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GUIDE IN THE AUDIT OF PROCUREMENT

(First Update December 2009)


with focus on the

Government Procurement Policy Board (GPPB) Circular No.


01-2009 dated January 22, 2009

Revised Implementing Rules and Regulations (IRR) of R.A. No.


9184 approved per GPPB Resolution No. 03-2009 dated July 22,
2009

Amendments to the Revised IRR of R.A. No. 9184 approved per


GPPB Resolution No. 06-2009 dated September 30, 2009

Public Bidding Documents 3rd Edition (October 2009) approved


per GPPB Resolution No. 05-2009 dated September 30, 2009

Guidelines for Shopping and Small-Value Procurement


approved per GPPB Resolution No. 09-2009 dated 23 November
2009

Amendments to the Revised IRR of RA 9184 approved per GPPB


Resolution No. 11-2009 dated 30 November 2009

Amendments to the Revised IRR of RA 9184 approved per GPPB


Resolution No. 13-2009 dated 16 December 2009

Technical Services Office


Special Services Sector
Commission on Audit
Republic of the Philippines
Prepared by: GUIDE IN THE AUDIT OF PROCUREMENT
Technical Services Office First Update - December 2009
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Special Services Sector
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Republic of the Philippines
TABLE OF CONTENTS

Page

COA Memorandum adopting the Guide in the Audit of Procurement

Title page i
Acknowledgments ii
Table of Contents iv

I INTRODUCTION 1

The Development of the Audit Guide 2


Objectives of the Audit Guide 3
Scope and Limitations of the Audit Guide 3

II GENERAL INSTRUCTIONS ON THE USE OF THE GUIDE 7

III GUIDE IN THE AUDIT OF PROCUREMENT 10

On the Basic Elements

Bids and Awards Committee (BAC) 11


Bids and Awards Committees Secretariat 24
Annual Procurement Plan (APP) 29
Bids and Awards Committees Observers 35
Bids and Awards Committees Technical Working Group (TWG) 39
Customized Bidding Documents for Goods 42
Customized Bidding Documents for Infrastructure Projects 51
Customized Bidding Documents for Consulting Services 60

On the Procurement Procedures

COMPETITIVE / PUBLIC BIDDING FOR THE PROCUREMENT


75
OF GOODS
I. Bidding Documents 76
II. Pre-Procurement Conference 80
III. Advertising and Posting of the Invitation to Bid 87
IV. Posting of the Invitation to Bid 90
Issuance of Bidding Documents for the Procurement of
V. 93
Goods
VI. Pre-Bid Conference 96
VII. Supplemental / Bid Bulletins for the Procurement of Goods 103
VIII. Submission, Receipt, Opening of Bids and Preliminary
107
Examination of Bids for the Procurement of Goods
IX. Bid Evaluation for the Procurement of Goods 128

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TABLE OF CONTENTS

X. Post-Qualification for the Procurement of Goods 137


XI. Award of Contract for the Procurement of Goods 153
XII. Failure of Bidding Declared By the BAC 169
XIII. Failure of Bidding Declared by the HOPE 175

ALTERNATIVE METHODS OF PROCUREMENT FOR GOODS 179


Limited Source Bidding 180
Direct Contracting 193
Repeat Order 202
Shopping 208
Negotiated Procurements
After Two (2) Failed Biddings 218
Emergency 244
Agency To Agency 249
Small Value Procurement 251
Defense Cooperation Agreement 262
United Nations Agencies 264

COMPETITIVE / PUBLIC BIDDING FOR THE PROCUREMENT


266
INFRASTRUCURE PROJECTS
I. Bidding Documents 267
II. Pre-Procurement Conference 271
III. Advertising and Posting of the Invitation to Bid 279
IV. Posting of the Invitation to Bid 283
V. Issuance Of Bidding Documents for the Procurement of
286
Infrastructure Project
VI. Pre-Bid Conference 289
VII. Supplemental / Bid Bulletins for the Procurement of
296
Infrastructure Project
Submission, Receipt, Opening Of Bids And Preliminary
VIII. Examination of Bids for the Procurement of Infrastructure 301
Project
IX. Bid Evaluation 318
X. Post Qualification 327
XI. Award of Contract 349
XII. Failure of Bidding Declared by the BAC 366
XIII. Failure of Bidding Declared By the HOPE
373

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TABLE OF CONTENTS

ALTERNATIVE METHODS OF PROCUREMENT FOR


INFRASTRUCTURE PROJECT 377
Negotiated Procurements:
After Two (2) Failed Biddings 378
Emergency Cases 406
Take Over of Contracts 411
Adjacent or Contiguous 421
Community Participation 431
Small-Value Procurement 437
Non-Governmental Organizations (NGOs) Participation 446

COMPETITIVE / PUBLIC BIDDING FOR THE PROCUREMENT OF


448
CONSULTING SERVICES
I. Bidding Documents 449
II. Pre-Procurement Conference 453
III. Advertising and Posting of the Request for Expression of Interest 461
IV. Posting of Request for Expression of Interest 465
V. Issuance of Bidding Documents to Consultants 468
VI. Eligibility Checking & Short listing of Consultants 470
VII. Pre-Bid Conference 486
Supplemental / Bid Bulletins for the Procurement of Consulting
VIII. 492
Services
Submission, Receipt, Opening Of Bids And Preliminary
IX. Examination of Bids for the Procurement of Consulting Services 497
(Using Quality-Based Evaluation Procedures)
Submission, Receipt, Opening of Bids and Preliminary
X. Examination of Bids for the Procurement of Consulting Services 521
(Using Quality-Cost Based Evaluation Procedures)
XI. Post Qualification 549
XII. Award of Contract 571
XIII. Failure of Bidding Declared by the BAC 588
XIV. Failure of Bidding Declared by the HOPE 594

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TABLE OF CONTENTS

ALTERNATIVE METHODS OF PROCUREMENT FOR


CONSULTING SERVICES 598
Limited Source Bidding 599
Negotiated Procurement
After Two (2) Failed Biddings 611
Emergency Cases 637
Take Over of Contracts 642
Adjacent or Contiguous 653
Agency-to-Agency 660
Highly Technical Consultants 662
Small Value Procurement 666

On Offenses and Sanctions / Penalties 676

APPENDICES

1 List of Risks Associated with Procurement

2 Guidelines Clarifying the Procurement Activities which may be Undertaken Without


an Issued Allotment as approved through Government Procurement Policy Board
(GPPB) Circular 01-09 dated January 20, 2009

3 Revised Implementing Rules and Regulations (IRR) of Republic Act No. 9184 which
became effective in September 2, 2009 as approved through Government
Procurement Policy Board (GPPB) Resolution No. 03-2009 dated 22 July 2009

4 Amendments to the Revised Implementing Rules and Regulations (IRR) of Republic


Act No. 9184 as approved through Government Procurement Policy Board (GPPB)
Resolution No. 06-2009 dated 30 September 2009

5 Philippine Bidding Documents for the Procurement of Goods, 3rd Edition as approved
through Government Procurement Policy Board (GPPB) Resolution No. 05-2009
dated 30 September 2009

6 Philippine Bidding Documents for the Procurement of Infrastructure Projects,


3rd Edition as approved through Government Procurement Policy Board (GPPB)
Resolution No. 05-2009 dated 30 September 2009

7 Philippine Bidding Documents for the Procurement of Consulting Services, 3rd Edition
as approved through Government Procurement Policy Board (GPPB) Resolution No.
05-2009 dated 30 September 2009

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8 Approving by Referendum, the Guidelines for Shopping and Small-Value


Procurement through Government Procurement Policy Board (GPPB) Resolution No.
09-2009 dated 23 November 2009

9 Approving Amendments to the Revised Implementing Rules and Regulations of


Republic Act No. 9184 through Government Procurement Policy Board (GPPB)
Resolution No. 11-2009 dated 30 November 2009

10 Approving Amendments to the Revised Implementing Rules and Regulations of


Republic Act No. 9184 through Government Procurement Policy Board (GPPB)
Resolution No. 13-2009 dated 16 December 2009

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I. INTRODUCTION

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A. THE DEVELOPMENT OF THE GUIDE

The magnitude of the operations of the Government makes it undoubtedly the


biggest buyer of infrastructure projects, goods and services in the country. The billions of
pesos annually spent to buy the goods and services needed in its day-to-day activities
represent a significant percentage of government expenditures.

The volume of public expenditure passing through the public procurement system
has increased rapidly in the last few years. Averaging around P121 billion per year from
2003 to 2005, procurement expenditure jumped to P168 billion when the Governments
infrastructure program kicked off in 2006, and increased further to P229 billion by 2007. a

The money spent to finance these procurements came from various sources
including foreign borrowing and as such must have been used with prudence. However,
news of procurement transactions allegedly tainted with fraud had been hugging the
headlines incessantly.

In its continuing efforts to promote good governance the Government has


enacted laws on procurement, the latest of which is Republic Act No. 9184 otherwise
known as the Government Procurement Reform Act. This Act provides for the
Modernization, Standardization and Regulation of the Procurement Activities of the
Government and For Other Purposes and took effect on January 26, 2003, while its
Implementing Rules and Regulations Part A (IRR-A) took effect on 8 October 2003.

After five (5) years of implementation, much progress has been made in
procurement reforms in terms of rules and regulations but implementation and
enforcement are still weak, and the objectives of the reform have not been fully
achieved. This scenario is consistent with perceptions of a high level of corruption in
procurement and with the SWS survey findings that only 13 percent of the public is
aware of the new procurement law and its intended benefits.b

As to the assessment on the Internal Control and Audit, the finding is that
procurement audit is not yet given enough focus in most of the audit programs because
most auditors have inadequate knowledge of the law, its implementing rules, the
harmonized bidding documents and contract forms, and the procurement manuals; and
there is no procurement audit guide to act as the basis for including procurement audit in
the annual audit program. Most auditors are not trained to carry out risk-based audit
tailored for risk management. Recommendation: A procurement audit guide should be
developed and implemented by COA with particular focus on the audit of the
implementation of the GPRA. A training program on procurement should be developed
and implemented for auditors with the procurement audit guide as a training material,
and both the guide and the training should include a risk-based approach to audit. c

The 1987 Constitution provides for an independent Commission on Audit (COA)


that has the power to audit all accounts pertaining to government funds nationwide,
including procurement-related transactions. The Government Auditing Code (PD 1445)
empowers COA to determine policies, promulgate rules and regulations, and prescribe
standards governing the performance of its powers and functions and realizing the need
to address the Country Procurement Assessment Report (CPAR) findings and
recommendation, development of this Guide in the Audit of Procurement is imperative.
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B. OBJECTIVES OF THE GUIDE

This Guide is intended as a reference and guidance material for COA


auditors in planning for, conducting and reporting on the results of the audit on the area
of procurement.

COA Auditors are provided with e-copies of this Guide to enable them to
immediately utilize the audit matrices as working papers in their audits. They may also
modify some aspects of these audit matrices to fit their particular needs. In the process,
each individual auditors copy of the Guide becomes unique to him/her as it reflects
enhancements which he/she built into the Guide with constant use.

Under a risk-based audit approach, audit foci, objectives and audit techniques are
identified through a risk-assessment process which auditors perform following existing
COA regulations. For the purpose of this Guide, audit foci, audit objectives/sub-
objectives, audit techniques, and even suggested audit working papers have been
developed with no particular risk in mind. Auditors may adopt portions of the Guide
which they consider appropriate for their risk-based audit purposes. To aid auditors in
their risk assessment activities, a list of risks associated with procurement have been
developed and included in this Guide as APPENDIX 1.

It is hoped that as Auditors use this Guide they will identify other risks which are
specific to their auditee entities and analyze them to identify the appropriate audit
criteria, develop the appropriate audit objectives, identify the audit techniques, develop
the audit programs and design the audit working papers.

Auditors are encouraged to provide feedback for improvement, through the COA
Directors who have supervision over them, including the inclusion in this Guide of the
risks, audit objectives, audit techniques, audit programs, and audit working papers they
have developed.

The public is likewise encouraged to provide feedback to improve the Guide,


either through any COA auditor they are acquainted with or through the COA Website:
http://www.coa.gov.ph.

From the feedback and the continuing policy study, this Guide is expected to
evolve through updates which will be issued as they are developed.

C. SCOPE AND LIMITATIONS OF THE GUIDE

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 also includes the lease of goods and real estate. With respect to
real property, its procurement shall be governed by the provisions of Republic Act No.
8974 and other applicable laws, rules and regulations.d

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This Guide in the Audit of Procurement will neither cover the entire gamut of
procurement nor all possible related risks that could be subject to audit.

The scope of the Guide is limited to the following:

1. Elements of Procurement
a. Annual Procurement Plan (APP)
b. Bids and Awards Committee (BAC)
c. BAC Observers
d. BAC Secretariat
e. BAC Technical Working Group (TWG)
f. Bidding Documents

2. Procurement Processes:
a. Competitive Bidding (from Bidding Documents to Award of
Contract) for Procurement of Goods
b. Alternative Methods of Procurement for Goods
c. Competitive Bidding (from Bidding Documents to Award of
Contract) for Procurement of Infrastructure Projects
d. Alternative Methods of Procurement for Infrastructure Projects
e. Competitive Bidding (from Bidding Documents to Award of
Contract) for Procurement of Consulting Services
f. Alternative Methods of Procurement for Consulting Services

3. Offenses and Penalties

The Guide may be used as a reference in the:

evaluation of compliance with the requirements of applicable laws, rules and


regulations which is a component of the auditorial review provided in COA Circular No.
2009-001 dated February 12, 2009 on the subject: Restatement with Amendments of
COA Circular No. 87-278 and COA Memorandum 2005-027 re: submission of copy of
government contracts, purchase orders and their supporting documents to the
Commission on Audit,

review of bidding procedures, necessity and validity of other alternative


modes of procurement and manner of award to the winning bidder/contractor and such
other relevant requirements provided in RA No. 9184 and its implementing rules and
regulations provided in item 4.3.6 of COA Circular No. 2009-002 dated May 18, 2009
dated May 18, 2009 on the subject: Reinstituting Selective Pre-Audit on Government
Transactions.

The extent of audit that can be conducted based on the Guide will be limited to
the specific elements (areas/foci), procurements processes, audit objectives/sub-
objectives and audit activities mentioned in the various components of the Guide.

The audit criteria used in the Guide are those prevailing at the time of the
development of the Guide as follows:

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1. Guidelines Clarifying the Procurement Activities which may be Undertaken
Without an Issued Allotment, approved per Government Procurement Policy
Board (GPPB) Circular No. 01-2009 dated January 22, 2009 (attached to this
Guide as APPENDIX 2);

2. Revised Implementing Rules and Regulations (IRR) of R.A. No. 9184,


approved per Government Procurement Policy Board (GPPB) Resolution No.
03-2009 dated July 22, 2009 (attached to this Guide as APPENDIX 3);

3. Amendments to the Revised IRR approved per Government Procurement


Policy Board (GPPB) Resolution No. 06-2009 dated September 30, 2009
(attached to this Guide as APPENDIX 4);

4. Philippine Bidding Documents 3rd Edition (October 2009) approved per GPPB
Resolution No. 05-2009 dated September 30, 2009 (attached to this Guide as
APPENDIX 5);

5. Approving by Referendum, the Guidelines for Shopping and Small-Value


Procurement approved per Government Procurement Policy Board (GPPB)
Resolution No. 09-2009 dated 23 November 2009 (attached to this Guide as
APPENDIX 6);

6. Amendments to the Revised IRR approved per GPPB Resolution No. 11-2009
dated 30 November 2009 (attached to this Guide as APPENDIX 7);

7. Amendments to the Revised IRR approved per Government Procurement


Policy Board (GPPB) Resolution No. 13-2009 dated 16 December 2009
(attached to this Guide as APPENDIX 8).

Amendments, revisions, repeal, and other changes in the above-mentioned law,


rules and regulations will have the effect of correspondingly changing the affected
portions of this Guide. Users of this Guide should therefore apprise themselves of the
laws/regulations prevailing as of the time of planning for, execution of, and reporting on
the audit and correspondingly modify the portions of the Guide affected by such
amendments, revisions, repeal, and other changes in the above-mentioned law, rules and
regulations. For the purpose, they may avail of the internet facilities of the GPPB:

www.gppb.gov.ph

gppb@gppb.gov.ph

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END NOTES

a. World Banks Country Procurement Assessment Report (Philippines) 2008, p. 14

b. World Banks Country Procurement Assessment Report (Philippines) 2008, p. 17

c. World Banks Country Procurement Assessment Report (Philippines) 2008, p. 37

d. Section 5(n), Republic Act No. 9184 otherwise known as the Government
Procurement Reform Act (GPRA) which became effective in January 26, 2003

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II. GENERAL INSTRUCTIONS ON THE USE OF THE GUIDE

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Following are the steps to be considered by the user of this Guide:

Step 1 Determine the audit areas and audit objectives based on Risk Assessment
pursuant to existing regulations and/or on requirements of other regulations
(e.g. COA Circular No. 2009-002 on selective pre-audit).

Procurement as defined in R.A. No. 9184 should be identified as an audit area.


The audit sub-areas should likewise be identified. The Table of Contents of this
Audit Guide will be useful for the purpose of identifying these audit sub-areas.

For each sub-area, the audit objectives shall be identified based on the risks
determined during the Risk Assessment and/or based on the requirements of
existing regulations (e.g. COA Circular No. 2009-002 on selective pre-audit).

Step 2 - Determine the audit scope (e.g. For Financial/Compliance Audit procurement
activities and transactions subject to audit during a calendar year).

Step 3 Determine the audit criteria that are relevant to the identified risks and audit
scope.

The audit criteria identified in the Audit Guide were the IRR of RA No. 9184 and
GPPB issuances prevailing during the time of the development of the Guide. For
his/her specific audit scope, the auditor shall determine versions of RA 9184, its
IRR and GPPB issuances and identify those that are applicable to the
procurements subject of his/her audit.

If no changes/updates have occurred, the Audit Guide may be used as is.

Otherwise, the audit criteria as quoted in the first column of the audit matrices of
this Guide shall be changed to reflect those that are applicable to the audit scope.

Step 4 Determine the audit sub-objectives.

The audit sub-objectives in the first column of the audit matrices shall correspond
to the identified audit objective(s) and the audit criteria identified in Step 3 above.

Step 5 Determine the audit activities that will attain the audit sub-objectives.

The Audit Activities identified in the Guide are mere suggestions and may be
substituted by the auditor with more effective, efficient, and economical activities
which are more workable under his/her specific audit situation.

Step 6 Determine the audit questions that will match the audit sub-objectives.

The audit questions in the 3rd column of the audit matrices of this Guide shall be
changed to correspond to the identified audit sub-objectives.

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It is suggested that the auditor be proactive in the sense that he/she should have
already conducted auditorial review on the audit sub-areas that will impact on the
succeeding sub-areas and/or audit sub-objectives where audit findings/conclusions of
non-compliance will result in audit decisions leading to the recommendations of
imposition of sanctions on liable/responsible persons and/or recommendations of
recovery of pecuniary losses on the part of the Procuring Entity.

The Guide is to be used according to the following sequence:

At any time during the Audit Period prior to Any Procurement

1st: Basic Element Bids and Awards Committee (BAC)

2nd: Basic Element - BAC Secretariat

3rd: Basic Element Annual Procurement Plan (APP)

4th: Basic Element Customized Bidding Documents

During Specific Procurements

5th: Basic Element BAC Observers

6th: Basic Element BAC Technical Working Group (TWG)

7th: Procurement Process - depending on the item to be procured, i.e.,


goods, infrastructure projects or consulting services & depending on the
method of procurement, i.e., competitive bidding or alternative method
of procurement

Upon discovery of non-compliances either through the Procurement


Monitoring Reports or during the audit conducted

Offenses and Penalties

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III. GUIDE IN THE AUDIT OF PROCUREMENT

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On the Basic Element:

BIDS AND AWARDS COMMITTEE (BAC)

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BASIC ELEMENT BIDS AND AWARDS COMMITTEE

A. AUDIT OBJECTIVES:

1. To verify the existence of the Bids and Awards Committee (BAC),

2. To verify if the BAC composition is in accordance with laws/regulations,

3. To verify if the term of members of the BAC is fixed at one (1) year reckoned from the
date of appointment.

4. To verify if the BAC prepared a procurement monitoring report as required by


regulations and had it approved by the Head of the Procuring Entity for submission to the
GPPB within the required timeline.

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

List of documents needed (those applicable to the procurements subject of audit for the audit period):

1. Appointment of the Head of the Procuring Entity (HOPE), if an individual;


2. Office Order of or the GOCC/GFI Board Resolution designating/authorizing a specific official to act on
his/her/their behalf;
3. Office Orders creating the previous BACs and the present BAC;
4. Office Orders designating the Chairman and Vice-Chairman of the BAC;
5. Office Orders designating the alternate members of the BAC;
6. Office Orders of replacements and evidences of absence of the BAC members they are replacing and
the period of absence (e.g. approved applications for leave);
7. Plantilla/Organizational Chart of the procuring entity;
8. Work History and evidences of training on procurement of BAC members;
9. Minutes of meeting of LGU BAC electing the Chairman and Vice-Chairman;
10. Approved Procurement Monitoring Reports;
11. Others as appropriate based on the audit sub-objective and audit activity.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
1. To verify if a Bids and Awards 1. From the documents Is there a BAC in
Committee (BAC) exists in the (e.g. Office Orders, the procuring
procuring entity Resolutions) relative to entity?
procurements to be
Implementing Rules and Regulations audited evidencing the
(IRR) of RA 9184, as amended on creation of the BAC, using
September 2, 2009: the one (1) year term
11.1.1 Each procuring entity shall from the creation of the
establish in its head office a single BAC BAC as basis, determine if
to undertake the functions specified in a BAC existed for the
Section 12 of the Revised IRR of RA procurements at hand or
9184 in order to facilitate for future procurements to
professionalization and harmonization be subject of audit.
of procedures and standards.

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Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer

2. To verify if the Head of the 2. Compare the Office Was the BAC
Procuring Entity (HOPE) was the Order(s) creating the created by the
one that created the BAC BAC(s) as follows: Head of the
Procuring Entity
Implementing Rules and Regulations a. Name and position of (HOPE)?
(IRR) of RA 9184, as amended on the signatory vs. the
September 2, 2009: name and position of
the HOPE per his
11.2.1 The Head of the Procuring Entity appointment/
shall designate at least five but not designating Office or
more than seven members of the BAC Assignment Order;
of unquestionable integrity and
procurement proficiency. b. In NGAs, constitutional
commissions or offices,
5 (t). Head of the Procuring Entity. and branches of
Refers to: (i) the head of the agency or government; and in
body, or his duly authorized official, for GOCCs, GFIs, and
NGAs and the constitutional SUCs, if the HOPE is
commissions or offices, and branches of not the signatory,
government; (ii) the governing board or
its duly authorized official, for GOCCs, Name and position of
GFIs and SUCs; or (iii) the local chief the signatory vs. the
executive for LGUs: Provided, however, name and position of
That in an agency, department, or the duly authorized
office where the procurement is official per Office Order
decentralized the head of its or Board Resolution
decentralized unit shall be considered designating him/her.
as the head of the Procuring Entity,
subject to the limitations and authority
delegated by the head of the agency,
department, or office.

3. To verify if the number of BAC 3. Compare the number Did the number of
members conforms to the of BAC members per BAC members
required number of at least 5 but Office Order(s) with the conform to the
required number. required number of
not more than 7
at least 5 but not
more than 7?
Implementing Rules and Regulations
(IRR) of RA 9184, as amended on
September 2, 2009: If the number of
11.2.1 The Head of the Procuring Entity BAC members is
shall designate at least five but not equal to the
more than seven members of the BAC minimum of 5, were
of unquestionable integrity and there only three (3)
procurement proficiency. regular members
and two (2)
provisional
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Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
members?

If the number of
BAC members is
equal to six (6),
were there:

a. three (3) regular


members and three
(3) provisional
members?
OR
b. at most four (4)
regular members
and two (2)
provisional
members?

If the number of
BAC members is
equal to the
maximum of seven
(7), were there:
a. three (3) regular
members and at
most four (4)
provisional
members?
OR
b. four (4) regular
members and three
(3) provisional
members?
OR
c. at most five (5)
regular members
and two (2)
provisional
members?
4. For head offices of National 4. Verify from the Office Was the BAC
Government Agencies/ GOCCs/GFIs, Order constituting the BAC Chairman
to verify if the qualifications of the if the Chairman was designated as such?
regular members of the BAC designated as such.
conform with the requirements: 5. Compare the rank and Was the BAC
a. Chairman - at least a third status of the BAC Chairman:
ranking permanent official of Chairman per Plantilla of
the Procuring Entity with a. at least a 3rd
the procuring entity;
the required at least 3rd ranking official of
b. representative of the Legal or the Procuring
Administrative area, at least a rank and permanent
status. Entity?
5th ranking permanent official
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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 14
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
of the procuring entity with b. of permanent
knowledge, experience and/or status?
expertise in procurement;
c. representative of the Finance 6. For Regular Members, Were Regular
area, at least a third ranking compare their rank and Members of the BAC
permanent official of the status per Plantilla of the at least 5th ranking
procuring entity with Procuring Entity with the officials of the
knowledge, experience and/or required at least 5th rank Procuring Entity?
and permanent status.
expertise in procurement
Implementing Rules and Regulations 7. For Regular Members, Were Regular
(IRR) of RA 9184, as amended on compare their status per Members of the BAC
September 2, 2009: Plantilla of the Procuring of permanent
Entity and per his/her status?
11.2.2. The BAC for NGAs, appointment, with the
departments, bureaus, offices, or required permanent
instrumentalities of the GOP, including status.
the judicial and legislative branches,
constitutional commissions, SUCs, 8. For Regular Members, Were Regular
GOCCs, and GFIs shall be composed of verify from their Work Members with
the following: History and training knowledge,
documents if they have experience and/or
Regular Members knowledge, experience expertise in
a. Chairman, who is at least a third and/or expertise in procurement?
ranking permanent official of the procurement;
procuring entity;
b. An officer, who is at least a fifth 9. For Regular Members, Was/Were there
ranking permanent official, with verify from their work Regular members
knowledge, experience and/or assignments if at the time representing the
expertise in procurement who, to the of designation the legal legal or
extent possible, represents the legal area or administrative administrative area
or administrative area of the areas and the financial of the Procuring
procuring entity, provided that in the area were represented. Entity?
case of bureaus, regional offices and
sub-regional/district offices, BAC Was/Were there
members shall be at least a third Regular members
ranking permanent personnel; representing the
c. An officer, who is at least a fifth financial area of the
ranking permanent official, with Procuring Entity?
knowledge, experience and/or
expertise in procurement who, to the
extent possible, represents the
finance area of the procuring entity,
provided that in the case of bureaus,
regional offices and sub-
regional/district offices, BAC
members shall be at least a third
ranking permanent personnel.

5. For bureaus, regional offices 10. Verify from the Office Was the BAC
and sub-regional/district offices Order constituting the BAC Chairman
of NGAs, departments, or if the Chairman was designated as such?
instrumentalities of the designated as such.
Government of the Philippines 11. Compare the rank Was the BAC
(GOP), including the judicial and and status of the BAC Chairman:
legislative branches, Chairman per Plantilla of
a. at least a 3rd
the Procuring Entitys
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Commission on Audit
Republic of the Philippines Page 15
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
constitutional commissions, bureau, regional office, ranking official of
SUCs, GOCCs, and GFIs, to verify if sub-regional office, or the Procuring
the qualifications of the regular district office with the Entitys bureau,
BAC members conform to the required at least 3rd rank regional office,
in said Office and sub-regional
requirements:
permanent status. office, or district
a. Chairman, at least a 3rd office?
ranking permanent official of
the procuring entity; b. of permanent
status?
b. Legal or Administrative area
representative, at least a 3rd 12. For Regular Members, Were Regular
ranking permanent official of compare their rank and Members of the BAC
the procuring entity with status per Plantilla of the at least 3rd ranking
knowledge, experience and/or Procuring Entitys bureau, officials of the
expertise in procurement; regional office, sub- Procuring Entitys
c. Finance area representative, at regional office, or district bureau, regional
office with the required at office, sub-regional
least a 3rd ranking permanent
least 3rd rank and office, or district
official of the procuring entity permanent status. office?
with knowledge, experience
and/or expertise in 13. For Regular Members, Were Regular
procurement compare their status per Members of the BAC
Plantilla of the Procuring of permanent
Implementing Rules and Regulations Entitys bureau, regional status?
(IRR) of RA 9184, as amended on office, sub-regional office,
September 2, 2009: or district office and per
his/her appointment, with
11.2.2. The BAC for NGAs, the required permanent
departments, bureaus, offices, or status.
instrumentalities of the GOP, including
the judicial and legislative branches, 14. For Regular Members, Were Regular
constitutional commissions, SUCs, verify from their Work Members with
GOCCs, and GFIs shall be composed of History and training knowledge,
the following: documents if they have experience and/or
knowledge, experience expertise in
Regular Members and/or expertise in procurement?
a. Chairman, who is at least a third procurement.
ranking permanent official of the
procuring entity; 15. For Regular Members, Was/Were there
b. An officer, who is at least a fifth verify from their work Regular members
ranking permanent official, with assignments if at the time representing the
knowledge, experience and/or of designation the legal legal or
expertise in procurement who, to the area or administrative administrative area
extent possible, represents the legal areas and the financial of the Procuring
or administrative area of the area of the Procuring Entitys bureau,
procuring entity, provided that in the Entitys bureau, regional regional office, sub-
case of bureaus, regional offices and office, sub-regional office, regional office, or
sub-regional/district offices, BAC or district office were district office?
members shall be at least a third represented.
ranking permanent personnel; Was/Were there
c. An officer, who is at least a fifth Regular members
ranking permanent official, with representing the
knowledge, experience and/or financial area of the
expertise in procurement who, to the Procuring Entitys
extent possible, represents the bureau, regional
finance area of the procuring entity, office, sub-regional
provided that in the case of bureaus, office, or district
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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 16
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
regional offices and sub- office?
regional/district offices, BAC
members shall be at least a third
ranking permanent personnel.

11.2.2.
The Chairman and the Vice-Chairman
shall also be designated by the Head of
the procuring entity. Moreover, the
Vice-Chairman shall be a regular
member of the BAC.

6. For National Government 16. Verify from the Office Was the BAC Vice-
Agencies/GOCCs/GFIs, to verify if Order if from among the Chairman
the Vice-Chairman was Regular Members of the designated as such
designated by the Head of the BAC, the Vice-Chairman from the regular
procuring entity from the was designated as such. members of the
BAC?
regular members of the BAC

Implementing Rules and Regulations


(IRR) of RA 9184, as amended on
September 2, 2009:
11.2.2.
The Chairman and the Vice-Chairman
shall also be designated by the Head of
the procuring entity. Moreover, the
Vice-Chairman shall be a regular
member of the BAC. For purposes of
this IRR, the term permanent shall
refer to a plantilla position within the
procuring entity concerned.

7. For local government units, to For Local Government


verify if the BAC is composed of Units (LGUs):
one representative each from the
regular offices under the Office 17. Compare the Office Are the members of
assignments as indicated the BAC from the
of the Local Chief Executive in the Appointment and regular offices
Assignment Documents of under the Office of
Implementing Rules and Regulations the designated members the Local Chief
(IRR) of RA 9184, as amended on of the BAC with the Executive?
September 2, 2009: regular Offices under the
11.2.3.The BAC for Local Government Office of the Local Chief
Units shall be composed of the Executive per LGUs
following: Organizational/ Functional
chart.
a. One representative each from the
regular offices under the Office of
the Local Chief Executive such as,
but not limited to, the following:
Office of the Administrator, Budget
Office, Legal Office, Engineering
Office, General Services Offices;
and
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Commission on Audit
Republic of the Philippines Page 17
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
b. A representative from the end user
unit.

8. For local government units, to For Local Government


verify if at least one of the Units (LGUs):
members represents the end-
18. Compare the Office Is there a
user unit
assignment of the representative in
designated member- the BAC from the
Implementing Rules and Regulations
representative-of-the-end end user unit?
(IRR) of RA 9184, as amended on user unit to the BAC as
September 2, 2009: indicated in the Office
11.2.3.The BAC for Local Government Order creating the BAC
Units shall be composed of the with the Office assignment
following: of the official as it appears
in the Appointment
a. One representative each from the documents/Assignment
regular offices under the Office of Order.
the Local Chief Executive such as,
but not limited to, the following:
Office of the Administrator, Budget
Office, Legal Office, Engineering
Office, General Services Offices;
and
b. A representative from the end user
unit.

9. For local government units, to For Local Government


verify if the members of the BAC Units (LGUs):
are personnel occupying plantilla
positions of the procuring entity 19. From the Appointment Did the members of
documents/Assignment the BAC occupy
concerned Orders of the members of plantilla positions of
Implementing Rules and Regulations the BAC obtain the procuring entity
(IRR) of RA 9184, as amended on information on their concerned?
September 2, 2009: respective position titles
and compare these with
11.2.3.The BAC for Local Government the Plantilla of the
Units shall be composed of the Procuring Entity.
following:
a.
b.

The members shall elect among


themselves who shall act as Chairman and
Vice-Chairman. The Chairman of the BAC
shall be at least a third ranking permanent
official of the procuring entity. The
members of the BAC shall be personnel
occupying plantilla positions of the
procuring entity concerned.

10. For local government units, For Local Government


to verify if the designated Units (LGUs):
members of the BAC elected 20. From the relevant
among themselves who shall act Did the members of
Minutes of meetings of the BAC elect
as Chairman and Vice-Chairman. the BAC, compare the
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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 18
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
name and position of the among themselves:
Implementing Rules and Regulations Chairman with the name
(IRR) of RA 9184, as amended on and position of the person a. the Chairman?
September 2, 2009: elected by the members
11.2.3.The BAC for Local Government from among themselves b. Vice Chairman?
Units shall be composed of the to act as Chairman and
following: Vice-Chairman.

a. 21. Compare the rank and Was the Chairman


b. status of the BAC of the BAC:
Chairman per Plantilla of
The members shall elect among the Procuring Entity with a. at least a 3rd
themselves who shall act as Chairman and the required at least 3rd ranking official of
Vice-Chairman. The Chairman of the BAC rank and permanent the procuring
shall be at least a third ranking permanent status. entity?
official of the procuring entity. The
members of the BAC shall be personnel b. a permanent
occupying plantilla positions of the official of the
procuring entity concerned. procuring entity?
11. To verify if designated 22. For alternate Were the
alternate members of the BAC members, compare the qualifications of
have the same qualifications as qualifications of designated alternate
designated alternate members of the BAC
their principals
members of the BAC with the same as the
Implementing Rules and Regulations the qualifications of their qualifications of
(IRR) of RA 9184, as amended on principals. their principals?
September 2, 2009:
11.2.4. The Head of the Procuring
Entity may designate alternate
members to the BAC, who shall have
the same qualifications as their
principals as set in the Act and this IRR.
The alternate members shall attend
meetings of the BAC and receive the
corresponding honoraria, whenever
their principals are absent. The
alternate members shall have the same
term as their principals. The
accountability of the principal and the
alternate member shall be limited to
their respective acts and decisions.

12. To verify if the members of 23. From the Office Was the term of all
the BAC have a fixed term of 1 Orders creating the members of the BAC
year reckoned from the date of previous BACs and the within the fixed
Office Order of the new term of one (1) year
appointment, renewable at the
BAC, compare the term of reckoned from the
discretion of the HOPE
all members of the BAC date of
Implementing Rules and Regulations with the fixed term of one appointment?
(IRR) of RA 9184, as amended on (1) year reckoned from
September 2, 2009: the date of appointment,
11.2.6. Unless sooner removed for a renewable at the
cause, the members of the BAC shall discretion of the Head of
have a fixed term of one (1) year the Procuring Entity.
reckoned from the date of appointment,
renewable at the discretion of the Head 24. For a BAC member Was the term of
designated to replace a replacements for

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 19
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
of the Procuring Entity. Upon expiration resigned, retired, reason of
of the terms of the current members, separated, transferred, re- resignation,
they shall continue to exercise their assigned, removed, or retirement,
functions until new BAC members are dead member, compare separation, transfer,
designated. In case of resignation, his/her term with the un- re-assignment,
retirement, separation, transfer, re- expired term. removal, or death
assignment, removal, or death, the within the un-
replacement shall serve only for the expired term only?
unexpired term: Provided, however,
That in case of leave or suspension, the 25. For a BAC member Was the term of
replacement shall serve only for the designated to replace a replacements for
duration of the leave or suspension. For member who went on reason of leave or
justifiable causes, a member shall be leave or was suspended, suspension within
suspended or removed by the Head of compare his/her term with the duration of the
the Procuring Entity. the duration of the leave said leave or
or suspension. suspension only?
13. To verify if the HOPE and/or 26. Compare the name Is the HOPE:
approving authority is not the and position of the Head
Chairman or a member of the BAC of the Procuring Entity a. NOT the
and/or the approving Chairman of the
Implementing Rules and Regulations authority (from BAC?
(IRR) of RA 9184, as amended on Appointment
September 2, 2009: documents/election AND
11.2.5. In no case shall the Head of the documents/relevant Office
Procuring Entity and/or the approving b. NOT a member
Orders/ Assignment
authority be the Chairman or a member of the BAC?
Orders) with the names
of the BAC. and positions of the
Chairman and all Is the approving
members of the BAC. authority:

a. NOT the
Chairman of the
BAC?

AND
b. NOT a member
of the BAC?

PROCUREMENT MONITORING REPORT


1. To verify if the BAC: 1. Based on approved Did the BAC prepare
a. prepared a procurement Procurement Monitoring the procurement
monitoring report in the form Reports and monitoring reports
communications on in the form
prescribed by the GPPB;
submissions (by the BAC prescribed by the
b. covering all procurement
to the HOPE and by the GPPB?
activities specified in the HOPE to the GPPB)
Annual Procurement Plan obtained from the BAC or
(APP), whether on-going and the Office of the HOPE
completed, from the holding of and on a copy of the form
the pre-procurement required by the GPPB,
conference to the issuance of determine if the Reports
the notice of award and the are in the form prescribed.
approval of the contract,
2. Based on approved Did the
including the standard and
Procurement Monitoring procurement
actual time for each major Reports and monitoring reports
procurement activity; communications on prepared by the
c. submitted the monitoring submissions (by the BAC BAC cover:
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Commission on Audit
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Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
report to the Head of the to the HOPE and by the
HOPE to the GPPB) a. all procurement
Procuring Entity (HOPE) for
obtained from the BAC or activities specified in
approval and submission to
the Office of the HOPE, the APP, whether
the GPPB in printed and on-going and
determine if the Reports
electronic format within 14 completed?
covered all the items
days after the end of each required.
semester b. from the holding
of the pre-
Implementing Rules and Regulations procurement
(IRR) of RA 9184, as amended on conference to the
September 2, 2009: issuance of the
12.2. The BAC shall be responsible for notice of award and
ensuring that the procuring entity abides the approval of the
by the standards set forth by the Act and contract?
this IRR, and it shall prepare a c. standard and
procurement monitoring report in the actual time for each
form prescribed by the GPPB. The major procurement
procurement monitoring report shall cover activity?
all procurement activities specified in the
3. Based on approved Did the BAC submit
APP, whether ongoing and completed,
Procurement Monitoring the procurement
from the holding of the pre-procurement
Reports and monitoring reports
conference to the issuance of notice of
communications on to the HOPE:
award and the approval of the contract,
submissions (by the BAC
including the standard and actual time for
to the HOPE and by the a. for approval?
each major procurement activity. The
HOPE to the GPPB)
procurement monitoring report shall be
obtained from the BAC or b. for submission to
approved and submitted by the Head of
the Office of the HOPE, the GPPB in both
the Procuring Entity to the GPPB in
verify if the Reports were printed and
printed and electronic format within
submitted by the BAC to electronic format?
fourteen (14) calendar days after the end
the HOPE for approval
of each semester.
and submission to the c. for submission to
GPPB in both printed and the GPPB within 14
Annex C electronic format within calendar days after
Period of Action on Procurement 14 calendar days after the end of each
Activities the end of each semester. semester?

2. To verify if the HOPE: 4. Based on approved Did the HOPE


Procurement Monitoring approve
a. approved the Procurement Reports and procurement
Monitoring Report and communications on monitoring reports?
submissions by the HOPE
b. submitted it to the GPPB in to the GPPB obtained from
printed and electronic format the BAC or the Office of Did the HOPE
within 14 days after the end of the HOPE, verify if the submit the
each semester Reports were approved by procurement
the HOPE and submitted monitoring reports
Implementing Rules and Regulations to the GPPB in both to the GPPB in both
(IRR) of RA 9184, as amended on printed and electronic printed and
September 2, 2009: format within 14 calendar electronic format?
12.2. The procurement monitoring days after the end of
report shall be approved and submitted by each semester.
the Head of the Procuring Entity to the Did the HOPE
GPPB in printed and electronic format submit the
within fourteen (14) calendar days after approved
the end of each semester. procurement
monitoring reports
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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 21
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
to the GPPB
within 14 calendar
days after the end
of each semester?

3. To verify if appropriate actions 5. Identify instances of Were appropriate


have been taken by the HOPE noncompliance actions taken by the
in case of instances of discovered by the BAC auditee in regard to
and/or by the HOPE in instances of non-
noncompliance committed by
the Procurement compliance?
the BAC, BAC TWG, BAC Monitoring Report;
Secretariat and/or bidders and, instances of
noncompliance noted
during the course of
the audit.

Look for
information/documents on
the actions taken by the
auditee in regard to such
non-compliances and
compare these with the
actions required by the
Revised IRR of RA 9184
and other relevant
regulations.

4. To verify what actions have 6. Request for Did the GPPB take
been taken by the GPPB in information from the action on instances
regard to instances of GPPB on the actions of noncompliance
they have taken on involving the
noncompliance
instances of auditee, including
noncompliance non-submission of
Implementing Rules and Regulations involving the auditee, the Procurement
(IRR) of RA 9184, as amended on including non- Monitoring Report?
September 2, 2009: submission of the
63.1. The Government Procurement Procurement
Policy Board (GPPB), as established in Monitoring Report.
Section 63 of the Act, shall have the
following duties and responsibilities:
a.

d. To ensure the proper
implementation by procuring entities
of the Act, this IRR and all other
relevant rules and regulations
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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 22
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
pertaining to public procurement.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of Appropriate Audit Working Papers
instances of non-compliance on non-compliances to
the: establish the effects and
develop appropriate audit
a. validity of the designation of
recommendations.
the BAC members/Chairman/
Vice-Chairman;

b. validity of the actions of the


BAC including the validity of
the resulting contract;
c. validity of any payment to be
made on the basis of the
contract;
d. etc.
and make appropriate audit
recommendations
2. To verify the causes of Analyze the instances of Appropriate Audit Working Papers
instances of non-compliance and non-compliances to
make appropriate audit establish the cause(s) and
develop appropriate audit
recommendations
recommendations.
3. To communicate the results of Prepare the appropriate
the audit with management audit/ validation document Audit Observation Memorandum (AOM), if
reflecting the results of applicable
COA Circular No. 2009-006 dated the audit/validation and
September 15, 2009 re- Prescribing the transmit to management
Use of the Rules and Regulations on
Settlement of Accounts

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Commission on Audit
Republic of the Philippines Page 23
On the Basic Element:

BIDS AND AWARDS COMMITTEEs SECRETARIAT

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Commission on Audit
Republic of the Philippines Page 24
BASIC ELEMENT BAC SECRETARIAT

A. AUDIT OBJECTIVES:

1. To verify the existence of the Bids and Awards Committee (BAC) Secretariat

2. To verify if the BAC Secretariat was constituted as required by law/regulations

3. To verify if the designated Head of the BAC Secretariat is qualified

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

List of documents needed (those applicable to the procurements subject of audit for the audit period):

1. Appointment of the Head of the Procuring Entity (HOPE), if an individual;


2. Office Order of or the GOCC/GFI Board Resolution designating/authorizing a specific official to act on
his/her/their behalf;
3. Office Orders creating the BAC Secretariat;
4. Office Order designating the Head of the BAC Secretariat;
5. Office Orders designating the alternate members of the BAC;
6. Plantilla/Organizational Chart of the procuring entity;
7. Work History and evidences of training on procurement of the Head of the BAC Secretariat;
8. Others as appropriate based on the audit sub-objective and audit activity.

Suggested Audit Working Paper


Audit Sub-objective
Audit Activities Particulars
Audit Criteria
Audit Question Yes No of the
Answer
1.To verify if the procuring 1. Compare the Office Order Was the BAC
entitys Bids and Awards creating the BAC Secretariat Secretariat
Committee (BAC) as follows: constituted by the
Secretariat was constituted Head of the
a. Name and position of the Procuring Entity?
by the Head of the
signatory vs. the name
Procuring Entity and position of the HOPE
per his/her/their
Implementing Rules and appointment(s);
Regulations (IRR) of RA 9184, as
amended on September 2, 2009: b. In NGAs, constitutional
14.1 The HOPE shall create a commissions or offices,
Secretariat which will serve as the and branches of
main support unit of the BAC. An government; and in
existing organic office within the GOCCs, GFIs, and SUCs,
procuring entity may also be if the HOPE is not the
designated to serve as Secretariat. signatory,
However, to strengthen and
promote the professionalization of Name and position of the
the organizations procuring unit, signatory vs. the name
the HOPE may create procurement and position of the duly
units that may serve concurrently authorized official per
as BAC Secretariat in accordance Office Order or Board
with the guidelines issued by the Resolution designating
DBM him/her.

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Commission on Audit
Republic of the Philippines Page 25
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Particulars
Audit Criteria
Audit Question Yes No of the
Answer
2. To verify if the BAC 2. Identify the method of Was the BAC
Secretariat was created: creation and the functions of Secretariat created:
a. as a Secretariat to serve the BAC Secretariat from the
Office Order and compare a. as a Secretariat
as the main support unit
with the requirements of to serve as the
of the BAC, regulations. main support
b. by designating an unit of the BAC?
existing organic office
within the procuring b. by designating an
entity, existing organic
c. or by creating a office within the
procurement unit to procuring entity?
serve concurrently as
BAC Secretariat OR
c. by creating a
in accordance with the
procurement unit
guidelines issued by the to serve
DBM concurrently as
BAC Secretariat
Implementing Rules and in accordance
Regulations (IRR) of RA 9184, as with the
amended on September 2, 2009: guidelines issued
by the DBM?
14.1 The HOPE shall create a
Secretariat which will serve as the
main support unit of the BAC. An
existing organic office within the
procuring entity may also be
designated to serve as Secretariat.
However, to strengthen and
promote the professionalization of
the organizations procuring unit,
the HOPE may create procurement
units that may serve concurrently
as BAC Secretariat in accordance
with the guidelines issued by the
DBM

NOTE: The guidelines available


are those in Budget Circular No.
2007 -3 dated November 29,
2007, Budget Circular No.
2004-5A dated October 7, 2005
and Budget Circular No. 2004-5
dated March 23, 2004 on the
Grant of honoraria to
Government Personnel Involved
in Government Procurement.

3. To verify if the Head of 3. In the head office of the Was the Head of the
the BAC Secretariat met the Procuring Entity: BAC Secretariat at
following qualifications: least a fifth ranking
a. at least a fifth ranking Compare the rank and official in the head
status of the Head of the office?
permanent employee or,
BAC Secretariat per
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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 26
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Particulars
Audit Criteria
Audit Question Yes No of the
Answer
if not available, a Plantilla of the Procuring If a 5th ranking
permanent official of the Entity with the required official is not
next lower rank; at least 5th rank (or if not available, was the
available, a next lower Head of the BAC
b. at least a third ranking
rank) and permanent Secretariat at least
permanent employee in status of the next lower
bureaus, regional offices rank official in the
and sub-regional/ district head office?
offices, or if not Was the Head of the
available, a permanent BAC Secretariat a
employee of the next permanent official in
lower rank; the head office?
c. possesses integrity; 4. In bureaus, regional
d. possesses procurement offices and sub-regional/
proficiency district offices of the
Procuring Entity:
Implementing Rules and
Regulations (IRR) of RA 9184, as Compare the rank and Was the Head of the
amended on September 2, 2009: status of the Head of the BAC Secretariat at
14.2 The head of the Secretariat in BAC Secretariat per least a 3rd ranking
central offices shall be at least a Plantilla of the official in bureaus,
fifth ranking permanent organizational unit regional offices and
employee or, if not available, a concerned of the sub-regional/ district
permanent official of the next Procuring Entity with the offices?
lower rank; or shall be at least a required at least 3rd rank
third ranking permanent (or if not available, a next If a 3rd ranking
employee in bureaus, regional lower rank) and official is not
offices and sub-regional/ district permanent status available, was the
offices, or if not available, a Head of the BAC
permanent employee of the Secretariat at least
next lower rank. In addition to of the next lower
integrity, heads of Procuring rank official in the
Entities shall consider bureaus, regional
procurement proficiency as a offices and sub-
factor in designating the head of regional/ district
the Secretariat and Procurement offices?
Unit
Was the Head of the
BAC Secretariat a
permanent official in
the bureaus,
regional offices and
sub-regional/ district
offices?

5. Identify the criteria / Did the procuring


method adopted by the entity consider
procuring entity in integrity as a factor
considering integrity as in designating the
a factor in designating Head of the BAC
the Head of the BAC Secretariat?
Secretariat.

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 27
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Particulars
Audit Criteria
Audit Question Yes No of the
Answer
6. From the Work History Did the Head of the
and training documents BAC Secretariat
of the Head of the BAC possess
Secretariat verify if procurement
he/she has procurement proficiency?
proficiency.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of Appropriate Audit Working Papers
instances of non- non-compliances to establish
compliance and make the effects and develop
appropriate audit
appropriate audit
recommendations.
recommendations
2. To verify the causes of Analyze the instances of Appropriate Audit Working Papers
instances of non- non-compliances to establish
compliance and make the cause(s) and develop
appropriate audit
appropriate audit
recommendations.
recommendations
3.To communicate the Prepare the appropriate
results of the audit with audit/ validation document Audit Observation Memorandum (AOM), if
management reflecting the results of the applicable
audit/validation and transmit
to management
COA Circular No. 2009-006 dated
September 15, 2009 re-
Prescribing the Use of the Rules
and Regulations on Settlement of
Accounts

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 28
On the Basic Element:

ANNUAL PROCUREMENT PLAN


(APP)

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 29
BASIC ELEMENT - ANNUAL PROCUREMENT PLAN (APP)

A. AUDIT OBJECTIVES:

1. To verify the existence of an approved Annual Procurement Plan (APP) and supporting
Project Procurement Management Plans (PPMPs)

2. To verify the completeness of the required information in the APP

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

List of Documents needed:


1. Budget approved by the HOPE (could be the Budget Proposal approved by the HOPE if the
GAA, corporate budget or budget ordinance has not yet become final);
2. Approved APP with supporting PPMPs based on the final budget per GAA, corporate
budget, or budget ordinance (could be the initial approved APP based on the approved
budget proposal when the budget has not yet become final);
3. Copy of the report on the review of the PPMPs conducted by the BAC Secretariat
pertaining to the finalization of the modes of procurement under the APP;
4. Relevant portions of the GAA (national government) or corporate budget (GOCCs & GFIs)
or budget ordinance (LGUs);
5. Appointment document of the HOPE;
6. Office order designating the official to act on behalf of the HOPE, if applicable;
7. Organizational Chart/Plantilla or other document with information on the rank of the
designated official;
8. Approved updated APP with supporting PPMPs;
9. Updated budget approved by the HOPE or the designated second-ranking official;
10. Authority for the supplemental/updated budget (appropriation document for the
supplemental appropriation, supplemental or updated corporate budget, supplemental or
updated budget resolution).

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
1. To verify if the 1. Upon approval of the Does the entity
procuring entity has an budget proposal by the have a proposed
Annual Procurement Plan HOPE, obtain a copy of APP?
the proposed APP from
(APP)
the BAC Secretariat.
Implementing Rules and OR
Regulations (IRR) of RA 9184,
as amended on September 2, When the GAA, Does the entity
2009: corporate budget, or have an approved
7.3.2. The end-user units appropriation ordinance, APP?
shall prepare their respective as the case may be,
PPMPs becomes final, obtain a
7.3.4. budget office shall copy of the approved APP
furnish a copy of the from the BAC Secretariat.
procuring entitys budget
proposal as well as the
corresponding PPMPs to the
BAC Secretariat for its review
and consolidation into the
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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 30
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
proposed APP
7.3.5. 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
Sec 7.2 of this IRR.

2. To verify if the APP is 2. Compare the name, Is the APP


approved by the HOPE or position, and designation approved by the
by a second-ranking of the person who HOPE or second-
approved the APP with the ranking official
official designated by the
relevant data in the designated by the
HOPE to act on his behalf appointment document of HOPE to act on his
the HOPE. behalf?
Implementing Rules and
Regulations (IRR) of RA 9184, 2.1. If the signatory is not
as amended on September 2, the HOPE, compare the
2009: name, position, and
7.2. The APP shall bear the designation of the person
approval of the HOPE or who approved the APP
second ranking official with the relevant data in
designated by the HOPE to the office order
act on his behalf, and must designating the official to
be consistent with its duly act on behalf of the HOPE.
approved yearly budget
2.2. Compare the rank of
the designated official
with the second-in-rank
per Organizational
Structure / Plantilla of the
procuring entity.

3. To verify if the APP 3. From the APP, look for Does the APP
contains the following the following information: contain the
information: following
a. name of the information:
a. name of the procurement program/
procurement project; a. name of the
b. project management procurement
program/ project;
office or end-user unit; program/ project?
b. project management c. general description of
office or end-user the procurement;
unit; d. procurement method to b. project
c. general description of be adopted; management office
the procurement; e. time schedule for each or end-user unit?
d. procurement method procurement activity;
to be adopted; f. source of fund;
e. time schedule for g. approved budget for c. general
the contract. description of the
each procurement
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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 31
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
activity; procurement?
f. source of fund;
g. approved budget for d. procurement
method to be
the contract.
adopted?
GPPB Circular 1-2009 dated
20 January 2009: e. time schedule
for each
3.2. Annual Procurement procurement
Plan (APP) the requisite activity?
document that the agency
must prepare to reflect the
entire procurement activity f. source of fund?
(i.e., goods, services, civil
works to be procured) that
it plans to undertake within g. approved
the calendar year. This budget for the
document contains the contract?
following information:
3.2.1. Name of the
procurement
program/project;
3.2.2. Project
management office or
end-user unit;
3.2.3. General description
of the procurement;
3.2.4. Procurement
method to be adopted;
3.2.5. Time schedule for
each procurement
activity;
3.2.6. Source of fund; and
3.2.7. Approved Budget
for the Contract.

4. To verify if the APP is 4. Upon approval of the Is the proposed


supported by PPMPs budget proposal by the APP supported by
prepared by the HOPE, obtain from the PPMPs prepared by
respective end-user units BAC Secretariat a copy the respective end-
each of the PPMPs which user units?
it reviewed and
Implementing Rules and consolidated into the
Regulations (IRR) of RA 9184, proposed APP.
as amended on September 2,
2009: Also obtain a copy of
7.3.2. The end-user units the report on the review
shall prepare their respective of the PPMPs conducted
PPMPs by the BAC Secretariat.
7.3.4. budget office shall
furnish a copy of the
procuring entitys budget OR
proposal as well as the
corresponding PPMPs to the When the GAA, Is the approved
BAC Secretariat for its review corporate budget, or APP supported by
and consolidation into the appropriation ordinance, adjusted PPMPs
proposed APP as the case may be, adjusted by end-
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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 32
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
7.3.5. end-user units shall becomes final, obtain from user units to reflect
revise and adjust the PPMP to the BAC Secretariat a copy the final budget?
reflect the budgetary each of the PPMPs
allocation for their respective adjusted by the end-user
PAPs. The revised PPMPs shall units which it consolidated
be submitted to the BAC into the approved APP.
through its Secretariat for the
finalization of the modes of Also obtain a copy of
procurement under the the report on the review
proposed APP of the PPMPs conducted
by the BAC Secretariat.

5. To verify if the items in 5. Compare the items in Are the items in


the approved APP were the approved APP with the the approved APP
included in the PPMPs items in the PPMPs. included in the
PPMPs?
Identify items which do
Implementing Rules and
not match.
Regulations (IRR) of RA 9184,
as amended on September 2,
2009:

7.3.2. The end-user units


shall prepare their respective
PPMPs
7.3.4. 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
7.3.5. 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

6. To verify if the APP 6. Compare the items and Does the APP
matches the budget per budgets in the GAA, match the budget
GAA, corporate budget, corporate budget, per GAA, corporate
appropriation ordinance, appropriation ordinance, budget,
as the case may be, with appropriation
as the case may be
the items and amounts in ordinance, as the
the approved APP. case may be?
Implementing Rules and
Regulations (IRR) of RA 9184,
as amended on September 2,
2009:
7.1. All procurement shall be
within the approved budget of
the procuring entity and
should be meticulously and
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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 33
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
judiciously planned by the
procuring entity.
7.2. No procurement shall be
undertaken unless it is in
accordance with the approved
APP of the procuring entity.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of Appropriate Audit Working Papers
instances of non- non-compliances to
compliance on the: establish the effects and
develop appropriate audit
recommendations.
a. validity of the
procurement activities
and outputs including
the validity of the
resulting contract;
b. validity of any
payment to be made
on the basis of the
contract;
c. etc.
and develop appropriate
audit recommendations
2. To verify the causes of Analyze the instances of Appropriate Audit Working Papers
instances of non- non-compliances to
compliance and develop establish the cause(s) and
develop appropriate audit
appropriate audit
recommendations.
recommendations

3. To communicate the Prepare the appropriate


results of the audit with audit/ validation document Audit Observation Memorandum (AOM), if applicable
the auditees reflecting the results of
Management the audit/validation and
transmit to Management
COA Circular No. 2009-006
dated September 15, 2009 re-
Prescribing the Use of the
Rules and Regulations on
Settlement of Accounts

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 34
On the Basic Element:

BIDS AND AWARDS COMMITTEEs


OBSERVERS

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 35
BASIC ELEMENT BAC OBSERVERS

A. AUDIT OBJECTIVES:

1. To verify if the BAC established a mechanism for identifying/selecting the group


(professional organizations; non-governmental organizations) from which Observers were
invited for specific procurements

2. To verify if the BAC implemented the mechanism and established the pool of professional
organizations and non-governmental organizations from which they will select representatives
as Observers in specific procurements

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

List of needed documents:


1. Copy of the Policy on the mechanism for identifying/selecting the group (professional
organizations; non-governmental organizations) from which Observers were invited
for specific procurements;
2. Relevant Minutes of the BACs meetings;
3. Documentation on the creation of the pool of relevant professional organizations and
non-governmental organizations;
4. Documentation on selection of representatives of each organization.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
1.To verify if the BAC 1. From the BAC Did the BAC establish a
established and is Secretariat, obtain a copy mechanism for
implementing a of the policy on the identifying/selecting the
mechanism for group (professional
mechanism for
identifying/selecting the organizations; non-
identifying/selecting the
group (professional governmental
group (professional organizations; non- organizations) from
organizations; non- governmental which Observers were
governmental organizations) from which invited for specific
organizations) from which Observers were invited for procurements?
Observers were invited for specific procurements.
specific procurements
2. Go through the policy Did the policy of the
Implementing Rules and and compare its provisions procuring entity on the
Regulations (IRR) of RA 9184, with the requirements of selection of Observers
the IRR of RA No. 9184 conform with the
as amended on September 2,
pertaining to the selection requirements of the IRR
2009: of Observers for specific of RA No. 9184
13.1. To enhance the procurements. pertaining to the
transparency of the process, selection of Observers
the BAC shall, in all stages of for specific
the procurement process, procurements as
invite, in addition to the follows:
representative of the COA, at
least two (2) observers, who a. One Observer from
shall not have the right to the Commission on
vote, to sit in its proceedings Audit?
where:
a) At least one (1) shall come b. One Observer from a
from a duly recognized duly recognized private
private group in a sector or group in a sector or
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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 36
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
discipline relevant to
discipline relevant to the the procurement at
procurement at hand, for hand?
example:
i) For infrastructure projects, c. One Observer from a
national associations of non-governmental
constructors duly organization?
recognized by the
Construction Industry
Authority of the Philippines d. The organization is
(CIAP), such as, but not registered with the SEC
limited to the following: or with the Cooperative
(1) Philippine Constructors Development Authority
Association, Inc.; (CDA)?
(2) National Constructors
Association of the
Philippines, Inc.; and e. The organizations
(3) Philippine Institute of representative has
Civil Engineers (PICE). knowledge, experience
or expertise in
ii) For goods, a specific
procurement or in the
relevant chamber-member of
subject matter of the
the Philippine Chamber of
contract to be bid?
Commerce and Industry.
iii) For consulting services, a
project-related professional f. The organization
organization accredited or and/or its
duly recognized by the representative has no
Professional Regulation actual or potential
Commission or the Supreme conflict of interest in the
Court, such as, but not limited contract to be bid?
to:
(1) PICE;
(2) Philippine Institute of g. Adopted other
Certified Public relevant criteria
Accountants (PICPA); determined by the BAC?
and
(3) Confederation of Filipino 3. Obtain and evaluate Did the BAC implement
Consulting Organizations; documents from the BAC the procuring entitys
and Secretariat evidencing mechanism for
implementation of the identifying/selecting
b) The other observer shall policy (e.g. relevant Observers for specific
come from a non-government Minutes of the BACs procurements?
organization (NGO). meetings, documentation
of the pool of relevant
13.2. The observers shall come professional organizations
from an organization duly and non-governmental
registered with the Securities organizations, invitation
and Exchange Commission letters).
(SEC) or the Cooperative
Development Authority (CDA),
and should meet the following
criteria:
a) Knowledge, experience or
expertise in procurement or in
the subject matter of the
contract to be bid;
b) Absence of actual or potential
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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 37
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
conflict of interest in the
contract to be bid; and
c) Any other relevant criteria
that may be determined by
the BAC.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of Appropriate Audit Working Papers
instances of non- non-compliances to
compliance on the: establish the effects and
develop appropriate audit
recommendations.
a. validity of the
procurement activities
and outputs including
the validity of the
resulting contract;
b. validity of any payment
to be made on the basis
of the contract;
c. etc.
and develop appropriate
audit recommendations
2. To verify the causes of Analyze the instances of Appropriate Audit Working Papers
instances of non- non-compliances to
compliance and develop establish the cause(s) and
develop appropriate audit
appropriate audit
recommendations.
recommendations

3. To communicate the Prepare the appropriate


results of the audit with audit/ validation document Audit Observation Memorandum (AOM), if applicable
the auditees Management reflecting the results of
the audit/validation and
transmit to Management
COA Circular No. 2009-006
dated September 15, 2009 re-
Prescribing the Use of the Rules
and Regulations on Settlement
of Accounts

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 38
On the Basic Element:

BIDS AND AWARDS COMMITTEEs


TECHNICAL WORKING GROUP
(TWG)

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 39
BASIC ELEMENT BAC Technical Working Group (TWG)

A. AUDIT OBJECTIVES:

1. To verify if the BAC established a mechanism for constituting the pool of technical,
financial, and/or legal experts from which they will identify/select members of the Technical
Working Group for specific procurements

2. To verify if the BAC implemented the mechanism and established the pool of
technical, financial, and/or legal experts from which they will identify/select members of
the Technical Working Group for specific procurements

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

List of needed documents:


1. Copy of the policy on the mechanism for constituting the pool of technical, financial, and/or
legal experts from which the BAC will identify/select members of the Technical Working
Group for specific procurements;
2. Relevant Minutes of the BACs meetings;
3. Documentation on the creation of the pool of technical, financial, and/or legal experts from
which the BAC will identify/select members of the Technical Working Group for specific
procurements.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of the
Answer
1.To verify if the BAC 1. From the BAC Did the BAC establish
established and is Secretariat, obtain a copy a mechanism for
implementing a of the policy on the identifying/selecting
mechanism for members of the
mechanism for
identifying/selecting Technical Working
identifying/selecting members of the Technical Group for specific
members of the Working Group for specific procurements?
Technical Working procurements.
Group for specific
procurements 2. Obtain documents from Did the BAC
the BAC Secretariat implement the
Implementing Rules and evidencing implementation procuring entitys
Regulations (IRR) of RA of the policy (e.g. relevant mechanism for
9184, as amended on Minutes of the BACs identifying/selecting
September 2, 2009: meetings, documentation members of the
of the pool of technical, Technical Working
12.1. The BAC shall have the financial, and/or legal Group for specific
following functions: (a) (k) experts, Office Orders procurements?
perform such other related creating TWGs for specific
functions as may be procurements) and verify if
necessary, including the as a result a pool of Was a pool of
creation of a Technical technical, financial, and/or technical, financial,
Working Group (TWG) from a legal experts has been and/or legal experts
pool of technical, financial, created from which created from which
and/or legal experts to assist members of TWGs for members of TWGs for
in the procurement process, specific procurements may specific procurements
particularly in the eligibility be selected. may be selected?
screening, evaluation of bids,
and post-qualification.

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 40
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of the
Answer

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects Analyze the instances of Appropriate Audit Working Papers
of instances of non- non-compliances to
compliance on the: establish the effects and
develop appropriate audit
recommendations.
a. validity of the
procurement
activities and
outputs including
the validity of the
resulting contract;
b. validity of any
payment to be made
on the basis of the
contract;
c. etc.
and develop
appropriate audit
recommendations
2. To verify the causes Analyze the instances of Appropriate Audit Working Papers
of instances of non- non-compliances to
compliance and establish the cause(s) and
develop appropriate audit
develop appropriate
recommendations.
audit
recommendations

3. To communicate the Prepare the appropriate


results of the audit audit/ validation document Audit Observation Memorandum (AOM), if applicable
with the auditees reflecting the results of the
audit/validation and
Management
transmit to Management
COA Circular No. 2009-006
dated September 15, 2009
re- Prescribing the Use of
the Rules and Regulations
on Settlement of Accounts

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 41
On the Basic Element:

CUSTOMIZED BIDDING DOCUMENTS


FOR GOODS

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 42
BASIC ELEMENT CUSTOMIZED BIDDING DOCUMENTS FOR GOODS

A. AUDIT OBJECTIVES:

1. To verify if the procuring entitys customized bidding documents for goods are complete

2. To verify if the forms and contents of the procuring entitys customized bidding documents
for goods are as prescribed by the GPPB

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed:
Customized Bidding Documents for Goods

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
1. To verify if the procuring 1. Request for the Did the procuring
entity adopted a set of customized bidding entity adopt a set of
customized bidding documents for goods customized bidding
from the BAC Secretariat. documents for goods?
documents for goods

Implementing Rules and


Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
17.1 The bidding documents
shall be prepared by the
procuring entity following the
standard forms and manuals
prescribed by the GPPB.
6.2 Once issued by the GPPB,
the use of the Generic
Procurement Manuals (GPMs),
Philippine Bidding Documents
(PBDs), and other standard
forms shall be mandatory upon
all Procuring Entities. However,
whenever necessary, to suit the
particular needs of the procuring
entity, modifications may be
made, particularly for major and
specialized procurement, subject
to the approval of the GPPB.

NOTE: If the Procuring Entity did not adopt a set of customized bidding documents for goods, the
succeeding Audit Sub-Objectives and related Activities need not be performed and the related
Audit Questions for this element need not be answered.
2.To verify if the set of 2. Compare the set of Are the items in the
customized bidding customized bidding customized bidding
documents for goods are documents for goods with documents for goods
complete, i.e., include the the Philippine Bidding complete when
Documents (PBDs) for compared with the
following: Procurement of Goods, items in the Philippine
a. Approved Budget for the 3rd edition, October 2009 Bidding Documents
Contract, approved by the GPPB (PBDs) for
b. Invitation to Bid per GPPB Resolution No. Procurement of
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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 43
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
c. Eligibility Requirements 05-2009 dated 30 Goods, 3rd edition,
d. Instructions to Bidders, September 2009 October 2009
including Scope of Bid, published by the
documents comprising GPPB?
the bid, criteria for
eligibility, bid evaluation
methodology/criteria in
accordance with the Act,
and post-qualification, as
well as the date, time and
place of the pre-bid
conference (where
applicable), submission of
bids and opening of bids
e. Technical Drawings and
Specifications
f. Form of Bid, Price Form,
and list of goods
g. Delivery Schedule
h. Form, amount, and
validity period of bid
security
i. Form, amount, and
validity of performance
security and warranty
j. Form of Contract and
General and Special
Conditions of Contract

Implementing Rules and


Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
17.1 The bidding documents
shall be prepared by the procuring
entity following the standard forms
and manuals prescribed by the
GPPB. The bidding documents shall
include the following:
a. Approved Budget for the
Contract
b. Invitation to Bid
c. Eligibility Requirements
d Instructions to Bidders, including
Scope of Bid, documents
comprising the bid, criteria for
eligibility, bid evaluation
methodology/criteria in
accordance with the Act, and
post-qualification, as well as the
date, time and place of the pre-
bid conference (where
applicable), submission of bids
and opening of bids
e. Form of Bid, Price Form, and list

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 44
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
of goods and services
f. Delivery Schedule
g. Form, amount, and validity
period of bid security
h. Form, amount, and validity of
performance security and
warranty
i. Form of Contract and General
and Special Conditions of
Contract.

Philippine Bidding Documents


(PBDs) for Procurement of
Goods, 3rd edition, October 2009
approved by the GPPB per GPPB
Resolution No. 05-2009 dated 30
September 2009

3. To verify if the form and 3. Compare the individual Did the form of the
contents of the customized documents of the Invitation to Bid in the
bidding documents for procuring entitys customized bidding
customized bidding documents for goods
goods conform with those
documents for goods with conform with the
in the Philippine Bidding
the corresponding standard form
Documents (PBDs) for documents of the prescribed by the
Procurement of Goods, 3rd Philippine Bidding GPPB?
edition, October 2009 Documents (PBDs) for
approved by the GPPB per Procurement of Goods, Did the contents of
GPPB Resolution No. 05- 3rd Edition, October 2009 the form of the
2009 dated 30 September approved by the GPPB Invitation to Bid in
2009 & with Section 21.1 of per GPPB Resolution No. the customized
05-2009 dated 30
the Revised IRR of RA No. bidding documents for
September 2009 goods conform with
9184
the contents of the
Philippine Bidding Documents Invitation to Bid
(PBDs) for Procurement of prescribed by Section
Goods, 3rd edition, October 2009 21.1 of the IRR of RA
approved by the GPPB per GPPB 9184 and the PBDs?
Resolution No. 05-2009 dated 30
September 2009 Did the form of the
Instructions to Bidders
Implementing Rules and in the customized
Regulations (IRR) of RA 9184, as bidding documents for
amended on September 3, 2009: goods conform with
21.1. The Invitation to Bid shall the standard form
provide prospective bidders the prescribed by the
following information, among PBDs?
others:
a. For the procurement of goods,

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Prepared by:
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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 45
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
the name of the contract to be Did the contents of
bid and a brief description of the Instructions to
the goods to be procured; Bidders in the
b. A general statement on the customized bidding
criteria to be used by the documents for goods
procuring entity for the conform with the
eligibility check, the contents of the
examination and evaluation of Instructions to Bidders
bids, post-qualification, and prescribed by the
award; PBDs?
c. The date, time and place of
the deadline for the Did the form for the
submission and receipt of the Bid Data Sheet in the
eligibility requirements, the customized bidding
pre-bid conference, if any, the documents for goods
submission and receipt of bids, conform with the
and the opening of bids; standard form
d. ABC to be bid; prescribed by the
e. The source of funding; PBDs?
f. The period of availability of the
Bidding Documents, the place Did the contents of
where the Bidding Documents the Bid Data Sheet in
may be secure, the website the customized
where the Bidding Documents bidding documents for
may be downloaded, and, goods conform with
where applicable, the price of the contents of the Bid
the Bidding Documents; Data Sheet prescribed
g. The contract duration or by the PBDs?
delivery schedule; Did the form of the
h. The name, address, telephone General Conditions of
number, facsimile number, e- Contract in the
mail and website addresses of customized bidding
the concerned procuring documents for goods
entity, as well as its conform with the
designated contact person; standard form
and prescribed by the
i. Such other necessary PBDs?
information deemed relevant
by the procuring entity. Did the contents of
the form of General
Conditions of Contract
in the customized
bidding documents for
goods conform with
the contents of the
General Conditions of
Contract form
prescribed by the
PBDs?

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 46
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Did the form for the
Special Conditions of
Contract in the
customized bidding
documents for goods
conform with the
standard form
prescribed by the
PBDs?

Did the contents of


the form for the
Special Conditions of
Contract in the
customized bidding
documents for goods
conform with the
contents of the Special
Conditions of Contract
prescribed by the
PBDs?

Did the form of the


Schedule of
Requirements in the
customized bidding
documents for goods
conform with the
standard form
prescribed by the
PBDs?

Did the contents of


the form for the
Schedule of
Requirements in the
customized bidding
documents for goods
conform with the
contents of the
Schedule of
Requirements
prescribed by the
PBDs?

Did the form for the


Technical
Specifications in the
customized bidding
documents for goods
conform with the
standard form
prescribed by the
PBDs?

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 47
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Did the contents of
the form for Technical
Specifications in the
customized bidding
documents for goods
conform with the
contents of the
Technical
Specifications
prescribed by the
PBDs?

Did the Bid Form in


the customized
bidding documents for
goods conform with
the standard forms
prescribed by the
PBDs?

Did the contents of


the Bid Form in the
customized bidding
documents for goods
conform with the
contents of the Bid
Form prescribed by
the PBDs?

Did the Contract


Agreement Form in
the customized
bidding documents for
goods conform with
the standard form
prescribed by the
PBDs?

Did the contents of


the Contract
Agreement Form in
the customized
bidding documents for
goods conform with
the contents of the
Contract Agreement
Form prescribed by
the PBDs?

Did the form for the


Omnibus Sworn
Statement in the
customized bidding
documents for goods
conform with the
standard forms
prescribed by the
PBDs?
----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 48
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer

Did the contents of


the form for the
Omnibus Sworn
Statement in the
customized bidding
documents for goods
conform with the
contents of the
Omnibus Sworn
Statement prescribed
by the PBDs?

Did the Bank


Guarantee Form for
Advance Payment in
the customized
bidding documents for
goods conform with
the standard form
prescribed by the
PBDs?

Did the contents of


the Bank Guarantee
Form for Advance
Payment in the
customized bidding
documents for goods
conform with the
contents of the Bank
Guarantee Form for
Advance Payment
prescribed by the
PBDs?
EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT
1. To verify the effects of Analyze the instances of Appropriate Audit Working Papers
instances of non- non-compliances to
compliance on the: establish the effects and
develop appropriate audit
recommendations.
a. validity of the
procurement activities
and outputs including the
validity of the resulting
contract;
b. validity of any payment
to be made on the basis
----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 49
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
of the contract;
c. etc.
and develop appropriate
audit recommendations

2. To verify the causes of Analyze the instances of Appropriate Audit Working Papers
instances of non- non-compliances to
compliance and develop establish the cause(s) and
develop appropriate audit
appropriate audit
recommendations.
recommendations

3. To communicate the Prepare the appropriate


results of the audit with the audit/ validation Audit Observation Memorandum (AOM), if applicable
auditees Management document reflecting the
results of the
audit/validation and
COA Circular No. 2009-006 dated
transmit to Management
September 15, 2009 re-
Prescribing the Use of the Rules
and Regulations on Settlement of
Accounts

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 50
On the Basic Element:

CUSTOMIZED BIDDING
DOCUMENTS FOR
INFRASTRUCTURE PROJECTS

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 51
BASIC ELEMENT CUSTOMIZED BIDDING DOCUMENTS
FOR INFRASTRUCTURE PROJECTS

A. AUDIT OBJECTIVES:

1. To verify if the Procuring Entitys customized bidding documents for infrastructure


projects are complete

2. To verify if the forms and contents of the Procuring Entitys customized bidding
documents for infrastructure projects are as prescribed by the GPPB

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed:
Customized Bidding Documents for Infrastructure Projects

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
1. To verify if the procuring 1. Request for the Did the procuring
entity adopted a set of customized bidding entity adopt a set of
customized bidding documents for customized bidding
infrastructure projects documents for
documents for
from the BAC Secretariat infrastructure
infrastructure projects
projects?
Implementing Rules and
Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
17.1 The bidding documents
shall be prepared by the
procuring entity following the
standard forms and manuals
prescribed by the GPPB.
6.2 Once issued by the GPPB,
the use of the Generic
Procurement Manuals (GPMs),
Philippine Bidding Documents
(PBDs), and other standard
forms shall be mandatory upon
all Procuring Entities. However,
whenever necessary, to suit the
particular needs of the procuring
entity, modifications may be
made, particularly for major and
specialized procurement, subject
to the approval of the GPPB.

NOTE: If the Procuring Entity did not adopt a set of customized bidding documents for infrastructure
projects, the succeeding Audit Sub-Objectives and related Activities need not be performed and
the related Audit Questions for this element need not be answered.
2.To verify if the set of 2. Compare the set of Were the items in the
customized bidding customized bidding customized bidding
documents for documents with the documents complete
infrastructure projects are Philippine Bidding compared with the
Documents (PBDs) for items in the Philippine
complete, i.e., include the Procurement of Bidding Documents
following:
----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 52
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
a. Approved Budget for the Infrastructure Projects, (PBDs) for
Contract, 3rd edition, October 2009 Procurement of
b. Invitation to Bid published by the GPPB Infrastructure
c. Eligibility Requirements Projects, 3rd edition,
October 2009
d. Instructions to Bidders,
published by the
including Scope of Bid, GPPB?
documents comprising
the bid, criteria for
eligibility, bid evaluation
methodology/criteria in
accordance with the Act,
and post-qualification, as
well as the date, time and
place of the pre-bid
conference (where
applicable), submission of
bids and opening of bids
e. Technical Drawings and
Specifications
f. Form of Bid, Price Form,
and list of goods
g. Delivery Schedule
h. Form, amount, and
validity period of bid
security
i. Form, amount, and
validity of performance
security and warranty
j. Form of Contract and
General and Special
Conditions of Contract

Implementing Rules and


Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
17.1 The bidding documents
shall be prepared by the procuring
entity following the standard forms
and manuals prescribed by the
GPPB. The bidding documents shall
include the following:
a. Approved Budget for the
Contract
b. Invitation to Bid
c. Eligibility Requirements
d Instructions to Bidders, including
Scope of Bid, documents
comprising the bid, criteria for
eligibility, bid evaluation
methodology/criteria in
accordance with the Act, and
post-qualification, as well as the
date, time and place of the pre-
bid conference (where
----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 53
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
applicable), submission of bids
and opening of bids
e. Form of Bid, Price Form, and list
of goods and services
f. Delivery Schedule
g. Form, amount, and validity
period of bid security
h. Form, amount, and validity of
performance security and
warranty
i. Form of Contract and General
and Special Conditions of
Contract.

Philippine Bidding Documents


(PBDs) for Procurement of
Infrastructure Projects, 3rd
edition, October 2009 published
by the GPPB

3. To verify if the form and 3. Compare the individual Did the form of the
contents of the customized documents of the Invitation to Bid in
bidding documents for procuring entitys the customized
infrastructure projects customized bidding bidding documents for
documents for infrastructure projects
conform with those in the infrastructure projects conform with the
Philippine Bidding with the corresponding standard form
Documents (PBDs) for documents of the prescribed by the
Procurement of Goods, 3rd Philippine Bidding PBDs?
edition, October 2009 Documents (PBDs) for
approved by the GPPB per Procurement of Did the contents of
GPPB Resolution No. 05- Infrastructure Projects, the Invitation to Bid
2009 dated 30 September 3rd edition, October 2009 in the customized
published by the GPPB bidding documents for
2009 & with Section 21.1 of
infrastructure projects
the Revised IRR of RA No.
conform with the
9184 contents of the
Invitation to Bid
Philippine Bidding Documents prescribed by Section
(PBDs) for Procurement of 21.1 of the IRR of RA
Infrastructure Projects, 3rd 9184 and the PBDs?
edition, October 2009 approved
by the GPPB per GPPB Resolution
Did the form of the
No. 05-2009 dated 30 September
Instructions to Bidders
2009 in the customized
bidding documents for
Implementing Rules and infrastructure projects
Regulations (IRR) of RA 9184, as conform with the
amended on September 2, 2009: standard form
21.1. The Invitation to Bid prescribed by the
shall provide prospective GPPB?
bidders the following

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 54
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
information, among others: Did the contents of
a. For the procurement of the form for the
Infrastructure projects, the Instructions to Bidders
name and location of the in the customized
contract to be bid, the project bidding documents for
background and other relevant infrastructure projects
information regarding the conform with the
proposed contract works, contents of the
including a brief description of Instructions to Bidders
the type, size, major items, prescribed by the
and other important or PBDs?
relevant features of the works;
b. A general statement on the Did the form for the
criteria to be used by the Bid Data Sheet in the
procuring entity for the customized bidding
eligibility check, the documents for
examination and evaluation of infrastructure projects
bids, post-qualification, and conform with the
award; standard form
c. The date, time and place of prescribed by the
the deadline for the PBDs?
submission and receipt of the
eligibility requirements, the Did the contents of
pre-bid conference, if any, the the form for the Bid
submission and receipt of bids, Data Sheet in the
and the opening of bids; customized bidding
d. ABC to be bid; documents for
e. The source of funding; infrastructure projects
f. The period of availability of the conform with the
Bidding Documents, the place contents of the Bid
where the Bidding Documents Data Sheet prescribed
may be secure, the website by the PBDs?
where the Bidding Documents
may be downloaded, and, Did the form for the
where applicable, the price of General Conditions of
the Bidding Documents; Contract in the
g. The contract duration or customized bidding
delivery schedule; documents for
h. The name, address, telephone infrastructure projects
number, facsimile number, e- conform with the
mail and website addresses of standard form
the concerned procuring prescribed by the
entity, as well as its PBDs?
designated contact person;
and Did the contents of
i. Such other necessary the form for the
information deemed relevant General Conditions of
by the procuring entity. Contract in the
customized bidding
documents for
infrastructure projects
conform with the
contents of the
General Conditions of
Contract prescribed by
the PBDs?

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 55
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Did the form for the
Special Conditions of
Contract in the
customized bidding
documents for
infrastructure projects
conform with the
standard form
prescribed by the
PBDs?

Did the contents of


the form for the
Special Conditions of
Contract in the
customized bidding
documents for
infrastructure projects
conform with the
contents of the form
for the Special
Conditions of Contract
prescribed by the
PBDs?

Did the form for the


Bill of Quantities in the
customized bidding
documents for
infrastructure projects
conform with the
standard form
prescribed by the
PBDs?

Did the contents of


the form for the Bill of
Quantities in the
customized bidding
documents for
infrastructure projects
conform with the
contents of the Bill of
Quantities prescribed
by the PBDs?

Did the Bid Form in


the customized
bidding documents for
infrastructure projects
conform with the
standard form
prescribed by the
PBDs?

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 56
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Did the contents of
the Bid Form in the
customized bidding
documents for
infrastructure projects
conform with the
contents of the Bid
Form prescribed by
the PBDs?

Did the Form of


Contract Agreement in
the customized
bidding documents for
infrastructure projects
conform with the
standard forms
prescribed by the
PBDs?

Did the contents of


the Form of Contract
Agreement in the
customized bidding
documents for
infrastructure projects
conform with the
contents of the Form
of Contract Agreement
prescribed by the
PBDs?

Did the form of the


Omnibus Sworn
Statement in the
customized bidding
documents for
infrastructure projects
conform with the
standard form
prescribed by the
PBDs?

Did the contents of


the form for the
Omnibus Sworn
Statement in the
customized bidding
documents for
infrastructure projects
conform with the
contents of the
Omnibus Sworn
Statement prescribed
by the PBDs?

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 57
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Notes on Specifications Did the customized
in Section VI. Specifications bidding documents for
of the Philippine Bidding infrastructure projects
Documents (PBDs) for of the procuring entity
contain a Section on
Procurement of Specifications with
Infrastructure Projects, 3rd Notes similar to those
edition, October 2009 in the PBDs?
published by the GPPB,
Did the customized
which are meant to guide bidding documents for
the procuring entity in infrastructure projects
developing specifications of the procuring entity
for individual procurements. contain a Section on
Drawings with Notes
The statements: Insert similar to those in the
here a list of Drawings. PBDs?
The actual Drawings,
including site plans, should
be attached to this section
or annexed in a separate
folder. Are in Section VII.
Drawings of the Philippine
Bidding Documents (PBDs)
for Procurement of
Infrastructure Projects, 3rd
edition, October 2009
published by the GPPB

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of Appropriate Audit Working Papers
instances of non- non-compliances to
compliance on the: establish the effects and
develop appropriate audit
recommendations.
a. validity of the
procurement activities
and outputs including the
validity of the resulting
contract;
b. validity of any payment
to be made on the basis
of the contract;
c. etc.
and develop appropriate
audit recommendations
2. To verify the causes of Analyze the instances of Appropriate Audit Working Papers
instances of non- non-compliances to
compliance and develop establish the cause(s) and
appropriate audit develop appropriate audit
recommendations.
recommendations

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 58
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
3. To communicate the Prepare the appropriate
results of the audit with the audit/ validation Audit Observation Memorandum (AOM), if applicable
auditees Management document reflecting the
results of the
audit/validation and
COA Circular No. 2009-006 dated
transmit to Management
September 15, 2009 re-
Prescribing the Use of the Rules
and Regulations on Settlement of
Accounts

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 59
On the Basic Element:

CUSTOMIZED BIDDING DOCUMENTS


FOR CONSULTING SERVICES

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 60
BASIC ELEMENT CUSTOMIZED BIDDING DOCUMENTS FOR
CONSULTING SERVICES

A. AUDIT OBJECTIVES:

1. To verify if the Procuring Entitys customized bidding documents for consulting services
are complete

2. To verify if the forms and contents of the Procuring Entitys customized bidding
documents for consulting services are as prescribed by the GPPB

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed:
Customized Bidding Documents for Consulting Services

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
1. To verify if the 1. Request for the Did the procuring entity
procuring entity adopted customized bidding adopt a set of customized
a set of customized documents for consulting bidding documents for
services from the BAC consulting services?
bidding documents for
Secretariat.
consulting services

Implementing Rules and


Regulations (IRR) of RA 9184,
as amended on September 2,
2009:
17.1 The bidding documents
shall be prepared by the
procuring entity following the
standard forms and manuals
prescribed by the GPPB.
6.2 Once issued by the GPPB,
the use of the Generic
Procurement Manuals (GPMs),
Philippine Bidding Documents
(PBDs), and other standard
forms shall be mandatory
upon all Procuring Entities.
However, whenever
necessary, to suit the
particular needs of the
procuring entity, modifications
may be made, particularly for
major and specialized
procurement, subject to the
approval of the GPPB.

NOTE: If the Procuring Entity did not adopt a set of customized bidding documents for infrastructure
projects, the succeeding Audit Sub-Objectives and related Activities need not be performed and the
related Audit Questions for this element need not be answered.

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 61
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
2.To verify if the set of 2. Compare the set of Were the items in the
customized bidding customized bidding customized bidding
documents for consulting documents with the documents for consulting
services are complete, Philippine Bidding services complete when
Documents (PBDs) for compared with the items
i.e., include the
Procurement of in the Philippine Bidding
following: Consulting Services, 3rd Documents (PBDs) for
a. Approved Budget for edition, October 2009 Procurement of Consulting
the Contract, published by the GPPB Services, 3rd edition,
b. Request for Expression October 2009 published by
of Interest, the GPPB
c. Eligibility
Requirements
d. Instructions to
Bidders, including
Scope of Bid,
documents comprising
the bid, criteria for
eligibility, bid
evaluation
methodology/criteria in
accordance with the
Act, and post-
qualification, as well as
the date, time and
place of the pre-bid
conference (where
applicable), submission
of bids and opening of
bids
e. Technical Drawings
and Specifications
f. Form of Bid, Price
Form, and list of goods
g. Delivery Schedule
h. Form, amount, and
validity period of bid
security
i. Form, amount, and
validity of performance
security and warranty
j. Form of Contract and
General and Special
Conditions of Contract

Implementing Rules and


Regulations (IRR) of RA 9184,
as amended on September 3,
2009:
17.1 The bidding documents
shall be prepared by the
procuring entity following the

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 62
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
standard forms and manuals
prescribed by the GPPB. The
bidding documents shall include
the following:
a. Approved Budget for the
Contract,
b. Request for Expression of
Interest,
c. Eligibility Requirements
d Instructions to Bidders,
including Scope of Bid,
documents comprising the
bid, criteria for eligibility, bid
evaluation
methodology/criteria in
accordance with the Act, and
post-qualification, as well as
the date, time and place of
the pre-bid conference
(where applicable),
submission of bids and
opening of bids
e. Form of Bid, Price Form, and
list of goods and services
f. Delivery Schedule
g. Form, amount, and validity
period of bid security
h. Form, amount, and validity of
performance security and
warranty
i. Form of Contract and General
and Special Conditions of
Contract.

Philippine Bidding
Documents (PBDs) for
Procurement of Consulting
Services, 3rd edition,
October 2009 published by
the GPPB published by the
GPPB

3. To verify if the form 3. Compare the individual Did the form for the
and contents of the documents of the Request for Expression of
customized bidding procuring entitys Interest in the customized
documents for consulting customized bidding bidding documents for
documents for consulting consulting services
services conform with
services with the conform with the standard
those in the Philippine corresponding documents form prescribed by the
Bidding Documents of the Philippine Bidding PBDs?
(PBDs) for Procurement Documents (PBDs) for

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 63
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
of Consulting Services, Procurement of Did the contents of the
3rd edition, October 2009 Consulting Services, 3rd form for the Request for
published by the GPPB edition, October 2009 Expression of Interest in
published by the GPPB the customized bidding
documents for consulting
Philippine Bidding Documents
services conform with the
(PBDs) for Procurement of
contents of the form for
Consulting Services, 3rd
the Request for Expression
edition, October 2009
published by the GPPB
of Interest prescribed by
the PBDs?
Did the form of the
Eligibility Documents in the
customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for Eligibility
Documents in the
customized bidding
documents for consulting
services conform with the
contents of the form for
Eligibility Documents
prescribed by the PBDs?

Did the form for the


Eligibility Data Sheet in
the customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for the Eligibility Data
Sheet in the customized
bidding documents for
consulting services
conform with the contents
of the form for the
Eligibility Data Sheet
prescribed by the PBDs?
Did the form for the Notice
of Eligibility and Short
Listing in the customized
bidding documents for
consulting services
conform with the standard
form prescribed by the
PBDs?

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 64
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Did the contents of the
form for Notice of Eligibility
and Short Listing in the
customized bidding
documents for consulting
services conform with the
contents of the Notice of
Eligibility and Short Listing
prescribed by the PBDs?

Did the form for the


Instructions to Bidders in
the customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for the Instructions to
Bidders in the customized
bidding documents for
consulting services
conform with the contents
of the Instructions to
Bidders prescribed by the
PBDs?

Did the form of the Bid


Data Sheet in the
customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for the Bid Data
Sheet in the customized
bidding documents for
consulting services
conform with the contents
of the Bid Data Sheet
prescribed by the PBDs?

Did the form for the


General Conditions of
Contract in the customized
bidding documents for
consulting services
conform with the standard
form prescribed by the
PBDs?

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 65
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Did the contents of the
form for the General
Conditions of Contract in
the customized bidding
documents for consulting
services conform with the
contents of the form for
the General Conditions of
Contract prescribed by the
PBDs?

Did the form for the


Special Conditions of
Contract in the customized
bidding documents for
consulting services
conform with the standard
form prescribed by the
PBDs?

Did the contents of the


form for the Special
Conditions of Contract in
the customized bidding
documents for consulting
services conform with the
contents of the form for
the Special Conditions of
Contract prescribed by the
PBDs?

Did the form for the


Eligibility Documents
Submission Form in the
customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


Eligibility Documents
Submission Form in the
customized bidding
documents for consulting
services conform with the
contents of the Eligibility
Documents Submission
Form prescribed by the
PBDs?

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 66
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Did the Technical Proposal
Submission Form in the
customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


Technical Proposal
Submission Form in the
customized bidding
documents for consulting
services conform with the
contents of the Technical
Proposal Submission Form
prescribed by the PBDs?

Did the form for the


Consultants Reference in
the customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for the Consultants
Reference in the
customized bidding
documents for consulting
services conform with the
contents of the form for
the Consultants Reference
prescribed by the PBDs?

Did the form for the


Comments and
Suggestions of Consultant
on the Terms of Reference
and on Data, Services, and
Facilities to be Provided by
the Procuring in the
customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 67
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Did the contents of form
for the Comments and
Suggestions of Consultant
on the Terms of Reference
and on Data, Services, and
Facilities to be Provided by
the Procuring in the
customized bidding
documents for consulting
services conform with the
contents of the Comments
and Suggestions of
Consultant on the Terms
of Reference and on Data,
Services, and Facilities to
be Provided by the
Procuring form
prescribed by the PBDs?

Did the customized bidding


documents for consulting
services have a form for
the Description of the
Methodology and Work
Plan for Performing the
Project as required by the
PBDs?
Did the form for Team
Composition and Task
Projects in the
customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for the Team
Composition and Task
Projects in the customized
bidding documents for
consulting services
conform with the contents
of the form for theTeam
Composition and Task
Projects prescribed by
the PBDs?

Did the Format of


Curriculum Vitae (CV) for
Proposed Professional Staff
in the customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 68
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Did the contents of the
Format of Curriculum Vitae
(CV) for Proposed
Professional Staff in the
customized bidding
documents for consulting
services conform with the
contents of the Format of
Curriculum Vitae (CV) for
Proposed Professional Staff
prescribed by the PBDs?

Did the form for the Time


Schedule for Professional
Personnel in the
customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for theTime Schedule
for Professional Personnel
in the customized bidding
documents for consulting
services conform with the
contents of the form for
the Time Schedule for
Professional Personnel
prescribed by the PBDs?

Did the form for the


Activity (Work) Schedule in
the customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for the Activity
(Work) Schedule in the
customized bidding
documents for consulting
services conform with the
contents of the form for
the Activity (Work)
Schedule prescribed by
the PBDs?

Did the form for the


Financial Proposal
Submission in the
customized bidding
documents for consulting

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 69
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for the Financial
Proposal Submission in the
customized bidding
documents for consulting
services conform with the
contents of the form for
the Financial Proposal
Submission prescribed by
the PBDs?

Did the form of the


Summary of Costs in the
customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for the Summary of
Costs in the customized
bidding documents for
consulting services
conform with the contents
of the form for the
Summary of Costs
prescribed by the PBDs?

Did the form for the


Breakdown of Price per
Activity in the customized
bidding documents for
consulting services
conform with the standard
form prescribed by the
PBDs?

Did the contents of the


form for the Breakdown of
Price per Activity form in
the customized bidding
documents for consulting
services conform with the
contents of the form for
the Breakdown of Price per
Activity prescribed by the
PBDs?

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 70
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Did the form for the
Breakdown of
Remuneration per Activity
in the customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for the Breakdown of
Remuneration per Activity
in the customized bidding
documents for consulting
services conform with the
contents of the form for
the Breakdown of
Remuneration per Activity
prescribed by the PBDs?

Did the form for the


Reimbursables per Activity
in the customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for Reimbursables
per Activity in the
customized bidding
documents for consulting
services conform with the
contents of the form for
Reimbursables per Activity
prescribed by the PBDs?

Did the form for the


Miscellaneous Expenses in
the customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 71
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Did the contents of the
form for the Miscellaneous
Expenses in the
customized bidding
documents for consulting
services conform with the
contents of the form for
the Miscellaneous
Expenses form prescribed
by the PBDs?

Did the Form of Contract


Agreement in the
customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


Form of Contract
Agreement in the
customized bidding
documents for consulting
services conform with the
contents of the Form of
Contract Agreement
prescribed by the PBDs?

Did the Omnibus Sworn


Statement form in the
customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


Omnibus Sworn Statement
form in the customized
bidding documents for
consulting services
conform with the contents
of the Omnibus Sworn
Statement form prescribed
by the PBDs?

Did the Appendices form in


the customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 72
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Did the contents of the
form for the Appendices in
the customized bidding
documents for consulting
services conform with the
contents of the form for
the Appendices prescribed
by the PBDs?

Did the form for the


Breakdown of Agreed
Fixed Rate in the
customized bidding
documents for consulting
services conform with the
standard form prescribed
by the PBDs?

Did the contents of the


form for the Breakdown of
Agreed Fixed Rate in the
customized bidding
documents for consulting
services conform with the
contents of the form for
the Breakdown of Agreed
Fixed Rate prescribed by
the PBDs?

The contents of the Terms Did the customized bidding


of Reference are as follows: documents for consulting
a. Background, services of the procuring
b. Objectives, entity contain a Section on
c. Scope of the Services, Terms of Reference with
d. Training (when contents similar to those in
appropriate), the PBDs?
e. Reports and Time
Schedule,
f. Data. Local Services,
Personnel, and
Facilities to be
provided by the
Procuring Entity
per Section VI. Terms of
Reference of the Philippine
Bidding Documents (PBDs)
for Procurement of
Consulting Services, 3rd
edition, October 2009
published by the GPPB,
which are meant to guide
the procuring entity in
developing Terms of
Reference for individual
procurements.

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 73
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT
1. To verify the effects of Analyze the instances of Appropriate Audit Working Papers
instances of non- non-compliances to
compliance on the: establish the effects and
develop appropriate audit
recommendations.
a. validity of the
procurement activities
and outputs including
the validity of the
resulting contract;
b. validity of any
payment to be made
on the basis of the
contract;
c. etc.
and develop appropriate
audit recommendations
2. To verify the causes of Analyze the instances of Appropriate Audit Working Papers
instances of non- non-compliances to
compliance and develop establish the cause(s) and
develop appropriate audit
appropriate audit
recommendations.
recommendations

3. To communicate the Prepare the appropriate


results of the audit with audit/ validation Audit Observation Memorandum (AOM), if applicable
the auditees document reflecting the
results of the
Management
audit/validation and
transmit to Management
COA Circular No. 2009-006
dated September 15, 2009 re-
Prescribing the Use of the
Rules and Regulations on
Settlement of Accounts

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 74
On the Procurement Procedures:

COMPETITIVE / PUBLIC BIDDING


FOR THE PROCUREMENT OF
GOODS

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 75
Procurement Procedures:
COMPETITIVE / PUBLIC BIDDING FOR THE
PROCUREMENT OF GOODS

I. PREPARATORY ACTIVITY:
BIDDING DOCUMENTS

Bidding documents are documents issued by the Procuring Entity to provide prospective
bidders all the necessary information that they need to prepare their bids.

A. AUDIT OBJECTIVE:

To verify if the Bidding Documents followed the standard forms and manuals prescribed
by the Government Procurement Policy Board (GPPB)

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. The procuring entitys Customized Bidding Documents for Goods;
2. Bidding Documents for the specific procurement.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
1. To verify if the Bidding 1. If the procuring entity Are the Bidding
Documents for the specific adopted customized Bidding Documents/
procurement include the Documents and the results Information complete:
information and are of the earlier validation of
a. Approved Budget
according to the forms this element showed that
for the Contract?
included in the Customized these are compliant with
Bidding Documents the Philippine Bidding b. Invitation to Bid?
approved by the GPPB or Documents for the
the Philippine Bidding Procurement of Goods and c. Eligibility
Documents for the Section 17.1 of the Requirements?
Procurement of Goods, 3rd Implementing Rules and
Edition (October 2009) Regulations of RA 9184, d. Instruction to
Bidders, including
issued by the GPPB and secure from the BAC
- scope of bid?
Section 17 of the Secretariat duly certified
Implementing Rules and copies of the Bidding - documents
Regulations of RA 9184 as Documents for the specific comprising the bid?
amended on September 2, procurement and compare
2009: these with the customized - criteria for
a. Approved Budget for Bidding Documents of eligibility?
the Contract; the procuring entity.
b. Invitation to Bid; - bid evaluation
methodology/
c. Eligibility If the customized
criteria in
Requirements; Bidding Documents are not
accordance with
d. Instruction to Bidders, compliant, compare the the Act?
including scope of bid, procurement-specific
documents comprising Bidding Documents with - post-qualification
the bid, criteria for the Philippine Bidding methodology?
eligibility, bid Documents for the
- date of the pre-

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 76
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
evaluation Procurement of Goods bid conference?
methodology/criteria in issued by the GPPB.
accordance with the - time of the pre-
Act, and post- bid conference?
qualification, as well as - Place of the pre-
the date, time and bid conference?
place of the pre-bid
conference (where - Deadline for
applicable), submission submission of
of bids and opening of bids?
bids;
e. Scope of work, where - Place of
submission of
applicable;
bids?
f. Plans/Drawings and
Technical - Date of opening of
Specifications; bids?
g. Form of Bid, Price Form,
and List of Goods; - Time of opening
h. Delivery Time or of bids?
Completion Schedule;
i. Form, Amount, and - Place of opening
of bids?
Validity Period of Bid
Security;
e. Scope of work,
j. Form, Amount, and where applicable?
Validity of Performance
Security and Warranty; f. Plans/Drawings and
and Technical
k. Form of Contract and Specifications?
General and Special
Conditions of Contract. f.1. Was there no
reference to brand
names?
Implementing Rules and
Regulations (IRR) of RA 9184, as
g. Form of Bid, Price
amended on September 2, 2009:
Form, and List of
Goods?
17.1. The Bidding Documents
shall be prepared by the
h. Delivery Time or
procuring entity following the
Completion
standard forms and manuals
Schedule?
prescribed by the GPPB.
a. Approved Budget for the
i. Form, Amount, and
Contract;
Validity Period of
b. Invitation to Bid;
Bid Security?
c. Eligibility Requirements;
d. Instruction to Bidders,
j. Form, Amount, and
including scope of bid,
Validity of
documents comprising the
Performance
bid, criteria for eligibility, bid
Security and
evaluation
Warranty?
methodology/criteria in
accordance with the Act, and
k. Form of Contract
post-qualification, as well as
and General and
the date, time and place of
Special Conditions

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 77
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
the pre-bid conference of Contract?
(where applicable),
submission of bids and Were the Bidding
opening of bids; Documents in the
e. Scope of work, where required form:
applicable;
f. Plans/Drawings and a. Invitation to Bid?
Technical Specifications;
g. Form of Bid, Price Form, and b. Instructions to
List of Goods; Bidders?
h. Delivery Time or Completion
Schedule; c. Bid Data Sheet?
i. Form, Amount, and Validity
Period of Bid Security; d. General Condition
j. Form, Amount, and Validity of of the Contract?
Performance Security and
Warranty; and e. Special Condition of
k. Form of Contract and General Contract?
and Special Conditions of
Contract. f. Schedule of
Requirements?
Section 18. Reference to
Brand Names g. Technical
Specifications for the procurement Specifications?
of goods shall be based on
relevant characteristics and/or h. Bidding Forms?
performance requirements.
Reference to brand names shall
not be allowed.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of non- Appropriate Audit Working Papers
instances of non- compliances to establish the
compliance on the: effects and develop
appropriate audit
a. validity of the recommendations.
procurement activities
and outputs including
the validity of the
resulting contract;
b. validity of any payment
to be made on the basis
of the contract;
c. etc.
and develop appropriate
audit recommendations
2. To verify the causes of Analyze the instances of non- Appropriate Audit Working Papers
instances of non- compliances to establish the
compliance and develop cause(s) and develop
appropriate audit appropriate audit
recommendations.
recommendations

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 78
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
3. To communicate the Prepare the appropriate audit/
results of the audit with validation document reflecting Audit Observation Memorandum (AOM), if
the auditees Management the results of the applicable
audit/validation and transmit
to Management
COA Circular No. 2009-006
dated September 15, 2009 re-
Prescribing the Use of the Rules
and Regulations on Settlement
of Accounts

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 79
II. PREPARATORY ACTIVITY:
PRE-PROCUREMENT CONFERENCE
(For procurement of goods costing more than P2 million)

The pre-procurement conference is the forum where all officials involved in the procurement
meet and discuss all aspects of a specific procurement activity, which includes the technical
specifications, the Approved Budget for the Contract (ABC), the applicability and appropriateness
of the recommended method of procurement and the related milestones, the bidding documents,
and availability of the pertinent budget release for the project.

A. AUDIT OBJECTIVES:

1. To verify if the Pre-Procurement Conference was conducted within the required time

2. To verify if the participants to the Conference are as required

3. To verify if during the Conference the participants, led by the Bids and Awards
Committee (BAC), performed the required tasks and attained the objectives of the
Conference

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


a. copy of the Minutes of Pre-Procurement Conference duly certified by the BAC
Secretariat;
b. Invitation to Bid;
c. Duly certified copies of the documents (Office Orders, contracts,
Organizational/Functional Charts, etc) which the BAC Secretariat used as bases for
identifying and notifying the participants to the Pre-Procurement Conference, including
duly certified copies of the notices issued with evidence of receipt by the participants.

Audit Sub-objective Suggested Audit Working Paper


Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
1. To verify if the BAC 1. Secure from the BAC Did the BAC
conducted the Pre- Secretariat a duly certified conduct the Pre-
Procurement Conference prior copy of the Minutes of Pre- Procurement
to the advertisement or the Procurement Conference Conference prior
and compare the date the to the
issuance of the Invitation to conference was held with advertisement or
Bid the date indicated in the issuance of the
Invitation to Bid (included in Invitation to Bid?
Implementing Rules and Regulations the Bidding Documents)
(IRR) of RA 9184, as amended on
September 2, 2009:
20.1. Prior to the Advertisement or
the issuance of the Invitation to Bid
for each procurement undertaken
through public bidding, the BAC,
through its Secretariat shall call for a
Pre-Procurement Conference.

2. To verify if the participants 2. Secure from the BAC Did the


to the Pre-Procurement Secretariat duly certified attendees to the
Conference included the BAC, copies of the documents Conference

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 80
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
the Secretariat, the unit or (Office Orders, contracts, include the:
officials, including consultants Organizational/Functional
hired by the procuring entity, Charts, etc) which it used as a. BAC?
bases for identifying and
who prepared the Bidding
notifying the participants to b. Secretariat?
Documents and the draft
the Pre-Procurement
Invitation to Bid Conference, including duly c. unit or
certified copies of the officials who
Implementing Rules and Regulations notices issued with evidence prepared the
(IRR) of RA 9184, as amended on of receipt by the Bidding
September 2, 2009: participants. Documents
20.1. The pre-procurement and the draft
conference shall be attended by the 3. From the Minutes of Pre- Invitation to
BAC, the Secretariat, the unit or Procurement Conference Bid?
officials, including consultants hired look for the names of the
by the procuring entity, who members of the BAC, the d. consultants
prepared the Bidding Documents members of the Secretariat, hired by the
and the draft Invitation to Bid, for the officials and/or procuring
each procurement. consultants who prepared entity, who
the Bidding Documents and prepared the
the draft Invitation to Bid. Bidding
Documents
and the draft
Invitation to
Bid?

3. To verify if the BAC observed 4. From the Office Order Was there a
quorum creating the BAC, determine quorum of the
the number of BAC BAC?
Implementing Rules and Regulations members and identify the
(IRR) of RA 9184, as amended on Chairman or Vice-Chairman.
September 2, 2009:
12.3 Quorum 5. From the Minutes of Pre-
A majority of the total BAC Procurement Conference,
composition as designated by the Head check for the presence of
of the Procuring Entity shall constitute the Chairman or Vice-
a quorum for the transaction of Chairman and if majority of
business, provided that the presence the BAC members or
of the Chairman or Vice-Chairman shall representatives/alternates
be required. attended the conference.

4. To verify if during the Pre- 6. From the Minutes of Pre- Did the
Procurement Conference the Procurement Conference participants led
participants, led by the BAC, look for information on the by the BAC
presentation of the scope of discuss and
performed the following tasks
the contract, the ABC, and confirm the:
and attained the related contract duration, the
objectives: deliberation thereon, and a. Description of
a. Discussed relevant the conclusions reached as a the scope of
information and confirmed the result of the deliberation; the contract?
description of the scope of the and analyze if they led to
contract, the ABC, and the confirmation of the b. ABC?
contract duration; description of the scope of
b. Discussed relevant the contract, the ABC, and c. Contract
the contract duration. duration?
information and confirmed

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 81
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
that the procurement is in Did the
accordance with the project 7. From the Minutes of Pre- participants led
procurement management Procurement Conference by the BAC
look for information on the discuss and
plan (PPMP) and annual
presentation of the review of confirm that the:
procurement plan (APP);
the PPMP and APP,
c. Discussed relevant availability of appropriations a. procurement
information and confirmed the and programmed budget for is in
availability of appropriations the contract, the accordance
and programmed budget for deliberation thereon, and with the PPMP
contract; the conclusions reached as a and APP?
d. Discussed relevant result of the deliberation;
information and confirmed the and analyze if they led to b. appropriations
the confirmation of the and
completeness of the Bidding
procurement is in programmed
Documents and their accordance with the PPMP budget for the
adherence to relevant general and APP, and availability of contract are
procurement guidelines; appropriations and available?
e. Reviewed, modified and programmed budget for the
agreed on the criteria for contract. Did the
eligibility screening, participants led
evaluation, and post- by the BAC
qualification; 8. From the Minutes of Pre- discuss and
f. Reviewed and adopted the Procurement Conference confirm the
look for information on the following:
procurement schedule,
presentation of the Bidding
including deadlines and Documents, the deliberation a. completeness
timeframes, for the different thereon, and the conclusions of
activities; and reached as a result of the the Bidding
g. Reiterated and deliberation; and analyze if Documents?
emphasized the importance of they led to the confirmation
confidentiality and the of the completeness of the b. adherence to
applicable sanctions and Bidding Documents and their the PBDs/
adherence to the Philippine
penalties, as well as agreed on customized
Bidding Documents (PBDs)/ Bidding
measures to ensure
customized Bidding Documents?
compliance with the foregoing. Documents.
Implementing Rules and Regulations Did the
(IRR) of RA 9184, as amended on participants led
9. From the Minutes of Pre-
September 2, 2009: by the BAC
Procurement Conference
look for information on the discuss and
20.1. During the conference, the confirm the
presentation of the criteria
participants, led by the BAC, shall: criteria for:
for eligibility screening, bid
a) Confirm the description and
evaluation, and post-
scope of the contract, the ABC, a. Eligibility
qualification, the deliberation
and contract duration; screening?
thereon, and the conclusions
b) Ensure that the procurement is
reached as a result of the
in accordance with the project b. Bid
deliberation; and analyze if
and annual procurement plans; evaluation?
they led to the confirmation
c) Determine the readiness of the
of the criteria for eligibility
procurement at hand, including, c. Post-
screening, bid evaluation,
among other aspects, the qualification?
and post-qualification.
following:
o availability of appropriations
and programmed budget Did the
10. From the Minutes of Pre- participants led
for contract;
o completeness of the
Procurement Conference by the BAC

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 82
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
Bidding Documents and look for information on the discuss and
their adherence to relevant presentation of the confirm the:
general procurement procurement schedule,
guidelines; including deadlines and a. adoption of
d) Review, modify and agree on timeframes for the different the
the criteria for eligibility activities, the no-contact procurement
screening, evaluation, and post- rule, the deliberation schedule
qualification; thereon, and the conclusions including
e) Review and adopt the reached as a result of the deadlines and
procurement schedule, including deliberation; and analyze if timeframes
deadlines and timeframes, for they led to the confirmation for the
the different activities; and of the adoption of the different
f) Reiterate and emphasize the procurement schedule activities?
importance of confidentiality including deadlines and
and the applicable sanctions timeframes for the different b. agreement on
and penalties, as well as agree activities and agreement on the no-
on measures to ensure the no-contact rule. contact rule?
compliance with the foregoing.

7.2. 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.

GPPB Circular 01-2009 dated 20


January 2009:

4.2. To facilitate the immediate
implementation of projects even
pending approval of the GAA, the
ABC shall be based on the budget
levels under the National
Expenditure Program (NEP)
submitted to Congress.
4.3. For specifically appropriated
projects, agencies can proceed
with the procurement activities
prior to issuance of the notice of
award using as basis the NEP
figures.
4.4. For lump-sum appropriations and
Centrally Managed Items (CMIs)
under the agencys budget, the
head of the agency shall identify
and thereafter notify the
implementing units (IUs) of the
amount allocated for the projects
they are to implement. On the
basis of said notification, the
heads of the respective IUs, as

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 83
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
procuring entities, can proceed
with the procurement activities
prior to issuance of the notice of
award.
4.5. For Multi-Year Projects (MYPs),
for which the initial funding
sourced from either the
existing/current years budget or
the NEP is not sufficient to
cover the total cost of the
project, it is required that a Multi-
Year Obligational Authority
(MYOA) must already have been
issued in accord with DBM
Circular Letter 2004-012 prior to
commencement of any
procurement activity.
Thus, the MYOA shall be a
pre-requisite for procurement of
a multi-year contract. All
procurement activities should be
within the total project cost and
categories reflected in the MYOA
issued by DBM for the said MYP.
4.6. As prescribed under Section 47,
Chapter 8, Subtitle B, Title I,
Book V of the Administrative
Code of 1987, no contract
involving the expenditure of
public funds shall be entered into
unless the proper accounting
official of the procuring entity
shall have certified as to the
availability of funds and the
allotment to which the
expenditure or obligation may be
properly charged.

Definition:
3.1. Allotment - document issued
by the Department of Budget
and Management (DBM) which
authorizes an agency to incur
obligations for a specified
amount as contained in a
legislated appropriation. The
allotment issued may either be
trough the Agency Budget
Matrix (ABM) which covers the
comprehensive release of
specifically appropriated items
in the agencys budget or
through the Special Allotment
Release Order (SARO).

3.2. Annual Procurement Plan


(APP) the requisite document

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 84
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
that the agency must prepare
to reflect the entire
procurement activity (i.e.,
goods, services, civil works to
be procured) that it plans to
undertake within the calendar
year. This document contains
the following information:
3.2.1. Name of the procurement
program/project;
3.2.2. Project management office
or end-user unit;
3.2.3. General description of the
procurement;
3.2.4. Procurement method to be
adopted;
3.2.5. Time schedule for each
procurement activity;
3.2.6. Source of fund; and
3.2.7. Approved Budget for the
Contract.
3.3. Approved Budget for the
Contract (ABC) refers to the
following:
NGs including SUCs (referred to in
Section 2.1)
3.3.1. For specifically
appropriated items as reflected in
the annual budget of the national
government agency, the amount
corresponding to either the full
cost of a single year or multi-year
program/project/ activity. For
multi-year projects, for which a
Multi-Year Obligational Authority
has been issued, the ABC shall be
the amount reflected in the Multi-
Year Obligational Authority.
GOCCs and LGUs (referred to in
Section 2.2)
3.3.3. In the case of GOCCs,
including government financial
institutions as well as LGUs, the
ABC represents the amount of
fund transfers which they receive
from a national government
agency to implement a
program/project/activity.

3.8. Multi-Year Obligational


Authority (MYOA) a document
issued by the DBM either for
locally funded projects or foreign
assisted projects implemented by
agencies in order to authorize the
latter to enter into multi-year

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 85
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
contracts for the full project cost.
A MYOA, which contains an annual
breakdown of the full project cost,
obligates agencies to include in
their budget proposal for the
ensuring years the amount
programmed for the said year(s).
3.9. National Expenditure
Program (NEP) the proposed
national budget submitted by the
President to Congress in accord
with Section 22, Article VII of the
Constitution. The NEP shall be the
basis of the general appropriations
bill, which upon its enactment,
becomes the General
Appropriations Act (GAA).

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of Appropriate Audit Working Papers
instances of non-compliance non-compliances to establish
on the: the effects and develop
appropriate audit
a. validity of the procurement recommendations.
activities and outputs
including the validity of the
resulting contract;
b. validity of any payment to
be made on the basis of the
contract;
c. etc.
and develop appropriate audit
recommendations

2. To verify the causes of Analyze the instances of Appropriate Audit Working Papers
instances of non-compliance non-compliances to establish
and develop appropriate audit the cause(s) and develop
appropriate audit
recommendations
recommendations.

3. To communicate the results Prepare the appropriate


of the audit with the auditees audit/ validation document Audit Observation Memorandum (AOM), if
Management reflecting the results of the applicable
audit/validation and transmit
to Management
COA Circular No. 2009-006 dated
September 15, 2009 re- Prescribing
the Use of the Rules and Regulations
on Settlement of Accounts

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 86
III. ADVERTISING AND POSTING OF THE INVITATION TO BID
(For procurement of goods costing more than P2 million)

Advertising and posting are conducted to ensure transparency of the procurement


process, widest possible dissemination to increase the number of prospective bidders, and
intensify competition for the procurement activity or project

A. AUDIT OBJECTIVE:

To verify if the Invitation to Bid was advertised and posted in the media as required and
within the specified time

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. Entire page of the newspaper where the Invitation to Bid was advertised;
2. Document used by the BAC Secretariat to verify from the publisher the extent of
circulation of the newspaper and the first day of its publication;
3. Printout of the web page where the Invitation to Bid was posted in the PhilGEPS website,
the website of the procuring entity concerned, if available, and website prescribed by the
foreign government/ foreign or international financing institution, if applicable for the first
day and at least the last day of posting;
4. Certification by the head of the BAC Secretariat of the procuring entity that the invitation
was posted at any conspicuous place reserved for the purpose in the premises of the
procuring entity for 7 calendar days.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
1. To verify if the BAC 1. Request the BAC Secretariat Did the BAC
advertised the Invitation to to provide a copy of the entire advertise the
Bid in a newspaper of page of the newspaper where Invitation to Bid in
the Invitation to Bid was a newspaper of
general nationwide
advertised, to be submitted to general nationwide
circulation which has been the Auditor on the day of circulation which
regularly published for the advertisement. has been regularly
last 2 years before the date published for the
of issue of the advertisement 2. From the verification last 2 years before
document obtained by the BAC the date of issue of
Implementing Rules and Regulations Secretariat from the publisher, the advertisement?
(IRR) of RA 9184, as amended on check the extent of circulation
September 2, 2009: of the newspaper and the first
21.2.1. Except as otherwise day of publication.
provided in Sections 21.2.2 and
54.2 of this IRR and for the
procurement of common-use
goods and supplies, the Invitation
to Bid shall be:
a. Advertised at least once in a
newspaper of general nationwide
circulation which has been
regularly published for at least 2
years before the date of issue of
the advertisement.

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 87
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
2. To verify if the BAC posted 3. Ahead of any procurement, Did the BAC
the Invitation to Bid request the BAC Secretariat for advertise the
continuously in the PhilGEPS advance information on the Invitation to Bid
website, the website of the first day of any posting. continuously in the:
procuring entity concerned,
4. On the first day of posting 1. PhilGEPS website
if available, and the website access the PhilGEPS website, for 7 calendar
prescribed by the foreign the website of the procuring days starting on
government/foreign or entity concerned, if available, the date of
international financing and website prescribed by the advertisement?
institution, if applicable, for foreign government/ foreign or
7 calendar days starting on international financing 2. website of the
the date of advertisement institution, if applicable. Print procuring entity
the page where the notice was concerned, if
posted (to form part of the available, for 7
Implementing Rules and Regulations
audit evidences). calendar days
(IRR) of RA 9184, as amended on
starting on the
September 2, 2009:
5. Access the websites at date of
21.2.1. Except as otherwise
random during the 7-day advertisement?
provided in Sections 21.2.2 and
period to verify the postings.
54.2 of this IRR and for the
3. website
procurement of common-use
prescribed by
goods and supplies, the Invitation
the foreign
to Bid shall be:
government/
a.
foreign or
b. Posted continuously in the
international
PhilGEPS website, the website
financing
of the procuring entity
institution, if
concerned, if available, and the
applicable, for 7
website prescribed by the
calendar days
foreign government/foreign or
starting on the
international financing
date of
institution, if applicable, for 7
advertisement?
calendar days starting on the
date of advertisement

3. To verify if the BAC posted 6. Ahead of any procurement, Did the BAC post
the Invitation to Bid request the BAC Secretariat for the Invitation to
continuously at any advance information on the Bid:
first day of any posting.
conspicuous place reserved 1. continuously for
for the purpose in the 7. Conduct ocular inspection seven (7) calendar
premises of the procuring on the first day of posting. days,
entity for 7 calendar days, as
certified by the head of the 2. at the
8. Repeat the ocular
conspicuous place
BAC Secretariat of the inspections (may be at
reserved for the
procuring entity random) during the 7-day
purpose in the
period to verify the postings.
Implementing Rules and Regulations premises of the
(IRR) of RA 9184, as amended on procuring entity,
9. Request for the certification
September 2, 2009: of the head of the BAC 3. as certified by
Secretariat. the head of the
21.2.1. Except as otherwise
BAC Secretariat of
provided in Sections 21.2.2 and the procuring
54.2 of this IRR and for the entity?
procurement of common-use
goods and supplies, the Invitation
to Bid shall be:
a.

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 88
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
b.
c. Posted at any conspicuous place
reserved for the purpose in the
premises of the procuring entity
for 7 calendar days, as certified
by the head of the BAC
Secretariat of the procuring
entity.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of non- Appropriate Audit Working Papers
instances of non-compliance compliances to establish the
on the: effects and develop
appropriate audit
a. validity of the recommendations.
procurement activities and
outputs including the
validity of the resulting
contract;
b. validity of any payment to
be made on the basis of
the contract;
c. etc.
and develop appropriate
audit recommendations

2. To verify the causes of Analyze the instances of non- Appropriate Audit Working Papers
instances of non-compliance compliances to establish the
and develop appropriate cause(s) and develop
appropriate audit
audit recommendations
recommendations.

3. To communicate the Prepare the appropriate audit/


results of the audit with the validation document reflecting Audit Observation Memorandum (AOM), if
auditees Management the results of the applicable
audit/validation and transmit
to Management
COA Circular No. 2009-006 dated
September 15, 2009 re-
Prescribing the Use of the Rules
and Regulations on Settlement of
Accounts

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 89
IV. POSTING OF THE INVITATION TO BID
(For procurement of goods costing P2 million and below)

A. AUDIT OBJECTIVE:

To verify if the Invitation to Bid was posted in the media as required and within the specified
time

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. Printout of the web pages where the Invitation to Bid was posted in the PhilGEPS website,
the website of the procuring entity concerned, if available, and website prescribed by the
foreign government/ foreign or international financing institution, if applicable for the first
day and at least the last day of posting;
2. Certification by the head of the BAC Secretariat of the procuring entity that the invitation
was posted at any conspicuous place reserved for the purpose in the premises of the
procuring entity for 7 calendar days.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
1. To verify if the BAC posted 1. Ahead of any Did the BAC post the
the Invitation to Bid procurement, request the Invitation to Bid
continuously in the PhilGEPS BAC Secretariat for advance continuously in the:
information on the first day
website, the website of the
of any posting. 1. PhilGEPS website
procuring entity concerned,
for 7 calendar
if available, and the website 2. On the first day of posting days starting on
prescribed by the foreign access the PhilGEPS website, the date of
government/foreign or the website of the procuring advertisement?
international financing entity concerned, if
institution, if applicable, for available, and website 2. website of the
7 calendar days starting on prescribed by the foreign procuring entity
the date of advertisement government/ foreign or concerned, if
international financing available, for 7
institution, if applicable. calendar days
Implementing Rules and Regulations
Print the page where the starting on the
(IRR) of RA 9184, as amended on
notice was posted (to form date of
September 2, 2009:
part of the audit evidences). advertisement?
21.2.2. Advertisement of the
Invitation to Bid n a newspaper of
3. Access the websites at 3. website prescribed
general nationwide circulation
random during the 7-day by the foreign
provided in Section 21.2.1 (a)
period to verify the postings. government/
shall not be required for contracts
foreign or
to be bid with an approved budget
international
of Two Million Pesos
financing
(P2,000,000.00) and below 21.2.1.
institution, if
Except as otherwise provided in
applicable, for 7
Sections 21.2.2 and 54.2 of this
calendar days
IRR and for the procurement of
starting on the
common-use goods and supplies,
date of
the Invitation to Bid shall be:
advertisement?
b.
b. Posted continuously in the
PhilGEPS website, the website
of the procuring entity
concerned, if available, and the

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 90
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
website prescribed by the
foreign government/foreign or
international financing
institution, if applicable, for 7
calendar days starting on the
date of advertisement

2. To verify if the BAC posted 4. Ahead of any Did the BAC post the
the Invitation to Bid procurement, request the Invitation to Bid
continuously at any BAC Secretariat for advance continuously at any
conspicuous place reserved information on the first day conspicuous place
of any posting. reserved for the
for the purpose in the
purpose in the
premises of the procuring 5. Conduct ocular premises of the
entity for 7 calendar days, as inspection on the first day of procuring entity for 7
certified by the head of the posting. calendar days, as
BAC Secretariat of the certified by the head
procuring entity 6. Repeat the ocular of the BAC Secretariat
inspections (may be at of the procuring
Implementing Rules and Regulations random) during the 7-day entity?
(IRR) of RA 9184, as amended on period to verify the postings.
September 2, 2009:
21.2.1 7. Request for the
a. certification of the head of
b the BAC Secretariat
c. Posted continuously at any
conspicuous place reserved for
the purpose in the premises of
the procuring entity for 7
calendar days, as certified by
the head of the BAC Secretariat
of the procuring entity
concerned.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of
instances of non-compliance non-compliances to establish Appropriate Audit Working Papers
on the: the effects and develop
appropriate audit
a. validity of the recommendations.
procurement activities and
outputs including the
validity of the resulting
contract;
b. validity of any payment to
be made on the basis of
the contract;
c. etc.
and develop appropriate
audit recommendations

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 91
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
2. To verify the causes of Analyze the instances of
instances of non-compliance non-compliances to establish Appropriate Audit Working Papers
and develop appropriate the cause(s) and develop
audit recommendations appropriate audit
recommendations.

3. To communicate the Prepare the appropriate


results of the audit with the audit/ validation document Audit Observation Memorandum (AOM), if
auditees Management reflecting the results of the applicable
audit/validation and transmit
to Management
COA Circular No. 2009-006 dated
September 15, 2009 re-
Prescribing the Use of the Rules
and Regulations on Settlement of
Accounts

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 92
V. ISSUANCE OF BIDDING DOCUMENTS FOR THE PROCUREMENT OF GOODS

The bidding documents must be made available to the prospective bidders from the time
the Invitation to Bid is advertised until immediately before the deadline for submission of bids.

A. AUDIT OBJECTIVES:

1. To determine whether the prescribed procedures in the issuance of bidding documents


were followed

2. To determine whether the prescribed timelines in the issuance of bidding documents were
followed

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. Invitation to Bid;
2. Printout of the web pages where the Invitation to Bid was posted in the PhilGEPS website,
the website of the procuring entity concerned, if available, and website prescribed by the
foreign government/ foreign or international financing institution, if applicable for the first
day of posting;
3. Records of the BAC on issued bidding documents (with information on Official Receipt
numbers) for the procurement at hand.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
1. To verify if the BAC 1. Compare the period of Did the BAC make
observed the time required availability of the Bidding the bidding
in making the Bidding Documents indicated in the documents
Documents available, that is, Invitation to Bid with the available from the
first day of time the Invitation
from the time the Invitation advertising/posting of the to Bid was first
to Bid was first advertised up Invitation to Bid (day 1 of advertised/ posted
to the deadline for the period) and the deadline for up to the deadline
submission and receipt of the submission of bids (last for the submission
bids day of period). and receipt of bids?

Implementing Rules and Regulations


(IRR) of RA 9184, as amended on
September 2, 2009:
17.3. To provide prospective
bidders ample time to examine the
Bidding Documents and to prepare
their respective bids, the
concerned BAC shall make the
Bidding Documents for the
contract to be bid available for the
following period:

a) For the procurement of goods,


from the time the Invitation to
Bid is first advertised/posted
until the deadline for the
submission of bids.

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 93
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
2. To verify if the BAC posted 2. Ahead of any Did the BAC post
the Bidding Documents at procurement, request the the Bidding
the website of the procuring BAC Secretariat for advance Documents in the:
entity and at the PhilGEPS information on the first day
of any posting of Bidding a. PhilGEPS
website from the time that
Documents. website starting
the Invitation to Bid was on the first day
advertised up to the deadline 3. On the first day of posting of
for the submission and access the PhilGEPS website, advertisement?
receipt of bids the website of the procuring
entity concerned, if b. website of the
Implementing Rules and Regulations available. procuring entity
(IRR) of RA 9184, as amended on concerned, if
September 2, 2009: Print the page where
available,
the notice was posted (to
17.5 The procuring entity shall starting on the
form part of the audit
also post the Bidding Documents first day of
evidences).
at its website and at the PhilGEPS advertisement?
website from the time that the
4. Access the websites at
Invitation to Bid is advertised.
random from the first day of
Prospective Bidders may download
posting up to the deadline
the Bidding Documents from any
for the submission and
of the said websites; Provided
receipt of bids to verify the
that, bidders shall pay the fee for
postings.
the Bidding Documents upon
submission of their Bids.

3. To verify if all bidders 5. Compare the records of Did all the bidders
that secured Bidding the BAC on issued bidding who submitted bids
Documents paid to the documents (with information pay the correct
on Official Receipt numbers) amount for the
authorized collecting officer
for the procurement at hand bidding documents
of the procuring entity
with copies of Official to the authorized
Implementing Rules and Regulations Receipts (ORs) issued by collecting officer of
(IRR) of RA 9184, as amended on authorized collecting officers the procuring
September 2, 2009: for the sale of bidding entity?
17.4. Bidders may be asked to documents.
pay for the Bidding Documents to
recover the cost of its preparation
and development. The BAC shall 6. After submission of bids,
issue the Bidding Documents upon for bidders that downloaded
payment of the corresponding cost bidding documents, compare
thereof to the collecting/ disbursing the OR numbers indicated in
officer of the procuring entity the records of the BAC
concerned. Secretariat with copies of
17.5. Prospective bidders may the ORs or Report of
download the Bidding Documents Collection of authorized
from any of the said websites; collecting officers.
Provided that, bidders shall pay the
fee for the Bidding Documents upon
submission of their bids.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of
instances of non-compliance non-compliances to establish Appropriate Audit Working Papers
on the: the effects and develop
appropriate audit
a. validity of the recommendations.

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 94
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
procurement activities and
outputs including the
validity of the resulting
contract;
b. validity of any payment to
be made on the basis of
the contract;
c. etc.
and develop appropriate
audit recommendations

2. To verify the causes of Analyze the instances of


instances of non-compliance non-compliances to establish Appropriate Audit Working Papers
and develop appropriate the cause(s) and develop
appropriate audit
audit recommendations
recommendations.

3. To communicate the Prepare the appropriate


results of the audit with the audit/ validation document Audit Observation Memorandum (AOM), if
auditees Management reflecting the results of the applicable
audit/validation and transmit
to Management
COA Circular No. 2009-006 dated
September 15, 2009 re-
Prescribing the Use of the Rules
and Regulations on Settlement of
Accounts

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Prepared by:
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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 95
VI. PRE-BID CONFERENCE
For procurement of goods with
Approved Budget for the Contract of at least One Million Pesos (P 1 Million)

The pre-bid conference is the initial forum where the Procuring Entitys representatives
and the prospective bidders discuss the different aspects of the procurement at hand.

A pre-bid conference must be held for contracts with ABCs of at least One Million Pesos (P
1 Million). For contracts with ABCs of less than P 1 million, pre-bid conferences may or may not be
held at the discretion of the BAC. The BAC may also decide to hold a pre-bid conference upon the
written request of a prospective bidder.

A. AUDIT OBJECTIVES:

1. To verify if the BAC conducted a Pre-Bid Conference for a contract with ABC of at least
P1 million

2. To verify if the Pre-Bid Conference was conducted within the required time

3. To verify if during the Pre-Bid Conference the participants, led by the BAC, performed
the required tasks

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. Invitation to Bid;
2. Minutes of the pre-bid conference approved by the BAC;
3. Minutes of the BAC meeting on the selection of the Observer from the pool;
4. Invitations to the Observers with evidence of receipt.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of the
Answer
1. To verify if the BAC 1. If the ABC is at least P1 Did the BAC hold a
conducted a Pre-Bid million, obtain certified Pre-Bid Conference
Conference for a contract copies of the Invitation to for a contract with
with ABC of at least P1 Bid and Minutes of the Pre- ABC of at least P1
Bid Conference. million?
million

Implementing Rules and


Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
22.1. For contracts to be bid
with an approved budget of One
Million Pesos (P1,000,000.00) or
more, the BAC shall convene at
least one (1) pre-bid conference
to clarify and/or explain any of
the requirements, terms,
conditions, and specifications
stipulated in the Bidding
Documents. For contracts to be
bid with an approved budget of
less than One Million Pesos
(P1,000,000), pre-bid
conferences may be conducted

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 96
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of the
Answer
at the discretion of the BAC.
Subject to the approval of the
BAC, a pre-bid conference may
also be conducted upon written
request of any prospective
bidder.

2. To verify if the Pre-Bid 2. Based on the deadline for Was the Pre-Bid
Conference was held at the submission and receipt Conference held at
least twelve (12) calendar of bids indicated in the least twelve
days before the deadline Invitation to Bid, determine calendar days
the 12th day before such before the deadline
for the submission and
deadline. for the submission
receipt of bids and receipt of
3. Compare the date bids?
Implementing Rules and established in 2. above with
Regulations (IRR) of RA 9184, as the date of holding the Pre-
amended on September 2, 2009: Bid Conference indicated in
22.2 The pre-bid conference the certified copy of the
shall be held at least twelve Minutes of Pre-Bid
(12) calendar days before the Conference .
deadline for the submission and
receipt of bids. If the procuring
entity determines that, by
reason of the method, nature,
or complexity of the contract to
be bid or when international
participation will be more
advantageous to the GOP, a
longer period for the
preparation of bids is necessary,
the pre-bid conference shall be
held at least thirty (30) calendar
days before the deadline for the
submission and receipt of bids.

3. To verify if the BAC 4. From the Office Order Was there a


observed quorum. creating the BAC, determine quorum of the
the number of BAC BAC?
Implementing Rules and members and identify the
Regulations (IRR) of RA 9184, as Chairman or Vice-Chairman.
amended on September 2, 2009:
12.3 Quorum
A majority of the total BAC 5. From the Minutes of Pre-
composition as designated by the Bid Conference, check for
Head of the Procuring Entity shall the presence of the
constitute a quorum for the Chairman or Vice-Chairman
transaction of business, provided and if majority of the BAC
that the presence of the Chairman members or
or Vice-Chairman shall be representatives/alternates
required. attended the conference.

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 97
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of the
Answer
4. To verify if during the 6. From the Minutes of Pre- Did the BAC
Conference the BAC Bid Conference look for present, discuss,
performed the following information on the and answer queries
tasks and attained the presentation/discussion, on the following:
issues/questions raised by
related objectives:
prospective bidders, and a. eligibility
a. Presented the eligibility clarifications made thereon requirements?
requirements as well as relative to the following:
a. eligibility requirements, b. technical
the technical and
b. technical component of component of
financial components of
the contract to be bid, the contract to
the contract to be bid, c. financial component of be bid?
the evaluation the contract to be bid,
procedures, evaluation d. bid evaluation criteria, c. financial
criteria, and possible e. bid evaluation component of
causes of failure of the procedures, the contract to
bidding. f. post-qualification criteria, be bid?
g. post-qualification
b. Discussed the procedures, d. bid evaluation
requirements in the h. possible causes of failure criteria?
ITB, replied to the of the bidding,
bidders queries about i. requirements in the e. bid evaluation
the requirements, Instructions to Bidders, procedures?
j. specifications,
specifications and other
k. other conditions of the f. post-
conditions of the project, qualification
project, the procedures l. warranty requirement of criteria?
on the bid evaluation of the project,
all bidders and post- m. different offenses and g. post-
qualification evaluation penalties provided for in qualification
of the lowest calculated IRR of RA 9184 procedures?
bidder. Emphasized the
warranty requirement h. possible causes
of failure of the
of the project and the
bidding?
different offenses and
penalties provided for i. requirements in
in IRR of RA 9184. the Instructions
to Bidders?
Implementing Rules and
Regulations (IRR) of RA 9184, as j. specifications?
amended on September 2, 2009:
k. other conditions
22.3. The pre-bid conference of the project?
shall discuss, among other
things, the eligibility l. warranty
requirements and the technical requirement of
and financial components of the the project?
contract to be bid. Attendance
of the bidders shall not be m. different
mandatory. However, AT THE offenses and
OPTION OF THE PROCURING penalties
ENTITY [amendment per provided for in
Annex A of GPPB Resolution IRR of RA
No. 06-2009 dated 30 9184?
September 2009] only those
who have purchased the
Bidding Documents shall be

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 98
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of the
Answer
allowed to participate in the
pre-bid conference and raise or
submit written queries or
clarifications.

Generic Procurement Manual,


Volume 2, Manual of Procedures
for the Procurement of Goods and
Services issued by the GPPB:
The manner by which the pre-
bid conference is conducted
depends on the discretion of the
BAC. However, several events
need to take place in the
conference, namely:
a. The presentation by the BAC
of the eligibility requirements
as well as the technical and
financial components of the
contract to be bid, the
evaluation criteria, and
possible causes of failure of
the bidding.
b.The BAC chairperson shall
also discuss the requirements
in the ITB, the replies to the
bidders queries about the
requirements, specifications
and other conditions of the
project, the bid evaluation of
all bidders and post-
qualification evaluation of the
lowest calculated bidder.
Emphasis should also be
given to the warranty
requirement of the project
and the different offenses and
penalties provided for in IRR-
A of R.A. 9184.

5. To verify if the BAC 7. Compare the date of the Were the Minutes
Secretariat recorded the approval of the Minutes of of the Pre-Bid
proceedings of the Pre-Bid the pre-bid conference with Conference made
the date of the pre-bid available not later
Conference and made the
conference. than three (3)
Minutes available to all calendar days after
participants not later than the pre-bid
three (3) calendar days conference?
after the pre-bid
conference

Implementing Rules and 8. Confirm with the Were the minutes


Regulations (IRR) of RA 9184, as participants (telephone calls of pre-bid
amended on September 2, 2009: or letters) if they were given conference made
22.4 The minutes of the pre-bid copies of the Minutes and available by the
conference shall be recorded when. BAC Secretariat to
and made available to all all the participants?

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Commission on Audit
Republic of the Philippines Page 99
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of the
Answer
participants not later than three
(3) calendar days after the pre-
bid conference

6. To verify if the BAC 9. From the Minutes of the Did the BAC
invited Observers: BAC meeting on the choose the
a. representing the COA, selection of the Observer Observers
from the pool, check for considering:
the specific relevant
information on the BACs
chamber-member of the
evaluation in regard to: a. one
Philippine Chamber of
the selection of the representing
Commerce and Industry,
organization from which the COA?
and a non-government
the Observer will be
organization (NGO) from
invited; b. One
the procuring entitys Pool
knowledge, experience or representing
of Observers;
expertise in procurement the specific
b. that have:
or in the subject matter relevant
b.1. knowledge, of the contract to be bid; chamber-
experience or expertise no actual or potential member of the
in procurement or in the conflict of interest in the Philippine
subject matter of the contract to be bid; and Chamber of
contract to be bid; conformed with other Commerce and
b.2. no actual or potential relevant criteria Industry?
conflict of interest in the determined by the BAC.
contract to be bid; and c. One
b.3. conformed with other representing a
relevant criteria non-
determined by the BAC; government
c. at least 3 calendar days organization?
prior to the pre-bid
conference d. With
knowledge,
experience or
Implementing Rules and expertise in
Regulations (IRR) of RA 9184, procurement or
as amended on September 2, in the subject
2009: matter of the
contract to be
Section 13. Observers
bid?
13.1. To enhance the
transparency of the process, the
e. With no actual
BAC shall, in all stages of the
or potential
procurement process, invite, in
conflict of
addition to the representative of
interest in the
the COA, at least two (2)
contract to be
observers, who shall not have the
bid?
right to vote, to sit in its
proceedings where:
a) At least one (1) shall come
f. Conformed with
from a duly recognized private
other relevant
group in a sector or discipline
criteria
relevant to the procurement at
determined by
hand, for example:
the BAC?
i)
ii) For goods, a specific relevant
chamber-member of the
Philippine Chamber of 10. From certified copies of Did the BAC invite
Commerce and Industry. the invitations to the the Observers at

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Commission on Audit
Republic of the Philippines Page 100
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of the
Answer
iii) and Observers with evidence of least 3 days before
b) The other observer shall come receipt, compare the date of the date of the
from a non-government receipt with the 3-day pre-bid
organization (NGO). minimum requirement. conference?

13.2. The observers shall come


from an organization duly
registered with the Securities
and Exchange Commission (SEC)
or the Cooperative Development
Authority (CDA), and should meet
the following criteria:
a) Knowledge, experience or
expertise in procurement or in
the subject matter of the
contract to be bid;
b) Absence of actual or potential
conflict of interest in the
contract to be bid; and
c) Any other relevant criteria that
may be determined by the BAC.
13.3. Observers shall be invited at
least three (3) calendar days
before the date of the
procurement stage/activity. The
absence of observers will not
nullify the BAC proceedings,
provided that they have been duly
invited in writing.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of
instances of non- non-compliances to establish Appropriate Audit Working Papers
compliance on the: the effects and develop
appropriate audit
a. validity of the recommendations.
procurement activities
and outputs including
the validity of the
resulting contract;
b. validity of any payment
to be made on the basis
of the contract;
c. etc.
and develop appropriate
audit recommendations.

2. To verify the causes of Analyze the instances of


instances of non- non-compliances to establish Appropriate Audit Working Papers
compliance and develop the cause(s) and develop
appropriate audit appropriate audit
recommendations.
recommendations

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 101
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of the
Answer
Implementing Rules and
Regulations (IRR) of RA 9184,
as amended on September 2,
2009:
13.3. Observers shall be invited
at least three (3) calendar days
before the date of the
procurement stage/activity. The
absence of observers will not
nullify the BAC proceedings,
provided that they have been
duly invited in writing.

3. To communicate the Prepare the appropriate


results of the audit with audit/ validation document Audit Observation Memorandum (AOM), if applicable
the auditees Management reflecting the results of the
audit/validation and transmit
to Management
COA Circular No. 2009-006
dated September 15, 2009 re-
Prescribing the Use of the Rules
and Regulations on Settlement
of Accounts

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 102
VII. SUPPLEMENTAL / BID BULLETINS FOR THE PROCUREMENT OF GOODS

Supplemental/Bid Bulletins may be issued upon the procuring entitys initiative for purposes of
clarifying or modifying any provision of the Bidding Documents at least seven (7) calendar days
before the deadline for the submission and receipt of bids. Any modification to the Bidding
Documents shall be identified as an amendment.

A. AUDIT OBJECTIVE:

To verify if Supplemental / Bid Bulletins were issued as required

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. Minutes of the Pre-Bid Conference approved by the BAC;
2. Copy of the Supplemental/Bid Bulletin;
3. Copies of Requests for Clarification submitted by bidder with evidence of receipt by the
BAC Secretariat;
4. Printouts of PhilGEPS web page evidencing posting of the Supplemental/Bid Bulletin;
5. Printout of the procuring entitys web page evidencing posting of the Supplemental/Bid
Bulletin.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
1. To verify if the BAC issued 1. Go over the Minutes of Did the BAC issue
Supplemental / Bid Bulletins the Pre-Bid Conference and Supplemental/Bid
in regard to statements made check for statements that Bulletins in regard to
could modify the terms of statements made at
at the pre-bid conference that
the Bidding Documents. the pre-bid
could modify the terms of the
conference that could
Bidding Documents 2. Obtain a copy of the modify the terms of
related Supplemental / Bid the Bidding
Implementing Rules and Regulations
Bulletin. Documents?
(IRR) of RA 9184, as amended on
September 2, 2009:
22.4. Any
statement made at the pre-bid
conference shall not modify the terms
of the Bidding Documents, unless
such statement is specifically
identified in writing as an amendment
thereto and issued as a
Supplemental/ Bid Bulletin.

2. To verify if: 3. Obtain copy/ies of Were Requests for


a. requests for Requests for Clarification Clarification
clarification(s) on any and check (date of receipt submitted at least ten
part of the Bidding stamped on the letters) (10) calendar days
whether these were before the deadline
Documents or for an
submitted at least ten (10) set for the submission
interpretation were in calendar days before the and receipt of bids?
writing and submitted to deadline set for the
the BAC of the procuring submission and receipt of
entity at least ten (10) bids.
calendar days before the

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Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
deadline set for the 4. Obtain duly certified Were Supplemental/
submission and receipt of copies of Supplemental/Bid Bid Bulletins signed
bids; Bulletins and check for the by the BAC
signature of the BAC Chairman?
b. the Supplemental/ Bid Chairman.
Bulletin was duly signed
by the BAC Chairman; 5. From the records of the Were Supplemental/
BAC (copies of Bid Bulletins issued at
c. the Supplemental/ Bid Supplemental/Bid Bulletins least seven (7)
Bulletin was issued at with evidence of the date of calendar days before
least seven (7) calendar issuance) check if the deadline for the
days before the deadline Supplemental/Bid Bulletins submission and
for the submission and were issued at least seven receipt of bid?
receipt of bid. (7) calendar days before the
deadline for the submission
Implementing Rules and Regulations and receipt of bid.
(IRR) of RA 9184, as amended on
September 2, 2009:
22.5.1 Requests for clarification(s)
on any part of the Bidding
Documents or for an interpretation
must be in writing and submitted
to the BAC of the procuring entity
at least ten (10) calendar days
before the deadline set for the
submission and receipt of bids. The
BAC shall respond to the said
request by issuing a
Supplemental/Bid Bulletin, duly
signed by the BAC Chairman, to be
made available to all those who
have properly secured the Bidding
Documents, at least seven (7)
calendar days before the deadline
for the submission and receipt of
bids.

3. To verify if:
6. Obtain duly certified Were Supplemental/
a. Supplemental/Bid Bulletins copies of Supplemental/Bid Bid Bulletins initiated
initiated by the procuring Bulletins with evidence of by the procuring
entity for purposes of the date of issuance and entity for purposes of
clarifying or modifying any check if these were issued at clarifying or
provision of the Bidding least seven (7) calendar modifying any
Documents were issued at days before the deadline for provision of the
the submission and receipt Bidding Documents
least seven (7) calendar of bid. were issued at least
days before the deadline seven (7) calendar
for the submission and days before the
receipt of bids; deadline for the
submission and
b. Modifications to the receipt of bids?
Bidding Documents were
identified as amendments.

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Commission on Audit
Republic of the Philippines Page 104
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
Implementing Rules and Regulations 7. Go through the contents Were modifications to
(IRR) of RA 9184, as amended on of Supplemental/Bid the Bidding
September 2, 2009: Bulletins and check if Documents were
22.5.1. issuing a amendments were identified identified as
Supplemental/Bid Bulletin, duly as such. amendments?
signed by the BAC Chairman

22.5.2 Supplemental/Bid Bulletins 8. Go through the Were


may be issued upon the procuring Supplemental/Bid Bulletins Supplemental/Bid
entitys initiative for purposes of and check for the signature Bulletins duly signed
clarifying or modifying any of the BAC Chairman. by the BAC
provision of the Bidding Documents Chairman?
at least seven (7) calendar days
before the deadline for the
submission and receipt of bids.
Any modification to the Bidding
Documents shall be identified as an
amendment.

4. To verify if the BAC posted 9. In advance of the posting, Did the BAC post
Supplemental/ Bid Bulletins request the BAC Secretariat Supplemental/Bid
issued by the BAC on the for print-outs (printed on the Bulletins issued:
day of the posting) of
PhilGEPS and at the website
Supplemental/Bid Bulletins a. on the PhilGEPS
of the procuring entity
as posted on the PhilGEPS website?
concerned, if available and at their website.
AND
Implementing Rules and Regulations 10. Obtain from the BAC
(IRR) of RA 9184, as amended on Secretariat the print-outs b. the website of the
September 2, 2009: requested in 9. above. procuring entity
22.5.3 Any Supplemental/ Bid concerned?
Bulletin issued by the BAC shall
also be posted on the PhilGEPS or
[OR was changed to AND per
Annex A of GPPB Resolution No.
06-2009 dated September 30,
2009] the website of the procuring
entity concerned, if available. It
shall be the responsibility of all
those who have properly secured
the Bidding Documents to inquire
and secure Supplemental/Bid
Bulletins that may be issued by the
BAC. However, bidders who have
submitted bids before the issuance
of the Supplemental/Bid Bulletin
must be informed and allowed to
modify or withdraw their bids in
accordance with Section 26.1 of
the IRR.

5. To verify if the BAC 11. From the BAC records on Did the BAC inform
informed the bidders who submission of bids, identify the Bidders who have
have submitted bids before the bidders who have submitted bids before
submitted bids before the the issuance of the
the issuance of the
issuance of Supplemental/Bid
Supplemental/Bid Bulletin Supplemental/Bid Bulletins. Bulletin of such

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of the
Answer
and allowed to modify or issuance?
withdraw their bids.

Implementing Rules and Regulations 12. Go through copies of Were the bidders who
(IRR) of RA 9184, as amended on letters sent by the BAC to have submitted bids
September 2, 2009: these bidders and check if before the issuance of
22.5.3 However, bidders who they were informed and Supplemental/Bid
have submitted bids before the allowed to modify or Bulletins informed
issuance of the Supplemental/Bid withdraw their bids in and allowed to modify
Bulletin must be informed and accordance with Section or withdraw their bids
allowed to modify or withdraw their 26.1 of the IRR in accordance with
bids in accordance with Section Section 26.1 of the
26.1 of the IRR. IRR?

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of
instances of non-compliance non-compliances to establish Appropriate Audit Working Papers
on the: the effects and develop
appropriate audit
a. validity of the procurement recommendations.
activities and outputs
including the validity of the
resulting contract;
b. validity of any payment to
be made on the basis of
the contract;
c. etc.
and develop appropriate
audit recommendations

2. To verify the causes of Analyze the instances of


instances of non-compliance non-compliances to establish Appropriate Audit Working Papers
and develop appropriate the cause(s) and develop
appropriate audit
audit recommendations
recommendations.

3. To communicate the Prepare the appropriate


results of the audit with the audit/ validation document Audit Observation Memorandum (AOM), if
auditees Management reflecting the results of the applicable
audit/validation and transmit
COA Circular No. 2009-006 dated to Management
September 15, 2009 re- Prescribing
the Use of the Rules and
Regulations on Settlement of
Accounts

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VIII. SUBMISSION, RECEIPT, OPENING OF BIDS
& PRELIMINARY EXAMINATION OF BIDS
FOR THE PROCUREMENT OF GOODS

Bids shall be submitted simultaneously in two (2) separate sealed envelopes and received
by the procuring entity on or before the deadline specified in the Invitation to Bid. Opening of Bids
shall be at the time, date and place specified in the Invitation to Bid.

A. AUDIT OBJECTIVES:

1. To verify if the prescribed conditions and procedures in the submission and


receipt of bids were followed

2. To verify if the bids were submitted in the prescribed manner, specified forms and
contained all the required information

3. To verify if the prescribed conditions and procedures in the opening and


preliminary examination of bids were followed.

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. Minutes of the Bid Opening approved by the BAC;
2. Letters from bidders submitting their bids;
3. Bid documents submitted by the bidders;
4. Copy of portions of the BAC Secretariats Receiving logbook containing information on
receipt of bids;
5. Invitation to Bid;
6. Accomplished Checklist for the First Envelopes;
7. Accomplished Checklist for the Second Envelopes;
8. Abstract of Bids as Read;
9. BAC Resolution on the results of the opening and the preliminary evaluation of bids;
10. Minutes of the BAC meeting on the selection of the Observer from the pool;
11. Invitations to the Observers with evidence of receipt.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
SUBMISSION OF BIDS FOR THE PROCUREMENT OF GOODS
1. To verify if the BAC 1. Go through the Minutes of the Did the BAC validate if
validated if the bidders Bid Opening and look for the bidders submit their
submitted their bids: information on the BACs bids through their duly
validation if the signatory to the authorized
a. through their duly
document submitting the bid is representative?
authorized representative, the bidders authorized
b. using the forms specified in representative as indicated in the
the Bidding Documents, Sworn statement .
c. in two (2) separate sealed
bid envelopes submitted
simultaneously

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Implementing Rules and Regulations 2. Go through the Minutes of the Did the BAC validate if
(IRR) of RA 9184, as amended on Bid Opening and look for the bidders submitted
September 2, 2009: information on the BACs their bids using the
25.1. Bidders shall submit their validation if each bidder adopted forms specified in the
bids through their duly authorized the forms specified in the Bidding Bidding Documents?
representative using the forms Documents.
specified in the Bidding
Documents in two (2) separate 3. Go through the records of the Did the bidders submit
sealed bid envelopes, and which BAC pertaining to the submission their bids in two (2)
shall be submitted simultaneously. of bids of each bidder and check separate sealed bid
The first shall contain the if the two (2) envelopes were envelopes submitted
technical component of the bid, submitted simultaneously. simultaneously?
including the eligibility
requirements under Section 23.1 4. Go through the Minutes of the
of this IRR, and the second shall Bid Opening and look for
contain the financial component of information pertaining to opening
the bid. of two (2) sealed envelopes of
each bidder.

2. To verify if the 5. Go through the records of the Did the BAC validate
BAC validated that in BAC pertaining to the submission that the bidders
modifying a bid: of bids of each bidder and check concerned submit their
if the submission of modifications bid modifications before
a. it was done before the were done before the deadline the deadline for the
deadline for the for the submission and receipt. submission and receipt?
submission and receipt of
6. Go through the Minutes of the Did the BAC validate if
bids,
Bid Opening and look for the bidders concerned
b. the original bid was not information on the BACs did not retrieve the
retrieved but another bid activities validating if: original bid but merely
a. modifications were marked as submitted another bid
equally sealed, properly
modification and stamped equally sealed, properly
identified, was submitted received by the BAC; and identified, and linked to
and linked to the original b. linked to the original bid (not the original bid and
bid and marked as a withdrawn). marked as a
modification, thereof, modification, thereof,
and stamped received by and stamped received
the BAC by the BAC?

Implementing Rules and Regulations


(IRR) of RA 9184, as amended on
September 2, 2009:
26.1. A bidder may modify its bid,
provided that this is done before
the deadline for the submission
and receipt of bids. Where a
bidder modifies its bid, it shall not
be allowed to retrieve its original
bid, but shall only be allowed to
send another bid equally sealed,
properly identified, linked to its
original bid and marked as a
modification, thereof, and
stamped received by the BAC.
Bid modifications received after
the applicable deadline shall not

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be considered and shall be
returned to the bidder unopened.
26.2. A bidder may, through a
letter, withdraw its bid before the
deadline for the receipt of bids.
Withdrawal of bids after the
applicable deadline shall be
subject to appropriate sanctions
as prescribed in this IRR. A bidder
may also express its intention not
to participate in the bidding
through a letter which should
reach and be stamped received by
the BAC before the deadline for
the receipt of bids. A bidder that
withdraws its bid shall not be
permitted to submit another bid,
directly or indirectly, for the same
contract.

RECEIPT OF BIDS FOR THE PROCUREMENT OF GOODS


1. To verify if the BAC 1. Check the receiving logbook of Did the BAC receive
received bids on the: the BAC on the date, time, and bids on the date and
a. date, place of receipt of bids and time specified in the
compare these with those in the Invitation to Bid?
b. time, and
Invitation to Bid
c. place
specified in the Invitation to Were the bids received
Bid by the BAC at the place
specified in the
Implementing Rules and Regulations Invitation to Bid?
(IRR) of RA 9184, as amended on
September 2, 2009:
Were bids submitted
25.4. Bids shall be received by the
after the deadline for
BAC on the date, time, and place
submission of bids not
specified in the Invitation to Bid.
accepted?
25.5. Bids, including the eligibility
requirements under Section 23.1
of this IRR, submitted after the
deadline shall not be accepted by
the BAC.

2. To verify if the BAC 2. Count the number of days Did the BAC observe the
observed the maximum of 45 from the last day of posting of maximum of 45
calendar days from the last the Invitation to Bid up to the calendar days from the
day of posting of the deadline for submission and last day of posting of
receipt of bids and compare with the Invitation to Bid up
Invitation to Bid up to the the 45-day maximum period. to the deadline for
deadline for submission and submission and receipt
receipt of bids of bids?

Implementing Rules and Regulations


(IRR) of RA 9184, as amended on
September 2, 2009:
25.4. Bids shall be received by the

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BAC on the date, time, and place
specified in the Invitation to
Bid/Request for Expression of
Interest. The following periods
from the last day of posting of the
Invitation to Bid/Request for
Expression of Interest up to the
submission and receipt of bids
shall be observed:
a) For Goods, a maximum period
of forty-five (45) calendar days.
b)
c)

OPENING & PRELIMINARY EXAMINATION OF BIDS FOR THE PROCUREMENT OF GOODS


1. To verify if the BAC 1. From the Office Order Was there a quorum of
observed quorum. creating the BAC, determine the the BAC?
number of BAC members and
Implementing Rules and Regulations identify the Chairman or Vice-
(IRR) of RA 9184, as amended on Chairman.
September 2, 2009:
12.3 Quorum 2. From the Minutes of Opening
A majority of the total BAC of Bids, check for the presence
composition as designated by the of the Chairman or Vice-
Head of the Procuring Entity shall Chairman and if majority of the
constitute a quorum for the BAC members or
transaction of business, provided that representatives/alternates
the presence of the Chairman or attended the proceedings.
Vice-Chairman shall be required.

2. To verify if the BAC opened 3. Compare the date and time of Did the BAC open the
the bids immediately after the opening of bids indicated in bids immediately after
the deadline for the the Minutes of the Opening of the deadline for the
Bids with the deadline for submission and receipt
submission and receipt of
submission and receipt of bids of bids?
bids and at the: stated in the Bidding Documents.
a. date, Did the BAC open the
b. time, and 4. Compare the date, time and bids on the date
c. place place of the opening of bids specified in the
specified in the Invitation to indicated in the Minutes of the Invitation to Bid?
Bid Opening of Bids with those
specified in the Invitation to Bid. Did the BAC open the
Implementing Rules and Regulations bids on the time
(IRR) of RA 9184, as amended on specified in the
September 2, 2009: Invitation to Bid?
29. Bid Opening
The BAC shall open the bids Did the BAC open the
immediately after the deadline for bids at the place
the submission and receipt of bids. specified in the
[GPPB Resolution No. 13-2009, Invitation to Bid?
dated 16 December 2009] The
time, date, and place of the
opening of bids shall be specified
in the Bidding Documents. The
bidders or their duly authorized
representatives may attend the

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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.

3. To verify if the BAC/BAC 5. From the Minutes of Bid Did the BAC:
Secretariat read out and Opening, check for information
recorded during bid opening on the BACs reading out and a. read out and record
letters of withdrawal and recording of withdrawn bids during bid opening
during the bid opening; checking letters of withdrawal of
returned to the bidder the of the date of submission of the bids?
envelope containing the withdrawal letter; and returning
corresponding withdrawn bid the withdrawn bid unopened. b. if the withdrawal of
unopened, either to the bid was made before
bidders representative if he 6. Also check for evidence of the the deadline for
is present or by registered return of the withdrawn bids submission and receipt
mail from acknowledged registered of bids, return the bids
mails. unopened to
Philippine Bidding Documents for the representatives of the
Procurement of Goods, 3rd edition bidders concerned
(October 2009) approved per GPPB present during the bid
Resolution No. 05-2009 dated 30 opening?
September 2009:
23. Modification and Withdrawal c. if the withdrawal of
of Bids bid was made before
23.1. The Bidder may modify its the deadline for
bid after it has been submitted; submission and receipt
provided that the modification is of bids, return
received by the Procuring Entity withdrawn bids
prior to the deadline prescribed unopened by registered
for the submission and receipt mail?
of bids. The Bidder shall not be
allowed to retrieve its original 7. From the Minutes of the Bid Did the BAC forfeit the
bid, but shall be allowed to Opening, check for information bid security and
submit another bid, equally on withdrawals of bids made recommend the
sealed, properly identified, after the deadline for submission imposition of sanctions
linked to its original bid, marked and receipt of bids up to the on bidders who
as TECHNICAL expiration of the period of bid withdrew their bids
MODIFICATION or FINANCIAL validity specified by the bidder in during the interval
MODIFICATION and stamped the financial bid form; and for between the deadline
received by the BAC. Bid information on forfeiture of bid for submission of bids
modifications received after the security and imposition of and the expiration of
applicable deadline shall not be sanctions on these bidders. the period of bid validity
considered and shall be specified by the Bidder
returned to the bidder on the Financial Bid
unopened. Form?
23.2. A Bidder may, through a
letter of withdrawal, withdraw
its bid after it has been
submitted, for valid and
justifiable reason; provided that
the letter of withdrawal is

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received by the Procuring Entity
prior to the deadline prescribed
for submission and receipt of
bids.
23.3. Bids requested to be
withdrawn in accordance with
ITB Clause 23.1, shall be
returned unopened to the
Bidders. A Bidder may also
express its intention not to
participate in the bidding
through a letter which should
reach and be stamped by the
BAC before the deadline for
submission and receipt of bids.
A Bidder that withdraws its bid
shall not be permitted to submit
another bid, directly or
indirectly, for the same contract.
23.4. No bid may be modified
after the deadline for
submission of bids. No bid may
be withdrawn in the interval
between the deadline for
submission of bids and the
expiration of the period of bid
validity specified by the Bidder
on the Financial Bid Form.
Withdrawal of a bid during this
interval shall result in the
forfeiture of the Bidders bid
security, pursuant to ITB Clause
18.5, and the imposition of
administrative, civil, and
criminal sanctions as prescribed
by RA 9184 and its IRR.

24. Opening and Preliminary


Examination of Bids
24.3 Letters of withdrawal
shall be read out and recorded
during bid opening, and the
envelope containing the
corresponding withdrawn bid
shall be returned to the Bidder
unopened. If the withdrawing
Bidders representative is in
attendance, the original bid and
all copies thereof shall be
returned to the representative
during the bid opening. If the
representative is not in
attendance, the bid shall be
returned unopened by
registered mail. The Bidder may
withdraw its bid prior to the
deadline for the submission and

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receipt of bids, provided that
the corresponding Letter of
Withdrawal contains a valid
authorization requesting for
such withdrawal, subject to
appropriate sanctions.

4. To verify if the BAC opened 8. From the Attendance Did the BAC open the
the first bid envelopes of the Record/Minutes of the Opening first bid envelopes of
bidders in public of Bids check if the participants the bidders in public?
include bidders and observers.
Implementing Rules and Regulations
(IRR) of RA 9184, as amended on
September 2, 2009:
30.1. The BAC shall open the first
bid envelopes of prospective
bidders in public to determine
each bidders compliance with the
documents required to be
submitted for eligibility and for the
technical requirements, as
prescribed in this IRR. For this
purpose, the BAC shall check the
submitted documents of each
bidder against a checklist of
required documents to ascertain if
they are all present, using a
nondiscretionary pass/fail
criterion, as stated in the
Instructions to Bidders. If a bidder
submits the required document, it
shall be rated passed for that
particular requirement. In this
regard, bids that fail to include
any requirement or are incomplete
or patently insufficient shall be
considered as failed. Otherwise,
the BAC shall rate the said first bid
envelope as passed

5. To verify if the BAC 9. Compare the Checklist with Did the BAC adopt a
determined compliance of the list of documents in the first Checklist for the first
each bidder with the envelope per Bidding envelope in accordance
Documents. with the list of
documents required to be
documents in the first
submitted in the first
envelope per Bidding
envelope by checking the Documents?
submitted documents of each
bidder against a checklist of 10. Validate the entries Did the BAC determine
required documents to (pass/fail) in the Checklist with each prospective
ascertain if they are all the documents submitted by the bidders compliance
bidders in the first envelope (for with the documents
present, using a
presence or absence). required to be
nondiscretionary pass/fail submitted in the first
criterion, as stated in the envelope:
Instructions to Bidders

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Implementing Rules and Regulations a. Registration
(IRR) of RA 9184, as amended on certificate from SEC,
September 2, 2009: Department of Trade
30.1. The BAC shall open the first and Industry (DTI)
bid envelopes of prospective bidders for sole
in public to determine each bidders proprietorship, or
compliance with the documents CDA for
required to be submitted for cooperatives, or any
eligibility and for the technical proof of such
requirements, as prescribed in this registration as stated
IRR. For this purpose, the BAC shall in the Bidding
check the submitted documents of Documents?
each bidder against a checklist of
required documents to ascertain if b. In a Joint Venture,
they are all present, using a each partners
nondiscretionary pass/fail criterion, Registration
as stated in the Instructions to certificate from SEC,
Bidders. If a bidder submits the Department of Trade
required document, it shall be rated and Industry (DTI)
passed for that particular for sole
requirement. In this regard, bids proprietorship, or
that fail to include any requirement CDA for
or are incomplete or patently cooperatives, or any
insufficient shall be considered as proof of such
failed. Otherwise, the BAC shall registration as stated
rate the said first bid envelope as in the Bidding
passed. Documents?

25.2. The first envelope shall c. Mayors permit


contain the following technical issued by the city or
information/ documents, at the municipality where
least: the principal place of
a) For the procurement of goods: business of the
i) Eligibility requirements under prospective bidder is
Section 23.1 of this IRR; located?
ii) The bid security in the
prescribed form, amount and d. In a Joint Venture,
validity period; each partners
iii) Technical specifications, which Mayors permit
may include production/delivery issued by the city or
schedule, manpower municipality where
requirements, and/or after-sales the principal place of
service/parts, if applicable; and business of the
iv) Sworn statement by the prospective bidder is
prospective bidder or its duly located?
authorized representative in the
form prescribed by the GPPB as to e. Statement of the
the following:
prospective bidder of
(1) It is not blacklisted or barred
all its ongoing and
from bidding by the GOP or any completed
of its agencies, offices, government and
corporations, or LGUs, including
private contracts,
foreign government/foreign or
including contracts
international financing awarded but not yet
institution whose blacklisting started, if any,
rules have been recognized by
whether similar or
the GPPB;
not similar in nature

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(2) Each of the documents and complexity to
submitted in satisfaction of the the contract to be
bidding requirements is an bid, within the
authentic copy of the original, relevant period as
complete, and all statements provided in the
and information provided Bidding Documents?
therein are true and correct;
(3) It is authorizing the Head of
the Procuring Entity or his duly e.1. In a Joint
authorized representative/s to Venture, any
verify all the documents partners?
submitted;
(4) The signatory is the duly
authorized representative of the f. The bidders audited
prospective bidder, and granted financial statements,
full power and authority to do, showing, among
execute and perform any and all others, the
acts necessary and/or to prospective bidders
represent the prospective bidder total and current
in the bidding, with the duly assets and liabilities,
notarized Secretarys Certificate stamped received
attesting to such fact, if the by the BIR or its duly
prospective bidder is a accredited and
corporation, partnership, authorized
cooperative, or joint venture; institutions, for the
(5) It complies with the disclosure preceding calendar
provision under Section 47 of year which should
the Act in relation to other not be earlier than
provisions of R.A. 3019; two (2) years from
(6) It complies with the the date of bid
responsibilities of a prospective submission?
or eligible bidder provided in the
PBDs; and f.1. In a Joint
(7) It complies with existing labor Venture, any
laws and standards, in the case partners?
of procurement of services.

23.1. For purposes of determining g. The bidders


the eligibility of bidders using the computation for its
criteria stated in Section 23.5 of this Net Financial
IRR, only the following documents Contracting Capacity
shall be required by the BAC, using (NFCC) or a
the forms prescribed in the Bidding commitment from a
Documents,: Universal or
a) Class A Documents Commercial Bank to
extend a credit line
Legal Documents in favor of the
i) Registration certificate from prospective bidder if
SEC, Department of Trade and awarded the
Industry (DTI) for sole contract to be bid
proprietorship, or CDA for (CLC)?
cooperatives, or any proof of
such registration as stated in g.1. In a Joint
the Bidding Documents. Venture, any
ii) Mayors permit issued by the partners?
city or municipality where the
principal place of business of

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the prospective bidder is h. Valid joint venture
located. Agreement (JVA), in
case the joint
Technical Documents
venture is already in
iii) Statement of the prospective
existence.
bidder of all its ongoing and
completed government and
In the absence of
private contracts, including
a JVA, duly notarized
contracts awarded but not yet
statements from all
started, if any, whether similar
the potential joint
or not similar in nature and
venture partners
complexity to the contract to be
stating that they will
bid, within the relevant period
enter into and abide
as provided in the Bidding
by the provisions of
Documents. The statement shall
the JVA in the
include all information required
instance that the bid
in the PBDs prescribed by the
is successful?
GPPB.
iv)
Financial Documents i. The bid security in
v) The prospective bidders the prescribed:
audited financial statements, (1) form?
showing, among others, the (2) amount?
prospective bidders total and (3) validity period?
current assets and liabilities,
stamped received by the BIR
or its duly accredited and j. Technical
authorized institutions, for the specifications, which
preceding calendar year which may include:
should not be earlier than two (1) production/
(2) years from the date of bid delivery
submission. schedule?
vi) The prospective bidders (2) manpower
computation for its Net Financial requirements?
Contracting Capacity (NFCC) or (3) after-sales
a commitment from a Universal service/parts, if
or Commercial Bank to extend a applicable?
credit line in favor of the
prospective bidder if awarded
the contract to be bid (CLC). k. Sworn statement by
b) Class B Document the prospective
bidder or its duly
Valid joint venture Agreement authorized
(JVA), in case the joint venture is representative in the
already in existence. In the form prescribed by
absence of a JVA, duly notarized the GPPB as to the
statements from all the potential following:
joint venture partners stating that (1) It is not
they will enter into and abide by blacklisted or
the provisions of the JVA in the barred from
instance that the bid is successful bidding by the
shall be GOP or any of its
included in the bid. Failure to agencies, offices,
enter into a joint venture in the corporations, or
event of a LGUs, including
contract award shall be ground for foreign
the forfeiture of the bid security. government/

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Each partner of the joint venture foreign or
shall submit the legal eligibility international
documents. The submission of financing
technical and financial eligibility institution whose
documents by any of the joint blacklisting rules
venture partners constitutes have been
compliance. recognized by the
GPPB?
27.1. All bids shall be
(2) Each of the
accompanied by a bid security, documents
payable to the procuring entity submitted in
concerned as a guarantee that the satisfaction of the
successful bidder shall, within ten bidding
(10) calendar days or less, as requirements is an
indicated in the Instructions to authentic copy of
Bidders, from receipt of the notice of the original,
award, enter into contract with the complete, and all
procuring entity and furnish the
statements and
performance security required in information
Section 39 of this IRR, except when provided therein
Section 37.1 of this IRR allows a are true and
longer period. Failure to enclose the correct?
required bid security in the form and (3) It is authorizing
amount prescribed herein shall the Head of the
automatically disqualify the bid Procuring Entity or
concerned.
his duly authorized
27.2 The bid security shall be in representative/s to
an amount equal to a percentage of verify all the
the ABC in accordance with the documents
following schedule [as amended by submitted?
Annex A of GPPB Resolution No. 06- (4) The signatory is
2009 dated September 30, 2009]: the duly
authorized
Amount of Bid representative of
Security (Equal
Form of Bid Security
to Percentage of the prospective
the ABC) bidder, and
a) Cash or cashiers/ granted full power
managers check Two percent and authority to
issued by a Universal (2%)
or Commercial Bank. do, execute and
b) Bank draft/ perform any and
guarantee or all acts necessary
irrevocable letter of
credit issued by a
and/or to
Universal or represent the
Commercial Bank: prospective bidder
Provided, however, in the bidding,
that it shall be
confirmed or authentic- with the duly
ated by a Universal or notarized
Commercial Bank, if Secretarys
issued by a foreign
bank.
Certificate
c) Surety bond callable attesting to such
upon demand issued fact, if the
by a surety or prospective bidder
insurance company Five percent
duly certified by (5%) is a corporation,
Insurance Commission partnership,
as authorized to issue cooperative, or
such security.
joint venture?
(5) It complies with

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d) Any combination of Proportionate to the disclosure
the foregoing. share of form
with respect to
provision under
total amount of Section 47 of the
security Act in relation to
other provisions of
For biddings conducted by LGUs, the R.A. 3019?
prospective bidder may also submit (6) It complies with
bid securities in the form of the responsibilities
cashiers/managers check, bank of a prospective or
draft/guarantee, or eligible bidder
irrevocable letter of credit from other provided in the
banks certified by the BSP as PBDs?
authorized to issue such financial (7) It complies with
instrument. existing labor laws
and standards, in
27.3. The bid security shall be the case of
denominated in Philippine Pesos and procurement of
posted in favor of the procuring services?
entity.

28.1. Bids and bid securities shall


be valid for a reasonable period as
determined by the Head of the
Procuring Entity concerned, which
shall be indicated in the Bidding
Documents, but in no case shall the
period exceed one hundred twenty
(120) calendar days from the date of
the opening of bids.

Section 47. Disclosure of Relations


All bids shall be accompanied by a
sworn affidavit of the bidder that it is
not related to the Head of the
Procuring Entity, members of the
BAC, the TWG, and the BAC
Secretariat, the head of the PMO or
the end-user unit, and the project
consultants, by consanguinity or
affinity up to the third civil degree.
Failure to comply with the
aforementioned provision shall be a
ground for the automatic
disqualification of the bid in
consonance with Section 30 of this
IRR. For this reason, relation to the
aforementioned persons within the
third civil degree of consanguinity or
affinity shall automatically disqualify
the bidder from participating in the
procurement of contracts of the
procuring entity. On the part of the
bidder, this provision shall apply to
the following persons:
a) If the bidder is an individual or a
sole proprietorship, to the bidder
himself;
b) If the bidder is a partnership, to all

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its officers and members;
c) If the bidder is a corporation, to all
its officers, directors, and
controlling stockholders; and
d) If the bidder is a joint venture, the
provisions of items (a), (b), or (c)
of this Section shall
correspondingly apply to each of
the members of the said joint
venture, as may be appropriate.

6. To verify if the BAC opened 11. From the Checklists and Did the BAC open only
the second envelopes of the Minutes of the Bid Opening and the second envelopes of
bidders whose first envelopes of the first envelope identify the the bidders whose first
were rated passed on the same bidders who were rated passed envelopes were rated
day and determined compliance passed?
with the requirements using a
nondiscretionary pass/fail
criterion, as stated in the
Instructions to Bidders

Implementing Rules and Regulations


(IRR) of RA 9184, as amended on 12. From the Minutes of the Bid Did the BAC open the
September 2, 2009: Opening, check if the second second envelopes on
envelopes of the bidders who the same day when the
30.2 Immediately after
were rated passed was opened first envelopes were
determining compliance with the
by the BAC on the same day opened?
requirements in the first envelope,
when the first envelopes were
the BAC shall forthwith open the
opened.
second bid envelope of each
remaining eligible bidder whose
first bid envelope was rated
passed. The second envelope of
each complying bidder shall be
opened within the same day In
13. Compare the Checklist with Was the BACs Checklist
case one or more of the
the list of documents in the in accordance with the
requirements in the second
second envelope per Bidding list of documents in the
envelope of a particular bid is
Documents. second envelope per
missing, incomplete or patently
Bidding Document?
insufficient, and/or if the
submitted total bid price exceeds
the ABC, the BAC shall rate the bid
concerned as failed. Only bids
that are determined to contain all
the bid requirements for both
components shall be rated
passed and shall immediately be 14. Validate the entries Did the BAC determine
(pass/fail) in the Checklist with each bidders
considered for evaluation and
comparison. the documents submitted by compliance with the
the bidders in the second documents required to
25.3. The second envelope shall envelope (for presence or be submitted in the
contain the financial absence). second envelope:
information/documents as (a) Financial Bid Form,
specified in the PBDs. which includes

a.1 bid prices?

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Philippine Bidding Documents for the a.2 bill of
Procurement of Goods, 3rd Edition quantities?
(October 2009) issued by the GPPB:
a.3 Price
Instruction to Bidders (ITB) 13. Schedules?
Documents Comprising the Bid:
Financial Component a.4 total bid price?
13.1 Unless otherwise stated in
the BDS, the financial component (b) If the bidder claims
of the bid shall contain the preference as a
following: Domestic Bidder or
(a) Financial Bid Form, which Domestic Entity, a
includes bid prices and the bill of certification from
quantities and the applicable Price the:
Schedules, in accordance with ITB
Clauses 15.1 and 15.4; DTI? or
(b) If the bidder claims preference
as a Domestic Bidder or Domestic SEC? or
Entity, a certification from the
DTI, SEC, or CDA issued in CDA?
accordance with ITB Clause 27
15. From the Minutes of Bid Did the BAC
---- Opening, Abstract of Bids as automatically disqualify
15.1 The Bidder shall complete Read, and relevant BAC bids higher than the
the appropriate Price Resolutions check if bids higher ABC?
than the ABC were automatically
Schedules included herein,
disqualified.
stating the unit prices, total
price per item, the total
amount and the expected
countries of origin of the
Goods to be supplied under
this Project.

----

15.4 Prices indicated on the


Price Schedule shall be entered
separately in the following
manner:

(a) For Goods offered from


within the Procuring Entitys
country:

(i) The price of the Goods


quoted EXW (ex works, ex
factory, ex warehouse, ex
showroom, or off-the-shelf, as
applicable), including all
customs duties and sales and
other taxes already paid or
payable:

(i.1) on the components and raw

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material used in the manufacture
or assembly of Goods quoted
ex works or ex factory; or

(i.2) on the previously


imported Goods of foreign
origin quoted ex warehouse,
ex showroom, or off-the-shelf
and any Procuring Entity
country sales and other taxes
which will be payable on the
Goods if the contract is
awarded.

(ii) The price for inland


transportation, insurance, and
other local costs incidental to
delivery of the Goods to their
final destination.

(iii) The price of other


(incidental) services, if any,
listed in the BDS.

(b) For Goods offered from


abroad:

(i) Unless otherwise stated in


the BDS, the price of the
Goods shall be quoted
Delivered Duty Paid (DDP) with
the place of destination in the
Philippines as specified in the
BDS. In quoting the price, the
Bidder shall be free to use
transportation through carriers
registered in any eligible
country. Similarly, the Bidder
may obtain insurance services
from any eligible source
country.

(ii) The price of other


(incidental) services, if any, are
listed in the BDS.

----

27. Domestic Preference


27.1 Unless otherwise stated in
the BDS, the Procuring Entity will

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grant a margin of preference for
the purpose of comparison of bids
in accordance with the following:

(a) The preference shall be


applied when (i) the lowest
Foreign Bid is lower than the
lowest bid offered by a
Domestic Bidder, or (ii) the
lowest bid offered by a non-
Philippine national is lower
than the lowest bid offered by
a Domestic Entity.
(b) For evaluation purposes, the
lowest Foreign Bid or the bid
offered by a non-Philippine
national shall be increased by
fifteen percent (15%).
(c) In the event that (i) the
lowest bid offered by a
Domestic Entity does not
exceed the lowest Foreign Bid
as increased, or (ii) the lowest
bid offered by a non-
Philippine national as
increased, then the Procuring
Entity shall award the
contract to the Domestic
Bidder/Entity at the amount
of the lowest Foreign Bid or
the bid offered by a non-
Philippine national, as the
case may be.
(d) If the Domestic
Entity/Bidder refuses to
accept the award of contract
at the amount of the Foreign
Bid or bid offered by a non-
Philippine national within two
(2) calendar days from receipt
of written advice from the
BAC, the Procuring Entity
shall award to the bidder
offering the Foreign Bid or the
non-Philippine national, as the
case may be, subject to post-
qualification and submission
of all the documentary
requirements under these
Bidding Documents.

27.2. A Bidder may be granted


preference as a Domestic Entity
subject to the certification from
the DTI (in case of sole
proprietorships), SEC (in case of
partnerships and corporations), or

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CDA (in case of cooperatives)that
the (a) sole proprietorship is a
citizen of the Philippines or
the partnership, corporation,
cooperative, or association is duly
organized under the laws of the
Philippines with at least seventy
five percent (75%) of its interest
or outstanding capital stock
belonging to citizens of the
Philippines, (b) habitually
established in business and
habitually engaged in the
manufacture or sale of the
merchandise covered by is bid,
and (c) the business has been in
existence for at least five (5)
consecutive years prior to the
advertisement and/or posting of
the Invitation to Bid for this
Project.

27.3. A Bidder may be granted


preference as a Domestic Bidder
subject to the certification from
the DTI that the Bidder is offering
unmanufactured articles, materials
or supplies of the growth of
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.

----
31.1.The ABC shall be the
upper limit or ceiling for
acceptable bid prices. If a bid
price, as evaluated and
calculated in accordance with
this IRR, is higher than the
ABC, the bidder submitting the
same shall be automatically
disqualified. There shall be no
lower limit or floor on the
amount of the award.

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Answer
IN CASE A BIDDER DETERMINED AS FAILED FILES A REQUEST FOR RECONSIDERATION
1. To verify if the Bidder 1. Count the number of days Did the BAC ensure that
determined as failed FROM the date of bid opening or the Bidder determined
submitted his request for date of receipt of the notice by as failed submitted
the concerned Bidder TO the their requests for
reconsideration within 3 days
date of receipt by the BAC reconsideration within 3
upon written notice or, if
Secretariat of the letter-request days upon written
present at the time of bid for reconsideration (duly notice or, if present at
opening, upon verbal stamped received by the BAC the time of bid opening,
notification Secretariat) and compare with upon verbal
the 3-day maximum. notification?
Philippine Bidding Documents (PBDs)
for the Procurement of Goods, 3rd
Edition, (October 2009) approved by
2. From the Minutes of the Did the BAC evaluate if
the GPPB per GPPB Resolution No.
deliberation of the request for the failure was due to
06-2009 dated September 30, 2009:
reconsideration, look for the fault of the bidder?
24.7. A Bidder determined as information and finding if the
failed has three (3) calendar days failure was due to the fault of
upon written notice or, if present at the Bidder, and the if the BAC If in the affirmative, did
the time of bid opening, upon verbal decided not to grant the request. the BAC decide not to
notification within which to file a grant the request?
request or motion for
reconsideration with the BAC: 3. From the Minutes of the Did the BAC decide on
Provided, however, that the motion deliberation of the request for the request for
for reconsideration shall not be reconsideration, look for reconsideration within 7
granted if it is established that the information on the period within days from receipt
finding of failure is due to the fault which the BAC decided on the thereof?
of the Bidder concerned: Provided, request for reconsideration
further, that the BAC shall decide on from the date of receipt of the
the request for reconsideration request for reconsideration up to
within seven (7) calendar days from the date of decision (BAC
receipt thereof. If a failed bidder Resolution) on the decision
signifies his intent to file a request reached; and compare with the
for reconsideration, the BAC shall 7-day maximum period.
keep the bid envelopes of the said
failed Bidder unopened and/or duly
sealed until such time that the
request for reconsideration or
protest has been resolved.

INVOLVEMENT OF BAC OBSERVERS IN THE BID OPENING AND PRELIMINARY EXAMINATION OF


BIDS, INCLUDING EVALUATION AND DECISION ON MOTIONS FOR RECONSIDERATION
1. To verify if the BAC invited 1. From the Minutes of the BAC Did the BAC choose the
Observers: meeting on the selection of the Observers considering:
a. representing the COA, the Observer from the pool, check
specific relevant chamber- for information on the BACs a. one representing the
member of the Philippine evaluation in regard to: COA?
Chamber of Commerce and the selection of the
Industry, and a non- organization from which the b. One representing the
government organization Observer will be invited; specific relevant
(NGO) from the procuring knowledge, experience or chamber-member of
entitys Pool of Observers; expertise in procurement or in the Philippine
b. that have: the subject matter of the Chamber of
contract to be bid; Commerce and
b.1. knowledge, experience or Industry?
no actual or potential conflict
expertise in procurement or
of interest in the contract to

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in the subject matter of the be bid; and c. One representing a
contract to be bid; conformed with other relevant non-government
b.2. no actual or potential criteria determined by the organization?
conflict of interest in the BAC.
contract to be bid; and d. With knowledge,
b.3. conformed with other experience or
relevant criteria determined expertise in
by the BAC; procurement or in
the subject matter of
c. at least 3 calendar days
the contract to be
prior to the start of the
bid?
activity
e. With no actual or
Implementing Rules and potential conflict of
Regulations (IRR) of RA 9184, as interest in the
amended on September 2, 2009: contract to be bid?

Section 13. Observers f. Conformed with


13.1. To enhance the transparency of other relevant
the process, the BAC shall, in all criteria determined
stages of the by the BAC?
procurement process, invite, in
addition to the representative of the 2. From certified copies of the Did the BAC invite the
COA, at least two (2) observers, who invitations to the Observers with Observers at least 3
shall not have the right to vote, to sit evidence of receipt, compare the days before the date of
in its proceedings where: date of receipt with the 3-day the start of activities?
a) At least one (1) shall come from a minimum requirement.
duly recognized private group in a
sector or discipline relevant to the
procurement at hand, for example:
i)
ii) For goods, a specific relevant
chamber-member of the
Philippine Chamber of Commerce
and Industry.
iii) and
b) The other observer shall come
from a non-government
organization (NGO).

13.2. The observers shall come from


an organization duly registered with
the Securities
and Exchange Commission (SEC) or
the Cooperative Development
Authority (CDA), and should meet the
following criteria:
a) Knowledge, experience or
expertise in procurement or in the
subject matter of the contract to
be bid;
b) Absence of actual or potential
conflict of interest in the contract
to be bid; and
c) Any other relevant criteria that
may be determined by the BAC.

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13.3. Observers shall be invited
at least three (3) calendar days
before the date of the
procurement stage/activity. The
absence of observers will not
nullify the BAC proceedings,
provided that they have been
duly invited in writing.

2. To verify if the Procuring 3. Based on the BACs Minutes Did the Procuring Entity
Entity considered the on the bid opening, preliminary consider the comments/
comments/observations of evaluation of bids, evaluation observations of the
and decision on motions for Observers?
the Observers
reconsideration, and the report
Implementing Rules and of the Observers check whether
Regulations (IRR) of RA 9184, as a deliberation was made on the
comments /observations of the
amended on September 2, 2009:
observers.
13.4. The observers shall have the
following responsibilities:
a) To prepare the report either
jointly or separately indicating
their observations made on the
procurement activities conducted
by the BAC for submission to the
Head of the Procuring Entity, copy
furnished the BAC Chairman. The
report shall assess the extent of
the BACs compliance with the
provisions of this IRR and areas of
improvement in the BACs
proceedings;
b) To submit their report to the
procuring entity 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
c) To immediately inhibit and notify
in writing the procuring entity
concerned of any actual or
potential interest in the contract to
be bid.

13.5. Observers shall be allowed


access to the following documents
upon their request, subject to
signing of a confidentiality
agreement: (a) minutes of BAC
meetings; (b) abstract of Bids;
(c) post-qualification
summary report; (d) APP and
related PPMP; and (e) opened
proposals

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EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT
1. To verify the effects of Analyze the instances of non-
instances of non-compliance compliance to establish the Appropriate Audit Working Papers
on the: effects and develop appropriate
audit recommendations.
a. validity of the procurement
activities and outputs Also determine if appropriate
including the validity of the actions were taken by the
resulting contract; auditee in regard to instances of
non-compliance.
b. validity of any payment to
be made on the basis of
the contract; NOTE:
Also refer to the OFFENSES
c. etc. AND PENALTIES portion of this
and develop appropriate Audit Guide.
audit recommendations

Implementing Rules and


Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
13.3. Observers shall be invited at
least three (3) calendar days before
the date of the procurement
stage/activity. The absence of
observers will not nullify the BAC
proceedings, provided that they
have been duly invited in
writing.

2. To verify the causes of Analyze the instances of non-


instances of non-compliance compliances to establish the Appropriate Audit Working Papers
and develop appropriate cause(s) and develop appropriate
audit recommendations audit recommendations.

Also determine if appropriate


actions were taken by the
auditee in regard to instances of
non-compliance.

NOTE:
Also refer to the OFFENSES
AND PENALTIES portion of this
Audit Guide.

3. To communicate the Prepare the appropriate audit/


results of the audit with the validation document reflecting Audit Observation Memorandum (AOM), if
auditees Management the results of the audit/validation applicable
and transmit to Management
COA Circular No. 2009-006 dated
September 15, 2009 re- Prescribing
the Use of the Rules and
Regulations on Settlement of
Accounts

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IX. BID EVALUATION FOR THE PROCUREMENT OF GOODS

The purpose of bid evaluation is to determine the Lowest Calculated Bid. This is done by
establishing the correct calculated prices of the bids and ranking in ascending order the total bid
prices as so calculated. The bid with the lowest price is the LCB.

A. AUDIT OBJECTIVES:

1. To verify if the BAC adopted the required conditions and procedures in bid
evaluation

2. To verify if the BAC followed the required timeline in the conduct of bid evaluation.

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for the evaluation:


1. Minutes of Bid Opening;
2. Checklists for technical and financial envelopes;
3. Abstract of Bids as Read;
4. BAC Resolution(s) on the preliminary examination of bids;
5. TWG report on the bid evaluation for determination of the bidder with the LCB, as
reviewed by the BAC;
6. Abstract of Bids as Calculated;
7. Minutes of the BAC meeting on bid evaluation;
8. Resolution of the BAC declaring the LCB;
9. Minutes of the BAC meeting on the selection of the Observer from the pool;
10. Invitation letters to the Observers with evidence of receipt.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
1. To verify if the BAC 1. From the Minutes of Bid Did the BAC conduct
conducted detailed Opening, Checklists for detailed evaluation of
evaluation of all bidders technical and financial all bidders who
envelopes, Abstract of Bids passed in the
whose first envelope
as Read, and BAC preliminary
(technical component)
Resolutions identify the examination of bids?
and second envelope bidders who were rated
(financial component) passed in all aspects and
were rated passed compare with the names of
the bidders included in the
Implementing Rules and bid evaluation (from the
Regulations (IRR) of RA 9184, as TWG report, as reviewed by
amended on September 2, 2009: the BAC, Minutes of the BAC
meeting on bid evaluation,
30.2. .Only bids that are and Resolution of the BAC
determined to contain all the bid declaring the LCB).
requirements for both
components shall be rated
passed and shall immediately
be considered for evaluation
and comparison.

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2. To verify if the BAC 2. From the TWG report, as Did the BAC evaluate
considered completeness reviewed by the BAC, the completeness of
and arithmetical Minutes of the BAC meeting the financial
corrections of the on bid evaluation, and component of the
Resolution of the BAC bids :
financial component of
declaring the LCB, look for
the bids in the detailed the information on the For Goods offered
evaluation evaluation of completeness from within the
of financial component of Philippines:
Implementing Rules and the bids.
Regulations (IRR) of RA 9184, as a. Item?
amended on September 2, 2009:
b. Description?
32.2.1 The BAC shall
immediately conduct a detailed c. Country of Origin?
evaluation of all bids using non-
discretionary criteria in d. Quantity?
considering the following:
(a) Completeness of the bid e. Unit Price EXW per
Unless the Instruction to item?
Bidders specifically allow
partial bids, bids not f. Cost of local labor,
addressing or providing all of raw material, and
the required items in the component?
Bidding Documents including,
where applicable, bill of g. Total price EXW
quantities, shall be considered per item?
non-responsive and, thus,
automatically disqualified. In h. Unit prices per
this regard, where a required item final
item is provided, but no price destination and
is indicated, the same shall be unit price of other
considered as non-responsive, incidental
but specifying a 0 (zero) for services?
the said item would mean
that it is being offered for free i. Sales and other
to the Government; and taxes payable per
(b) Arithmetical corrections item if Contract is
Consider computational errors awarded?
and omissions to enable
proper comparison of all j. Total price
eligible bids. It may also delivered Final
consider bid modifications it Destination?
expressly allowed in the
Bidding Documents [AS For Goods Offered
AMENDED BY GPPB from Abroad:
RESOLUTION NO. 06-2009
DATED SEPT 30, 2009] Any a. Item?
adjustment shall be calculated
in monetary terms to b. Description?
determine the calculated
prices. c. Country of
32.2.2. The BAC shall evaluate Origin?
all bids on an equal footing to
ensure fair and competitive bid d. Quantity?
comparison. For this purpose,
all bidders shall be required to e. Unit price CIF
include the cost of all taxes, port of entry

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Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
such as, but not limited to, (specified port)
value added tax (VAT), income or CIF named
tax, local taxes, and other fiscal place (specified
levies and duties which shall be border point or
itemized in the bid form and place of
reflected in the detailed destination)?
estimates. Such bids, including
said taxes, shall be the basis for f. Total CIF or CIF
bid evaluation and comparison. price per item?

g. Unit price
Delivered Duty
Unpaid (DDU)?

h. Unit price
Delivered Duty
Paid (DDP)?

i. Total Price
Delivered DDP?

Did the BAC consider


non-responsive and,
thus, automatically
disqualified bids not
addressing or
providing all of the
required items in the
Bidding Documents?

Did the BAC consider


non-responsive and,
thus, automatically
disqualified bids that
did not indicate the
price for a required
item?

3. From the TWG report with Did the BAC evaluate


supporting documents and the arithmetical
duly reviewed by the BAC, accuracy of financial
Minutes of the BAC meeting components of bids in
on bid evaluation, and terms of:
Resolution of the BAC
declaring the LCB, look for a. computational
the information on the errors?
evaluation of arithmetical
accuracy of financial b. omissions?
component of the bids.
c. other bid
modification, if
allowed in the
Bidding
Documents?

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Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
3. To verify if the BAC 4. Analyze the TWG report, Did the BAC disqualify
disqualified bidders whose as reviewed by the BAC, bidders whose bids as
bids as calculated were Minutes of the BAC meeting calculated were
higher than the ABC on bid evaluation, Abstract higher than the ABC?
of Bids as Calculated, and
Implementing Rules and Resolution of the BAC
Regulations (IRR) of RA 9184, as declaring the LCB, in regard
amended on September 2, 2009: to disqualified bidders whose
bids are higher than the
31.1 The ABC shall be the ABC.
upper limit or ceiling for
acceptable bid prices. If a bid
price, as evaluated and calculated
in accordance with this IRR, is
higher than the ABC, the bidder
submitting the same shall be
automatically disqualified. There
shall be no lower limit or floor on
the amount of the award.

4. To verify if the BAC 5. Check for completeness Did the BAC prepare
prepared the Abstract of of the information contained the Abstract of Bids
Bids as Calculated with the in the Abstract of Bids as as calculated with the
Calculated and if this was following information:
required information
signed by the members of
the BAC. a. Name of the
Implementing Rules and
contract?
Regulations (IRR) of RA 9184, as
amended on September 2, 2009: b. Location?
Section 32.3 After all bids
c. Time of bid
have been received, opened, opening?
examined, evaluated, and ranked,
the BAC shall prepare the d. Date of bid
corresponding Abstract of Bids.
opening?
.The Abstract of Bids shall
contain the following: e. Place of bid
opening?
(a) Name of the contract and its
location, if applicable; f. Names of bidders
(b) Time, date and place of bid and their
opening; and corresponding
(c) Names of bidders and their calculated bid
corresponding calculated bid prices
prices arranged from lowest
to highest, the amount of bid g. Calculated bid
security and the name of the prices arranged
issuing entity. from lowest to
highest?

h. Amount of bid
security?

i. Name of the issuing


entity?

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Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
j. Names and
signatures of the
Chairman and
members of the
BAC?

5. To verify if the BAC 6. Analyze the TWG report, Did the BAC declare
declared rank 1 in the as reviewed by the BAC, rank 1 in the Abstract
Abstract of Bids as Minutes of the BAC meeting of Bids as Calculated
on bid evaluation, Abstract as the Lowest
Calculated as the Lowest
of Bids as Calculated, and Calculated Bid (LCB)?
Calculated Bid (LCB)
Resolution of the BAC
declaring the LCB, in regard
Implementing Rules and to disqualified bidders whose
Regulations (IRR) of RA 9184, as bids are higher than the
amended on September 2, 2009: ABC.
32.2.4. Bids shall then be
ranked in the ascending order of
their total calculated bid prices,
as evaluated and corrected for
computational errors, and other
bid modifications, to identify the
Lowest Calculated Bid. Total
calculated bid prices, as
evaluated and corrected for
computational errors, and other
bid modifications, which exceed
the ABC shall be disqualified.

32.3. After all bids have been


received, opened, examined,
evaluated, and ranked, the BAC
shall prepare the corresponding
Abstract of Bids.

6. To verify if the BAC 7. Obtain a copy of the Did the BAC notify
notified the bidder with the notice issued by the BAC to the bidder with the
LCB the bidder with the LCB and LCB?
check for receipt by the
Implementing Rules and bidder.
Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
34.2. Within three (3) calendar
days from receipt by the bidder
of the notice from the BAC that
the bidder has the Lowest
Calculated Bid or Highest Rated
Bid, the bidder shall submit the
following documentary
requirements to the BAC:

7. To verify if the BAC 8. From the Office Order Was there a quorum
observed quorum creating the BAC, determine of the BAC?
the number of BAC
Implementing Rules and members and identify the
Regulations (IRR) of RA 9184, as Chairman or Vice-Chairman.
amended on September 2, 2009:
12.3 Quorum 9. From the Minutes of Bid

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Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
A majority of the total BAC Evaluation, check for the
composition as designated by the presence of the Chairman or
Head of the Procuring Entity shall Vice-Chairman and if
constitute a quorum for the majority of the BAC
transaction of business, provided members or
that the presence of the Chairman representatives/alternates
or Vice-Chairman shall be required. attended the proceedings.

8. To verify if the BAC 10. From the Invitation to Did the BAC complete
completed the evaluation Bid and BAC Resolution the evaluation
process within seven (7) determine the number of process within seven
calendar days from the days from the deadline for (7) calendar days
receipt of proposals and the from the Bid
deadline for receipt of
completion of the bid Submission Deadline?
proposals evaluation.

Implementing Rules and


Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
32.4 The entire evaluation
process shall be completed
within seven (7) calendar days
from the deadline for receipt of
proposals.

INVOLVEMENT OF BAC OBSERVERS IN THE BID EVALUATION INCLUDING EVALUATION AND


DECISION ON MOTIONS FOR RECONSIDERATION
9. To verify if the BAC 11. From the Minutes of the Did the BAC choose
invited Observers: BAC meeting on the the Observers
a. representing the COA, selection of the Observer considering:
from the pool, check for
the specific relevant
information on the BACs a. one representing
chamber-member of the
evaluation in regard to: the COA?
Philippine Chamber of
the selection of the
Commerce and Industry,
organization from which b. One representing
and a non-government
the Observer will be the specific
organization (NGO) from
invited; relevant chamber-
the procuring entitys Pool
knowledge, experience or member of the
of Observers;
expertise in procurement Philippine
b. that have: or in the subject matter Chamber of
b.1. knowledge, experience of the contract to be bid; Commerce and
or expertise in procurement no actual or potential Industry?
or in the subject matter of conflict of interest in the
the contract to be bid; contract to be bid; and c. One representing
b.2. no actual or potential conformed with other a non-government
conflict of interest in the relevant criteria organization?
contract to be bid; and determined by the BAC.
b.3. conformed with other d. With knowledge,
relevant criteria determined experience or
by the BAC; expertise in
c. at least 3 calendar days procurement or in
prior to the start of the the subject matter
activity of the contract to
be bid?
Implementing Rules and
Regulations (IRR) of RA 9184, as e. With no actual or
amended on September 2, 2009: potential conflict
of interest in the

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Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
13. Observers contract to be bid?
13.1. To enhance the transparency
of the process, the BAC shall, in all f. Conformed with
stages of the procurement process, other relevant
invite, in addition to the criteria determined
representative of the COA, at least by the BAC?
two (2) observers, who shall not
have the right to vote, to sit in its
proceedings where: 12. From certified copies of Did the BAC invite the
a) At least one (1) shall come from the invitations to the observers at least 3
a duly recognized private group in Observers with evidence of days before the date
a sector or discipline relevant to receipt and the date of the of the bid evaluation?
the procurement at hand, for start of bid evaluation,
example: compare the period with the
i) 3-day minimum
ii) For goods, a specific relevant requirement.
chamber-member of the
Philippine Chamber of
Commerce and Industry.
iii) and
b) The other observer shall come
from a non-government
organization (NGO).

13.2. The observers shall come


from an organization duly
registered with the Securities
and Exchange Commission (SEC) or
the Cooperative Development
Authority (CDA), and should meet
the following criteria:
a) Knowledge, experience or
expertise in procurement or in
the subject matter of the
contract to be bid;
b) Absence of actual or potential
conflict of interest in the contract
to be bid; and
c) Any other relevant criteria that
may be determined by the BAC.
13.3. Observers shall be invited at
least three (3) calendar days
before the date of the procurement
stage/activity. The absence of
observers will not nullify the BAC
proceedings, provided that they
have been duly invited in writing.

10. To verify if the 13. Based on the BACs Did the Procuring
Procuring Entity considered Minutes on the bid Entity consider the
the comments/observations evaluation and the report of comments/
of the Observers the Observers check observations of the
whether a deliberation was Observers?
made on the comments
Implementing Rules and /observations of the
Regulations (IRR) of RA 9184, as observers.
amended on September 2, 2009:
13.4. The observers shall have

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Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
the following responsibilities:
a) To prepare the report either
jointly or separately indicating
their observations made on the
procurement activities
conducted by the BAC for
submission to the Head of the
Procuring Entity, copy furnished
the BAC Chairman. The report
shall assess the extent of the
BACs compliance with the
provisions of this IRR and areas
of improvement in the BACs
proceedings;
b) To submit their report to the
procuring entity 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
c) To immediately inhibit and
notify in writing the procuring
entity concerned of any actual
or potential interest in the
contract to be bid.

13.5. Observers shall be allowed


access to the following
documents upon their request,
subject to signing of a
confidentiality agreement: (a)
minutes of BAC meetings;
(b) abstract of Bids; (c)
post-qualification summary
report; (d) APP and related
PPMP; and (e) opened
proposals.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of
instances of non- non-compliances to establish Appropriate Audit Working Papers
compliance on the: the effects and develop
appropriate audit
a. validity of the recommendations.
procurement activities
and outputs including the Also determine if
validity of the resulting appropriate actions were
contract; taken by the auditee in
regard to instances of non-
b. validity of any payment compliance.
to be made on the basis
of the contract;

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Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
NOTE:
c. etc. Also refer to the
and develop appropriate OFFENSES AND
audit recommendations PENALTIES portion of
this Audit Guide.
Implementing Rules and
Regulations (IRR) of RA 9184,
as amended on September 2,
2009:
13.3. Observers shall be invited at
least three (3) calendar days
before the date of the procurement
stage/activity. The absence of
observers will not nullify the BAC
proceedings, provided that
they have been duly invited in
writing.

2. To verify the causes of Analyze the instances of


instances of non- non-compliances to establish Appropriate Audit Working Papers
compliance and develop the cause(s) and develop
appropriate audit
appropriate audit
recommendations.
recommendations
Also determine if
appropriate actions were
taken by the auditee in
regard to instances of non-
compliance.

NOTE:
Also refer to the
OFFENSES AND
PENALTIES portion of
this Audit Guide.

3. To communicate the Prepare the appropriate


results of the audit with the audit/ validation document Audit Observation Memorandum (AOM), if
auditees Management reflecting the results of the applicable
audit/validation and transmit
COA Circular No. 2009-006 dated to Management
September 15, 2009 re-
Prescribing the Use of the Rules
and Regulations on Settlement of
Accounts

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X. POST-QUALIFICATION FOR THE PROCUREMENT OF GOODS

The Lowest Calculated Bid (LCB) 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.

A. AUDIT OBJECTIVES:

1. To verify if the BAC adopted the required conditions and procedures in the conduct
of post-qualification

2. To verify if the BAC followed the required timeline in the conduct of post-qualification

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. Minutes of the BAC meetings on post-qualification;
2. Copy of the BAC Secretariats Receiving logbook indicating information on receipt of
the: a) Tax clearance, b) Latest income and business tax returns, c) Certificate of
PhilGEPS Registration; and d) Other appropriate licenses and permits required by law
and stated in the Bidding Documents, submitted by the bidder with the LCB;
3. Copy each of the documents submitted by the bidder with the LCB;
4. BAC Resolution disqualifying the bidder and forfeiting its bid security, if the bidder with
the LCB did not comply with the required submissions;
5. Documents evidencing the BACs validation of the veracity of the documents submitted
and the information thereon;
6. Copy of the BAC Resolution disqualifying the bidder and forfeiting its bid security, if the
BAC had a finding against the veracity of the documents/ information thereon;
7. TWG report on the post-qualification conducted, including supporting documents (e.g.
inspection reports), as reviewed by the BAC; evidencing:
7.1. validation of the authenticity of the documents submitted and information thereon;
7.2. validation of compliance of the goods offered with the requirements specified in the
Bidding Documents, duly supported with: inspection reports on the goods offered
and test results;
7.3. validation of the sufficiency of the bid security as to type, amount, form and
wording, validity period;
7.4. validation of compliance with the financial requirements of the LCB;
7.5. conduct of analysis and concluding on the post-qualification or disqualification of
the bidder, as the case may be;
8. TWG report(s) on the evaluation of the post-disqualified bidder(s) request for
reconsideration, as reviewed by the BAC;
9. Minutes of the post-qualification activities;
10. BAC Resolution declaring the LCRB;
11. Copy of the document approved by the HOPE extending the period for the post-
qualification process, if applicable;
12. Minutes of the BAC meeting on the selection of the Observer from the pool;
13. Reports of the BAC Observers.

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Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
1. To verify whether the 1. From the records of Did the bidder with
bidder whose bid was the BAC, check the date the LCB submit
declared by the BAC as LCB when the bidder with the within 3 calendar
submitted the following LCB submitted the: a) Tax days from receipt
clearance, b) Latest of the notice as
documents within 3 calendar
income and business tax LCB:
days from its receipt of the returns, c) Certificate of
notice: PhilGEPS Registration; a. Tax Clearance?
a) Tax clearance; and d) Other appropriate
b) Latest income and licenses and permits
business tax returns; required by law and b. Latest income
c) Certificate of PhilGEPS stated in the Bidding and business tax
Registration; and Documents and compare returns?
this with the date of
d) Other appropriate licenses
receipt of the notice that
and permits required by the bidder has the LCB. c. Certificate of
law and stated in the PhilGEPS
Bidding Documents. 2. Ask for copies of the Registration?
documents submitted
Implementing Rules and Regulations from the BAC Secretariat
(IRR) of RA 9184, as amended on and compare them with d. Other
September 2, 2009: the requirements. appropriate
34.2. Within three (3) calendar licenses and
days from receipt by the bidder of permits required by
the notice from the BAC that the law and stated in
bidder has the Lowest Calculated the Bidding
Bid or Highest Rated Bid, the Documents?
bidder shall submit the following
documentary requirements to the
BAC:
a) Tax clearance;
b) Latest income and business tax
returns;
c) Certificate of PhilGEPS
Registration; and
d) Other appropriate licenses and
permits required by law and
stated in the Bidding
Documents.

2. To verify if the BAC: 3. If based on the Did the BAC forfeit


2.1. determined the veracity validation conducted in 1. the bid security and
of the documents and 2. above, the disqualify the
submissions were found bidder for award
submitted and
to be incomplete and/or because of failure
2.2. forfeited the bid security not on time, obtain a copy to submit the
and disqualified the of the BAC Resolution required
bidder for award for disqualifying the bidder documents on
reason that; and forfeiting its bid time?
a. the bidder failed to security.
submit the required
documents on time,
and/or 4. Obtain from the BAC Did the BAC forfeit
b. there was a finding Secretariat documents the bid security and
evidencing the BACs disqualify the
against the veracity of
validation of the veracity bidder for award
the documents/ of the documents because of a
information submitted and the finding against the

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Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
information thereon and veracity of the
Implementing Rules and Regulations check the results of such documents/
(IRR) of RA 9184, as amended on validation. information?
September 2, 2009:
34.2.Within three (3) calendar
If the BAC had a
days from receipt by the bidder of finding against the
the notice from the BAC that the veracity of the
bidder has the Lowest Calculated Bid documents/ information
or Highest Rated Bid, the bidder thereon, obtain a copy of
shall submit the following the BAC Resolution
documentary requirements to the disqualifying the bidder
BAC: and forfeiting its bid
a) Tax clearance; security.
b) Latest income and business tax
returns;
c) Certificate of PhilGEPS
Registration; and
d) Other appropriate licenses and
permits required by law and
stated in the Bidding Documents.
Failure to submit the above
requirements on time or a finding
against the veracity of such shall be
ground for the forfeiture of the bid
security and disqualify the bidder for
award.

3. To verify if the BAC 5. Match the name of Did the BAC


conducted post-qualification the bidder with the LCB conduct post-
on the bidder with the Lowest as indicated in the BAC qualification on the
Calculated Bid (LCB) Resolution declaring the bidder with the
LCB with the name of the Lowest Calculated
bidder indicated in the Bid (LCB)?
Implementing Rules and Regulations Post-Qualification Report.
(IRR) of RA 9184, as amended on
September 2, 2009:
34.1 The Lowest Calculated 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.

4. To verify if the BAC 6. Secure from the BAC Did the BAC
verified, validated, and Secretariat the TWG validate the
ascertained that the bidder report, as reviewed by the authenticity of the
with the LCB is: BAC, evidencing validation Registration
of the authenticity of the: documents
submitted by the
a. a duly licensed Filipino a) DTI Registration bidder?
citizen/sole proprietor, or Certificate, duly supported
b. a Partnerships duly with:
the DTI-certified copy
organized under the laws of
of the Registration
the Philippines and of which Certificate and
at least sixty percent (60%) DTI certificate that
of the interest belongs to the sole proprietor is
citizens of the Philippines, or a Filipino citizen

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Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
c. a Corporation duly (based on the
organized under the laws of application for
the Philippines, and of which registration filed by
at least sixty percent (60%) the bidder with the
DTI),
of the outstanding capital
if the bidder is a sole
stock belongs to citizens of proprietorship;
the Philippines, or
d. Cooperatives duly b. SEC registration and of
organized under the laws of the 60% Filipino
the Philippines, and of which ownership, duly
at least sixty percent (60%) supported with:
belongs to citizens of the the SEC-certified
copy of the
Philippines, or
Registration
e. Joint Venture - that Filipino Certificate,
ownership or interest of the if the bidder is a
joint venture concerned shall partnership;
be at least sixty percent (60%).
c. SEC registration and of
Implementing Rules and the 60% Filipino
Regulations (IRR) of RA 9184, as ownership, duly
amended on September 2, 2009: supported with:
34.3. The post-qualification shall SEC-certified copy
verify, validate, and ascertain all of the Registration
statements made and documents Certificate and
submitted by the bidder with the SEC-certified copy
Lowest Calculated Bid/Highest of the Articles of
Rated Bid, using non-discretionary Incorporation
criteria, as stated in the Bidding if the bidder is a
Documents. These criteria shall corporation.
consider, but shall not be limited
to, the following: d. CDA registration and
a) Legal Requirements. To verify, of the 60% Filipino
validate, and ascertain licenses, ownership, duly
certificates, permits, and supported with:
agreements submitted by the CDA-certified copy
bidder, and the fact that it is not of the Registration
included in any blacklist as Certificate and
provided in Section 25.2 of this CDA certificate
IRR. For this purpose, the GPPB that at least sixty
shall maintain a consolidated file percent (60%)
of all blacklisted suppliers, belongs to citizens
contractors, and consultants. of the Philippines
if the bidder is a
cooperative
23.5.1. For the procurement of
e. Joint Venture individual
goods:
partners:
23.5.1.1. The following shall be
DTI, SEC, or CDA
eligible to participate in the
registrations and
bidding for the supply of goods:
of the 60%
Filipino ownership
a) Duly licensed Filipino citizens/
duly supported with
sole proprietorships;
b) Partnerships duly organized the DTI-, SEC-, or
CDA-certified
under the laws of the Philippines
Certificate, as the case
and of which at least sixty percent
may be and DTI-, SEC-

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Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
(60%) of the interest belongs to , or CDA-certified
citizens of the Philippines; documents evidencing
c) Corporations duly organized ownership.
under the laws of the Philippines, 7. Compare the Did the BAC
and of which at least sixty percent data/documents in 6. validate if the
(60%) of the outstanding capital above with the documents bidder is a Filipino,
stock belongs to citizens of the submitted by the bidder for a sole
Philippines; to validate authenticity proprietorship?
d) Cooperatives duly organized and extent of Filipino
under the laws of the Philippines, ownership.
and of which at least sixty percent Did the BAC
(60%) belongs to citizens of the validate if the
Philippines; or Partnership or
e) Persons/ entities forming Corporation or
themselves into a joint venture, Cooperative or
i.e., a group of two (2) or more Joint Venture is at
persons/entities that intend to be least 60% Filipino
jointly and severally responsible or owned?
liable for a particular contract:
Provided, however, That Filipino
ownership or interest of the joint
venture concerned shall be at
least sixty percent (60%). For this
purpose, Filipino ownership or
interest shall be based on the
contributions of each of the
members of the joint venture as
specified in their JVA.

5. To verify if the BAC 8. Secure from the BAC Did the BAC
verified, validated, and Secretariat the TWG validate the
ascertained that the Mayors report, as reviewed by the authenticity of the
BAC, evidencing validation Mayors Permit
Permit submitted by the
of the authenticity of the submitted by the
bidder with the LCB was Mayors Permit and bidder?
issued by the city or whether it was issued by
municipality where the the city or municipality
principal place of business of where the principal place
the prospective bidder is of the business of the Did the BAC verify,
located bidder is located, duly validate, and
supported with: ascertain that the
Implementing Rules and The LGU-certified Mayors Permit
Regulations (IRR) of RA 9184, as copy of the Mayors submitted by the
amended on September 2, 2009: permit, and bidder with the LCB
DTI-, SEC-, or CDA- was issued by the
34.3. The post-qualification shall
certified Registration city or municipality
verify, validate, and ascertain all
Certificate showing where the principal
statements made and documents
the bidders principal place of business of
submitted by the bidder with the
place of business the prospective
Lowest Calculated Bid/Highest
bidder is located?
Rated Bid, using non-discretionary
9. Compare the
criteria, as stated in the Bidding
data/documents in 8.
Documents. These criteria shall
above with the documents
consider, but shall not be limited
submitted by the bidder
to, the following:
to validate authenticity
a) Legal Requirements. To verify,
and issuing entity is the
validate, and ascertain licenses,
city/municipality where
certificates, permits, and
the bidders principal

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Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
agreements submitted by the place of business is
bidder, and the fact that it is not located.
included in any blacklist as
provided in Section 25.2 of this
IRR. For this purpose, the GPPB
shall maintain a consolidated file
of all blacklisted suppliers,
contractors, and consultants.

23.1. For purposes of
determining the eligibility of
bidders using the criteria stated
in Section 23.5 of this IRR, only
the following documents shall be
required by the BAC, using the
forms prescribed in the Bidding
Documents,:
a) Class A Documents
Legal Documents
i) ---
ii) Mayors permit issued by the
city or municipality where the
principal place of business of
the prospective bidder is
located.
6. To verify if the BAC 10. Secure from the BAC Did the BAC verify,
verified, validated, and Secretariat the TWG validate, and
ascertained compliance of the report, as reviewed by ascertain that the
the BAC, evidencing goods offered by
goods offered with the
validation of the goods the bidder with the
requirements specified in the
offered with the LCB complied with
Bidding Documents, requirements specified the requirements
including, where applicable: in the Bidding specified in the
a. Verification and/or Documents, duly Bidding Documents
inspection and testing of supported with: in terms of:
the goods/product,
b. after sales and/or a. inspection reports a. specifications of
maintenance capabilities, on the goods the item?
offered;
in applicable cases
b. test results b. maintenance
and/or after-sales
Implementing Rules and 11. Compare the results capabilities?
Regulations (IRR) of RA 9184, as of validation in 10
amended on September 2, 2009: above with the
34.3. The post-qualification shall requirements in the
verify, validate, and ascertain all Bidding Documents
statements made and documents
submitted by the bidder with the
Lowest Calculated Bid/Highest
Rated Bid, using non-discretionary
criteria, as stated in the Bidding
Documents. These criteria shall
consider, but shall not be limited
to, the following:
a) Legal Requirements
b) Technical Requirements. To
determine compliance of
goods, infrastructure

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 142
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
projects, or consulting
services offered with the
requirements specified in the
Bidding Documents, including,
where applicable:
i)
ii)
iii) Verification and/or
inspection and testing of the
goods/product, after sales
and/or maintenance
capabilities, in applicable
cases, for the procurement of
goods;

7. To verify if the BAC 11. From the TWG report Did the BAC
validated if the bidder with with supporting validate if the
the LCB is not blacklisted documents (e.g. bidder with the LCB
consolidated file of all was not
blacklisted suppliers blacklisted?
Implementing Rules and Regulations
maintained by the GPPB)
(IRR) of RA 9184, as amended on
duly reviewed by the BAC,
September 2, 2009:
and the Minutes of BAC
34.3. The post-qualification shall
meetings, check for
verify, validate, and ascertain all
information showing the
statements made and documents
BACs validation if the
submitted by the bidder with the
bidder with the LCB is not
Lowest Calculated Bid/Highest Rated
blacklisted.
Bid, using non-discretionary criteria,
as stated in the Bidding Documents.
These criteria shall consider, but
shall not be limited to, the following:

a) Legal Requirements. To verify,


validate, and ascertain licenses,
certificates, permits, and
agreements submitted by the
bidder, and the fact that it is not
included in any blacklist as
provided in Section 25.2 of
this IRR. For this purpose, the
GPPB shall maintain a
consolidated file of all
blacklisted suppliers,
contractors, and consultants.

8. To verify if the BAC 12. From the TWG report, Did the BAC
validated the bidders as reviewed by the BAC, validate the
compliance with the no the Minutes of BAC relationship of the
relationship provision meetings/ deliberations bidder with the:
and BAC Resolution,
embodied in Section 47 of the
check for information a. HOPE?
Revised IRR of RA No. 9184, showing the BACs
i.e., that the bidder is not validation that: b. members of the
related by consanguinity or a. the individual bidder in BAC?
affinity up to the 3rd civil an individual or a sole
degree to the: proprietorship, is not c. members of the
related to the persons TWG?

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Commission on Audit
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Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
a. HOPE, mentioned in Sec. 47,
b. members of the BAC, Amended IRR of RA d. members of the
c. members of the TWG, 9184; BAC Secretariat?
d. members of the BAC b. all the officers and
members of the bidder e. head of the
Secretariat,
partnership are not Project
e. head of the Project related to the persons Management
Management Office (PMO), mentioned in Sec. 47, Office (PMO)?
f. head of the end-user unit, Amended IRR of RA
g. project consultants 9184; f. head of the end-
c. all the officers, user unit?
Section 47. Disclosure of Relations directors, and
All bids shall be accompanied by a controlling g. project
sworn affidavit of the bidder that it is stockholders of the consultants?
not related to the Head of the bidder corporation are
Procuring Entity, members of the not related to the
BAC, the TWG, and the BAC persons mentioned in
Secretariat, the head of the PMO or Sec. 47, Amended IRR
the end-user unit, and the project of RA 9184.
consultants, by consanguinity or
affinity up to the third civil degree.
Failure to comply with the 13. From the TWG report, Did the BAC
aforementioned provision shall be a as reviewed by the BAC, automatically
ground for the automatic the Minutes of BAC disqualify the
disqualification of the bid in meetings/deliberations bidder found to be
consonance with Section 30 of this and BAC Resolution, related within the
IRR. For this reason, relation to the check for information 3rd civil degree of
aforementioned persons within showing the BACs consanguinity or
the third civil degree of decision/action in case of affinity with the
consanguinity or affinity shall violation with the no persons listed in
automatically disqualify the relationship provision. Section 47 of the
bidder from participating Revised IRR of RA
in the procurement of contracts 9184?
of the procuring entity. On the
part of the bidder, this
provision shall apply to the following
persons:
a) If the bidder is an individual or a
sole proprietorship, to the bidder
himself;
b) If the bidder is a partnership, to all
its officers and members;
c) If the bidder is a corporation, to all
its officers, directors, and
controlling stockholders; and
d) If the bidder is a joint venture, the
provisions of items (a), (b), or (c)
of this Section shall
correspondingly apply to each of
the members of the said joint
venture, as may be appropriate.

9. To verify if the BAC 14. Request from the BAC 1. Did the BAC
verified, validated, and Secretariat, for the ascertain the
ascertained sufficiency of the document evidencing that sufficiency of the
bid security as to: the TWG ascertained the bid security as to:
sufficiency of the bid
a. type,
security. a. type?

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Commission on Audit
Republic of the Philippines Page 144
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
b. amount,
c. form and wording, and b. amount?
d. validity period.
c. form and word?
Implementing Rules and d. validity period?
Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
34.3. The post-qualification shall
verify, validate, and ascertain all
statements made and documents
submitted by the bidder with the
Lowest Calculated Bid, using non-
discretionary criteria, as stated in
the Bidding Documents. These
criteria shall consider, but shall
not be limited to, the following:
a) Legal Requirements
b) Technical Requirements.
i)
ii)
iii)
iv) Ascertainment of the
sufficiency of the bid security
as to type, amount, form and
wording, and validity period;

10. To verify if the BAC 15. From the TWG report Did the BAC verify,
verified, validated, and duly reviewed by the BAC validate, and
ascertained if the Net with supporting ascertain the
Financial Contracting documents from the financial
appropriate authorities requirements of the
Capacity (NFCC) is at least (e.g. certified true copy of LCB as to:
equal to the ABC or the Credit the financial statements
Line Certificate (CLC) in favor with the Income Tax a. CLC at least
of the prospective bidder if Return, bank that issued equal to 10% of
awarded the contract is at the CLC), the Minutes of the ABC.
least 10% of the ABC BAC
meetings/deliberations Or
Implementing Rules and Regulations and BAC Resolution,
(IRR) of RA 9184, as amended on check for information b. NFCC at least
September 2, 2009: showing the bidders: equal to the
34.3. The post-qualification shall ABC?
verify, validate, and ascertain all a. CLC must be at least
statements made and documents equal to 10% of the
submitted by the bidder with the ABC.
Lowest Calculated Bid, using non-
discretionary criteria, as stated in Or
the Bidding Documents. These
criteria shall consider, but shall b. NFCC must be at least
not be limited to, the following: equal to the ABC
a) Legal Requirements .
b) Technical Requirements
c) Financial Requirements
To verify, validate and
ascertain the bid price proposal
of the bidder and, whenever
applicable, the required CLC in

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Commission on Audit
Republic of the Philippines Page 145
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
the amount specified and over
the period stipulated in the
Bidding Documents, or the
bidders NFCC to ensure that the
bidder can sustain the operating
cash flow of the transaction.

23.5.1.4. If the prospective bidder


submits a computation of its
NFCC, the NFCC must be at least
equal to the ABC to be bid,
calculated as follows:

NFCC = [(Current assets minus


current liabilities) (K)] minus the
value of all outstanding or
uncompleted portions of the
projects under ongoing contracts,
including awarded contracts yet to
be started coinciding with the
contract to be bid.
Where:
K = 10 for a contract duration
of one year or less, 15 for a
contract duration of more than
one year up to two years, and
20 for a contract duration of
more than two years.
If the prospective bidder
submits a CLC, the CLC must be
at least equal to ten percent
(10%) of the ABC to be bid. If
the CLC is issued by a foreign
Universal or Commercial Bank, it
shall be confirmed or
authenticated by a Universal or
Commercial Bank. For biddings
conducted by LGUs, the
prospective bidder may also
submit CLC from other banks
certified by the BSP as
authorized to issue such
financial instrument.

11. To verify if the BAC 16. From the post Did the LCB pass
declared the post-qualified qualification report of the post-qualification?
LCB as the Lowest Calculated TWG, as reviewed by the
Responsive Bid (LCRB) BAC, check if the LCB
passed all the criteria for
Implementing Rules and Regulations post qualification.
(IRR) of RA 9184, as amended on
September 2, 2009: 17. Match the name of Did the BAC
34.4. If the BAC determines that the LCRB as approved by declare the LCB as
the bidder with the Lowest the HOPE with the name the Lowest
Calculated Bid passes all the of bidder as indicated in Calculated
criteria for post-qualification, it the BAC resolution Responsive Bid
shall declare the said bid as the recommending LCRB. (LCRB)?

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Commission on Audit
Republic of the Philippines Page 146
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Lowest Calculated Responsive Bid,
and recommend to the Head of the
Procuring Entity the award of If Yes, proceed
contract to the said bidder at its to: AWARD OF
submitted bid price or its calculated
CONTRACT.
bid price, whichever is lower, or in
the case of quality-based
evaluation procedure, submitted
bid price or its negotiated price, If No, proceed to
whichever is lower. the Audit Sub-
Objectives in
case of Post-
disqualification
of the bidder
with the LCB.

IN CASE OF POST-DISQUALIFICATION OF THE BIDDER WITH THE LOWEST CALCULATED BID


(LCB) FOR THE PROCUREMENT OF GOODS
1. To verify if the BAC, in 1. From the records of Did the BAC
case of post-disqualification the BAC Secretariat, immediately notify
of the LCB, immediately check for information on the LCB of the
notified the LCB in writing of the date of receipt by the post-
post-disqualified bidder of disqualification?
the post-disqualification with
the notice and for the
the grounds for it. grounds for
disqualification indicated Did the BAC
Implementing Rules and Regulations thereon. indicate in the
(IRR) of RA 9184, as amended on notice the grounds
September 2, 2009: for post-
34.5. If, however, the BAC disqualification?
determines that the bidder with the
Lowest Calculated Bid fails the
criteria for post-qualification, it
shall immediately notify the said
bidder in writing of its post-
disqualification and grounds for it.
34.6. Immediately after the BAC
has notified the first bidder of its
post-disqualification, and
notwithstanding any pending
request for reconsideration thereof,
the BAC shall initiate and complete
the same post-qualification process
on the bidder with the second
Lowest Calculated Bid. .

2. To verify if the BAC 2. Look for the TWG Did the BAC
conducted and completed the report on the post- conduct and
post-qualification of the qualification of the second complete the post-
second rank bidder using the rank bidder as reviewed qualification of the
by the BAC. second rank
same post-qualification bidder?
process adopted for the LCB
3. Repeat the audit Did the TWG adopt
activities of sub-objective the same process
Implementing Rules and Regulations nos.4 to 10 above. of verifying,
(IRR) of RA 9184, as amended on validating and

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Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
September 2, 2009: 4. Analyze the post- ascertaining all
34.6. the BAC shall initiate and qualification reports of the statements made
complete the same post- TWG, as reviewed by the and documents
qualification process on the bidder BAC, for the LCB and the submitted by the
with the second Lowest Calculated second rank bidder to LCB and the
Bid. check whether the TWG second rank
adopted the same process bidder?
of verifying, validating
and ascertaining all
statements made and
documents submitted by
the LCB and the second
rank bidder.

5. From the post Did the second


qualification report of the rank bidder pass
TWG, as reviewed by the the post-
BAC, check if the second qualification?
rank bidder passed the
post qualification.

NOTE: If Yes, proceed


For each post- to the Audit Sub-
disqualification of the objective to
next-rank bidder, the verify if the
BAC is to repeat the BAC declared
post-qualification the post-
process until the LCRB qualified
is declared for award. second-rank
bidder as the
The related audit LCRB after a
activities are likewise to request for
be repeated. reconsideration
of the LCB
(first-rank,
second-rank,
or next-in-
rank, a the
case may be)
has been
denied

If No, proceed to
the Audit Sub-
Objectives in
case of Post-
disqualification
of the bidder
with the LCB.
3. To verify if the BAC 6. From the Minutes of Did the BAC
declared the post-qualified the BAC meeting, analyze declare the post-
second-rank bidder as the if the BAC declared the qualified second-
post-qualified second-rank rank bidder as the
LCRB after a request for

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Commission on Audit
Republic of the Philippines Page 148
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
reconsideration of the LCB bidder as the LCRB after a LCRB after a
(first-rank) has been denied request for request for
reconsideration of the LCB reconsideration of
Implementing Rules and Regulations (first-rank) has been the LCB (first-rank)
(IRR) of RA 9184, as amended on denied. has been denied?
September 2, 2009:
34.6. Immediately after the BAC 7. Match the name of the
has notified the first bidder of its LCRB as approved by the
post-disqualification, and HOPE with the name of
notwithstanding any pending bidder as indicated in the
request for reconsideration BAC resolution
thereof, the BAC shall initiate and recommending the LCRB.
complete the same post-
qualification process on the bidder
with the second Lowest Calculated
Bid. If the second bidder passes
the post-qualification, and
provided that the request for
reconsideration of the first bidder
has been denied, the second
bidder shall be post-qualified as
the bidder with the Lowest
Calculated Responsive Bid.

4. To verify if the BAC 8. Compute the number Did the BAC


completed the post- of days from the BAC complete the post-
qualification process in not Resolution declaring the qualification
more than seven (7) calendar LCB and the BAC process in not
Resolution declaring the more than seven
days from the determination
LCRB, and compare this (7) calendar days
of the LCB or if extended, with the 7-calenday-day from the
such extension was approved requirement. determination of
by the HOPE and not the LCB?
exceeding 30 calendar days 9. If the BAC completed
the post-qualification in If the BAC
34.8. The post-qualification more than seven (7) completed the
process shall be completed in not calendar days, secure a post-qualification in
more than seven (7) calendar copy of the document more than seven
days from the determination of approved by the HOPE (7) calendar days,
the Lowest Calculated Bid. In extending the period for was the extension
exceptional cases, the post- the post-qualification approved by the
qualification period may be process. HOPE?
extended by the Head of the
Procuring Entity, but in no case If the BAC
shall the aggregate period exceed completed the
thirty (30) calendar days. post-qualification in
more than seven
(7) calendar days,
was the extension
within the 30-
calendar day
maximum?

5. To verify if the BAC invited 10. From the Minutes of Did the BAC choose
Observers: the BAC meeting on the the Observers
a. representing the COA, the selection of the Observer considering:
from the pool, check for

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Commission on Audit
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Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
specific relevant chamber- information on the BACs a. one
member of the Philippine evaluation in regard to: representing the
Chamber of Commerce and the selection of the COA?
Industry, and a non- organization from
government organization which the Observer b. One
(NGO) from the procuring will be invited; representing the
entitys Pool of Observers; knowledge, experience specific relevant
b. that have: or expertise in chamber-
b.1. knowledge, experience or procurement or in the member of the
expertise in procurement or in subject matter of the Philippine
the subject matter of the contract to be bid; Chamber of
contract to be bid; no actual or potential Commerce and
b.2. no actual or potential conflict of interest in Industry?
conflict of interest in the the contract to be bid;
contract to be bid; and and c. One
conformed with other representing a
b.3. conformed with other
relevant criteria non-government
relevant criteria determined by
determined by the organization?
the BAC;
BAC.
c. at least 3 calendar days d. With
prior to the Post- knowledge,
qualification experience or
expertise in
Implementing Rules and Regulations procurement or
(IRR) of RA 9184, as amended on in the subject
September 2, 2009: matter of the
contract to be
Section 13. Observers
bid?
13.1. To enhance the transparency of
the process, the BAC shall, in all e. With no actual
stages of the or potential
procurement process, invite, in conflict of
addition to the representative of the interest in the
COA, at least two (2) observers, who contract to be
shall not have the right to vote, to sit
bid?
in its proceedings where:
a) At least one (1) shall come from a f. Conformed with
duly recognized private group in a other relevant
sector or discipline relevant to the criteria
procurement at hand, for example: determined by
i) the BAC?
ii) For goods, a specific relevant
chamber-member of the
Philippine Chamber of Commerce
11. From certified copies Did the BAC invite
and Industry.
of the invitations to the the observers at
iii) and
Observers with evidence least 3 days before
b) The other observer shall come
of receipt, compare the the date of the
from a non-government
date of receipt with the 3- post-qualification?
organization (NGO).
day minimum
requirement.
13.2. The observers shall come from
an organization duly registered with
the Securities
and Exchange Commission (SEC) or
the Cooperative Development
Authority (CDA), and should meet the
following criteria:
a) Knowledge, experience or

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Republic of the Philippines Page 150
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
expertise in procurement or in the
subject matter of the contract to
be bid;
b) Absence of actual or potential
conflict of interest in the contract
to be bid; and
c) Any other relevant criteria that
may be determined by the BAC.

13.3. Observers shall be invited


at least three (3) calendar days
before the date of the
procurement stage/activity. The
absence of observers will not
nullify the BAC proceedings,
provided that they have been
duly invited in writing.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of
instances of non-compliance non-compliance to Appropriate Audit Working Papers
on the: establish the effects and
develop appropriate audit
a. validity of the procurement recommendations.
activities and outputs
including the validity of the
resulting contract; Also determine if
appropriate actions were
b. validity of any payment to taken by the auditee in
be made on the basis of regard to instances of
the contract; non-compliance.
c. etc.
and develop appropriate NOTE:
audit recommendations Also refer to the
OFFENSES AND
Implementing Rules and PENALTIES portion of
Regulations (IRR) of RA 9184, as this Audit Guide.
amended on September 2, 2009:
13.3. Observers shall be invited at
least three (3) calendar days before
the date of the procurement
stage/activity. The absence of
observers will not nullify the BAC
proceedings, provided that they
have been duly invited in writing.

2. To verify the causes of Analyze the instances of


instances of non-compliance non-compliances to Appropriate Audit Working Papers
and develop appropriate establish the cause(s) and
audit recommendations develop appropriate audit
recommendations.

Also determine if
appropriate actions were
taken by the auditee in
regard to instances of

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Commission on Audit
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Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
non-compliance.

NOTE:
Also refer to the
OFFENSES AND
PENALTIES portion of
this Audit Guide.

3. To communicate the Prepare the appropriate


results of the audit with the audit/ validation Audit Observation Memorandum (AOM), if applicable
auditees Management document reflecting the
results of the
COA Circular No. 2009-006 dated audit/validation and
September 15, 2009 re- Prescribing transmit to Management
the Use of the Rules and
Regulations on Settlement of
Accounts

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Commission on Audit
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XI. AWARD OF CONTRACT FOR THE PROCUREMENT OF GOODS

A. AUDIT OBJECTIVES:

1. To verify if the conditions and procedures for the award of contract were adhered to by
the procuring entity

2. To verify if the award was made within the prescribed period

3. To verify if the conditions/requirements, procedures and timelines for entering into and
approval of the contract were adhered to by the procuring entity

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for the evaluation:


1. Minutes of the BAC meeting on post-qualification;
2. BAC Resolution declaring the LCRB and recommending award, approved by the HOPE with
the following supporting documents:
a. Abstract of Bids,
b. Duly approved delivery schedule and Cost Estimates,
c. Document issued by appropriate entity authorizing the procuring entity to incur
obligations for a specified amount,
d. Other pertinent documents required by existing laws, rules and/or the procuring entity
concerned.
3. Notice of Award signed by the HOPE, with date of release to and receipt by the winning
bidder;
4. Copy of the bid security of the winning bidder stamped received by the BAC Secretariat;
5. Copy of the portions of the receiving records of the BAC, with information on the date of
submission of the Joint Venture Agreement (JVA), if the winning bidder is a Joint Venture;
and the date of posting of the performance security;
6. Copy of the performance security posted by the winning bidder;
7. Copy of the complete set of contract documents duly signed and approved by higher
authorities;
8. Copy of the policy and schedule of approving authorities;
9. Evidences of postings at the PhilGEPS and the procuring entitys websites;
10. Evidences of postings at the conspicuous place at the premises of the procuring entity;
11. Copy of the document with the approval of the contract by higher authorities;
12. Copy of the document with the HOPEs disapproval of the award and the justifications
thereto, duly received by the BAC;
13. In case of disapproval of the BACs recommendation for award, copy of the document
with the HOPEs instructions on the steps to be adopted by the BAC.
14. Copy of the Minutes of the BAC meeting on the selection of the Observer from the
pool;
15. Copy of the reports of the BAC Observers.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Question Yes No Particulars
Audit Activities
of the
Answer
1. To verify if the BAC 1. Compare the LCRB Did the BAC
recommended the bidder determined by the BAC in its recommend to the
with the Lowest Calculated deliberations (per Minutes of HOPE the award of
Responsive Bid (LCRB) or the BAC meeting) with the contract to the

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Audit Activities
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Answer
Single Calculated Responsive LCRB recommended for award bidder with LCRB?
Bid (SCRB), if lone, to the in the BAC Resolution.
HOPE for award
Implementing Rules and Regulations .
(IRR) of RA 9184, as amended on
September 2, 2009:
37.1.1. The BAC shall recommend
to the Head of the Procuring
Entity the award of contract to the
bidder with the Lowest Calculated
Responsive Bid or the Single
Calculated Responsive Bid after
the post qualification process has
been completed.
To facilitate the approval of the
award, the BAC shall submit the
following supporting documents to
the Head of the Procuring Entity:
a) Resolution of the BAC
recommending award;
b) Abstract of Bids;
c) Duly approved program of
work or delivery schedule, and
Cost Estimates;
d) Document issued by
appropriate entity authorizing the
procuring entity to incur
obligations for a specified amount;
and
e) Other pertinent documents
required by existing laws, rules
and/ or the procuring entity
concerned.

2. To verify if the BAC 2. From the BAC Chairmans Did the BAC submit
submitted the following letter for the HOPE submitting the following
documents to the HOPE with the results and the documents documents to the
the recommendation for pertaining to the HOPE with the
recommendation, duly recommendation
award: received by the Office of the for award:
a. Resolution of the BAC HOPE, look for information on
recommending award; the documents submitted. a. Resolution of
b. Abstract of Bids; the BAC
c. Duly approved delivery recommending
schedule and Cost award?
Estimates;
d. Document issued by b. Abstract of
Bids?
appropriate entity
authorizing the procuring c. Duly approved
entity to incur delivery
obligations for a specified schedule and
amount; and Cost
e. Other pertinent Estimates?
documents required by

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Audit Activities
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Answer
existing laws, rules and/
or the procuring entity d. Document
concerned issued by
appropriate
Implementing Rules and Regulations entity
(IRR) of RA 9184, as amended on authorizing the
September 2, 2009: procuring
37.1.1. The BAC shall recommend entity to incur
to the Head of the Procuring obligations for
Entity the award of contract to the a specified
bidder with the Lowest Calculated amount?
Responsive Bid or the Single
Calculated Responsive Bid after e. Other pertinent
the post qualification process has documents
been completed. required by
existing laws,
To facilitate the approval of the rules and/or
award, the BAC shall submit the the procuring
following supporting documents to entity
the Head of the Procuring Entity: concerned?
a) Resolution of the BAC
recommending award;
b) Abstract of Bids;
c) Duly approved program of
work or delivery schedule, and
Cost Estimates;
d) Document issued by
appropriate entity authorizing
the procuring entity to incur
obligations for a specified
amount; and
e) Other pertinent documents
required by existing laws, rules
and/ or the procuring entity
concerned.

3. To verify if the HOPE, or 3. Determine the number of Did the HOPE


his/her duly authorized days from the date of receipt approve the BAC
official, approved the LCRB by the HOPE of the recommendation
recommended by the BAC for recommendation for award to for award within
the date of approval and the 7-calendar-day
award within 7 calendar
compare with the 7-day or 15- period (or 15-
days from the date of receipt day period. calendar-day period
of the recommendation from for GOCCs/GFIs)?
the BAC (15 calendar days
for GOCCs/GFIs)
Implementing Rules and Regulations
(IRR) of RA 9184, as amended on
September 2, 2009:
37.1.2. Within a period not
exceeding seven (7) calendar days
from the date of receipt of the
recommendation of the BAC, the
Head of the Procuring Entity shall
approve or disapprove the said

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Audit Activities
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Answer
recommendation.

4. In case of approval, to 4. Compare the name of the Was the Notice of


verify if the Notice of Award LCRB recommended by the Award immediately
was immediately issued to BAC and approved by the issued to the bidder
HOPE (per BAC Resolution with the Lowest
the bidder with the Lowest
declaring the LCRB and Calculated
Calculated Responsive Bid recommending award, Responsive Bid as
as recommended by the BAC approved by the HOPE) with recommended by
and approved by the HOPE the name of the bidder- the BAC and
awardee in the Notice of approved by the
Implementing Rules and Regulations Award. HOPE?
(IRR) of RA 9184, as amended on
September 2, 2009: 5. Compare the date of release
37.1.3. In case of approval, the of the Notice of Award with
Head of the Procuring Entity shall the date of approval of the
immediately issue the Notice of BAC Resolution recommending
Award to the bidder with the the award.
Lowest Calculated Responsive Bid.
In the event the Head of the
Procuring Entity shall disapprove
such recommendation, such
disapproval shall be based only on 6. Compare the date of the Was the award
valid, reasonable, and justifiable release of the Notice of Award made within the bid
grounds to be expressed in with the expiry date of the bid validity period of
writing, a copy furnished the BAC. validity period. the bid security?
37.1.5. Contract award shall be
made within the bid validity period
provided in Section 28 of this IRR

Annex C Period of Action on


Procurement Activities

5. To verify if the BAC 7. From the notices to the Did the BAC notify
notified all the losing bidders losing bidders, look for the all the losing
within the 7 calendar day date of its receipt and bidders within the 7
period (same period provided compare with the 7-day or 15- calendar day or 15
day requirement. calendar day period
for the HOPE to approve/
(same period
disapprove the BACs
8. Also compare the names of provided for the
Resolution)
the losing bidders notified with HOPE to approve/
Implementing Rules and Regulations those appearing in the disapprove the
(IRR) of RA 9184, as amended on Abstract of Bids as Read. BACs Resolution)?
September 2, 2009:
37.1.2. Within a period not
exceeding seven (7) calendar days
from the date of receipt of the
recommendation of the BAC, the
Head of the Procuring Entity shall
approve or disapprove the said
recommendation. In the case of
GOCCs and GFIs, the period
provided herein shall be fifteen
(15) calendar days. Within the
same period provided herein the

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Audit Activities
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Answer
BAC shall notify all losing bidders
of its decision.

6. To verify if the BAC posted 9. Access the PhilGEPS website Did the BAC post
the Notice of Award within 3 and the website of the the Notice of
days from its issuance at the: procuring entity, and conduct Award:
inspection of the area where a. within 3 days
a. PhilGEPS website,
the Notice of Award is to be from its issuance
b. website of the procuring
posted on the 3rd day from the at the PhilGEPS
entity, and issuance of the Notice of website?
c. any conspicuous place in Award to the winning bidder.
the premises of the b. within 3 days
procuring entity. from its issuance
at the website of
Implementing Rules and the procuring
Regulations (IRR) of RA 9184, as entity? And
amended on September 2, 2009:
c. within 3 days
37.1.6. The BAC, through the
from its issuance
Secretariat, shall post, within
at any
three (3) calendar days from its
conspicuous
issuance, the Notice of Award in
place in the
the PhilGEPS, the website of the
premises of the
procuring entity, if any, and any
procuring entity?
conspicuous place in the premises
of the procuring entity.

7. To verify if the procuring 10. From the receiving records Did the bidder
entity observed the following of the BAC, compare the date submit the JVA
conditions for the execution of submission of the Joint within ten (10)
Venture Agreement (JVA) with calendar days from
of the contract:
the required 10 days from receipt of the
a) Submission of valid joint
receipt of the Notice of Award. notice of award?
venture agreement, if
applicable, within 10 11. From the receiving records
days from receipt of the of the BAC, compare the date Was the
Notice of Award by the of posting of the performance performance
winning Joint Venture security with the required 10 security posted
bidder, days from receipt of the Notice within ten (10)
b) Posting of performance of Award; also compare with calendar days from
the date of the signing of the receipt by the
security within ten (10)
contract. winning bidder of
calendar days from the Notice of Award
receipt by the winning 12. Compare the amount, & prior to the
bidder of the Notice of currency, form, issuing entity, signing of the
Award & prior to the and validity period of the contract?
signing of the contract in performance security posted
the required amount, by the winning bidder with the Was the
currency, form, issuing requirements of Sec 39.2 of performance
entity, and valid until the the Revised IRR of RA 9184. security posted in
the:
issuance by the procuring
a. right amount?
entity of the final
certificate of acceptance, b. right currency?
c) Signing of the contract
within the same ten (10) 13. Compare the date of c. right form?
day period provided that signing of the contract with

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Answer
all the documentary the required 10-day period d. right issuing
requirements are from receipt of the Notice of entity?
complied with, Award.
d) Approval by higher e. right validity
period?
authority, if required, 14. Compare the signatory
within 15 days from (approval) in the contract with Was the contract
receipt (25 days for the authorized signatory as signed within 10
GOCCs) required by relevant calendar days from
regulations/policies and as receipt of the
Implementing Rules and Regulations shown by a copy of a valid Notice of Award by
(IRR) of RA 9184, as amended on appointment or office order. the winning bidder?
September 2, 2009:
37.1.4. Notwithstanding the If further approval
issuance of the Notice of Award, 15. Compare the date of by higher authority
award of contract shall be subject approval of the contract by is required, was the
to the following conditions: higher authority with the 15- contract approved
a) Submission of the following day-period from receipt (25 by appropriate
documents within the days for GOCCs). approving authority
prescribed period: or his/her duly
i) Valid JVA, if applicable, authorized
within ten (10) calendar representative?
days from receipt by the
bidder of the notice from Was the contract
the BAC that the bidder has approved by higher
the Lowest Calculated authority within 15
Responsive Bid, as the case calendar days?
may be; or (25 calendar days
ii) .. for GOCCs)?
b) Posting of performance
security in accordance with
Section 39 of this IRR;
c) Signing of the contract as
provided in Section 37.2 of
this IRR;
d) Approval by higher authority,
if required, as provided in
Section 37.3 of this IRR.

39. Performance Security


39.1. To guarantee the faithful
performance by the winning
bidder of its obligations under the
contract in accordance with the
Bidding Documents, it shall post a
performance security prior to the
signing of the contract.
39.2. The performance security
shall be in an amount equal to a
percentage of the total contract
price in accordance with the
following schedule:
[AS AMENDED UNDER GPPB
RESOLUTION NO. 06-2009 DATED 30
SEPTEMBER 2009]

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Form of Amount of
Performance Performance
Security Security (Equal
to Percentage
of the Total
Contract Price
a) Cash, cashiers/
managers check
issued by a
Universal or
Commercial Bank Two percent
b) Bank draft/ (2%)
guarantee or
irrevocable letter of
credit issued by a
Universal or
Commercial Bank;
Provided, however,
that it shall be
confirmed or
authenticated by a
Universal or
Commercial Bank,
if issued by a
foreign bank.
c) Surety bond Five percent
callable upon (5%)
demand issued by
a surety or
insurance company
duly certified by
the Insurance
Commission as
authorized to issue
such security.
d) Any combination Proportionate
of the foregoing. to share of
form with
respect to total
amount of
security

37.2. Contract Signing


37.2.1. The winning bidder shall
post the required Performance
Security and enter into contract
with the procuring entity within
ten (10) calendar days from
receipt by the winning bidder of
the Notice of Award.
37.2.2. The procuring entity shall
enter into contract with the
winning bidder within the same
ten (10) day period provided that
all the documentary requirements
are complied with.

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37.3. Contract Approval by
Higher Authority
When further approval of higher
authority is required, the
approving authority for the
contract or his duly authorized
representative shall be given
maximum of fifteen (15) calendar
days from receipt thereof to
approve or disapprove it.

38.3. If no action on the contract


is taken by the Head of the
Procuring Entity or the appropriate
approving authority within the
periods specified in this IRR, the
contract concerned shall be
deemed approved: Provided,
however, That where further
approval by the Office of the
President is required, the contract
shall not be deemed approved
unless and until the Office of the
President gives actual approval to
the contract concerned.

8. To verify if the BAC 16. From the Minutes of the Did the BAC choose
invited Observers: BAC meeting on the selection the Observers
a. representing the COA, the of the Observer from the considering:
specific relevant chamber- pool, check for information
member of the Philippine on the BACs evaluation in a. one
Chamber of Commerce and regard to: representing the
Industry, and a non- the selection of the COA?
government organization organization from which the
(NGO) from the procuring Observer will be invited; b. One
entitys Pool of Observers; knowledge, experience or representing the
b. that have: expertise in procurement or specific relevant
in the subject matter of chamber-
b.1. knowledge, experience the contract to be bid; member of the
or expertise in procurement or
no actual or potential Philippine
in the subject matter of the
conflict of interest in the Chamber of
contract to be bid;
contract to be bid; and Commerce and
b.2. no actual or potential conformed with other Industry?
conflict of interest in the relevant criteria determined
contract to be bid; and by the BAC. c. One
b.3. conformed with other representing a
relevant criteria determined non-government
by the BAC; organization?
c. at least 3 calendar days
prior to the start of the d. With knowledge,
activity experience or
expertise in
Implementing Rules and Regulations procurement or
(IRR) of RA 9184, as amended on in the subject
September 2, 2009: matter of the
contract to be

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Section 13. Observers bid?
13.1. To enhance the transparency
of the process, the BAC shall, in all e. With no actual
stages of the or potential
procurement process, invite, in conflict of
addition to the representative of the interest in the
COA, at least two (2) observers, who contract to be
shall not have the right to vote, to bid?
sit in its proceedings where:
a) At least one (1) shall come from a f. Conformed with
duly recognized private group in a other relevant
sector or discipline relevant to the criteria
procurement at hand, for example: determined by
i) the BAC?
ii) For goods, a specific relevant
chamber-member of the
Philippine Chamber of 17. From certified copies of the Did the BAC invite
Commerce and Industry. invitations to the Observers the observers at
iii) and with evidence of receipt, least 3 days from
b) The other observer shall come compare the date of receipt the date of the bid
from a non-government with the 3-day minimum evaluation?
organization (NGO). requirement.

13.2. The observers shall come from


an organization duly registered with
the Securities
and Exchange Commission (SEC) or
the Cooperative Development
Authority (CDA), and should meet
the following criteria:
a) Knowledge, experience or
expertise in procurement or in the
subject matter of the contract to
be bid;
b) Absence of actual or potential
conflict of interest in the contract
to be bid; and
c) Any other relevant criteria that
may be determined by the BAC.
13.3. Observers shall be invited
at least three (3) calendar days
before the date of the
procurement stage/activity. The
absence of observers will not
nullify the BAC proceedings,
provided that they have been
duly invited in writing.

9. To verify if the Procuring 18. Based on the Minutes of Did the Procuring
Entity considered the BACs meetings and the report Entity consider the
comments/observations of of the Observers check comments/
the Observers whether a deliberation was observations of the
made on the Observers?
Implementing Rules and Regulations comments/observations of the
(IRR) of RA 9184, as amended on observers.
September 2, 2009:

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13.4. The observers shall have
the following responsibilities:
a) To prepare the report either
jointly or separately indicating
their observations made on the
procurement activities conducted
by the BAC for submission to the
Head of the Procuring Entity,
copy furnished the BAC
Chairman. The report shall assess
the extent of the BACs
compliance with the provisions of
this IRR and areas of
improvement in the BACs
proceedings;
b) To submit their report to the
procuring entity 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
c) To immediately inhibit and notify
in writing the procuring entity
concerned of any actual or
potential interest in the contract
to be bid.

13.5. Observers shall be allowed


access to the following
documents upon their request,
subject to signing of a
confidentiality agreement: (a)
minutes of BAC meetings; (b)
abstract of Bids; (c) post-
qualification summary report;
(d) APP and related PPMP;
and (e) opened proposals.

10. To verify if the contract 19. Obtain from the BAC Are the contract
is complete Secretariat or the Project documents
Management Office or the complete,
Implementing Rules and Regulations Office responsible for consisting of the
(IRR) of RA 9184, as amended on following:
project implementation/ a) Contract
September 2, 2009:
contract execution for a Agreement;
37.2.3. The following documents
shall form part of the contract: copy of the complete set of b) Bidding
a) Contract Agreement; documents comprising the Documents;
b) Bidding Documents; contract and compare with c) Winning bidders
c) Winning bidders bid, including the requirements. bid, including the
the Eligibility requirements, Eligibility
Technical and Financial requirements,
Proposals, and all other Technical and
documents/statements Financial

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submitted; Proposals, and all
d) Performance Security; other
e) Credit line in accordance with documents/statem
the provisions of this IRR, if ents submitted;
applicable; d) Performance
f) Notice of Award of Contract; Security;
and e) Credit line in
g) Other contract documents that accordance with
may be required by existing the provisions of
laws and/or the procuring entity this IRR, if
concerned in the Bidding applicable;
Documents, f) Notice of Award
of Contract; and
g) Other contract
documents that
may be required by
existing laws
and/or the
procuring entity
concerned in the
Bidding
Documents, such
as the construction
schedule and S-
curve, manpower
schedule,
construction
methods,
equipment
utilization schedule,
construction safety
and health program
approved by the
Department of
Labor and
Employment, and
PERT/CPM for
infrastructure
projects?
IN CASE OF DISAPPROVAL BY THE HOPE OF THE BACS RECOMMENDATION FOR AWARD
FOR THE PROCUREMENT OF GOODS
1. In case of disapproval by 1. If the HOPE disapproved the In case of
the HOPE, verify if the: recommendation for award, disapproval by the
a. grounds for such were look for the document HOPE of the BACs
expressed in writing and indicating the grounds for such recommendation,
with evidence of receipt of a did the HOPE
a copy furnished to the
copy thereof by the BAC. express the
BAC, and grounds for such
b. written instructions on the and furnished a
subsequent steps to be copy to the BAC?
adopted were given to 2. Also look for the document
the BAC indicating the instructions In case of
given by the HOPE on the disapproval by the
Implementing Rules and Regulations subsequent steps to be HOPE of the BACs
(IRR) of RA 9184, as amended on adopted by the BAC. recommendation,
September 2, 2009: did the HOPE give

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37.1.3. In case of approval, the instructions to the
Head of the Procuring Entity shall BAC on the
immediately issue the Notice of subsequent actions
Award to the bidder with the to be adopted?
Lowest Calculated Responsive
Bid. In the event the Head of the
Procuring Entity shall disapprove
such recommendation, such
disapproval shall be based only on
valid, reasonable, and justifiable
grounds to be expressed in
writing, a copy furnished the BAC.

Generic Procurement Procedures for


Goods, June 2006, published by the
GPPB:
How is a contract awarded?

5. In case of disapproval of
the recommendation of award
the HOPE shall state the
reasons for disapproval and
instruct the BAC on the
subsequent actions to be
adopted.

IN CASE OF FAILURE, REFUSAL, OR INABILITY BY THE WINNING BIDDER TO SUBMIT


DOCUMENTS AND ENTER INTO CONTRACT - FOR THE PROCUREMENT OF GOODS
1. To verify if the BAC: 1. From the records of the Did the BAC
a. disqualified, BAC: disqualify the
b. forfeited the bid security documenting the fact- winning bidder
finding to establish if the who, through his
of and
winning bidder was fault, failed,
c. recommended the responsible for his failure, refused or was
imposition of sanctions to refusal, or inability to: (a) unable to:
the winning bidder who, to submit the documents a. submit the
through his fault, failed, required under Section documents
refused or was unable: 37.1 of the Revised IRR of required under
RA 9184, or (b) to make Section 37.1 of
a. to submit the documents good its bid by entering the Revised
required under Section into a contract with the IRR of RA
37.1 of the Revised IRR procuring entity, or (c) 9184?
of RA 9184, or post the required or
b. to make good its bid by Performance Security b. to make good its
entering into a contract within the period bid by entering
with the procuring entity, stipulated in the Revised into a contract
IRR of RA 9184 or in the with the
or procuring
Bidding Documents;
c. post the required documenting the entity?
Performance Security deliberations/evaluation or
within the period conducted and the c. post the required
stipulated in the Revised decisions arrived at; Performance
IRR of RA 9184 or in the documenting the Security within
Bidding Documents recommendations made to the period
the HOPE, stipulated in
Implementing Rules and look for information on the: the Revised

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Regulations (IRR) of RA 9184, as disqualification of the said IRR of RA
amended on September 2, 2009: bidder, 9184 or in the
40.1. If the bidder with the Lowest forfeiture of the bid Bidding
Calculated Responsive Bid/Highest security and Documents?
Rated Responsive Bid or the recommendation of the
bidder with the Single imposition of sanctions to Did the BAC forfeit
Calculated/Rated Responsive Bid, the winning bidder. the bid security of
fails, refuses or is unable to the winning bidder
submit the documents required who, through his
under Section 37.1 of this IRR or fault, failed,
to make good its bid by entering refused or was
into a contract with the procuring unable to:
entity or post the required a. submit the
Performance Security within the documents
period stipulated in this IRR or in required under
the Bidding Documents, the bid Section 37.1 of
security shall be forfeited and the the Revised
appropriate sanctions provided in IRR of RA
this IRR and existing laws shall be 9184?
imposed, except where such or
failure, refusal or inability is b. to make good its
through no fault of the said bid by entering
bidder. into a contract
with the
procuring
entity?
or
c. post the required
Performance
Security within
the period
stipulated in
the Revised
IRR of RA
9184 or in the
Bidding
Documents?

Did the BAC


recommend the
imposition of
sanctions to the
winning bidder
who, through his
fault, failed,
refused or was
unable to:
a. submit the
documents
required under
Section 37.1 of
the Revised
IRR of RA
9184?
or
b. to make good its
bid by entering

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 165
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Question Yes No Particulars
Audit Activities
of the
Answer
into a contract
with the
procuring
entity?
or
c. post the required
Performance
Security within
the period
stipulated in
the Revised
IRR of RA
9184 or in the
Bidding
Documents?

2. To verify if the BAC, after 2. From the records of the Did the BAC, after
disqualifying the winning BAC, look for information on disqualifying the
bidder who, due to his fault, the disqualification of the winning bidder
refused, failed, or was winning bidder who, due to his who, due to his
fault, refused, failed, or was fault, refused,
unable to enter into contract,
unable to enter into contract, failed, or was
post the required post the required performance unable to enter into
performance security, or security, or submit other contract, post the
submit other required required documents within the required
documents within the time time stipulated. performance
stipulated, initiated and security, or submit
completed the post- Look also for information on other required
qualification process on the the conduct of post- documents within
bidder with the second qualification on the bidder with the time stipulated,
the second Lowest Calculated initiate and
Lowest Calculated Bid
Bid. complete the post-
qualification
Implementing Rules and Regulations process on the
(IRR) of RA 9184, as amended on bidder with the
September 2, 2009: second Lowest
40.2. In the case of the failure, Calculated Bid?
refusal or inability of the bidder NOTE:
with the Lowest Calculated For the audit on the Post-
Responsive Bid/Highest Rated Qualification for the
Responsive Bid to submit the Procurement of Goods
documents required under Section conducted by the BAC,
37.1 of this IRR or to enter into perform the audit activities
contract and post the required pertaining to these
Performance Security, as provided procurement activities in
in this Section, the BAC shall another part of this Guide.
disqualify the said bidder, and
shall initiate and complete the
post-qualification process on the
bidder with the second Lowest
Calculated Bid/

3. To verify if the BAC, after 3. From the records of the Did the BAC, after
disqualifying the winning BAC, look for information on disqualifying the
bidder with the Single the disqualification of the winning bidder with
Calculated Responsive Bid winning bidder with the SCRB the SCRB who, due

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 166
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Question Yes No Particulars
Audit Activities
of the
Answer
(SCRB) who, due to his fault, who, due to his fault, refused, to his fault,
refused, failed, or was failed, or was unable to enter refused, failed, or
unable to enter into contract, into contract, post the required was unable to enter
post the required performance security, or into contract, post
submit other required the required
performance security, or documents within the time performance
submit other required stipulated. security, or submit
documents within the time other required
stipulated, declared the Look also for information on documents within
bidding a failure and the declaration of the bidding the time stipulated,
conducted a re-bidding with a failure and the conduct of a
re-advertisement and/or re-bidding with re- a. declare the
posting, as provided for in advertisement. bidding a failure?
Sections 21 and 25 of the
and
Revised IRR of RA 9184 b. conduct a re-
bidding with re-
Implementing Rules and Regulations advertisement
(IRR) of RA 9184, as amended on and/or posting?
September 2, 2009:
40.3. In the case of failure, refusal
or inability of the bidder with the
Single Calculated/Rated NOTE:
Responsive Bid to submit the For the audit on the Failure
documents required under Section of Bidding for the
37.1 of this IRR or to enter into Procurement of Goods and on
contract and post the required the Competitive/Public
Performance Security, as provided Bidding for the Procurement
in this Section, the BAC shall of Goods, perform the audit
disqualify the said bidder, and activities pertaining to these
shall declare the bidding a failure procurement activities in
and conduct a re-bidding with re- other parts of this Guide.
advertisement and/or posting, as
provided for in Sections 21 and 25
of this IRR. Should there occur
another failure of bidding after the
conduct of the contracts re-
bidding, the procuring entity
concerned may enter into a
negotiated procurement.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of non-
instances of non-compliance compliance to establish the Appropriate Audit Working Papers
on the: effects and develop
appropriate audit
a. validity of the recommendations.
procurement activities and
outputs including the Also determine if appropriate
validity of the resulting actions were taken by the
contract; auditee in regard to instances
of non-compliance.
b. validity of any payment to
be made on the basis of
the contract; NOTE:
Also refer to the OFFENSES

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 167
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Question Yes No Particulars
Audit Activities
of the
Answer
c. etc. AND PENALTIES portion
of this Audit Guide.
and develop appropriate
audit recommendations

Implementing Rules and


Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
13.3. Observers shall be invited at
least three (3) calendar days before
the date of the procurement
stage/activity. The absence of
observers will not nullify the BAC
proceedings, provided that they
have been duly invited in
writing.

2. To verify the causes of Analyze the instances of non-


instances of non-compliance compliances to establish the Appropriate Audit Working Papers
and develop appropriate cause(s) and develop
audit recommendations appropriate audit
recommendations.

Also determine if appropriate


actions were taken by the
auditee in regard to instances
of non-compliance.

NOTE:
Also refer to the OFFENSES
AND PENALTIES portion
of this Audit Guide.

3. To communicate the Prepare the appropriate audit/


results of the audit with the validation document reflecting Audit Observation Memorandum (AOM), if
auditees Management the results of the applicable
audit/validation and transmit
COA Circular No. 2009-006 dated to Management
September 15, 2009 re-
Prescribing the Use of the Rules
and Regulations on Settlement of
Accounts

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 168
XII. FAILURE OF BIDDING DECLARED BY THE B.A.C.
FOR THE PROCUREMENT OF GOODS

A. AUDIT OBJECTIVE:

To verify if the conditions/requirements, procedures for the declaration of failure of bidding


were adhered to by the procuring entity

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for the evaluation:


1. Documentary evidences that no bids were received;
2. Documentary evidences that all prospective bidders were declared ineligible;
3. Documentary evidences that all bids failed to comply with all the bid requirements;
4. Documentary evidences that all bids failed post-qualification;
5. Documentary evidences that the bidder with the Lowest Calculated Responsive Bid refused,
without justifiable cause, to accept the award of contract, and no award was made in
accordance with Section 40 of the RA 9184 and Revised IRR;
6. Minutes of the BAC meetings on post-qualification;
7. BAC Resolution declaring the bidding a failure;
8. Minutes of the BAC meetings with information on the review and evaluation conducted on the:
(a) terms, (b) conditions, (c) specifications, and (d) cost estimates and the
recommendations/decisions made possible revisions/adjustments;
9. Approved revised Bidding Documents;
10. Revised Approved Budget for the Contract (ABC);
11. Records of the re-bidding;
12. Copy of the Minutes of the BAC meeting on the selection of the Observer from the pool;
13. Copy of reports of the BAC Observers.

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 169
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
1. To verify if the BAC 1. From the Minutes of BAC Did the BAC declare a
declared a failure of bidding meetings and other records, failure of bidding for
for reason that: look for information that: reason that:
a) No bids were received; a) No bids were
a) No bids were received; or
b) All prospective bidders received?
b) All prospective bidders
were declared ineligible;
were declared ineligible; or c) all bids failed to comply b) All prospective
c) All bids failed to comply with all the bid bidders were
with all the bid requirements, declared ineligible?
requirements, or d) all bids failed post-
d) all bids failed post- qualification, or
qualification, or d) the bidder with the Lowest c) All bids failed to
e) the bidder with the Lowest Calculated Responsive Bid comply with all the
refused, without justifiable bid requirements?
Calculated Responsive Bid
cause, to accept the award
refused, without justifiable
of contract, and no award or
cause, to accept the award was made in accordance d) all bids failed post-
of contract, and no award with Section 40 of the RA qualification?
was made in accordance 9184 and Revised IRR.
with Section 40 of the RA or
9184 and Revised IRR e) the bidder with the
Lowest Calculated
Implementing Rules and Regulations . Responsive Bid
(IRR) of RA 9184, as amended on
refused, without
September 2, 2009: justifiable cause, to
35.1. The BAC shall declare the accept the award of
bidding a failure when: contract, and no
a) No bids are received; award was made in
b) All prospective bidders are accordance with
declared ineligible; Section 40 of the RA
c) All bids fail to comply with all the 9184 and Revised
bid requirements or fail post- IRR?
qualification, or, in the case of
consulting services, there is no
successful negotiation; or
d) The bidder with the Lowest
Calculated Responsive Bid/Highest
Rated Responsive Bid refuses,
without justifiable cause, to accept
the award of contract, and no
award is made in accordance with
Section 40 of the Act and this IRR.

2. To verify if the BAC 2. From the minutes of the Did the BAC determine
determined the reason for the BAC meetings held for the the reason for the failed
failed bidding by conducting a purpose, look for information bidding by conducting a
on the review and evaluation mandatory review and
mandatory review and
conducted on the: (a) terms, evaluation of the:
evaluation of the : (b) conditions, (c)
a. terms, specifications, and (d) cost a. terms in the Bidding
b. conditions, estimates and the Documents?
c. specifications, recommendations/decisions
d. cost estimates made possible b. conditions in the

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 170
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
in the Bidding Documents revisions/adjustments. Bidding Documents?

Implementing Rules and Regulations c. specifications in the


(IRR) of RA 9184, as amended on Bidding Documents?
September 2, 2009:
35.2. In order to determine the d. cost estimates?
reason for the failed bidding, the
BAC shall conduct a mandatory
review and evaluation of the terms,
conditions, and specifications in the
Bidding Documents, including its
cost estimates.

3. To verify if the BAC and the 3. From the minutes of the Did the BAC and the
concerned units/officials of BAC meetings held for the concerned units/officials
the procuring entity, revised purpose and other records of of the procuring entity,
the procuring entity, look for revised the following as
the following as a result of
information on the a result of the review
the review and evaluation
revisions/adjustments made on and evaluation
conducted: the (a) terms, (b) conditions, conducted:
a. terms, (c) specifications, (d) ABC and
b. conditions, approvals made thereon. a. terms in the Bidding
c. specifications, Documents?
d. Approved Budget for the
Contract (ABC); b. conditions in the
had them approved; and Bidding Documents?
conducted a re-bidding with
c. specifications in the
re-advertisement and/or
Bidding Documents?
posting
d. cost estimates?
Implementing Rules and Regulations
(IRR) of RA 9184, as amended on
September 2, 2009:
4. From the records of the Did the BAC conduct a
35.3. Based on its findings, the BAC look for information on re-bidding?
BAC shall revise the terms, the re-bidding conducted.
conditions, and specifications, and if
necessary, adjust the ABC, subject
to the required approvals, and
conduct a re-bidding with re-
advertisement and/or posting, as
provided for in Section 21.2 of this
IRR

35.4. All bidders who have NOTE:


initially responded to the Invitation For the audit on the re-
to Bid/Request for Expression of bidding conducted perform
Interest and have been declared the audit using the portion of
eligible or short listed in the previous this Guide on Competitive/
biddings shall be allowed to submit Public Bidding for the
new bids. The BAC shall observe the Procurement of Goods.
same process and set the new
periods according to the same rules
followed during the previous
bidding(s).

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 171
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
4. To verify if the BAC invited 5. From the Minutes of the Did the BAC choose the
Observers: BAC meeting on the selection Observers considering:
a. representing the COA, the of the Observer from the
specific relevant chamber- pool, check for information a. one representing the
member of the Philippine on the BACs evaluation in COA?
Chamber of Commerce and regard to:
Industry, and a non- the selection of the b. One representing the
government organization organization from which the specific relevant
(NGO) from the procuring Observer will be invited; chamber-member of the
entitys Pool of Observers; knowledge, experience or Philippine Chamber of
b. that have: expertise in procurement or Commerce and
in the subject matter of Industry?
b.1. knowledge, experience or
the contract to be bid;
expertise in procurement or in
no actual or potential c. One representing a
the subject matter of the
conflict of interest in the non-government
contract to be bid;
contract to be bid; and organization?
b.2. no actual or potential conformed with other
conflict of interest in the relevant criteria determined d. With knowledge,
contract to be bid; and by the BAC. experience or expertise
b.3. conformed with other in procurement or in the
relevant criteria determined by subject matter of the
the BAC; contract to be bid?
c. at least 3 calendar days
prior to the start of the e. With no actual or
activity potential conflict of
interest in the contract
Implementing Rules and Regulations to be bid?
(IRR) of RA 9184, as amended on
September 2, 2009: f. Conformed with other
relevant criteria
Section 13. Observers
determined by the BAC?
13.1. To enhance the transparency of
the process, the BAC shall, in all
stages of the 6. From certified copies of the Did the BAC invite the
invitations to the Observers observers at least 3
procurement process, invite, in
with evidence of receipt, days from the date of
addition to the representative of the
COA, at least two (2) observers, who compare the date of receipt the bid evaluation?
shall not have the right to vote, to sit with the 3-day minimum
requirement.
in its proceedings where:
a) 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:
i)
ii) For goods, a specific relevant
chamber-member of the
Philippine Chamber of Commerce
and Industry.
iii) and
b) The other observer shall come
from a non-government
organization (NGO).
13.2. The observers shall come from
an organization duly registered with
the Securities
and Exchange Commission (SEC) or
the Cooperative Development

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Commission on Audit
Republic of the Philippines Page 172
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
Authority (CDA), and should meet the
following criteria:
a) Knowledge, experience or
expertise in procurement or in the
subject matter of the contract to
be bid;
b) Absence of actual or potential
conflict of interest in the contract
to be bid; and
c) Any other relevant criteria that
may be determined by the BAC.
13.3. Observers shall be invited
at least three (3) calendar days
before the date of the
procurement stage/activity. The
absence of observers will not
nullify the BAC proceedings,
provided that they have been
duly invited in writing.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of non-
instances of non-compliance compliance to establish the Appropriate Audit Working Papers
on the: effects and develop
appropriate audit
a. validity of the procurement recommendations.
activities and outputs
including the validity of the Also determine if appropriate
resulting contract; actions were taken by the
auditee in regard to instances
b. validity of any payment to of non-compliance.
be made on the basis of
the contract;
NOTE:
c. etc. Also refer to the OFFENSES
and develop appropriate AND PENALTIES portion
audit recommendations of this Audit Guide.

Implementing Rules and


Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
13.3. Observers shall be invited at
least three (3) calendar days before
the date of the procurement
stage/activity. The absence of
observers will not nullify the BAC
proceedings, provided that they
have been duly invited in
writing.

2. To verify the causes of Analyze the instances of non-


instances of non-compliance compliances to establish the Appropriate Audit Working Papers
and develop appropriate cause(s) and develop
appropriate audit
audit recommendations
recommendations.

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 173
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
Also determine if appropriate
actions were taken by the
auditee in regard to instances
of non-compliance.

NOTE:
Also refer to the OFFENSES
AND PENALTIES portion
of this Audit Guide.

3. To communicate the Prepare the appropriate audit/


results of the audit with the validation document reflecting Audit Observation Memorandum (AOM), if
auditees Management the results of the applicable
audit/validation and transmit
COA Circular No. 2009-006 dated to Management
September 15, 2009 re- Prescribing
the Use of the Rules and
Regulations on Settlement of
Accounts

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 174
XIII. FAILURE OF BIDDING DECLARED BY THE HOPE
FOR THE PROCUREMENT OF GOODS

A. AUDIT OBJECTIVE:

To verify if the conditions/requirements for the declaration of failure of bidding were adhered
to by the procuring entity

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for the evaluation:


Documents on the declaration of failure of bidding by the HOPE with supporting
documents on the existence of the grounds used to justify the said declaration that:
1. there was prima facie evidence of collusion between appropriate public officers or
employees of the procuring entity, or
2. there was prima facie evidence of collusion between appropriate public officers or
employees of the procuring entity, or
3. there was prima facie evidence of collusion between or among the bidders
themselves,
4. there was prima facie evidence of collusion between a bidder and a third party, or
5. there was prima facie evidence of any act which restricted, suppressed or nullified
competition, or
6. the BAC was found to have failed in following the prescribed bidding procedures, or
7. the award of the contract will not redound to the benefit of the GOP, for justifiable
and reasonable grounds such as the physical and economic conditions have
significantly changed so as to render the project no longer economically, financially,
or technically feasible, as determined by the Head of the Procuring Entity, or
8. the award of the contract will not redound to the benefit of the GOP, for justifiable
and reasonable grounds such as the project is no longer necessary as determined
by the Head of the Procuring Entity, or
9. the award of the contract will not redound to the benefit of the GOP, for justifiable
and reasonable grounds such as the source of funds for the project has been
withheld or reduced through no fault of the procuring entity.

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
1. To verify if the HOPE 1. From the documents on the Did the HOPE declare
declared a failure of bidding for declaration of failure of bidding a failure of bidding
reason that: by the HOPE, look for for reason that:
information on the reason for
a. the funds/allotment for the such declaration. a. the
funds/allotment
program/project/activity
for the
has been withheld or
. program/project/a
reduced through no fault of ctivity has been
the procuring entity; withheld or
b. there is prima facie evidence reduced through
of collusion between: no fault of the
b.1. appropriate public procuring entity?
officers or employees of or
the procuring entity, or b. there was prima
facie evidence of
b.2. between the BAC and
collusion between
any of the bidders , or appropriate public

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 175
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
b.3. among the bidders officers or
themselves, or employees of the
b.4. a bidder and a third procuring entity?
Or
party,
c. there was prima
including any act which facie evidence of
restricts, suppresses or collusion between
nullifies or tends to restrict, the BAC and any
suppress or nullify of the bidders?
competition; or
or d. there was prima
c. the BAC is found to have facie evidence of
failed in following the collusion between
or among the
prescribed bidding
bidders
procedures; themselves?
or Or
d. the award of the contract e. there was prima
will not redound to the facie evidence of
benefit of the GOP, for collusion between
justifiable and reasonable a bidder and a
grounds such as: (i) if the third party?
physical and economic Or
f. there was prima
conditions have significantly
facie evidence of
changed so as to render the
any act which
project no longer restricted,
economically, financially, or suppressed or
technically feasible, as nullified
determined by the Head of competition?
the Procuring Entity; (ii) if or
the project is no longer g. the BAC was
necessary as determined by found to have
failed in following
the Head of the Procuring
the prescribed
Entity; and (iii) if the source
bidding
of funds for the project has procedures?
been withheld or reduced or
through no fault of the h. the award of the
procuring entity. contract will not
redound to the
Implementing Rules and Regulations benefit of the
(IRR) of RA 9184, as amended on GOP, for justifiable
September 2, 2009: and reasonable
Section 41. The Head of the grounds such as
Procuring Entity reserves the right to the physical and
reject any and all bids, declare a economic
failure of bidding, or not award the conditions have
contract in the following situations: significantly
a) If there is prima facie evidence of changed so as to
collusion between appropriate public render the project
officers or employees of the no longer
procuring entity, or between the BAC economically,
and any of the bidders, or if the financially, or
collusion is between or among the technically
bidders themselves, or between a feasible, as
bidder and a third party, including determined by the

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Commission on Audit
Republic of the Philippines Page 176
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
any act which restricts, suppresses Head of the
or nullifies or tends to restrict, Procuring Entity?
suppress or nullify competition; Or
b) If the BAC is found to have failed in i. the award of the
following the prescribed bidding contract will not
procedures; or redound to the
c) For any justifiable and reasonable benefit of the
ground where the award of the GOP, for justifiable
contract will not redound to the and reasonable
benefit of the GOP, as follows: (i) if grounds such as
the physical and economic the project is no
conditions have significantly changed longer necessary
so as to render the project no longer as determined by
economically, financially, or the Head of the
technically feasible, as determined Procuring Entity?
by the Head of the Procuring Entity; Or
(ii) if the project is no longer j. the award of the
necessary as determined by the contract will not
Head of the Procuring Entity; and redound to the
(iii) if the source of funds for the benefit of the
project has been withheld or GOP, for justifiable
reduced through no fault of the and reasonable
procuring entity. grounds such as
the source of
GPPB Circular 01-2009 dated 20 funds for the
January 2009 project has been
withheld or
Section 4.9
reduced through
Pursuant to Section 41 of the IRR-A no fault of the
of R.A. 9184, the procuring entity procuring entity?
reserves the right to declare a failure
of bidding if the funds/allotment for
the program/project/activity has
been withheld or reduced through
no fault of the procuring entity.

For transparency, procuring entities


shall ensure that their bid
documents expressly reserves their
right to reject bids, declare a failure
of bidding, and not to award the
contract without incurring any
liability if the funds/allotment for
said program/project/activity has
been withheld or reduced through
no fault of its own. They are also
encouraged to emphasize this
reservation clause during pre-bid
conference or submission of bids.

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 177
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars
of the
Answer
EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT
1. To verify the effects of Analyze the instances of non-
instances of non-compliance on compliance to establish the Appropriate Audit Working Papers
the: effects and develop
appropriate audit
a. validity of the procurement recommendations.
activities and outputs
including the validity of the Also determine if appropriate
resulting contract; actions were taken by the
auditee in regard to instances
b. validity of any payment to be of non-compliance.
made on the basis of the
contract;
c. etc.
and develop appropriate audit NOTE:
recommendations Also refer to the OFFENSES
AND PENALTIES portion
Implementing Rules and of this Audit Guide.
Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
13.3. Observers shall be invited at least
three (3) calendar days before the date
of the procurement stage/activity. The
absence of observers will not nullify
the BAC proceedings, provided that
they have been duly invited in
writing.

2. To verify the causes of Analyze the instances of non-


instances of non-compliance compliances to establish the Appropriate Audit Working Papers
and develop appropriate audit cause(s) and develop
appropriate audit
recommendations
recommendations.

Also determine if appropriate


actions were taken by the
auditee in regard to instances
of non-compliance.

NOTE:
Also refer to the OFFENSES
AND PENALTIES portion
of this Audit Guide.

3. To communicate the results Prepare the appropriate audit/


of the audit with the auditees validation document reflecting Audit Observation Memorandum (AOM), if
Management the results of the applicable
audit/validation and transmit
COA Circular No. 2009-006 dated to Management
September 15, 2009 re- Prescribing
the Use of the Rules and Regulations
on Settlement of Accounts

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 178
ALTERNATIVE METHODS OF

PROCUREMENT FOR GOODS

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Commission on Audit
Republic of the Philippines Page 179
On the Procurement Procedures:

LIMITED SOURCE BIDDING


FOR GOODS

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 180
Procurement Procedures:
LIMITED SOURCE BIDDING FOR GOODS

Limited Source Bidding, otherwise known as selective bidding, is a method of procurement of


goods that involves direct invitation to bid by the procuring entity from the list of pre-selected
suppliers with known experience and proven capability on the requirements of the particular
contract.

I. APPROVAL OF THE ALTERNATIVE METHOD

A. AUDIT OBJECTIVE:

To verify if the adoption of the Alternative Method: Limited Source Bidding was in accordance
with the rules and regulations

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. copy of the approved Annual Procurement Plan (APP);
2. evidences to support the conclusion that public bidding cannot be ultimately pursued;
3. list of the only suppliers who can supply the highly specialized types of goods subject of
the specific procurement; or, list of the only suppliers of the major plant component;
4. Minutes of BAC meetings on the deliberations made;
5. BAC Resolution recommending the alternative method of procurement: Limited Source
Bidding, duly approved by the HOPE.

Audit Sub-objective Suggested Audit Working Paper


Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
1. To verify if the BAC validated: 1. From the evaluation Did the BAC validate
a. that the original mode of report with supporting that the original mode
procurement per APP was documents and of procurement per
public bidding but cannot be minutes of the BACs APP was public
meetings and relevant bidding but cannot be
ultimately pursued; BAC Resolution(s), look ultimately pursued?
and, for information on the
b. the existence of the conditions BACs validation that
to justify Limited Source the original mode of Did the BAC validate
Bidding: procurement per APP the existence of the
b.1. Procurement of highly was public bidding but conditions to justify
specialized types of goods cannot be ultimately Limited Source
(e.g., sophisticated defense pursued and of the Bidding:
equipment, complex air existence of the
conditions to justify a. Procurement of
navigation systems, coal) Limited Source highly specialized
where only a few suppliers Bidding. types of goods
are known to be available, (e.g.,
such that resorting to the sophisticated
public bidding method will defense
not likely result in any equipment,
additional suppliers complex air
participating in the navigation
bidding; or systems, coal)

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 181
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
where only a few
b.2. Procurement of major suppliers are
plant components where it known to be
is deemed advantageous to available, such
limit the bidding to known that resorting to
qualified bidders in order the public bidding
to maintain uniform quality method will not
and performance of the likely result in any
additional
plant as a whole;
suppliers or
consultants
Implementing Rules and Regulations participating in the
(IRR) of RA 9184, as amended on bidding?
September 2, 2009:
48.2. In accordance with Section 10 or
of this IRR, as a general rule, the
Procuring Entities shall adopt public b. Procurement of
bidding as the general mode of major plant
procurement and shall see to it that components where
the procurement program allows it is deemed
sufficient lead time for such public advantageous to
bidding. Alternative methods shall be limit the bidding to
resorted to only in the highly known qualified
exceptional cases provided for in this bidders in order to
Rule. maintain uniform
quality and
48.3. The method of procurement to performance of
be used shall be as indicated in the the plant as a
Approved Procurement Plan (APP). If whole?
the original mode of procurement
recommended in the APP was public
bidding but cannot be ultimately
pursued, the BAC, through a
Resolution, shall justify and
recommend the change in the mode
of procurement to be approved by
the HOPE.

49.1. Limited Source Bidding,


otherwise known as selective bidding,
is a method of procurement of goods
that involves direct invitation to bid
by the procuring entity from the list
of pre-selected suppliers with known
experience and proven capability of
the requirements of the particular
contract. This alternative method of
procurement may be employed under
any of the following conditions:

a) Procurement of highly specialized


types of goods (e.g., sophisticated
defense equipment, complex air
navigation systems, coal) where only
a few suppliers are known to be
available, such that resorting to the
public bidding method will not likely

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 182
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
result in any additional suppliers
participating in the bidding; or

b) 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.

2. To verify if the BAC: 2. From the BAC Did the BAC


a. recommended the alternative Resolution recommend the
mode of procurement: Limited recommending Limited alternative mode of
Source Bidding as the procurement: Limited
Source Bidding to the HOPE,
method of procurement, Source Bidding to the
and look for the approval of HOPE?
b. the HOPE approved the the HOPE.
alternative method of
procurement
Did the HOPE
Implementing Rules and Regulations approve Limited
(IRR) of RA 9184, as amended on Source Bidding as the
September 2, 2009: method of
procurement?
48.3. The method of procurement to
be used shall be as indicated in the
Approved Procurement Plan (APP). If
the original mode of procurement
recommended in the APP was public
bidding but cannot be ultimately
pursued, the BAC, through a
Resolution, shall justify and
recommend the change in the mode
of procurement to be approved by
the HOPE.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of
instances of non-compliance on non-compliance to Appropriate Audit Working Papers
the: establish the effects and
develop appropriate audit
a. validity of the procurement recommendations.
activities and outputs
including the validity of the Also determine if
resulting contract; appropriate actions were
taken by the auditee in
b. validity of any payment to be regard to instances of
made on the basis of the non-compliance.
contract;
c. etc. NOTE:
and develop appropriate audit Also refer to the
recommendations OFFENSES AND
PENALTIES portion of
Implementing Rules and Regulations this Audit Guide.
(IRR) of RA 9184, as amended on
September 2, 2009:

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 183
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
13.3. Observers shall be invited at least
three (3) calendar days before the date of
the procurement stage/activity. The
absence of observers will not nullify the
BAC proceedings, provided that they
have been duly invited in writing.

2. To verify the causes of Analyze the instances of


instances of non-compliance and non-compliances to Appropriate Audit Working Papers
develop appropriate audit establish the cause(s) and
recommendations develop appropriate audit
recommendations.

Also determine if
appropriate actions were
taken by the auditee in
regard to instances of
non-compliance.

NOTE:
Also refer to the
OFFENSES AND
PENALTIES portion of
this Audit Guide.

3. To communicate the results of Prepare the appropriate


the audit with the auditees audit/ validation document Audit Observation Memorandum (AOM), if
Management reflecting the results of applicable
the audit/validation and
COA Circular No. 2009-006 dated transmit to Management
September 15, 2009 re- Prescribing the
Use of the Rules and Regulations on
Settlement of Accounts

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 184
LIMITED SOURCE BIDDING FOR GOODS
II. BIDDING DOCUMENTS

NOTE:
Since the requirement of regulations is for the Procuring Entity to prepare the Bidding
Documents including the Invitation to Bid (indicating therein the method of procurement to
be used) and the technical specifications, in accordance with the procedures in the IRR, the
Generic Procurement Manual and the Philippine Bidding Documents (PBDs), the audit
pertaining to Bidding Documents shall be as indicated in the Audit Guide for Bidding
Documents in Competitive/Public Bidding for Goods.

Audit Criteria:
49.4. The BAC of the concerned procuring entity shall directly invite all the suppliers appearing in the pre-
selected list. All other procedures for competitive bidding shall be undertaken, except for the
advertisement of Invitation to Bid under Section 21.2.1 of the Revised IRR of RA 9184.

Manual of Procedures for the Procurement of Goods and Services, Volume 2


The following steps are followed in conducting a limited source bidding:
1.
2. The BAC, through the TWG and the BAC Secretariat, prepares the Bidding Documents including the Invitation to
Bid (indicating therein the method of procurement to be used) and the technical specifications, in accordance
with the procedures laid down in the IRR, this Manual and the PBDs.

III. PRE-PROCUREMENT CONFERENCE

NOTE:
Since the requirement of regulations is for the Procuring Entity to conduct Pre-Procurement
Conference in accordance with the procedures in the IRR, the Generic Procurement Manual
and the Philippine Bidding Documents (PBDs), the audit pertaining to Pre-Procurement
Conference shall be as indicated in the Audit Guide for Pre-Procurement Conference in
Competitive/Public Bidding for Goods.

Audit Criteria:
49.4. The BAC of the concerned procuring entity shall directly invite all the suppliers appearing in the pre-selected list.
All other procedures for competitive bidding shall be undertaken, except for the advertisement of Invitation to Bid
under Section 21.2.1 of the Revised IRR of RA 9184.

Manual of Procedures for the Procurement of Goods and Services, Volume 2


The following steps are followed in conducting a limited source bidding:
1.
2.
3.
4. If a Pre-procurement Conference is required or deemed necessary as previously discussed in this Manual, the BAC
holds the said Conference. If a Pre-procurement Conference is held the participants should confirm the existence of
the conditions required by law for procurement through limited source bidding.

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 185
LIMITED SOURCE BIDDING FOR GOODS
IV. POSTING OF THE INVITATION TO BID

NOTE:
Since the requirement of regulations is for the Procuring Entity to post the Invitation to Bid in
accordance with the procedures in the IRR, the Generic Procurement Manual and the
Philippine Bidding Documents (PBDs), the audit pertaining to posting of the Invitation to Bid
shall be as indicated in the Audit Guide for posting of the Invitation to Bid in
Competitive/Public Bidding for Goods.

Audit Criteria:
49.4. The BAC of the concerned procuring entity shall directly invite all the suppliers appearing in the pre-selected list.
All other procedures for competitive bidding shall be undertaken, except for the advertisement of Invitation to Bid
under Section 21.2.1 of the Revised IRR of RA 9184.

V. PRE-SELECTION AND INVITATION OF SUPPLIERS

A. AUDIT OBJECTIVES

1. To verify if the BAC conducted the pre-selection of suppliers as required by regulations;

2. To verify if the BAC invited pre-selected suppliers as required by regulations.

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. List maintained by the relevant government authority that has expertise in the type of
procurement concerned;
2. BAC evaluation report with supporting documents on the pre-selection of suppliers;
3. List of Pre-Selected Suppliers;
4. Printout of the web pages where the Invitation to Bid was posted in the PhilGEPS website,
the website of the procuring entity concerned, if available, and website prescribed by the
foreign government/ foreign or international financing institution, if applicable for the first
day and at least the last day of posting;
5. Certification by the head of the BAC Secretariat of the procuring entity that the invitation
was posted at any conspicuous place reserved for the purpose in the premises of the
procuring entity for 7 calendar days.
6. Invitations to bid duly received by the suppliers;

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
1. To verify if the BAC: 1. From the BAC evaluation Did the BAC in the
a. used the list maintained by report with supporting pre-selection of
the relevant government documents (including a copy supplier:
of the list used by the BAC in
authority,
pre-selecting suppliers) on a. use the list
b. took into account the pre-selection of suppliers, maintained by
experience and past the minutes of BAC meetings the relevant
performance on similar conducted for the purpose, government
contracts, look for information on the authority?

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 186
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
c. took into account use of the list and
capabilities with respect to consideration of capabilities b. took into
personnel, and experience in the pre- account
d. took into account selection process. experience and
past
capabilities with respect to
performance on
equipment or similar
manufacturing facilities, contracts?
e. took into account
capabilities with respect to c. took into
financial position account
in the pre-selection of capabilities with
suppliers respect to
personnel?
Implementing Rules and Regulations
d. took into
(IRR) of RA 9184, as amended on
account
September 2, 2009:
capabilities with
49.2. The pre-selected suppliers
respect to
shall be those appearing in a list
equipment or
maintained by the relevant
manufacturing
government authority that has
facilities?
expertise in the type of procurement
concerned. The list of pre-selected
e. took into
suppliers shall be updated
account
periodically. A copy of the list shall
capabilities with
be submitted to, and maintained
respect to
updated with, the GPPB.
financial
position?
49.3. The pre-selection shall be
based upon the capability and
resources of the bidders to perform
the contract taking into account their
experience and past performance on
similar contracts, capabilities with
respect to personnel, equipment or
manufacturing facilities, and
financial position. Pre-selection shall
be done in accordance with the
procedures provided in the GPMs.

Section 6.2. Once issued by the


GPPB, the use of the Generic
Procurement Manuals (GPMs),
Philippine Bidding Documents
(PBDs), and other standard forms
shall be mandatory upon all
Procuring Entities. However,
whenever necessary, to suit the
particular needs of the procuring
entity, modifications may be made,
particularly for major and specialized
procurement, subject to the
approval of the GPPB.

Manual of Procedures for the


Procurement of Goods and Services,
Volume 2

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 187
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
The following steps are followed in
conducting a limited source bidding:
1.
2.
3. The BAC, through the Secretariat
gets the list of pre-selected
suppliers from the government
authority that has expertise in the
type of procurement at hand. It
may also access the PhilGEPS
website as a secondary source of
information.
4.
5.
6.
7.
2. To verify if the BAC sent 2. Compare the names of Did the BAC send
invitations to bid to all the suppliers per copies of invitations to bid to
pre-selected suppliers invitations to bid duly all the pre-selected
received by them with the suppliers?
suppliers in the list of pre-
Implementing Rules and Regulations
selected suppliers.
(IRR) of RA 9184, as amended on
September 2, 2009:
49.4. The BAC of the concerned
procuring entity shall directly invite
all the suppliers appearing in the
pre-selected list.

6.2. Once issued by the GPPB, the


use of the Generic Procurement
Manuals (GPMs), Philippine Bidding
Documents (PBDs), and other
standard forms shall be mandatory
upon all Procuring Entities. However,
whenever necessary, to suit the
particular needs of the procuring
entity, modifications may be made,
particularly for major and specialized
procurement, subject to the
approval of the GPPB.

Manual of Procedures for the


Procurement of Goods and Services,
Volume 2
The following steps are followed in
conducting a limited source bidding:

6. The BAC Secretariat sends the


invitation to bid to the pre-
selected suppliers. The invitation
to bid is sent to ALL suppliers in
the list.

3. To verify if the BAC 3. Ahead of any procurement, Did the BAC post
Secretariat post the request the BAC Secretariat for the Invitation to
invitation to bid in: advance information on the Bid continuously in
first day of any posting. the:
a. The PhilGEPS,

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Commission on Audit
Republic of the Philippines Page 188
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
b. the website of the
procuring entity, 4. On the first day of posting 1. PhilGEPS
c. electronic procurement access the PhilGEPS website, website for 7
service provider, if any, the website of the procuring calendar days
entity concerned, if available, starting on the
for a period of 7 calendar
and website prescribed by the date of
days prior to the opening of foreign government/ foreign or advertisement?
the bids international financing
institution, if applicable. Print 2. website of the
Implementing Rules and Regulations the page where the notice was procuring entity
(IRR) of RA 9184, as amended on posted (to form part of the concerned, if
September 2, 2009: audit evidences). available, for 7
6.2. Once issued by the GPPB, the calendar days
use of the Generic Procurement 5. Access the websites at starting on the
Manuals (GPMs), Philippine Bidding random during the 7-day date of
Documents (PBDs), and other period to verify the postings. advertisement?
standard forms shall be mandatory
upon all Procuring Entities. However, 3. website
whenever necessary, to suit the prescribed by the
particular needs of the procuring foreign
entity, modifications may be made, government/
particularly for major and specialized foreign or
procurement, subject to the international
approval of the GPPB. financing
institution, if
Manual of Procedures for the applicable, for 7
Procurement of Goods and Services, calendar days
Volume 2 starting on the
The following steps are followed in date of
conducting a limited source bidding: advertisement?

5. The BAC, through the


Secretariat, posts for information
purposes the invitation to bid in a.
The PhilGEPS; b. the website of
the procuring entity and its
electronic procurement service
provider , if any, for a period of 7
calendar days prior to the opening
of the bids.

4. To verify if the BAC 6. Ahead of any procurement, Did the BAC post
Secretariat post the request the BAC Secretariat for the Invitation to
invitation to bid in any advance information on the Bid continuously at
conspicuous place in the first day of any posting. any conspicuous
place reserved for
premises of the procuring
7. Conduct ocular inspection the purpose in the
entity for a period of 7 on the first day of posting. premises of the
calendar days prior to the procuring entity for
opening of the bids 8. Repeat the ocular 7 calendar days, as
inspections (may be at certified by the
Implementing Rules and Regulations random) during the 7-day head of the BAC
(IRR) of RA 9184, as amended on period to verify the postings. Secretariat of the
September 2, 2009: procuring entity?
6.2. Once issued by the GPPB, the 9. Request for the certification
use of the Generic Procurement of the head of the BAC
Manuals (GPMs), Philippine Bidding Secretariat

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Commission on Audit
Republic of the Philippines Page 189
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Documents (PBDs), and other
standard forms shall be mandatory
upon all Procuring Entities. However,
whenever necessary, to suit the
particular needs of the procuring
entity, modifications may be made,
particularly for major and specialized
procurement, subject to the
approval of the GPPB.

Manual of Procedures for the


Procurement of Goods and Services,
Volume 2
The following steps are followed in
conducting a limited source bidding:

5. The BAC, through the


Secretariat, posts for information
purposes the invitation to bid in a.
b. c. any conspicuous place
in the premises of the procuring
entity; for a period of 7 calendar
days prior to the opening of the
bids.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of non-
instances of non-compliance compliance to establish the Appropriate Audit Working Papers
on the: effects and develop
appropriate audit
a. validity of the procurement recommendations.
activities and outputs
including the validity of the Also determine if appropriate
resulting contract; actions were taken by the
auditee in regard to instances
b. validity of any payment to of non-compliance.
be made on the basis of
the contract;
c. etc. NOTE:
and develop appropriate Also refer to the OFFENSES
audit recommendations AND PENALTIES portion
of this Audit Guide.
Implementing Rules and
Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
13.3. Observers shall be invited at
least three (3) calendar days before
the date of the procurement
stage/activity. The absence of
observers will not nullify the BAC
proceedings, provided that they
have been duly invited in
writing.

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 190
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
2. To verify the causes of Analyze the instances of non-
instances of non-compliance compliances to establish the Appropriate Audit Working Papers
and develop appropriate cause(s) and develop
audit recommendations appropriate audit
recommendations.

Also determine if appropriate


actions were taken by the
auditee in regard to instances
of non-compliance.

NOTE:
Also refer to the OFFENSES
AND PENALTIES portion
of this Audit Guide.

3. To communicate the Prepare the appropriate audit/


results of the audit with the validation document reflecting Audit Observation Memorandum (AOM), if
auditees Management the results of the applicable
audit/validation and transmit
COA Circular No. 2009-006 dated to Management
September 15, 2009 re- Prescribing
the Use of the Rules and
Regulations on Settlement of
Accounts

LIMITED SOURCE BIDDING FOR GOODS


VI. PRE-BID CONFERENCE
VI. OPENING AND PRELIMINARY EXAMINATION OF BIDS
VII. BID EVALUATION
VIII. POST-QUALIFICATION
IX. AWARD OF CONTRACT

NOTE:
Since the requirement of regulations is for the Procuring Entity to undertake all
other procedures for competitive bidding, except for the advertisement of Invitation
to Bid, the audit pertaining to other phases/activities in Limited Source Bidding
shall be as indicated in the Audit Guide for Competitive/Public Bidding for Goods.

Audit Criteria:

Manual of Procedures for the Procurement of Goods and Services, Volume 2


The following steps are followed in conducting a limited source bidding:
1.
2.
3.
4.
5.
6.

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Commission on Audit
Republic of the Philippines Page 191
7. The BAC proceeds with the pre-bid conference (if deemed warranted under the
circumstances), eligibility check, bid evaluation, post-qualification and succeeding
activities up to contract award, signing and approval, following the procedures for
competitive bidding.

49.4. The BAC of the concerned procuring entity shall directly invite all the
suppliers appearing in the pre-selected list. All other procedures for competitive
bidding shall be undertaken, except for the advertisement of Invitation to Bid
under Section 21.2.1 of the Revised IRR of RA 9184.

54.1. Splitting of Government Contracts is not allowed. 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, specially the necessity of public bidding and the requirements
for the alternative methods of procurement.

54.4. Except for Limited Source Bidding under Section 49 of this IRR, submission
of bid securities may be dispensed with.

54.5. Performance and warranty securities, as prescribed in Sections 39 and 62 of


this IRR, shall be submitted for contracts acquired through the alternative
methods of procurement, except for Shopping under Section 52 and Negotiated
Procurement under Sections 53.2 emergency cases), 53.9 (small value
procurement), 53.10 (lease of real property), and 53.13 (UN agencies) .

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Commission on Audit
Republic of the Philippines Page 192
On the Procurement Procedures:

DIRECT CONTRACTING
FOR GOODS

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Commission on Audit
Republic of the Philippines Page 193
Procurement Procedures:
DIRECT CONTRACTING FOR GOODS

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.

I. APPROVAL OF THE ALTERNATIVE METHOD

A. AUDIT OBJECTIVE:

To verify if the adoption of Direct Contracting was in accordance with the rules and
regulations

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. copy of the approved Annual Procurement Plan (APP);
2. evidences to support the conclusion that public bidding cannot be ultimately pursued;
3. evidence of proprietary nature of the item to be procured; or
4. copy of the contract with a provision which requires procurement of critical plant
components from a specific supplier as a condition precedent to hold a contractor to
guarantee its project performance, in accordance with the provisions of its contract; or
5. evidence of exclusive dealership or of absence of sub-dealers selling at lower prices;
6. evidence that no suitable substitute for the item to be procured can be obtained at more
advantageous terms to the GOP;
7. Minutes of BAC meetings on the deliberations made;
8. BAC Resolution recommending the alternative method of procurement: Direct Contracting,
duly approved by the HOPE.

Suggested Audit Working Paper


Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
1. To verify if the BAC 1. From the minutes of the Did the BAC validate
validated: BACs meetings and that the original mode
a. that the original mode of relevant BAC of procurement per
procurement per APP was Resolution(s), look for APP was public
information on the BACs bidding but cannot be
public bidding but cannot be validation that the ultimately pursued?
ultimately pursued; original mode of
and, procurement per APP
b. the existence of the was public bidding but Did the BAC validate
conditions to justify Direct cannot be ultimately the existence of the
Contracting: pursued and of the conditions to justify
b.1. the goods are existence of the Direct Contracting:
proprietary in nature conditions to justify
which can be obtained Direct Contracting. a. the goods are
proprietary in
only from the proprietary
nature which can

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 194
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
source, i.e. when patents, be obtained only
trade secrets, and from the
copyrights prohibit proprietary source,
i.e. when patents,
others from
trade secrets, and
manufacturing the same
copyrights prohibit
item; or others from
b.2. the procurement manufacturing the
same item?
involves critical plant
components from a b. the patent,
specific supplier and is a copyright and
condition precedent to other evidences of
hold a contractor to propriety?
guarantee its project
performance, in or
accordance with the c. the procurement
provisions of its contract; involves critical
plant components
or
from a specific
b.3. the item to be procured
supplier and is a
is sold by an exclusive condition
dealer or manufacturer precedent to hold
which does not have sub- a contractor to
dealers selling at lower guarantee its
prices and for which no project
suitable substitute can be performance, in
obtained at more accordance with
the provisions of
advantageous terms to
its contract?
the GOP.
or
Implementing Rules and Regulations d. the item to be
(IRR) of RA 9184, as amended on procured is sold by
September 2, 2009: an exclusive dealer
48.1. Subject to the prior approval or manufacturer
of the Head of the Procuring Entity, which does not
and whenever justified by the have sub-dealers
conditions provided in this Act, the selling at lower
procuring entity may, in order to prices and for
promote economy and efficiency, which no suitable
resort to any of the alternative substitute can be
methods of procurement provided obtained at more
in this Rule. In all instances, the advantageous
procuring entity shall ensure that terms to the GOP?
the most advantageous price for
the Government is obtained.

48.2. In accordance with Section


10 of this IRR, as a general rule,
the Procuring Entities shall adopt
public bidding as the general mode
of procurement and shall see to it
that the procurement program
allows sufficient lead time for such

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Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
public bidding. Alternative methods
shall be resorted to only in the
highly exceptional cases provided
for in this Rule.

48.3. The method of procurement


to be used shall be as indicated in
the Approved Procurement Plan
(APP). If the original mode of
procurement recommended in the
APP was public bidding but cannot
be ultimately pursued, the BAC,
through a Resolution, shall justify
and recommend the change in the
mode of procurement to be
approved by the HOPE.

50. Direct contracting may be


resorted to by concerned Procuring
Entities under any of the following
conditions:

a) 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;

b) 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

c) 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.

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Commission on Audit
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Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
3. To verify if the BAC: 3. From the BAC Resolution Did the BAC
a. recommended the recommending Direct recommend the
alternative mode of Contracting as the method alternative mode of
of procurement, look for procurement: Direct
procurement: Direct
the approval of the HOPE. Contracting to the
Contracting to the HOPE,
HOPE?
and
b. the HOPE approved the
method of procurement Did the HOPE
approve Direct
Implementing Rules and Regulations Contracting as the
(IRR) of RA 9184, as amended on method of
September 2, 2009: procurement?
48.1. Subject to the prior approval
of the Head of the Procuring Entity,
and whenever justified by the
conditions provided in this Act, the
procuring entity may, in order to
promote economy and efficiency,
resort to any of the alternative
methods of procurement provided
in this Rule. In all instances, the
procuring entity shall ensure that
the most advantageous price for
the Government is obtained.

48.3. The method of procurement


to be used shall be as indicated in
the Approved Procurement Plan
(APP). If the original mode of
procurement recommended in the
APP was public bidding but cannot
be ultimately pursued, the BAC,
through a Resolution, shall justify
and recommend the change in the
mode of procurement to be
approved by the HOPE.
EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT
1. To verify the effects of Analyze the instances of
instances of non-compliance on non-compliance to establish Appropriate Audit Working Papers
the: the effects and develop
appropriate audit
a. validity of the procurement recommendations.
activities and outputs
including the validity of the Also determine if
resulting contract; appropriate actions were
taken by the auditee in
b. validity of any payment to be regard to instances of non-
made on the basis of the compliance.
contract;
c. etc.
and develop appropriate audit

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 197
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
recommendations

Implementing Rules and NOTE:


Regulations (IRR) of RA 9184, as Also refer to the
amended on September 2, 2009: OFFENSES AND
13.3. Observers shall be invited at least PENALTIES portion of
three (3) calendar days before the date this Audit Guide.
of the procurement stage/activity. The
absence of observers will not nullify
the BAC proceedings, provided that
they have been duly invited in
writing.

2. To verify the causes of Analyze the instances of


instances of non-compliance non-compliances to establish Appropriate Audit Working Papers
and develop appropriate audit the cause(s) and develop
recommendations appropriate audit
recommendations.

Also determine if
appropriate actions were
taken by the auditee in
regard to instances of non-
compliance.

NOTE:
Also refer to the
OFFENSES AND
PENALTIES portion of
this Audit Guide.

3. To communicate the results Prepare the appropriate


of the audit with the auditees audit/ validation document Audit Observation Memorandum (AOM), if
Management reflecting the results of the applicable
audit/validation and transmit
COA Circular No. 2009-006 dated to Management
September 15, 2009 re- Prescribing
the Use of the Rules and Regulations
on Settlement of Accounts

DIRECT CONTRACTING FOR GOODS

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II. BIDDING DOCUMENTS

NOTE:

The regulations provide that the method of procurement does not require elaborate
Bidding Documents.

Audit Criteria:
50. 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.

III. PRICE QUOTATION AND ACCEPTANCE OF OFFER

A. AUDIT OBJECTIVE

To verify if the BAC conducted Direct Contracting as required by regulations

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. BAC evaluation report with supporting documents on the accepted offer;
2. Request for price quotation from the identified supplier or a pro-forma invoice;

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of the
Answer
1. To verify if the 1. Obtain a copy of the Did the Procuring
Procuring Entity Procuring Entitys request Entity request for
requested for price for price quotation from the price quotation
identified supplier or a pro- from the identified
quotation from the
forma invoice together with supplier or a pro-
identified supplier or a the conditions of sale and a forma invoice
pro-forma invoice copy of the suppliers together with the
together with the submission. conditions of sale?
conditions of sale

Implementing Rules and Did the supplier


Regulations (IRR) of RA 9184, as submit the
amended on September 2, 2009: documents
requested?
50. 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.

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Commission on Audit
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Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of the
Answer
2. To verify if the 2. From the documentation Did the Procuring
Procuring Entity of the evaluation conducted Entity evaluate and
evaluated and accepted by the procurement unit, accept the offer
the offer based on pre- look for information on the based on pre-
evaluation conducted and established criteria
established criteria and
the decisions made. and procedures?
procedures

Implementing Rules and


Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
50. 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.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of
instances of non- non-compliance to establish Appropriate Audit Working Papers
compliance on the: the effects and develop
appropriate audit
a. validity of the recommendations.
procurement activities
and outputs including Also determine if
the validity of the appropriate actions were
taken by the auditee in
resulting contract;
regard to instances of non-
b. validity of any payment compliance.
to be made on the basis
of the contract;
NOTE:
c. etc. Also refer to the
and develop appropriate OFFENSES AND
audit recommendations PENALTIES portion of
this Audit Guide.
Implementing Rules and
Regulations (IRR) of RA 9184,
as amended on September 2,
2009:
13.3. Observers shall be invited
at least three (3) calendar days
before the date of the
procurement stage/activity. The
absence of observers will not
nullify the BAC proceedings,
provided that they have been
duly invited in writing.

2. To verify the causes of Analyze the instances of


instances of non- non-compliances to establish Appropriate Audit Working Papers
compliance and develop the cause(s) and develop
appropriate audit appropriate audit

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Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of the
Answer
recommendations recommendations.

Also determine if
appropriate actions were
taken by the auditee in
regard to instances of non-
compliance.

NOTE:
Also refer to the
OFFENSES AND
PENALTIES portion of
this Audit Guide.

3. To communicate the Prepare the appropriate


results of the audit with audit/ validation document Audit Observation Memorandum (AOM), if applicable
the auditees reflecting the results of the
audit/validation and transmit
Management
to Management
COA Circular No. 2009-006
dated September 15, 2009 re-
Prescribing the Use of the
Rules and Regulations on
Settlement of Accounts

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Commission on Audit
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On the Procurement Procedures:

REPEAT ORDER FOR GOODS

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Procurement Procedures:
REPEAT ORDER FOR GOODS

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.

A. AUDIT OBJECTIVE:

To verify if the adoption of the Alternative Method: Repeat Order was in accordance with the
rules and regulations

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. copy of the approved Annual Procurement Plan (APP);
2. copy of the original contract and evidences that it was awarded through Competitive
Bidding;
3. copy of the prices for the repeat order with evidences that they are the prevailing market
price (advantageous to the GOP) as of the time of the negotiation;
4. evidences to support the conclusion that the repeat order contract did not result to
splitting of requisition or contract;
5. Analysis showing that the quantity of each item in the repeat order did not exceed twenty-
five percent (25%) of the quantity of each item in the original contract;
6. Minutes of BAC meetings on the deliberations made;

Suggested Audit Working Paper


Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
1. To verify if the BAC 1. From the evaluation Did the BAC validate
validated: report with supporting that Repeat Order is
a. that Repeat Order is the documents (and the mode of
mode of procurement minutes of the BACs procurement provided
meetings, look for for in the approved
provided for in the approved information on the APP?
APP; BACs validation that
and that: the mode of
b. the original contract was procurement per APP is Did the BAC validate
previously awarded through Repeat Order and of that the original
Competitive Bidding; the existence of the contract was
c. Unit prices of the repeat conditions to justify previously awarded
order were the same as or Repeat Ordering. through Competitive
lower than those in the Bidding?
original contract, provided
that such prices are still the Did the BAC validate
most advantageous to the that Unit prices of the
GOP after price verification; repeat order were the
d. The repeat order will not same as or lower
result in splitting of than those in the
contracts, requisitions, or original contract,
provided that such

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Commission on Audit
Republic of the Philippines Page 203
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
purchase orders, as provided prices are still the
for in Section 54.1 of the most advantageous
Revised IRR of RA 9184; to the GOP after price
verification?
e. Except in cases duly
approved by the GPPB, the
repeat order was availed of Did the BAC validate
only within six (6) months that repeat order will
from the contract effectivity not result in splitting
date stated in the Notice to of contracts,
Proceed arising from the requisitions, or
original contract; purchase orders?
and
f. The repeat order did NOT
Did the BAC validate
exceed twenty-five percent
that except in cases
(25%) of the quantity of duly approved by the
each item in the original GPPB, the repeat
contract. order was availed of
only within six (6)
Implementing Rules and Regulations months from the
(IRR) of RA 9184, as amended on contract effectivity
September 2, 2009: date stated in the
48.1. Subject to the prior approval Notice to Proceed
of the Head of the Procuring Entity, arising from the
and whenever justified by the original contract?
conditions provided in this Act, the
procuring entity may, in order to
promote economy and efficiency, Did the BAC validate
resort to any of the alternative that the repeat order
methods of procurement provided did NOT exceed
in this Rule. In all instances, the twenty-five percent
procuring entity shall ensure that (25%) of the quantity
the most advantageous price for of each item in the
the Government is obtained. original contract?

48.3. The method of procurement


to be used shall be as indicated in
the Approved Procurement Plan
(APP). If the original mode of
procurement recommended in the
APP was public bidding but cannot
be ultimately pursued, the BAC,
through a Resolution, shall justify
and recommend the change in the
mode of procurement to be
approved by the HOPE.
51. 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

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Commission on Audit
Republic of the Philippines Page 204
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
through Competitive Bidding.

a) 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;
b) The repeat order will not result
in splitting of contracts,
requisitions, or purchase orders,
as provided for in Section 54.1
of the Revised IRR of RA 9184;
c) 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
d) The repeat order shall not
exceed twenty-five percent
(25%) of the quantity of each
item in the original contract.

2. To verify if the BAC 2. Ahead of the Did the BAC


Secretariat posted the notice of procurement, request the Secretariat post the
award in: BAC Secretariat for notice of award in:
advance information on
a. the PhilGEPS,
the schedule of any a. the PhilGEPS?
b. the website of the posting.
procuring entity, if b. the website of
available 3. Access the PhilGEPS the procuring
c. any conspicuous place in website, the website of entity?
the premises of the the procuring entity
procuring entity concerned, if available c. any conspicuous
and print the page where place in the
Implementing Rules and Regulations the notice was posted (to premises of the
(IRR) of RA 9184, as amended on form part of the audit procuring
September 2, 2009: evidences). entity?
54.3 In all instances of alternative
4. Conduct ocular
methods of procurement, the BAC, inspection on the schedule
through the Secretariat, shall post, of posting.
for information purposes, the notice
of award in the PhilG-EPS 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.
EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT
1. To verify the effects of Analyze the instances of

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Commission on Audit
Republic of the Philippines Page 205
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
instances of non-compliance on non-compliance to Appropriate Audit Working Papers
the: establish the effects and
develop appropriate audit
a. validity of the procurement recommendations.
activities and outputs
including the validity of the Also determine if
resulting contract; appropriate actions were
taken by the auditee in
b. validity of any payment to be regard to instances of
made on the basis of the non-compliance.
contract;
c. etc.
NOTE:
and develop appropriate audit Also refer to the
recommendations OFFENSES AND
Implementing Rules and PENALTIES portion
Regulations (IRR) of RA 9184, as of this Audit Guide.
amended on September 2, 2009:
13.3. Observers shall be invited at least
three (3) calendar days before the date
of the procurement stage/activity. The
absence of observers will not nullify
the BAC proceedings, provided that
they have been duly invited in
writing.
2. To verify the causes of Analyze the instances of
instances of non-compliance non-compliances to Appropriate Audit Working Papers
and develop appropriate audit establish the cause(s) and
develop appropriate audit
recommendations
recommendations.
Also determine if
appropriate actions were
taken by the auditee in
regard to instances of
non-compliance.
NOTE:
Also refer to the
OFFENSES AND
PENALTIES portion
of this Audit Guide.
3. To communicate the results Prepare the appropriate
of the audit with the auditees audit/ validation document Audit Observation Memorandum (AOM), if
Management reflecting the results of applicable
the audit/validation and
COA Circular No. 2009-006 dated transmit to Management
September 15, 2009 re- Prescribing
the Use of the Rules and Regulations
on Settlement of Accounts

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Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 206
On the Procurement Procedures:

SHOPPING FOR GOODS

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Procurement Procedures:
SHOPPING FOR GOODS

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.

I. APPROVAL OF THE ALTERNATIVE METHOD

A. AUDIT OBJECTIVE:

To verify if the adoption of the Alternative Method: Shopping was in accordance with the rules
and regulations

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. copy of the approved Annual Procurement Plan (APP);
2. evidences to support the conclusion that public bidding cannot be ultimately pursued;
3. evidences to support the occurrence of unforeseen contingency requiring immediate
purchase;
4. analysis leading to the conclusion that the items procured were ordinary or regular
office supplies and equipment;
5. evidences of the non-availability of the items in the Procurement Service;
6. analysis leading to the conclusion that the amounts involved are within the threshold
provided in Annex H of the Revised IRR of RA 9184;
7. Minutes of BAC meetings on the deliberations made;
8. BAC Resolution recommending the alternative method of procurement: Shopping, duly
approved by the HOPE.

Suggested Audit Working Paper


Audit Sub-objective
Audit Activities
Audit Criteria Audit Question Yes No Particulars of
the Answer
1. To verify if the BAC validated: 1. From the evaluation Did the BAC validate
a. that the original mode of report with supporting that the original mode
procurement per APP was documents and of procurement per
public bidding but cannot be minutes of the BACs APP was public
meetings and relevant bidding but cannot be
ultimately pursued;
BAC Resolution(s), look ultimately pursued?
and, for information on the
b. the existence of the conditions BACs validation that
to justify Shopping: the original mode of Did the BAC validate
b.1. occurrence of unforeseen procurement per APP the existence of the
contingency requiring was public bidding but conditions to justify
immediate purchase; cannot be ultimately Shopping:
b.2. procurement of ordinary pursued and of the
or regular office supplies existence of the a. occurrence of
conditions to justify unforeseen
and equipment not Shopping. contingency
available in the requiring

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Commission on Audit
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Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
Procurement Service; immediate
b.3. the amounts involved did purchase?
not exceed the thresholds
or
in Annex H of the
b. procurement of
Revised IRR of RA 9184,
ordinary or regular
c. that there is no splitting.
office supplies and
equipment not
Implementing Rules and Regulations available in the
(IRR) of RA 9184, as amended on
Procurement
September 2, 2009: Service?
48.3. The method of procurement to Or
be used shall be as indicated in the c. the amounts
Approved Procurement Plan (APP). If involved did not
the original mode of procurement exceed the
recommended in the APP was public thresholds in
bidding but cannot be ultimately Annex H of the
pursued, the BAC, through a Revised IRR of RA
Resolution, shall justify and 9184?
recommend the change in the mode
of procurement to be approved by Did the BAC validate
the HOPE. that there is no
splitting?
52.1. 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. This method of
procurement shall be employed in
any of the following cases:

a) When there is an unforeseen


contingency requiring immediate
purchase: Provided, however, That
the amount shall not exceed the
thresholds prescribed in Annex H
of the Revised IRR or RA 9184.

b) 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.

52.2. 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,

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Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
are necessary in the transaction of its
official businesses, and consumed in
the day-to-day operations of said
procuring entity. However, office
supplies shall not include services
such as repair and maintenance of
equipment and furniture, as well as
trucking, hauling, janitorial, security,
and related or analogous services.

54.1. Splitting of Government


Contracts is not allowed. 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,
specially the necessity of public
bidding and the requirements for the
alternative methods of procurement.

2. To verify if the BAC: 2. From the BAC Did the BAC


a. recommended the alternative Resolution recommend the
mode of procurement: recommending Shopping alternative mode of
as the method of procurement:
Shopping to the HOPE,
procurement, look for the Shopping to the
and approval of the HOPE. HOPE?
b. the HOPE approved the
alternative method of
procurement
Did the HOPE
Implementing Rules and Regulations approve Shopping as
(IRR) of RA 9184, as amended on the method of
September 2, 2009: procurement?
48.1. Subject to the prior approval of
the Head of the Procuring Entity, and
whenever justified by the conditions
provided in this Act, the procuring
entity may, in order to promote
economy and efficiency, resort to any
of the alternative methods of
procurement provided in this Rule. In
all instances, the procuring entity
shall ensure that the most
advantageous price for the
Government is obtained.

48.3. The method of procurement to


be used shall be as indicated in the
Approved Procurement Plan (APP). If
the original mode of procurement

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Commission on Audit
Republic of the Philippines Page 210
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
recommended in the APP was public
bidding but cannot be ultimately
pursued, the BAC, through a
Resolution, shall justify and
recommend the change in the mode
of procurement to be approved by
the HOPE.
EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT
1. To verify the effects of Analyze the instances of
instances of non-compliance on non-compliance to Appropriate Audit Working Papers
the: establish the effects and
develop appropriate audit
a. validity of the procurement recommendations.
activities and outputs
including the validity of the Also determine if
resulting contract; appropriate actions were
taken by the auditee in
b. validity of any payment to be regard to instances of
made on the basis of the non-compliance.
contract;
c. etc. NOTE:
and develop appropriate audit Also refer to the
recommendations OFFENSES AND
PENALTIES portion of
Implementing Rules and Regulations this Audit Guide.
(IRR) of RA 9184, as amended on
September 2, 2009:
13.3. Observers shall be invited at least
three (3) calendar days before the date of
the procurement stage/activity. The
absence of observers will not nullify the
BAC proceedings, provided that they
have been duly invited in writing.

2. To verify the causes of Analyze the instances of


instances of non-compliance and non-compliances to Appropriate Audit Working Papers
develop appropriate audit establish the cause(s) and
recommendations develop appropriate audit
recommendations.

Also determine if
appropriate actions were
taken by the auditee in
regard to instances of
non-compliance.

NOTE:
Also refer to the
OFFENSES AND
PENALTIES portion of
this Audit Guide.

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 211
Suggested Audit Working Paper
Audit Sub-objective
Audit Activities Audit Question Yes No Particulars of
Audit Criteria
the Answer
3. To communicate the results of Prepare the appropriate
the audit with the auditees audit/ validation document Audit Observation Memorandum (AOM), if
Management reflecting the results of applicable
the audit/validation and
COA Circular No. 2009-006 dated transmit to Management
September 15, 2009 re- Prescribing the
Use of the Rules and Regulations on
Settlement of Accounts

SHOPPING FOR GOODS


II. PRICE QUOTATIONS, ACCEPTANCE OF OFFER
AND AWARD OF CONTRACT

A. AUDIT OBJECTIVE

To verify if the Procuring Entity conducted Shopping as required by regulations

B. SUB-OBJECTIVES, CRITERIA, VALIDATION PROCEDURES & SUGGESTED WORKING PAPER

Documents needed for evaluation:


1. evidences that the suppliers identified were bona fide;
2. copy of the requests for price quotations duly received by the suppliers;
3. copy of the price quotations;
4. evidence of posting request for quotations (RFQ);
5. documentation of the analysis of the price quotations leading to the conclusion of what
was to be accepted/ compliance with the specifications and other terms and conditions
stated in the RFQ;
6. documentation of the recommendation to the authorized official of the Procuring Entity;
7. documentation of the acceptance of the offer;
8. Abstract of Quotations;
9. notice of award;
10. evidence of posting notice of award

Audit Sub-objective Suggested Audit Working Paper


Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
1. To verify if the Procuring 1. From the documentation of Did the
Entity obtained price the evaluation conducted by procurement unit
quotations from at least 3 the procurement unit of the of the Procuring
Procuring Entity, with Entity obtain price
bona fide suppliers (1
supporting documents, look quotations from at
supplier during unforeseen for information on whether least 3 bona fide
contingencies requiring price quotations were suppliers (or 1
immediate purchase) obtained from at least 3 bona supplier during
fide suppliers (or 1 supplier unforeseen
Implementing Rules and Regulations during unforeseen contingencies)?
(IRR) of RA 9184, as amended on contingencies).

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 212
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
September 2, 2009:

52.3. Under Section 52.1 (b) of


this IRR, at least three (3) price
quotations from bona fide
suppliers shall be obtained.

Guidelines for Shopping and Small


Value Procurement covered by GPPB
Resolution No. 09-2009, dated 23
November 2009:

1. . . .
2. . . .
3. Procedural Guidelines

c. The Request for Quotation
(RFQ) shall be sent to at least
three (3) suppliers of known
qualifications. However, during
unforeseen contingencies
requiring immediate purchase
under Section 52.1 (a) of the
IRR, the RFQ may be sent to
only one (1) supplier.

2. For procurement of 2. Ahead of the procurement, Did the


ordinary or regular office request the procuring entity procurement unit
supplies and equipment with for advance information on the of the Procuring
schedule of any posting. Entity post the
an ABC of more than Php
notice of award in:
50,000.00, To verify if the
3. Access the PhilGEPS
procuring entity posted the website, the website of the a. the PhilGEPS
RFQs in: procuring entity concerned, if for a period of 7
available and print the page calendar days?
a. the PhilGEPS, where the notice was posted
b. the website of the (to form part of the audit b. the website of
procuring entity, if evidences). the procuring
available entity for a
c. any conspicuous place in 4. Conduct ocular inspection period of 7
on the schedule of posting. calendar days?
the premises of the
procuring entity c. any
for a period of 7 calendar conspicuous
days place in the
premises of the
Guidelines for Shopping and Small procuring entity
Value Procurement covered by GPPB for a period of 7
Resolution No. 09-2009, dated 23 calendar days?
November 2009:

1. . . .
2. . . .
3. Procedural Guidelines

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 213
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
d. RFQs shall also be posted for
a period of seven (7) calendar
days in the Philippine
Government Electronic
Procurement System (PhilG-
EPS) website, website of the
procuring entity, if available,
and at any conspicuous place
reserved for this purpose in the
premises of the procuring
entity. However, in the following
instances, the posting
requirement shall not be
applicable:
i. When there is an unforeseen
contingency requiring
immediate purchase under
Section 52.1(a) of the IRR; or
ii. RFQs with ABCs equal to
Fifty Thousand Pesos (Php
50,000.00) and below.

3. To verify if the procuring 5. Look for the Abstract of Did the


entity prepared an Abstract of Quotations and check for the procurement unit
Quotations after the deadline indication of the lowest of the Procuring
quotation. Entity prepare an
for submission of price
Abstract of
quotations and determined 6. Compare the date of the Quotations?
the lowest quotation Abstract of Quotations with the
deadline for submission of Did the
Guidelines for Shopping and Small price quotations as indicated in procurement unit
Value Procurement covered by GPPB the RFQs. of the Procuring
Resolution No. 09-2009, dated 23 Entity prepare an
November 2009: Abstract of
Quotations after
1. . . .
the deadline for
2. . . .
submission of price
3. Procedural Guidelines
quotations?

e. After the deadline for
Did the
submission of price quotations,
procurement unit
an Abstract of Quotations shall
of the Procuring
be prepared setting forth the
Entity determine
names of those who responded
the lowest
to the RFQ, their corresponding
quotation?
price quotations, and the lowest
quotation submitted.

4. To verify if the procuring 7. Compare the name of Did the procuring


entity made the award of supplier with the lowest entity award the
contract to the lowest quotation as indicated in the contract to the
Abstract of Quotation with the lowest quotation
quotation which complied
name of supplier who was which complied
with the specifications and given the Notice of Award. with the
other terms and conditions specifications and
stated in the RFQ 8. From the documentation of other terms and

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 214
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
Guidelines for Shopping and Small the evaluation of price conditions stated in
Value Procurement covered by GPPB quotations conducted by the the RFQ?
Resolution No. 09-2009, dated 23 procuring entity, look for the
November 2009: verification on the compliance
with the specifications and
1. . . . other terms and conditions
2. . . . stated in the RFQ.
3. Procedural Guidelines

h. Award of contract shall be
made to the lowest quotation
for goods which complies with
the specifications and other
terms and conditions stated in
the RFQ.
5. For procurement with and 9. Ahead of the procurement, Did the procuring
ABC of more than request the procuring entity entity post the
P50,000.00, To verify if the for advance information on the notice of award in:
procuring entity posted the schedule of any posting.
a. the PhilGEPS?
notice of award in:
10. Access the PhilGEPS
a. the PhilGEPS, website, the website of the b. the website of
b. the website of the procuring entity concerned, if the procuring
procuring entity, if available and print the page entity?
available where the notice was posted
c. any conspicuous place in (to form part of the audit c. any
the premises of the evidences). conspicuous
procuring entity place in the
11. Conduct ocular inspection premises of
on the schedule of posting. the procuring
Guidelines for Shopping and Small
entity?
Value Procurement covered by GPPB
Resolution No. 09-2009, dated 23
November 2009:

1. . . .
2. . . .
3. Procedural Guidelines

i. For information purposes, all
awards shall be posted in the
PhilG-EPS website, website of
the procuring entity, if available,
and at any conspicuous place
reserved for this purpose in the
premises of the procuring entity
except for those with ABCs
equal to Fifty Thousand Pesos
(Php 50,000.00) and below.

EVALUATING AUDIT EVIDENCES GATHERED AND COMMUNICATING THE RESULTS OF AUDIT


1. To verify the effects of Analyze the instances of non-
instances of non-compliance compliance to establish the Appropriate Audit Working Papers
on the: effects and develop
appropriate audit
a. validity of the procurement recommendations.

----------------------------------------------------------------------------------------------------------
Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 215
Audit Sub-objective Suggested Audit Working Paper
Audit Criteria Audit Activities Audit Question Yes No Particulars of
the Answer
activities and outputs
including the validity of the Also determine if appropriate
resulting contract; actions were taken by the
auditee in regard to instances
b. validity of any payment to of non-compliance.
be made on the basis of
the contract;
NOTE:
c. etc.
Also refer to the
and develop appropriate OFFENSES AND
audit recommendations PENALTIES portion of
this Audit Guide.
Implementing Rules and
Regulations (IRR) of RA 9184, as
amended on September 2, 2009:
13.3. Observers shall be invited at
least three (3) calendar days before
the date of the procurement
stage/activity. The absence of
observers will not nullify the BAC
proceedings, provided that they
have been duly invited in
writing.

2. To verify the causes of Analyze the instances of non-


instances of non-compliance compliances to establish the Appropriate Audit Working Papers
and develop appropriate cause(s) and develop
appropriate audit
audit recommendations
recommendations.

Also determine if appropriate


actions were taken by the
auditee in regard to instances
of non-compliance.

NOTE:
Also refer to the
OFFENSES AND
PENALTIES portion of
this Audit Guide.

3. To communicate the Prepare the appropriate audit/


results of the audit with the validation document reflecting Audit Observation Memorandum (AOM), if
auditees Management the results of the applicable
audit/validation and transmit
COA Circular No. 2009-006 dated to Management
September 15, 2009 re- Prescribing
the Use of the Rules and
Regulations on Settlement of
Accounts

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector First Update - December 2009
Commission on Audit
Republic of the Philippines Page 216
Other criteria:

54.4. Except for Limited Source Bidding under Section 49 of this IRR, submission of
bid securities may be dispensed with.

54.5. Performance and warranty securities, as prescribed in Sections 39 and 62 of this


IRR, shall be submitted for contracts acquired through the alternative methods of
procurement, except for Shopping under Section 52 and Negotiated Procurement
under Sections 53.2 emergency cases), 53.9 (small value procurement), 53.10 (lease of
real property), and 53.13 (UN agencies).

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Prepared by:
Technical Services Office GUIDE IN THE AUDIT OF PROCUREMENT
Special Services Sector