Republic of the Philippines COMMISSION ON AUDIT MEMORANDUM No. + 2023~004 Date : 3.0 NAY 2003. TO 3 All Assistant Commissioners. rectors, Officers- in-Charge, Supervising Auditors, Audit Team Leaders, Audit Team Members, and Other Concerned Personnel SUBJECT : — Guidelines on the Direct Retail Purchase of Petroleum Fuel, Oil and Lubricant Products Generally, the procurement of Petroleum Fuel, Oil and Lubricant (POL) products shall undergo competitive public bidding, However, under Section 23 of the General Provisions of the General Appropriations Act for Fiscal Year 2023, fuel is among those classified as critical applies thai, in the procurement thereof, the agencies are encouraged to resort to available modalities. The above provision is consistent with Government Procurement Policy Board (GPPB) Resolution No, 24-2019 dated October 30, 2019,' as amended by GPPB Resolution No, 05- 2022 dated June 23, 2022,? on the direct retail purchase of POL products. Accordingly, audit of POL products shall be in accordance with the above-mentioned GPPB issuances, as quoted hereunder 2016 RE’ ED IMPLEMENTING RULES AND REGULATIONS (IRR) OF REPUBLIC ACT (RA) NO. 9184 53.14 Direct Retail Purchase of Petroleum Fuel, Oil and Lubricant (POL) Products, Airline Tickets and Online Subscriptions, Where Goods and Services are required by a Procuring Entity for the efficient discharge of its principal mandate, governmental functions, or day-loday operations, direct retail purchase of (i) petroleum fuel, oil and lubricant (POL) produets; (ii) airline tickets; and (iii) online subscriptions may be made by end-users delegated to procure the same from identified direct suppliers or service providers. XXX 54.5 Performance and Warranty Security. Approving Section 53.14 of the 2016 Revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184 and the Amendinents to the Affected Provisions in Aunes “HI thereat 2 Approving the Inclusion of Online Subscription to Negotiated Procurement ~ Direct Retail Purchase un: Section 53.14 of the 2016 Revised Implementing Rules and Regulations of the Republic Act No. 919, including the Related Guidelines under Annex “H” thereof. Page 1 of 3120Performance and/or warranty securities are required for the following alternative methods of procurement, in accordance with Sections 39 and 62 of this IRR: Alternative Method of | Performance Security | Warranty Security Procurement. _| PS) | CWS) E c XXX Direct Retail Purchase x WS is required if the of POL, Airline terms and conditions or and similar agreements do Subscriptions not provide corrective actions to be undertaken by the supplier or service provider on any noted defects in the procured item, as determined by the procuring entity, ANNEX “H” OF THE 2016 REVISED IRR OF RA NO. 9184 ENTITLED “CONSOLIDATED GUIDELINES FOR THE ALTERNATIVE METHODS OF PROCUREMENT” IV, GENERAL GUIDELINES J. Delegation of Authority, ‘The conduct of Shopping and Negotiated Procurement under Emergency Cases, Small Value Procurement and Lease of Real Property and Venue may be delegated to the End-user unit or any other appropriate bureau, committee, or support unit duly authorized by the BAC through a Resolution approved by the HOPE, XXX For Negotiated Procurement under Section 53.14, the BAC and the HOPE. through a Resolution and issuance for the purpose, respectively, shall delegate to specific off personnel, committee or office in the Procuring Entity the conduct of Direct Retail Purchase to efficiently and expeditiously deal with the pressing need sought (o be addressed. XXX For record and monitoring purposes, all awards shall be immediately reported with all supporting documents to the HOPE, through the BAC, to ensure compliance with all the conditions and requirements provided for under R.A, 9184, its IRR and related guidelines. L. Notice of Award; Contract Approval; Notice to Proceed. Page 2 of 51) Except in Shopping, Negotiated Procurement through Emergency Cases, Ageney-to-Agency, Small Value Procurement, and Direct Retail Purchase of Petroleum, Fuel, Oil and Lubricant, Airline Tickets, and Online Subscriptions, the following procedures shall apply in the issuance of the Notice of Award (NOA), ContracvPurchase Order (PO) and Notice to Proceed (NIP) for the Alternative Methods of Procurement identified in this Guidelines, thus: XXX M. Bid, Performance and Warranty Securit Bid security may be dispensed with. However, performance and/or warranty securities are required for the following alternative methods of procurement, in accordance with Sections 39 and 62 of the IRR as summarized below: Altemative Method of | Performance Security | Warranty Security Procurement (Ps) (ws) XXX [Direct Retail Purchase x WS is required if the | of POL, Airline Ticket terms and conditions or and Online | similar agreements do Subscriptions not provide corrective actions to be undertaken by the supplier or | service provider on any | noted defects in the procured item, as determined by the procuring entity V, SPECIFIC GUIDELINES D, NEGOTIATED PROCUREMENT. x x x 10. DIRECT RETAIL PURCHASE OF PETROLEUM FUEL, OIL AND. LUBRICANT (POL) PRODUCTS, AIRLINE TICKETS, AND ONLINE, SUBSCRIPTIONS a, Policy Considerations, All procurement of POL products, airline tickets, and online subscriptions shall be done through competitive bidding, except when the Procuring Entity has determined that Direct Retail Purchase is the best modality for the procurement of (i) non-bulk POL products or where fees for additional services or functionalities are charged on top of the payment for the requited POL, products, (ii) airline tickets, or (iii) online subscriptions. In case of competitive bidding, other factors such as value-added or related ay also be taken into account in determining the procurement project's services n ABC. Page 3 ofb. Definition, Where Goods and Services are required by a Procuring Entity for the efficient discharge of its principal mandate, governmental functions, or day- to-day operations, direct retail purchase of (i) POL products, (ii) airline tickets, and (iii) online subscriptions may be made by end-users delegated to procure the same from identified direct suppliers or service providers. XXX ©. Conditions. ‘The procurement of POL products, airline tickets, and online subscriptions ean be contracted by the end-user to identified direct suppliers or service providers under the following conditions: i, For petroleum fuel (gasoline, diesel, and kerosene), oil and lubricants: a) Direct retail purchase of POL products estimated to be necessary for the operations of the Procuring Entity within the fiscal year, including provisions for foreseeable emergencies based on historical records, shall be reflected in the annual procurement plan (APP) in its entirety including any amendment thereto which shall be reflected in the supplemental APP; b)_ Direct purchase must be made from any available retailers, dealers or gas stations at retail pump price; ©) The requirement must be intended to be used for any official government vehicles and equipment for immediate consumption; and 4) Payment may be made through cash advance, reimbursement or other allowable payment modalities subject to pertinent auditing and accounting rules. XXX d, Procedure, i. The end-user delegated to directly purchase POL products, airline tickets, and online subscriptions in accordance with Part IV (J) of this Guidelines shall determine the supplier or service provider capable of delivering the required POL, products, airline tickets, and online subscriptions at retail pump price or at the most reasonable retail price, as the case may be. ii, Taking into account the usual trade and business practices being observed in the industry and the requirements and other reasonable considerations identified by the end-user, direct retail purchase of the required POL, products, airline tickets, or online subscriptions shall be carried out in accordance with pertinent accounting prineiples and practices as well as of sound management and fiscal administration provided that they do not contravene existing laws and regulations applicable to financial transactions. iii, ‘The End-User shall carefully review the terms and conditions or similar agreements which shall contain a provision on compensation for losses incurred caused by delays of the supplier or service provider. iv. The PE shall reyuire the submission of a warranty secu End-User's determination that the terms and con: agreements do not provide corrective actions to be undertaken Page 4 of 5supplier or service provider on any noted defects in the procured online subscription. Ve xR APPENDIX A OF ANNEX “H” OF THE 2016 REVISED IRR OF RA NO. 9184 ENTITLED “DOCUMENTARY REQUIREMENTS FOR ALTERNATIVE METHODS OF PROCUREMENT” I. This Appendix prescribes the documents that the BAC shall require from suppliers, contractors and consultants for Alternative Methods of Procurement, except for Repeat Order, Shopping under Section 52.1(a), and Negotiated Procurement under Section 53.5 (Agency-to-Agency) and 53.14 (Direct Retail Purchase of Petroleum Fuel, Oil and Lubricant products, Airline Tickets, and Online Subscriptions) of the IRR of RA No. 9184. For the guidance of all concerned. GAMALIEL 4. CORDOBA Hy Chairperson IM nn Page S ofS