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TransparencyinPublicProcurementModule PDF
TransparencyinPublicProcurementModule PDF
Rationale:
The Philippines has been perceived to be one of the most corrupt nations in Asia. This
public perception may have stemmed from reports and studies of corruption in public
procurement. Thus, in 2003, the government, together with non-governmental organizations,
spearheaded the enactment of a comprehensive law that will cover all government purchases,
whether domestic or foreign. Said law, most commonly referred to as the 2003 Government
Procurement Reform Act, includes such important features such as participation of civilian
observers and an electronic portal called the Philippine Government Electronic Procurement
System (PhilGEPS). The implementation of the law is still said to be in its infancy stage,
requiring information about the law with the general public and the latter’s participation in the
quest for a more transparent public procurement system.
Description:
Target Audience:
With special emphasis on the PhilGEPS, this module aims to streamline the trainings
conducted by KDC branches in the Philippines as part of their endeavor to impart the basic
principles on the country’s public procurement system to young people aged 12-24 years old.
The training envisions that young people will appreciate how transparency can be promoted in
the public procurement system, both in its ideal and practical applications. In addition, the
Young people are an ideal target audience for this endeavor primarily because the quest
of nation-building does not border age. The KDCs are established for the purpose of maximizing
the participation of the youth sector in important good governance initiatives, particularly in
promoting transparency in public procurement.
At the end of the training, it is envisioned that young participants are able to:
• Know the basic principles of a sound public procurement system like transparency,
integrity and efficiency;
• Know the basic principles and processes involving the Philippines’ public procurement
system under the new Government Procurement Reform Act, its implementing rules and
regulations, and other related government issuances;
• Know how the PhilGEPS works;
• Identify red flags in actual procurement processes;
• Identify compliance of bidders and government agencies with existing procurement laws
by viewing PhilGEPS;
• Fill out a standard PhilGEPS questionnaire regarding the use of PhilGEPS in specific
local government units;
• Promote the principle of transparency in public procurement.
• If called for, act as civilian observers in any public bidding.
Outline:
A. Definitions
1. Public procurement
This is the process by which government buys goods and services from suppliers
(from both public and private) for the needs of its people.
2. Public Bidding
Explanation for the Trainor: This is the process of knowing which person or
company should government buy goods and services. Under Philippine law, that
would be the one that meets the minimum specifications at the lowest price.
3. Bid
Definition under R.A. 9184: “This refers to a signed offer or proposal submitted
by a supplier, manufacturer, distributor, contractor or consultant in response to the
Bidding document.”
Explanation for the Trainor: This is an offer or proposal to enter into a contract
with government. It is given by a supplier, called the bidder, to the government
agency who does the bidding.
Explanation for the Trainor: This refers to a person who submits the bid either for
himself or for another person who has given him the authority to do the submission
before the government agency concerned.
5. Goods
Definition under R.A. 9184: “These refer to all items, supplies, materials and
general support services, except consulting services and infrastructure projects, which
may be needed in the transaction of public businesses or in the pursuit of any
government undertaking, project or activity, whether in the nature of equipment,
furniture, stationery, materials for construction, or personal property of any kind,
including non-personal or contractual services such as the repair and maintenance of
equipment and furniture, as well as trucking, hauling, janitorial, security, and related
or analogous services, as well as procurement of materials and supplies provided by
the procuring entity for such services. The term “related” or “analogous services”
shall include, but not be limited to, lease or purchase of office space, media
advertisements, health maintenance services, and other services essential to the
operation of the procuring entity.”
Explanation for the Trainor: This refers to all items, supplies, materials and
general support services which may be needed by government and its agencies for its
activities. Goods can be equipment, furniture, stationery, materials for construction,
or property of any kind, including repair of equipment and furniture, trucking,
hauling, janitorial, security, and related services.
This is a group of at least five (5) but not more than seven (7) persons who are all
government officials occupying plantilla positions. They are in charge of the conduct
of bidding for government purchases.
8. Consulting Services.
These are services for Infrastructure Projects and other types of projects or
activities of the Government requiring adequate external technical and professional
expertise that are beyond the capability and/or capacity of the Government to undertake
such as, but not limited to: (i) advisory and review services; (ii) pre-investment or
feasibility studies; (iii) design; (iv) construction supervision; (v) management and related
services; and (vi) other technical services or special studies.
• Transparency
This is a principle that allows all interested participants (government agency, private
company and the general public) to know and understand the processes of awarding
government contracts.
• Efficiency
• Integrity
This involves rules to ensure that the bidding is within established rules and
regulations.
• Competition
This ensures that everyone has an equal opportunity to take part in government
transactions.
This ensures that government gets the best value for the taxpayer’s money.
• Uniformity
This ensures that the law applies to all government purchases and transactions
• Public Monitoring
This guarantees that contracts are awarded pursuant to the provisions of the Act
and this IRR-A, and that all these contracts are performed strictly according to
specifications.
Yes, Republic Act 9184 which is also known as the Government Procurement
Reform Act of 2003. It is the first law that applies to all government purchases
whether national government or local government units such as provinces, cities and
municipalities including NGA’s, GOCC’s, GFI’s, LGU’s, Provinces, Cities,
Municipalities and Barangays.
A. Special Features
a. Comprehensive Law
Technical Statement: Republic Act 9184 is the first law that applies to the
Procurement of Infrastructure Projects, Goods and Consulting Services, regardless of
source of funds, whether local or foreign, by all branches and instrumentalities of
government, its department, offices and agencies, including government-owned and
controlled corporations and local government units.
Explanation for the Trainor: Republic Act 9184 is the first law that covers all
government purchases whether goods, infrastructure or consulting services.
They are persons who are not government officials or employees who are invited
by the BAC to be present in its proceedings. At least two civilian observers are
invited by the BAC.
R.A. 9184 Definition: “Any person who shall come from a duly recognized
private group in a sector or discipline relevant to the procurement at hand and is
familiar with the procurement law but has no direct or indirect interest in the contract
to be bid our; another person who shall come from an NGO.”
Explanation for the Trainor: Any person who is knowledgeable on the subject
matter and processes of the contract, and has no interest in the said contract.
If there is no observer present during the bidding process, can the BAC proceed
with the public bidding?
Yes. The BAC can proceed with the public bidding. However, it is necessary that
a written invitation should have been given to the observers at least two (2) days
before the scheduled bidding.
c. PhilGEPS
Technical Statement: This is the central portal that serves as the primary and
definitive source of information on all government procurement. This is a website
where government can publish what goods, consulting services and infrastructure
projects it needs and where suppliers, private contractors and companies can search
Explanation for the Trainor: This is a website where government can publish
what goods and services it needs and suppliers can submit their offer to. It is at
www.philgeps.net.
Note: There are five (5) phases in the law for making relevant procurement
information available in PhilGEPS. To date, PhilGEPS is still on Phase 1.
The regular members consist of the chairman and four other members (2 regular
and 2 provisional: representative of end-user and one with technical expertise).
For Local Government Units, the BAC shall be composed of one (1) 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. The end user office shall always be
represented in the BAC. 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.
The head of the procuring entity or the Local Chief Executive (City or Municipal
Mayor, Provincial Governor, Barangay Chairman) shall determine the members of
the BAC.
Can the head of the procuring entity or the local chief executive serve as the
chairman of the BAC?
No.
No.
The fourth civil degree is determined by counting from the common ascendant.
To illustrate:
The grandson is the BAC member. From the grandson, go up to his father (1)
(ascendant) and then to the grandfather (2)(common ascendant). Then from the
common ascendant, go down to his father’s sister (3) and go down to her daughter (4)
who is the grandson’s first cousin.
Regular BAC members shall have a fixed term of one (1) year counted from the
date of designation. This can be renewed.
Who can question the composition of the BAC if it does not conform to the
requirements of the law?
Any party, such as the Commission on Audit (COA) and the observers.
The BAC undertakes the procurement process (planning to award of contract) and
ensures compliance with the law.
The procurement reform act covers all government purchases (national and local
governments).
The law covers the procurement of infrastructure projects, goods and consulting
services, regardless of source of money, whether local or foreign, by all branches and
instrumentalities of government, its departments, offices and agencies, including
government-owned and/or-controlled corporations and local government units.
a. Procurement of Goods
Goods refer to all items, supplies, materials and general support services which
may be needed in the transaction of the public businesses or in the pursuit of any
government undertaking, project or activity. Excluded in the procurement of goods
are consulting services and infrastructure projects.
• railways
• airports
• seaports
• communication facilities
• water supply
• sanitation
• shore protection
• national buildings
• school buildings
These refer to services for projects or activities of the government which require
professional expertise that cannot be rendered by government employees.
Minimum Requirements
the relevant government authority that has expertise in the type of procurement
authority should ensure that the list is updated. The BAC of the concerned
procuring entity shall directly send to the pre-selected bidders the invitation to
bid, which should already indicate the relevant information required to enable the
procurement of goods that does not require elaborate bidding documents. The
together with the conditions of sale. The offer may be accepted immediately or
the previous winning bidder may be resorted to by procuring entities only in cases
where the procured item is clearly superior to the other bids in terms of the price
delivery. It shall not exceed 25% of the quantity in the original contract.
simply requests for the submission of price quotations for readily available off-
infrastructure projects and consulting services, where the procuring entity directly
contractor or consultant.
Note: Baseline is for goods. Timelines change for infrastructure and consulting
services.
The pre-procurement conference must be held at least seven (7) days before
the advertisement of the invitation to bid for the general public.
The Invitation to Bid is a statement from the government agency that wishes
to purchase goods, consulting services or infrastructure. It shall contain:
(b) A general statement on the criteria to be used for choosing the contractor;
(c) The date, time and place of the deadlines for the submission and receipt of
the eligibility requirements, the pre-bid conference, if any, the submission
and receipt of bids, and the opening of bids;
(f) The period of availability of the Bidding Documents, and the place where
these may be found.
1. The objectives, scope and expected outputs and/or results of the proposed
contract;
2. The technical specifications of the goods, infrastructure projects and
consulting services to be procured;
3. Expected contract duration, the estimated quantity in the case of the
procurement of goods, delivery schedule and/or time frame;
4. The obligations, duties and/or functions of the winning bidder;
5. The minimum eligibility requirements of bidders, such as track record to be
determined by the head of the procuring entity.
It must be held for contracts with approved budget of at least one million
pesos (P 1 Million) and upon written request of a prospective bidder.
The pre-bid conference must be held at least twelve (12) calendar days before
the deadline for the submission of bids.
Any prospective bidder intending to submit a bid must make a written request
for clarification to the BAC at least ten (10) calendar days before the deadline for
the submission and receipt of bids. The BAC must answer the questions by
issuing a supplemental/bid bulletin 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.
The procuring entity may, in its own initiative, also issue supplemental/bid
bulletins to clarify any provision of the bidding documents not later than seven (7)
calendar days before the deadline for the submission and receipt of bids. Any
change in the bidding documents must be labeled as an “AMENDMENT.”
All those who have signified interest or who secured bid documents must be
furnished with a copy of the bid bulletin.
Each bidder shall submit three sealed envelopes for the bid—(1) one for
eligibility (2) one for the technical component containing all relevant documents
and (3) for the financial component which includes the price for the project.
This is the opening of the technical envelopes. If the bidder complies with the
technical specifications of the project, the BAC opens the financial envelopes and
ranks the remaining bids according to price. The bidder with the lowest bid is
ranked first.
Lowest Calculated Bid for goods and infrastructure and for Consulting
Services, Highest Rated Bid.
Bidder 2
Bidder 1
STEP 6 - Post-Qualification
Post-qualification is the stage where the Lowest Calculated Bid for goods and
infrastructure projects or the Highest Rated Bid for consulting services is checked
and validated to ensure that it has passed all the requirements and qualification as
stated in the bidding documents. If it does, it shall be referred to as the “Lowest
Calculated Responsive Bid” or the “Highest Rated Responsive Bid”.
The BAC shall look at the bidder with the second Lowest Calculated Bid or
Highest Rated Bid. If the bidder with the second Lowest Calculated Bid or
Highest Rated Bid does not meet the criteria either, the same procedure shall be
repeated until the Lowest Calculated Responsive Bid or Highest Rated
Responsive Bid is finally determined.
Third Lowest
Calculated Bid/
Third Highest
Calculated Bid
The contract shall be re-advertised and re-bid. The BAC shall observe the
same process and set the new periods according to the same rules during the first
bidding.
STEP 7 - Award
The contract is awarded after the approval by the head of the procuring entity of
the recommendation of the BAC. This is done within fifteen (15) days from the
determination of the Lowest Calculated Responsive Bid or the Highest Rated
Responsive Bid.
When must the winning bidder and the procuring entity enter into a contract?
The winning bidder and the procuring entity must enter into a contract
immediately after all documents needed for the contract have been submitted. The
parties must sign the contract within ten (10) calendar days from receipt by the
winning bidder of the Notice of Award.
1. Nature
May add:
2. Features of PhilGEPS
Failure to post a procurement opportunity will make the contract null and
void. The government office that failed to post the procurement opportunity will
be fined and may face imprisonment.
Pre-Bid Conference
Submission of Bid
Post-Qualification
Notice of Award
Notice to Proceed
Preparation of
Contract/Purchase Order
Payment Processsing
TRANSPARENCY IN PUBLIC PROCUREMENT 30
V. Red Flags in the Bidding Process
Philippine procurement law promotes the principle that each interested person or
corporation can have equal opportunity to bid for any government contract. If a
bidder is repeatedly awarded a contract, the situation creates a suspicion that such
contractor is given special consideration above all others because of his relationship
with the members of the BAC or the city or municipal officials. It can also indicate
that there is a possibility of corruption. If this happens, the observers who are present
during the bidding should increase their vigilance to make sure that no bidder is
favored over the others.
Observers in actual bidding should ask for a copy of the invitation to bid or look
at the PhilGEPS website to make sure that the posting requirement has been complied
with.
All changes in the invitation to bid or bid opportunities made after pre-bid
conference should be posted in PhilGEPS. At the same time, the BAC must furnish
copies of the bid bulletin to all who have signified interest to bid or who have secured
copies of the bid documents. The notice of the changes is important to the bidding
process because the bidders who submitted before the issuance of the
Supplemental/Bid Bulletin are still allowed to modify their bids to fit the new
requirements. Without the issuance of the Supplemental/Bid Bulletin, fair
competition is denied.
d. No pre-bid conference
Pre-bid conference is required for purchases of Php1M pesos and above for
goods, 2M pesos for consulting services and Php5M pesos for infrastructure. It is held
at least twelve (12) calendar days before the deadline for the submission of bids. If no
pre-bid conference is conducted as required, there is a violation of procurement laws
and the bidders do not get the chance to clarify any items in the bidding documents.
Any person observing the bidding can ask for information if this has been done.
At the PhilGEPS website, observers can check whether a pre-bid conference has been
indicated by looking at the procuring agency’s site at least twelve (12) days before the
f. No announcement of award
An announcement tells all bidders who won the bids and how much the contract
price is. It allows the bidders to verify “on the spot” whether their respective bids are
indeed higher than the declared lowest bidder and if the lowest bidder met the
minimum requirements under the law.
The law prohibits the award of contract to the relative of the BAC member within
the fourth civil degree. Awards to a favored person limit competition. Contracts
awarded to those who are close to officers and employees of the procuring entity who
have direct access to information may substantially affect the results of the bidding.
This limits competition and increases the risk of corruption.
The reason a government agency must come up with the Approved Budget for the
Contract (ABC) is to set the reasonable amount that it can pay for its projects. It
reflects the most advantageous price for the government and makes sure that
Acceptance of bids after the deadline of bid submission creates that suspicion that
the contractor who submitted it is favored. The deadline for submission determines
the closure of the bids, where no one is allowed to submit anymore. Qualified
bidders, in the case of procurement of infrastructure and consulting services, are
already determined even before the bids are closed. Only they can submit their
respective bids. If anyone is allowed to submit a bid after the deadline, his eligibility
was surely not evaluated beforehand. The integrity of the entire bidding process will
be compromised.
j. Always shopping
Public officers who commit any of the acts prohibited by R.A. 9184 can be
imprisoned for six (6) to fifteen (15) years. They can also be punished under other laws
like the Anti-Graft and Corrupt Practice Act (RA 3019). Aside from staying in prison,
they will be required to pay the government for the profit they derived from the
transaction.
In addition, a violator may be suspended from work for one (1) year if he committed
the offense for the first time, and suspensions of two (2) years for the second offense.
Can procuring entities be held liable if they decide not to enter into a contract?
No, the procuring entity reserves the right to reject any bid, declare a failure of
bidding, or not award the contract: a) when the BAC failed to follow the applicable
procurement laws; b) when there is collusion (a connivance between the BAC and a
bidder); or, c) when the project is no longer needed.
When can a member of the BAC be held liable, before or after the award of the
contract?
A BAC member can be held liable before and after the award of the contract.
There are citizens who have formed groups to help fight corruption in public
procurement. You can join any of them.
2. G-Watch
G-Watch Government-Watch