain, etc. which, in the performance of their official functions, may
require goods, such as office supplies and/ or equipments.
3. The PPMP shall then be submitted to the procuring entitys Budget Office.
The procuring entitys Budget Office shall evaluate each end-users
submitted PPMP and, if warranted, include it in the procuring entitys
budget proposal for approval by the Head of the Procuring Entity.10
4. After the budget proposal has been approved by the Head of the
Procuring Entity and/or other oversight bodies, the procuring entitys
budget office shall furnish a copy of the procuring entitys budget
proposal as well as the corresponding PPMPs to the BAC Secretariat for its
review and consolidation into the proposed APP.;11
5. The proposed APP shall be consistent with the procuring entitys budget
proposal.
6. As soon as the GAA, corporate budget, or appropriation ordinance, as
the case may be, becomes final, the end-user units shall revise and adjust
the PPMP to reflect the budgetary allocation for their respective PAPs.
The revised PPMPs shall be submitted to the BAC, through its Secretariat,
for the finalization of the modes of procurement under the proposed APP. The
APP shall then be approved in accordance with Section 7.2 of this IRR. (See Sec.
7.3.5.).
10. UPDATING OF PROCUREMENT PLAN
Note that the PPMP is not fixed. It may be updated from time to time.
10
11

See Sec. 7.3.3.

See Sec. 7.3.4.

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Under the rules, updating of the individual PPMPs and the consolidated
APP for each procuring entity shall be undertaken every six (6) months or as
often as may be required by the Head of the Procuring Entity. The updating of
the PPMPs shall be the responsibility of the respective end-user units of the
Procuring Entities, while the consolidation of these PPMPs into an APP shall be
lodged with the BAC Secretariat, subject to approval of the Head of the
Procuring Entity. (Read Sec. 7.4. of the Revised IRR).12
We may ask, how about procurements in emergency cases? Will they be
included in the plan? Under the rules, yes. Although we cannot identify the
specific nature of the items to be procured under emergency procurement, at
least we could anticipate, based on experience, that there are circumstances
that procurements are unanticipated.
The APP shall include provisions for foreseeable emergencies based on
historical records (Sec. 7.1., Ibid.).
11. COMPETITIVE BIDDING
The Procurement law declares that all procurement shall be done through
competitive bidding, except as provided in Rule XVI of this IRR (read Section 10).
Steps in Public Bidding:
1. Pre-Procurement Conference13: Prior to the advertisement or the issuance
of the Invitation to Bid/Request for Expression of Interest for each
procurement undertaken through a public bidding, the BAC, shall call for
a pre-procurement conference to perform, among others, the following:
to confirm the description and scope of the contract, the ABC, and
contract duration; to ensure that the procurement is in accordance with
the project and annual procurement plans; and determine the readiness
of the procurement at hand;14
Note, the ABC as reflected in the APP or PPMP shall be at all times consistent with the
appropriations for the project authorized in the GAA, continuing, and automatic
appropriations, the corporate budget, and the appropriation ordinance, as the case may be.
For NGAs, to facilitate the immediate implementation of projects even pending approval of
the GAA, the ABC shall be based on the budget levels the proposed national budget
submitted by the President to Congress. (See Sec. 7.5., R-IRR)
13
See Sec. 20 of the Revised IRR
14 Others include, d) Review, modify and agree on the criteria for eligibility screening, evaluation,
and post-qualification; e) Review and adopt the procurement schedule, including deadlines
12

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2. Advertising and Contents of the Invitation to Bid/Request for Expression of

Interest15: The Invitation to Bid/Request for Expression of Interest shall
provide prospective bidders the relevant information about the
procurement at hand. As per Section 21.2., the IAEB should be advertised
observing the following guidelines:
2.1. If the contract to be bid has an approved budget of more than two
Million Pesos (P2,000,000.00) for the procurement of goods, more
than Five Million Pesos (P5,000,000.00) for the procurement of
infrastructure projects, and more than One Million Pesos
(P1,000,000.00) or those whose duration is more than four (4) months
for the procurement of consulting services, the invitation to bid must
be advertised in at least one (1) newspaper of general nationwide
circulation which has been regularly published for at least two (2)
years before the date of issue of the advertisement. If the ABC is less
than the aforementioned, this requirement may be dispensed with;
2.2. IAEB to be posted continuously in the PhilGEPS website for seven (7)
calendar days starting on date of advertisement,
2.3. IAEB to be posted continuously in the website of the procuring entity
concerned, if available, for seven (7) calendar days starting on
date of advertisement; and
2.4. IAEB to be posted at any conspicuous place reserved for this
purpose in the premises of the procuring entity concerned for seven
(7) calendar days, if applicable, as certified by the head of the BAC
Secretariat of the procuring entity concerned. 16
3. Pre-bid Conference17: If the contract to be bid is less than One Million
Pesos, this stage may be dispensed with. The pre-bid conference shall
discuss, among other things, the eligibility requirements and the technical
and financial components of the contract to be bid. Attendance of the
bidders shall not be mandatory. However, only those who have

15
16

17

and timeframes, for the different activities; and f) Reiterate and emphasize the importance of
confidentiality, in accordance with Section 19 of this IRR, and the applicable sanctions and
penalties, as well as agree on measures to ensure compliance with the foregoing. Note,
however, that as per Section 20.2. of the Rules, the holding of a pre-procurement conference
may not be required for small procurements, i.e., procurement of goods costing Two Million
Pesos (P2,000,000.00) and below, procurement of infrastructure projects costing Five Million
Pesos (P5,000,000.00) and below, and procurement of consulting services costing One Million
Pesos (P1,000,000.00) and below;
Section 21 of the Revised Rules
Advertisement of the Invitation to Bid/Request for Expression of Interest in a newspaper of
general nationwide circulation provided in Section 21.2.1(a) shall not be required for. Sec.
21.2.2. of the Revised Rules.
Section 22, Revised IRR

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purchased the Bidding Documents shall be allowed to participate in the

pre-bid conference and raise or submit written queries or clarifications.
4. Submission, Receipt, and Evaluation of Bids18: Only the BAC, through the
BAC Secretariat, is authorized to receive bids. Under the new rule, the two
envelope system is adopted. The first envelope contains the Eligibility and
Technical documents and the second envelope contains the financial
proposal. The BAC shall open the bids at the time, date, and place
specified in the Bidding Documents. The bidders or their duly authorized
representatives may attend the opening of bids. The BAC shall adopt a
procedure for ensuring the integrity, security, and confidentiality of all
submitted bids. The minutes of the bid opening shall be made available to
the public upon written request and payment of a specified fee to
recover cost of materials.
5. Post-Qualification19: The Lowest Calculated Bid/Highest Rated Bid shall
undergo post-qualification in order to determine whether the bidder
concerned complies with and is responsive to all the requirements and
conditions as specified in the Bidding Documents.
6. Notice and Execution of Award20: It involves the issuance of Notice of PostQualification if the bidder passes the Post-Qualification, Notice of Award,
once the bidder posts performance security, the Signing of Contract, and
Notice to Proceed.
Note that under Section 46, on Lease Contracts, the procurement law
provides that the the lease of construction and office equipment, including
computers, communication and information technology equipment, are subject
to the same public bidding and to the processes prescribed under the Act and
this IRR.
Lease may also cover lease purchases or lease-to-own and similar
variations.

18

Sections 25 to 30 of the Revised IRR

See Sec. 34
20
See Section 37, of the Revised IRR
19

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12. ALTERNATIVE MODE OF PROCUREMENT

It is emphasized that:
1. As a general rule, the mode of procurement should be Public Bidding, in
accordance with Section 10 of the Revised IRR. Alternative methods shall
be resorted to only in the highly exceptional cases provided for in this
Rule. (Read Section 48.2. of the Revised IRR);
2. Alternative modes of procurement can only be used when:
2.1. There is a prior approval from the Head of the Procuring Entity;
2.2. Conditions provided in the procurement law, justifying the use of the
alternative mode, exist (Read Sec. 48.1.);
2.3. If the original mode of procurement recommended in the APP was
public bidding but cannot be ultimately pursued (Sec. 48.3.), and
justified as such by the BAC via resolution, and approved by the
HOPE.
3. The conditions on the use of the Alternative Mode of Procurement, as per
Section 54 of the Revised IRR, are properly observed, to wit:
3.1. Splitting of Government Contracts (Read Sec. 54.1.) Splitting of
Government Contracts means the division or breaking up of GOP
contracts into smaller quantities and amounts, or dividing contract
implementation into artificial phases or sub-contracts for the
purpose of evading or circumventing the requirements of law and
this IRR, especially the necessity of public bidding and the
requirements for the alternative methods of procurement.
3.2.

Invitation or request for submission of price quotations is posted/

advertised continuously, for a period of seven (7) calendar days, in
the PhilGEPS website, the website of the procuring entity
concerned, if available; and at any conspicuous place reserved for
this purpose in the premises of the procuring entity (Read Sec. 54.2.),
for the following alternative modes:
3.2.1. Shopping under Sections 52.1 (b)
3.2.2. Negotiated Procurement under Section 53.1 (two-failed
biddings)
3.2.3. Negotiated Procurement under Sections 53.9 (small value
procurement)

3.3.

Notice of award in all instances of alternative methods of

procurement shall be posted, for information purposes, in the
PhilGEPS website, the website of the procuring entity concerned, if
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available, and at any conspicuous place reserved for this purpose

in the premises of the procuring entity (Read Sec. 54.3.);
3.4.

Posting of bid securities for alternative mode of procurement is not

required, except for Limited Source Bidding (Sec. 54.4.);

3.5.

Performance and warranty securities, as prescribed in Sections 39

and 62 of the IRR, shall be submitted for contracts acquired through
the alternative methods of procurement, except for the following
(read Sec. 54.5.):
3.5.1. Shopping under Section 52;
3.5.2. Negotiated Procurement under Sections 53.2 (emergency
cases),
3.5.3. Negotiated Procurement under Sec. 53.9 (small value
procurement),
3.5.4. Negotiated Procurement under Sec. 53.10 (lease of real
property), and
3.5.5. Negotiated Procurement under Sec. 53.13 (UN agencies).

In all instances, the procuring entity shall ensure that the most
advantageous price for the Government is obtained (Read Sec. 48.1. of the
revised IRR).
What follows are the different alternative modes of procurement:
LIMITED SOURCE BIDDING
(UNDER SEC. 49)
As a Mode: Limited Source Bidding, otherwise known as selective bidding, is a
method of procurement of goods and consulting services that
involves direct invitation to bid by the procuring entity from the list of
pre-selected suppliers or consultants with known experience and
proven capability on the requirements of the particular contract.
Conditions of Use: This alternative method of procurement may be employed
under any of the following conditions:
1. Procurement of highly specialized types of goods (e.g., sophisticated
defense equipment, complex air navigation systems, coal) and consulting
services where only a few suppliers or consultants are known to be
available, such that resorting to the public bidding method will not likely
result in any additional suppliers or consultants participating in the
bidding; or
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2. Procurement of major plant components where it is deemed

advantageous to limit the bidding to known qualified bidders in order to
maintain uniform quality and performance of the plant as a whole.
DIRECT CONTRACTING
(Under Section 50)
As a Mode: Direct Contracting or single source procurement is a method of
procurement of goods that does not require elaborate Bidding
Documents. The supplier is simply asked to submit a price quotation
or a pro-forma invoice together with the conditions of sale. The offer
may be accepted immediately or after some negotiations.
Conditions of Use: Direct contracting may be resorted to by concerned
Procuring Entities under any of the following conditions:
1. Procurement of goods of proprietary nature which can be obtained only
from the proprietary source, i.e. when patents, trade secrets, and
copyrights prohibit others from manufacturing the same item;
2. When the procurement of critical plant components from a specific
supplier is a condition precedent to hold a contractor to guarantee its
project performance, in accordance with the provisions of its contract; or
3. Those sold by an exclusive dealer or manufacturer which does not have
sub-dealers selling at lower prices and for which no suitable substitute can
be obtained at more advantageous terms to the GOP.
REPEAT ORDER
(Under Section 51)
As a Mode: Repeat Order, when provided for in the APP, is a method of
procurement of goods from the previous winning bidder, whenever
there is a need to replenish goods procured under a contract
previously awarded through Competitive Bidding.
Conditions for Use: Repeat orders shall likewise be subject to the following
conditions:

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1. Unit prices of the repeat order must be the same as or lower than those in
the original contract, provided that such prices are still the most
advantageous to the GOP after price verification;
2. The repeat order will not result in splitting of contracts, requisitions, or
purchase orders, as provided for in Section 54.1 of this IRR;
3. Except in cases duly approved by the GPPB, the repeat order shall be
availed of only within six (6) months from the contract effectivity date
stated in the Notice to Proceed arising from the original contract; and
4. The repeat order shall not exceed twenty-five percent (25%) of the
quantity of each item in the original contract.
SHOPPING
(Under Section 52)
As a Mode: Shopping is a method of procurement of goods whereby the
procuring entity simply requests for the submission of price
quotations
for
readily
available off-the-shelf
goods
or
ordinary/regular equipment to be procured directly from suppliers
of known qualifications.
Conditions for Use: This method of procurement shall be employed in any of the
following cases:
1. When there is an unforeseen contingency requiring immediate purchase:
Provided, however, that the amount shall not exceed the thresholds
prescribed in Annex H of this IRR.

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2. Procurement of ordinary or regular office supplies and equipment not

available in the Procurement Service involving an amount not exceeding
the thresholds prescribed in Annex H of this IRR.

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Section 52.3. of the Revised Rule states that:

Under Section 52.1 (b) of this IRR, at least three (3) price
quotations from bona fide suppliers shall be obtained.

The submission of three (3) quotations applies only to Shopping (b) and
not to Sopping under emergency cases (Shopping [a]).
Important Terms/Phrases/Words to remember when using Shopping as a Mode:
1. The phrase ordinary or regular office supplies shall be understood to
include those supplies, commodities, or materials which, depending on
the procuring entitys mandate and nature of operations, are
necessary in the transaction of its official businesses, and consumed in
the day-to-day operations of said procuring entity (Read Sec. 52.2).
2. The phrase ordinary or regular office supplies does not include
services such as repair and maintenance of equipment and furniture,
as well as trucking, hauling, janitorial, security, and related or
analogous services.
NEGOTIATED PROCUREMENT21
(Under Section 53)
As a Mode: Negotiated Procurement is a method of procurement of goods,
infrastructure projects and consulting services, whereby the
procuring entity directly negotiates a contract with a technically,
legally and financially capable supplier, contractor or consultant.
Conditions for Use: Negotiated Procurement may only be used in any of the
following cases:
1. Two Failed Biddings (Read Sec. 53.1). Where there has been failure of
public bidding for the second time as provided in Section 35 of the Act
and this IRR.

21

For purposes of this Paper, the following modes are excluded from this section: Agency-toAgency (Sec. 53.5), Procurement Agent (Sec. 53.6), Highly Technical Consultants (Sec. 53.7)
Defense Cooperation Agreement (Sec. 53.8). the Revised Rules to learn more about this
modes.

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2. Emergency Cases22, this form of negotiated procurement may only be

used when any of the following conditions are present:
2.1. In case of imminent danger to life or property during a state of
calamity, or
2.2. When time is of the essence arising from:
2.2.1. Natural or man-made calamities or
2.2.2. Other causes where immediate action is necessary to
prevent damage to or loss of life or property, or to restore vital
public services, infrastructure facilities and other public
utilities.
Note that in the case of infrastructure projects, the procuring entity has
the option to undertake the project through negotiated procurement or
by administration or, in high security risk areas, through the AFP.
3. Take-Over of Contracts23. Take-over of contracts, which have been
rescinded or terminated for causes provided for in the contract and
existing laws, where immediate action is necessary to prevent damage to
or loss of life or property, or to restore vital public services, infrastructure
facilities and other public utilities.
4. Adjacent or Contiguous24. Where the subject contract is adjacent or
contiguous to an on-going Infrastructure Project or Consulting Service
where the consultants have unique experience and expertise to deliver
the required service: Provided, however, that:
4.1.
4.2.
4.3.
4.4.
4.5.
4.6.
4.7.

The original contract is the result of a Competitive Bidding;

The subject contract to be negotiated has similar or related scopes
of work;
It is within the contracting capacity of the contractor/consultant;
The contractor/consultant uses the same prices or lower unit prices
as in the original contract less mobilization cost;
The amount involved does not exceed the amount of the ongoing
project; and
The contractor/consultant has no negative slippage/delay;
Negotiations for the procurement are commenced before the
expiry of the original contract.

Sec. 53.2
Sec. 53.3
24 Sec. 53.4
22
23

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5. Small Value Procurement25. Where the procurement does not fall under
Shopping in Section 52 of this IRR and the amount involved does not
exceed the thresholds prescribed in Annex H of this IRR.
A good example where this form may be used is the procurement of a
Barangay electric generator with an ABC, for instance, of 20,000 and
procured for a purpose and reason other than unforeseen contingency.
The generator is not an office supply, but equipment. Since shopping (b)
covers on regular and ordinary office supplies, the generator does not fall
under Shopping, and since the ABC does not exceed 50,000, which is the
threshold prescribed for Barangays under Annex H of the Revised Rules,
the procurement, therefore, qualifies for Small Value Procurement.
13. OFFENSES AND PENALTIES
Imposable penalties under the Procurement Law are of three (3) kinds,
Criminal26, Civil27, and Administrative28.
We will limit our attention to the criminal penalty imposable on erring public
officers.
Under the law, the criminal penalty is imprisonment of not less than six (6) years
and one (1) day, but not more than fifteen (15) years, without prejudice to the
provisions of R.A. 3019 and other penal laws, to public officers who commit any
of the following acts:
1.1. Opening any sealed bid including but not limited to Bids that may
have been submitted through the electronic system and any and
all documents required to be sealed or divulging their contents,
prior to the appointed time for the public opening of Bids or other
documents.
1.2.

Delaying, without justifiable cause, the screening for eligibility,

opening of bids, evaluation and post evaluation of bids, and
awarding of contracts beyond the prescribed periods of action
provided for in this IRR.

Sec. 53.9
Sec. 65
27 Sections 67 and 68
28 Sec. 69
25
26

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1.3.

Unduly influencing or exerting undue pressure on any member of

the BAC or any officer or employee of the procuring entity to take a
particular action which favors, or tends to favor a particular bidder.

1.4.

Splitting of contracts which exceed procedural purchase limits to

avoid competitive bidding or to circumvent the limits of approving
or procurement authority.

1.5.

Abuse by the Head of the Procuring Entity of his power to reject any
and all bids as mentioned under Section 41 of the Act and this IRR,
with manifest preference to any bidder who is closely related to him
in accordance with Section 47 of the Act and this IRR.

According to the rules, when any of the foregoing acts is done in collusion with
private individuals, the private individuals shall likewise be liable for the offense.
In addition, the public officer involved shall also suffer the penalty of temporary
disqualification from public office, while the private individual shall be
permanently disqualified from transacting business with the Government.29
14. FINAL NOTES
In a 2008 case, the Supreme Court struck down as void the Manila International
Airport Authoritys authority to enter into negotiated contracts for its janitorial
and maintenance services without holding a public bidding, it said:
The rationale behind the requirement of a public bidding, as a mode of
awarding government contracts, is to ensure that the people get maximum
benefits and quality services from the contracts. More significantly, the strict
compliance with the requirements of a public bidding echoes the call for
transparency in government transactions and accountability of public officers.
Public biddings are intended to minimize occasions for corruption and
temptations to abuse of discretion on the part of government authorities in
awarding contracts.30

If we, in the Barangay, endeavor to observe, as best as we could, in light of our

circumstances and individual realities, the provisions of the procurement law,
then, we could send a strong message across our polity that responsible
governance, through accountable government procurement, is a doable ideal
that is possible in the grassroots level.

29
30

Sec. 65.2.
MIAA, et al vs. Gana, et al. G.R. No. 146184-85. January 31, 2008

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