The 2016 Revised Implementing Rules and Regulations (IRR) of Republic Act No.

9184,
also known as the Government Procurement Reform Act, is promulgated to modernize
and regulate the procurement activities of the Government of the Philippines (GoP).
The IRR emphasizes the principles of transparency, accountability, competitiveness,
efficiency, and economy in the procurement process. It applies to all branches,
agencies, departments, bureaus, offices, and instrumentalities of the GoP,
including government-owned and/or-controlled corporations, government financial
institutions, state universities and colleges, and local government units. The IRR
does not apply to certain activities, such as procurement funded from foreign
grants, acquisition of real property, public-private sector projects, and direct
financial or material assistance to beneficiaries. Various definitions are provided
for the terms used in the IRR.

The text provides definitions for various terms and phrases related to procurement
activities of the government. It defines terms such as Act, Approved Budget for the
Contract (ABC), Bid, Bidder, Bidding Documents, Bids and Awards Committee (BAC),
Common-Use Supplies and Equipment (CSE), Competitive Bidding, Consulting Services,
Domestic Bidder, Domestic Entity, Executive Agreements, Expendable Supplies,
Foreign Bid, and Foreign-funded Procurement. These definitions are important for
understanding the regulations and processes involved in government procurement.

Foreign grants refer to grants with no repayment obligations and are provided in
monetary form, goods, works, and consultancy services. Foreign loans refer to
loans, credits, and indebtedness with private foreign banks or with foreign
governments, agencies, or instrumentalities. Goods refer to all items, supplies,
materials, and general support services, except consulting services and
infrastructure projects. The Government Procurement Policy Board (GPPB) is the body
created in accordance with the rules. The Head of the Procuring Entity (HoPE)
refers to the head of the agency or body, or his duly authorized official.
Infrastructure projects include the construction, improvement, rehabilitation, and
maintenance of various government facilities and systems. An international
agreement refers to a contract or understanding entered into between the G o P and
another government or foreign or international financing institution. Non-
expendable supplies refer to articles that are not consumed in use and add to the
assets of the G o P. The Philippine Government Electronic Procurement System
(PhilGEPS) is the electronic system provided for in the Act. The term "portal"
refers to a website that integrates multiple users together in a central virtual
space. Procurement refers to the acquisition of goods, consulting services, and the
contracting for infrastructure projects. The Procuring Entity refers to any branch,
constitutional commission or office, agency, department, bureau, office, or
instrumentality of the G o P. Universal or commercial banks refer to banks duly
authorized under "The General Banking Act of 2000." The GPPB is responsible for
developing and approving generic procurement manuals, standard bidding documents,
and forms, while procuring entities are mandated to use these standardized
materials.

Modifications to procurement plans can be made by the procuring entity, subject to

approval from the GPPB. All procurement must be within the approved budget and be
carefully planned. The Annual Procurement Plan (APP) should only include projects
crucial to the efficient functioning of the procuring entity. The APP should also
consider foreseeable emergencies and appropriate timing/phasing of infrastructure
projects. No procurement should be undertaken unless it is in accordance with the
approved APP. The APP should be formulated and revised according to specific
guidelines, including the preparation of indicative APPs and Project Procurement
Management Plans (PPMPs). The PPMPs should be evaluated by the Budget Office and
forwarded to the BAC for final recommendation. The indicative APP should include
project details such as name, method of procurement, schedule, source of funds, and
estimated budget. The indicative APP and budget proposal should be submitted for
approval.
The end-user or implementing units must revise and adjust their PPMPs to reflect
the budgetary allocation for their respective projects. These revised PPMPs are
then submitted to the BAC for the final recommendation of the procurement method.
The indicative APP is also revised and approved in accordance with Section 7.2 of
this IRR. Changes to the individual PPMPs and the consolidated APP can be made
every six months or as often as required by the HoPE. The ABC in the approved APP
must always be consistent with the appropriations authorized in the GAA, corporate
budget, or appropriations ordinance. Procuring entities can start procurement
activities immediately after the NEP has been submitted, provided that the HoPE has
approved the indicative APP. The ABC for contracts not exceeding one year is based
on the amount in the indicative APP, while for multi-year contracts, it is based on
the amount in the MYOA or equivalent document. The GAA, corporate budget, or
appropriations ordinance must be approved or enacted before any contract can be
awarded. The PhilGEPS serves as the primary source of information on government
procurement, and all procuring entities must utilize it. Service providers can be
hired for electronic procurement, but they must meet certain requirements. The GPPB
determines and certifies compliance with these requirements.

The PhilGEPS (Philippine Government Electronic Procurement System) has several

features including a centralized electronic bulletin board for posting procurement
opportunities and related information. It also has a centralized electronic
database of registered manufacturers, suppliers, distributors, contractors, and
consultants. Registration with the PhilGEPS requires the submission of specified
requirements and includes the provision of an email address for communication
purposes. The PhilGEPS also has a centralized electronic catalog of common and non-
common use goods, supplies, materials, and equipment. It may feature a virtual
store for online ordering of items and support e-payment functions. Other
additional features may be developed in the future.

The PhilGEPS facilitates the electronic transfer of funds and supports the
electronic bid submission process for various types of procurement. All procuring
entities are required to fully use the PhilGEPS and register with it. Pre-bid
conferences and notices, as well as requests for clarification, can be conducted
electronically through the PhilGEPS. Bidders are required to register with the
PhilGEPS and upload and maintain eligibility documents. The PhilGEPS acknowledges
receipt of bids and the BAC has the sole authority to open them.

The PhilGEPS (Philippine Government Electronic Procurement System) incorporates

security, integrity, and confidentiality features to protect information and
documents submitted through the system. It ensures unauthorized access is prevented
through security measures like firewalls, and periodic tests are conducted to
ensure the system cannot be breached. The system also ensures the integrity of bids
by sealing them through electronic keys and using electronic signatures.
Confidentiality is maintained by not divulging electronic messages or documents to
third parties unless they are meant to be made publicly available. The system
includes an audit trail for on-line transactions and allows the Commission on Audit
to verify the security and integrity of the system. Performance tracking is also
implemented to monitor compliance with delivery schedules and other performance
indicators. Competitive bidding is mandated for all procurement, and a Bids and
Awards Committee (BAC) is established with members of unquestionable integrity and
procurement proficiency. The BAC structure and composition are determined by the
Head of the Procuring Entity.

The BAC for Local Government Units is composed of representatives from various
offices under the Local Chief Executive, as well as a representative from the end
user unit. The HoPE designates the Chairperson and Vice-Chairperson of the BAC, who
must be ranking permanent officials of the Procuring Entity. For Barangays, the BAC
is composed of at least five regular members of the Sangguniang Barangay, excluding
the Punong Barangay. Alternate BAC members may be designated by the HoPE and have
the same qualifications as the original members. The BAC is responsible for various
procurement functions, including advertising bids, determining bidder eligibility,
receiving and opening bids, evaluating bids, and recommending contract awards. They
are also tasked with creating a Procurement Monitoring Report to ensure compliance
with procurement standards. A majority of the BAC members, including the
Chairperson or Vice-Chairperson, constitute a quorum for conducting business.
Meetings are chaired by the Chairperson or Vice-Chairperson.

The Chairperson or Vice-Chairperson of the BAC shall preside at all meetings. The
decision of at least a majority of those present at a meeting with quorum shall be
valid and binding, but the Chairperson or Vice-Chairperson shall only vote in case
of a tie. To ensure transparency, the BAC shall invite at least two observers to
sit in its proceedings, one from a recognized private group relevant to the
procurement and one from a non-government organization. The observers should have
the necessary knowledge, experience, and absence of conflict of interest in the
procurement. They shall prepare a report on the BAC's compliance with the
provisions of the IRR and submit it to the HoPE, copy furnished to the BAC
Chairperson. The observers shall be allowed access to certain documents upon
request, and they shall enter into a confidentiality agreement with the Procuring
Entity. The HoPE shall create a Secretariat that will provide administrative
support to the BAC and the TWG, take custody of procurement documents, manage the
sale and distribution of Bidding Documents, monitor procurement activities, and act
as the central channel of communication.

The head of the Secretariat in central offices should be a high-ranking permanent

employee or, if not available, a lower-ranking permanent employee. Procuring
Entities should prioritize BAC assignments over other duties and responsibilities.
Honoraria may be granted to BAC members, BAC Secretariat, and TWG members. The GPPB
should establish a training program for BACs and Procurement Units. Bidding
Documents should follow standard forms and include various requirements. Bidders
may be asked to pay a fee for the preparation of bidding documents. Detailed
engineering investigations, surveys, and designs should be carried out for
infrastructure projects before bidding and awarding contracts.

The procurement process for infrastructure projects must follow the standards and
specifications set out by the relevant authority. In cases where there is pending
acquisition of right-of-way or location, the procurement process can begin but no
contract can be awarded until certain conditions are met. Brand names cannot be
referenced in specifications for procurement, except when necessary to maintain
compatibility with existing equipment. Equal access to information must be ensured
throughout the bidding process. A pre-procurement conference must be held before
advertising or issuing the invitation to bid, to confirm contract details and
readiness for procurement. Certain small procurements may be exempt from holding a
pre-procurement conference. The invitation to bid must provide relevant information
about the contract, including a description of the goods or services to be
procured.

The requirements for the bidding process include providing the project name,
identification and number of lots or items, basis of evaluation, criteria for
eligibility check, deadlines for submission and receipt of requirements and bids,
source of funding, contract duration or delivery schedule, contact information for
the procuring entity, and any other relevant information. The invitation to bid
should be posted in a conspicuous place, on the PhilGEPS and procuring entity
websites, and advertised in a newspaper of general circulation, except for
contracts below certain amounts. Pre-bid conferences are required for contracts
over a certain amount, where the eligibility requirements and contract details are
discussed. The minutes of the conference should be made available to prospective
bidders, and any amendments to the bidding documents should be issued through
supplemental/bid bulletins.

The BAC is responsible for responding to requests for clarification or modification

of the bidding documents by issuing Supplemental/Bid Bulletins. These bulletins
must be made available to all bidders who have obtained the bidding documents at
least seven days before the deadline for the submission of bids. The BAC must also
post the bulletins on the PhilGEPS website and within the premises of the Procuring
Entity. Bidders who have already submitted their bids before the issuance of a
bulletin must be informed and allowed to modify or withdraw their bids. For
eligibility requirements, bidders must provide legal documents such as registration
certificates and permits, as well as technical and financial documents including
audited financial statements and statements of ongoing contracts. Foreign bidders
must provide translated versions of their documents authenticated by the
appropriate Philippine foreign service establishment.

The PhilGEPS electronic registry is a platform for manufacturers, suppliers,

distributors, contractors, and consultants to be listed in accordance with the
eligibility criteria for procurement. For the procurement of goods, Filipino
citizens/sole proprietorships, partnerships, corporations, cooperatives, and joint
ventures with at least 60% Filipino ownership are eligible to participate. Foreign
bidders may also be eligible under certain circumstances. Prospective bidders must
have completed similar contracts and meet financial requirements. Similar
eligibility criteria apply for infrastructure projects, with a higher requirement
of 75% Filipino ownership.

Filipino ownership or interest must be at least 25% in joint ventures. Foreign

bidders may participate in infrastructure projects under certain conditions.
Contractors must have a license from the PCAB to participate in competitive
bidding. The prospective bidder must have completed a similar contract valued at
least 50% of the contract to be bid. The bidder's NFCC must be at least equal to
the ABC. GOCCs may participate in competitive bidding if they meet certain
requirements. The procuring entity has the right to review the qualifications of
bidders. For consulting services, the eligibility requirements include legal
documents, tax clearance, and a statement of ongoing and completed contracts.

The contract to be bid must include a statement from the consultant specifying
their nationality and confirming that the professionals who will perform the
service are registered and authorized by the appropriate regulatory body. The
consultant's audited financial statements must also be submitted, along with a
valid joint venture agreement if applicable. In the case of foreign consultants,
all documents must be in English or accompanied by an English translation
authenticated by the appropriate Philippine foreign service establishment.
Eligibility criteria for bidding on consulting services include being a duly
licensed Filipino citizen or entity with at least 60% Filipino ownership. Joint
ventures must also meet the 60% Filipino ownership requirement. The eligibility
envelopes of prospective bidders must be submitted before the deadline specified in
the Request for Expression of Interest and will be opened before the pre-bid
conference and bid opening. Short listing of prospective bidders will be based on
the evaluation of eligibility documents and consideration of contracts similar in
nature and complexity to the contract to be bid.

Three to seven consultants, with five as the preferable number, will be shortlisted
for a bidding process. The shortlisted consultants will need to pay a fee for the
bidding documents. The shortlisting criteria will include factors such as
applicable experience, qualifications of personnel, and current workload. The
eligibility check and shortlisting process should be completed within twenty
calendar days. Government-owned and controlled corporations must prove their
autonomy, adherence to commercial law, and non-attachment to the procuring entity
to be eligible for competitive bidding. The procuring entity reserves the right to
review a consultant's qualifications at any time if there are reasonable grounds to
suspect misrepresentation. Bidders must submit their bids in two separate sealed
envelopes, one for the technical component and one for the financial component,
along with the necessary documentation.

The procurement process for equipment and consulting services requires certain
documents and qualifications to be submitted by bidders. This includes an omnibus
sworn statement, bid security, organizational chart, list of completed and ongoing
projects, work plan and schedule, list of key personnel, and compliance with
various legal requirements. Bids must be submitted within specified time periods
and in properly sealed and marked envelopes. Bidders can modify or withdraw their
bids before the deadline, and bid security is required to guarantee the successful
bidder's performance.

The form and amount prescribed in the bidding documents must be followed for the
bid to be considered valid. The bidder must submit a Bid Securing Declaration or a
form of Bid Security, equal to a certain percentage of the ABC. The bid security
will only be returned after the bidder with the LCRB or HRRB has signed the
contract and furnished the performance security. The bid security must be
denominated in Philippine Pesos and in favor of the Procuring Entity. The bid
validity period shall not exceed 120 calendar days from the opening of bids, unless
extended. The bids shall be opened immediately after the deadline and the BAC shall
ensure the integrity, security, and confidentiality of the bids. The preliminary
examination of bids involves checking the documents required for eligibility and
technical requirements using a pass/fail criterion. Bids that fail to meet any
requirement or are incomplete shall be considered failed. The second envelope of
each eligible bidder will be opened if their first bid envelope passed the
preliminary examination. Only bids that meet all the requirements will be
considered passed.

A two-stage bidding procedure may be used for the procurement of Goods where the
technical specifications cannot be precisely defined in advance. In the first
stage, eligible bidders submit their eligibility requirements and initial technical
proposals. The concerned BAC evaluates the technical merits of the proposals and
holds a meeting with eligible bidders whose tenders meet the required standards.
Once the final revised technical specifications are approved, bidders submit their
revised technical tenders and price proposals. The ABC is the upper limit for bid
prices and if a bid price exceeds it, the bidder is automatically disqualified. For
foreign-funded procurement, certain conditions must be met for the ABC to be
applied as the ceiling. The BAC evaluates the financial component of bids by
considering completeness of the bid and arithmetical corrections. All bids are
evaluated on an equal footing to ensure fair and competitive comparison.

The bid evaluation process involves comparing bid prices and resolving any
discrepancies between the figures and words, the total price per item and unit
price, the stated total price and the sum of component prices, and the unit cost in
the detailed estimate and bill of quantities. Bids are then ranked based on their
total calculated bid prices, with those exceeding the Approved Budget for the
Contract (ABC) being disqualified. After the evaluation, the BAC prepares an
Abstract of Bids containing the name of the contract, bid opening details, and the
names of bidders with their calculated bid prices. The entire evaluation process
must be completed within seven days from the proposal deadline. For consulting
services, bidders are prohibited from communicating with the BAC until the approval
of the ranking of shortlisted bidders. Bid evaluation is conducted using either a
quality-based or quality-cost based evaluation procedure. The technical proposals
are evaluated based on criteria such as personnel quality and consultant
experience, and the highest rated bid is determined. The HoPE approves the
recommendations, and negotiations with the highest rated bidder are conducted for
the financial proposal. The specific weights for the technical and financial
proposals are indicated in the Bidding Documents.

The consultant for a project should have overall experience as a firm and
individual experiences of key staff. The plan of approach and methodology should be
clear, feasible, innovative, and comprehensive. For complex projects, shortlisted
consultants may be required to make an oral presentation. The evaluation of
technical proposals should not consider the highest and lowest scores to eliminate
bias. The results of the evaluation should be provided to all shortlisted
consultants and posted for public viewing. Negotiations with consultants should
cover various aspects such as terms of reference, methodology, and financial
proposal. Replacement of key personnel before contract award is generally not
allowed. The evaluation process should be completed within 21 days. Post-
qualification involves verifying compliance with all requirements and conditions
stated in the bidding documents. Failure to submit required documents disqualifies
the bidder. The post-qualification process verifies licenses, certificates,
permits, and agreements, as well as technical requirements.

Ongoing contracts may be disqualified for various reasons, including negative

slippage, failure to commence repair works on time, substandard work quality, or
unsatisfactory performance. For goods procurement, delays in delivery or
unsatisfactory performance can result in disqualification. The bid security and
financial requirements of bidders are also verified. If the lowest calculated bid
or highest rated bid passes all criteria, it is declared the lowest calculated
responsive bid or highest rated responsive bid and recommended for contract award.
If it fails, the next lowest bid undergoes the same post-qualification process. The
post-qualification process should be completed within 12 calendar days, with a
maximum extension of 45 calendar days for goods and infrastructure projects, or 30
calendar days for consulting services. If the bidding is deemed a failure, the BAC
will review the reasons and make necessary revisions to the bidding documents.

The section discusses the process of bidding and awarding contracts. It states that
if there is a failure in the bidding process, the procuring entity may resort to
negotiated procurement. It also talks about the circumstances under which a single
calculated/rated and responsive bid submission may be considered for award. The
section further explains the process of contract award, including the submission of
supporting documents and the issuance of a notice of award. It emphasizes that
contract award is subject to certain conditions, such as the submission of required
documents and the posting of performance security. The section concludes by stating
that the notice of award should be posted in the PhilGEPS and on the procuring
entity's website.

The winning bidder must post the required Performance Security and enter into a
contract with the Procuring Entity within ten (10) calendar days of receiving the
Notice of Award. The Procuring Entity will enter into the contract if all the
documentary requirements are complied with. The contract must be approved by the
appropriate higher authority within a specified time period. Once the contract is
approved, the Procuring Entity will issue a Notice to Proceed to the successful
bidder. The entire procurement process, from bid opening to contract award, should
not exceed three (3) months. A performance security must be posted by the winning
bidder before signing the contract, and the amount will depend on the type of
project. The performance security will be forfeited if the winning bidder fails to
fulfill its obligations under the contract.

The performance security can be released by the Procuring Entity after the issuance
of the Certificate of Final Acceptance, provided that there are no claims filed
against the contract awardee or the surety company, no claims for labor and
materials against the contractor, and all other terms of the contract are met. In
the case of infrastructure projects, the winning bidder must post additional
performance security to cover any cumulative increase of more than 10% over the
original contract value. If there is a reduction in the contract value or partially
completed works are usable and accepted by the GOP, a proportional reduction in the
original performance security may be allowed, as long as it does not exceed 50% of
the original security. If a bidder fails to submit the required documents or fails
to enter into a contract and post the required performance security, the bid
security shall be forfeited and appropriate sanctions imposed. The bidding process
may be repeated until a qualified bidder is determined, or the Procuring Entity may
enter into a negotiated procurement. The Head of the Procuring Entity reserves the
right to reject bids, declare a failure of bidding, or not award the contract in
certain situations, including evidence of collusion, failure to follow bidding
procedures, or if the contract will not benefit the GOP. The guidelines for
contract implementation and termination are provided, and no incentive bonuses are
allowed. The Procuring Entity may issue a letter of credit in favor of local or
foreign suppliers, but payment will only be made upon delivery and acceptance of
the goods.

The cost of opening a letter of credit for the procurement of domestic and foreign
goods shall be borne by the local or foreign supplier. Preference may be given to
the purchase of domestically-produced goods, supplies, and materials that meet
specified quality requirements. The lowest domestic bidder may be awarded the
contract as long as their bid is not more than 15% higher than the lowest foreign
bid. Domestic bidders must secure a certification from the Department of Trade and
Industry (DTI) that their bid includes locally-produced articles. The award of the
contract is subject to post-qualification and submission of required documentation.
Provincial projects funded by the government are subject to competitive bidding and
procurement processes. The right to match granted to provincial bidders is no
longer available. Lease contracts for equipment, including computers and
communication technology, are subject to competitive bidding. Bidders must submit a
sworn affidavit stating that they are not related to certain personnel involved in
the procurement process. Bidders found to have conflicting interests with each
other may be disqualified from participating.

A bidder may be disqualified from the bidding process if they have a relationship
that gives them access to information or influence over another bidder's bid or the
decisions of the Procuring Entity. This includes situations where a bidder submits
multiple bids, has previously worked as a consultant for the preparation of the
bid, or has a conflict of interest with the project. Alternative methods of
procurement may be used, but competitive bidding is generally preferred unless
justified by exceptional circumstances. Limited Source Bidding is a method where
the Procuring Entity invites bids from pre-selected suppliers or consultants with
specific expertise or experience.

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. Direct contracting may be resorted to by concerned Procuring Entities under
certain conditions. Repeat Order 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. 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. Negotiated Procurement is a method of procurement of goods,
infrastructure projects, and consulting services, whereby the Procuring Entity
directly negotiates a contract with a capable supplier, contractor, or consultant
in certain cases.

Procurement of goods, infrastructure projects, and consulting services can be done

through various alternative methods. These methods include agency-to-agency
procurement, procurement of scientific, scholarly or artistic work, exclusive
technology and media services, highly technical consultants, defense cooperation
agreements, small value procurement, lease of real property and venue, NGO
participation, community participation, and procurement from United Nations
agencies, international organizations or international financing institutions.
Splitting of government contracts is not allowed.

In alternative methods of procurement, the Procuring Entity may dispense with

newspaper advertising but must post the invitation or request for price
quotations/proposals on the PhilGEPS website and the Procuring Entity's website, as
well as at a conspicuous place for at least three calendar days. In all instances
of alternative methods of procurement, the notice of award or contract must be
posted on the PhilGEPS website, the Procuring Entity's website, and a conspicuous
place. Bid securities may be dispensed with, except for Limited Source Bidding.
Performance and warranty securities are required for certain alternative methods of
procurement. Manufacturers, suppliers, distributors, contractors, and consultants
must register with PhilGEPS and provide a PhilGEPS Registration Number in order to
be awarded contracts in certain alternative methods of procurement. The terms and
conditions for each alternative method of procurement are provided in Annex "H" of
the Implementing Rules and Regulations (IRR) and guidelines. Decisions of the BAC
may be questioned by filing a request for reconsideration within three calendar
days, and if denied, can be protested in writing to the Head of the Procuring
Entity within seven calendar days.

The BAC denied the request for reconsideration. A verified position paper with a
non-refundable protest fee must be filed for a protest. The position paper must
contain specific information and be verified by an affidavit. Failure to comply
with the requirements will result in dismissal of the protest. Protests must be
resolved within seven calendar days. Court action may only be taken after protests
have been resolved. Disputes may be settled through arbitration. Arbitral award and
decisions can be appealed to the Court of Appeals. Contract prices are governed by
specific rules.

All bid prices for contracts will be considered fixed and not subject to adjustment
or escalation, unless there are extraordinary circumstances, prior approval from
the GPPB, or specific provisions in a treaty or agreement. In cases where the cost
of the contract is affected by new laws or regulations, a price adjustment or
relief may be applied on a no loss - no gain basis. Requests for price escalation
under extraordinary circumstances must be submitted to the NEDA with the
endorsement of the Procuring Entity. Contracts must be denominated and payable in
Philippine currency, unless otherwise stated in the bidding documents. For the
procurement of goods, a warranty security is required for a minimum period of three
months for expendable supplies and one year for non-expendable supplies. For
infrastructure projects, the contractor is responsible for damages during
construction and defects for one year from project completion. The contractor must
undertake repair works within 90 days or the Procuring Entity may undertake the
repairs and seek reimbursement. Failure to comply with obligations may result in
forfeiture of the performance security and disqualification from future bidding.
Structural defects or failures in an infrastructure project may lead to liability
for the contractor, consultants, project owner's representatives, and third parties
involved.

Third parties can be held liable for structural defects or failures caused by their
work, such as leaking pipes or excavations. Users can be held liable if the defects
or failures are due to abuse or non-compliance with technical design limits. The
warranty against structural defects and failures varies depending on the type of
structure, ranging from two to fifteen years. Contractors are required to post a
warranty security, which can be in the form of cash, letter of credit, bank
guarantee, or surety bond. The warranty security remains effective for one year
from the date of final acceptance. In case of defects or failures during the
warranty period, the procuring entity can undertake restoration or reconstruction
works and seek reimbursement from the liable parties. The Government Procurement
Policy Board (GPPB) has various duties and responsibilities related to public
procurement, including formulating policies, preparing bidding forms, ensuring
proper implementation of regulations, conducting training programs, and reviewing
the effectiveness of the Act. The GPPB also creates a Technical Support Office
(TSO) to provide support in performing its duties.

The GPPB is responsible for providing research, technical, and administrative

support to the government in procurement processes. They are also tasked with
monitoring compliance with procurement laws and recommendations for improvement.
The GPPB absorbs the powers and responsibilities of the Procurement Policy Board.
The GPPB consists of various government officials and may invite representatives
from COA and other relevant agencies. The penalty for offenses related to
procurement includes imprisonment and disqualification from public office or
transacting with the government.

Participants in competitive bidding may face penalties and civil liability for
various offenses, such as submitting false information or withdrawing a bid after
being awarded. These penalties apply to both manual and electronic procurement
processes. Jurisdiction over these offenses falls under the appropriate courts, and
civil liability may include restitution or forfeiture. Contracts must include a
provision on liquidated damages for breaches, and excessive damages may result in
the termination of the contract. Administrative penalties, such as suspension and
disqualification from bidding, may be imposed for violations such as submitting
false information, withdrawal of bids without just cause, or attempting to unduly
influence the bidding process. Bid or performance security may also be forfeited.
The head of the procuring entity (HoPE) may delegate authority to the Bids and
Awards Committee (BAC) to impose these penalties. Preventive suspension and removal
of administrative penalties and disabilities follow the provisions of the
Administrative Code of 1987. BAC members are authorized to engage private legal
assistance if needed.

BAC members, including their support staff, are entitled to an indemnification

package for any legal action taken against them in connection with their official
duties. This package may include free legal assistance, liability insurance, and
other forms of protection and indemnification. The members of the BAC and its
support staff are also entitled to medical assistance for injuries incurred while
performing their duties. The IRR can be amended by the GPPB as needed, and any
amendment applies to all procurement activities after its effective date. The Act
repeals several previous laws and regulations related to procurement. If any
provision of the IRR is declared invalid or unconstitutional, the other provisions
remain valid. In procurement activities that began before the Act's effectivity,
the previous laws and regulations still apply. The IRR takes effect 60 days after
its publication and upon filing with the University of the Philippines Law Center.

Detailed engineering for infrastructure projects should be based on feasibility or

preliminary engineering studies. Changes in design standards should be justified
with their effects on cost and economics. Activities in detailed engineering
include survey, site investigation, design plans, technical specifications,
quantity and cost estimates, and bid/tender documents. Design standards should
consider seismicity. Field surveys and investigations should be done according to
design guidelines. Contract plans should include site development plan, profiles,
sections, drainage details, and structural plans. Quantities should be computed
accurately. Specifications, unit prices, and the approved budget for the contract
should be prepared. Bidding documents should be prepared as per regulations. A
program of work should be approved before starting construction, and it should
include estimates of work, quantities, costs, and a project schedule. The contract
time should be estimated through PERT/CPM analysis.

The Guidelines for Infrastructure Contracts outline several important principles to

be followed in procurement and implementation of infrastructure projects. These
include incorporating estimates of unfavorable weather conditions into the contract
time, specifying warranty periods and conducting value engineering for major
projects. The guidelines also address the preparation of site acquisition and
resettlement plans, as well as the clear delineation of work for each project
phase. In addition, the guidelines emphasize the need for certification of detailed
engineering surveys and designs, and the hiring of qualified and independent
consultants for government projects. The hiring of consultants should prioritize
Filipino consultants, but foreign consultants may be hired if local expertise is
insufficient. Finally, the guidelines emphasize the importance of technology and
knowledge transfer in consulting services provision.

A list of accredited consultants in various fields, prepared and updated annually

by an umbrella organization, will be disseminated to government agencies. The
umbrella organization will also regulate its members and the government may consult
with them on industry matters. The GPPB will recognize the consultants' umbrella
organization. The umbrella organization may submit its files of accredited
consultants to the BAC of the procuring entity. The services provided by
consultants can be classified into six categories: advisory and review services,
pre-investment or feasibility studies, design, construction supervision, management
and related services, and other technical services or special studies.

Technical services and special studies may include institution building, training
programs, economic and financial studies, land surveys, environmental statements,
construction management, and defense systems design. Technology and knowledge
transfer should be considered an important objective. The procurement timeline for
activities such as pre-procurement conference, bid advertisement, bid opening, bid
evaluation, post-qualification, contract preparation, and signing is outlined.

The timeline for procurement activities is outlined, with recommended minimum and
maximum calendar days for each activity. Activities include a pre-procurement
conference, advertisement/posting of invitation to bid, pre-bid conference, bid
submission and receipt, bid evaluation, post-qualification, contract preparation
and signing, approval of contract by higher authority, and issuance of notice to
proceed. The total time required for these activities is 141 to 156 calendar days,
excluding approval by higher authority if applicable. Different timelines and
conditions apply for infrastructure projects and consulting services.

Contract preparation and signing, approval of contract by higher authority,

issuance of notice to proceed, and contract implementation guidelines are discussed
in this text. The text also mentions amendments to orders, suspension of work, and
liquidated damages for delays in delivery.

If the sum of liquidated damages exceeds 10% of the total contract price, the
procuring entity may cancel the contract and impose additional sanctions. Advance
payment should not exceed 15% of the contract amount, unless directed by the
President. Certain services and goods may allow for advance payment up to 50% and
15% respectively. Other rules and guidelines for contract implementation will be
included in manuals issued by the GPPB. Variation orders can be issued to cover
changes in quantities or the introduction of new work items, but the cumulative
positive variation order cannot exceed 10% of the original contract price. If it
exceeds this limit, a separate contract may be needed.

The preparation and submission of Variation Orders involve several steps. First,
the procuring entity's representative or project engineer prepares the proposed
order and submits it to the Head of the Procuring Entity for approval. The Head of
the Procuring Entity then instructs the technical staff to conduct an investigation
and submit a report with their findings and recommendations. The Head of the
Procuring Entity approves the order if satisfied with the justification and
necessity. The processing of Variation Orders should not exceed 30 calendar days.
For extra work items covered by Change Orders, the unit prices from the original
contract are used. For new work items covered by Extra Work Orders, unit prices are
based on direct unit costs used in the original contract. Contractors must request
payment for extra work accompanied by a detailed statement of the amount claimed.
Contractors should not start work on any Change Order or Extra Work Order without
approval, but under certain conditions, the procuring entity's
representative/project engineer may give permission to start work. Advance payment
can be made to the contractor, not exceeding 15% of the total contract price, upon
submission and acceptance of an irrevocable standby letter of credit or surety
bond. The advance payment is repaid by deducting 15% from periodic progress
payments.

The contract specifies the percentage of the total contract price that will be used
for the advance payment. The contractor can reduce their standby letter of credit
or guarantee by the amounts refunded in the advance payment. The contractor can
submit a monthly statement of work accomplished and request progress payment. The
procuring entity will check the statement and certify the amount to be paid. The
procuring entity will deduct various amounts from the progress payment, including
the cumulative value of previously certified and paid work, the portion of the
advance payment to be recouped for the month, retention money, amount to cover
third party liabilities, and amount to cover discovered defects in the works.
Progress payments are subject to retention of 10% until 50% of the value of works
is completed. If the work is satisfactorily done and on schedule, no additional
retention will be made. Once the project reaches 95% completion, a punch-list will
be created for necessary corrections and completion of the project. Liquidated
damages will be imposed if the contractor fails to complete the work within the
specified contract time. The procuring entity may suspend the work for various
reasons.

The contractor must comply with any orders to suspend the work during construction.
The contractor may also suspend work if there are right-of-way problems,
construction plans are not issued, peace and order conditions are dangerous, or the
procuring entity fails to deliver materials or equipment. If the suspension is not
the contractor's fault, the contract time will be adjusted accordingly. The
procuring entity may grant an extension of contract time for additional work or
special circumstances, but not for unfavorable weather or the contractor's
negligence. Accredited testing laboratories must be used for infrastructure
projects. The performance of contractors must be evaluated using the NEDA-approved
CPES Guidelines.

Procuring entities implementing infrastructure projects are required to establish

CPES Implementing Units (IUs) responsible for implementing CPES guidelines,
accrediting Constructors Performance Evaluators (CPEs), and evaluating CPEs.
Results of performance evaluations are submitted to CIAP and disseminated to
concerned units. The CPES rating and information are used for various purposes,
such as pre-qualification, awarding contracts, and project monitoring. Guidelines
for other aspects of contract implementation, such as sub-contracting and
inspection, are included in manuals issued by GPPB. The guidelines for advance
payment for mobilization, fixed price contracts for consultancy services, and the
procurement and implementation of design and build infrastructure projects are also
provided. The advantages and disadvantages of the design and build scheme are
discussed.

The use of the Design and Build scheme in infrastructure projects is dependent on
several conditions, such as tight completion schedules, advanced engineering or
construction technologies, exclusive provision by a company, or previously approved
drawings. These projects should be included in the procuring entity's Annual
Procurement Plan and require prior approval. A Design and Build Committee, composed
of experienced technical personnel, may be created to assist in the preparation,
review, and evaluation of these projects. Preliminary design and construction
studies must be carried out and approved before bidding and awarding of contracts.
These studies include project description, conceptual design, performance
specifications, preliminary investigations, and utility locations. The accuracy and
applicability of the data used in these studies are the contractor's
responsibility.

In the design and build proposal process, the procuring entity is responsible for
acquiring right-of-way and conducting eminent domain proceedings. The winning
bidder is responsible for detailed engineering requirements, including
investigations, surveys, and designs. The procuring entity reviews and approves the
submitted plans. Eligibility requirements for design and build contractors are
based on legal, technical, and financial criteria. Joint ventures and partnerships
among contractors and consultants are allowed. Bids are submitted in two envelopes
- technical proposal and financial proposal. The bid evaluation process involves a
two-step procedure. The first step includes the review of preliminary design plans
and construction methods.

The contractor's conceptual design and track record will be evaluated using a
pass/fail criteria that includes adherence to performance specifications,
feasibility of approach and methodology, and quality of personnel. For complex
projects, there may be an oral presentation required. Only bids that pass the
evaluation will move on to the second step, where the financial proposals will be
evaluated and ranked based on calculated bid prices. The lowest calculated bid
price will be awarded the contract after post-qualification. Contract
implementation guidelines require approval before work can begin, and the
contractor is responsible for obtaining necessary information and submitting
required documents. Any errors or changes will be rectified at the contractor's
cost. Changes in design and construction require approval and may result in
additional costs to the procuring entity.

The contract documents specify that the cumulative amount of variation order should
not exceed 10% of the original contract price. The contractor is entitled to
advance payment, and the procuring entity should define quality control procedures
for design and construction. The contractor is responsible for providing necessary
equipment and personnel for specified tests. Design and build projects should have
a minimum Defects Liability Period of 1 year. The contractor is held liable for
design and structural defects within the warranty period. The GPPB may issue
additional guidelines and forms for procurement methods. Alternative methods of
procurement should be resorted to only in exceptional cases and with the approval
of the HOPE. The Guidelines cover national government entities, with some
exclusions. The APP should indicate the method of procurement, and splitting of
contracts is prohibited. The Procuring Entity should ensure that contracts do not
result in unnecessary expenditure and should maintain confidentiality of bidding
documents. Advertisement and posting requirements may be dispensed with for
alternative methods of procurement.

Suppliers, manufacturers, distributors, contractors, and consultants are required

to register with the PhilGEPS and provide a PhilGEPS Registration number in various
alternative methods of procurement. Observers may be invited by the Procuring
Entity for alternative methods of procurement. Specifications for the procurement
of Goods should not reference brand names, except for items or parts that are
compatible with existing equipment. The BAC may delegate the conduct of Shopping
and Negotiated Procurement under specific circumstances. The BAC must conduct a
mandatory review and evaluation if there are not enough quotations or proposals
received. Procedures for issuing the Notice of Award, Contract/Purchase Order, and
Notice to Proceed differ based on the alternative method of procurement used.

The guidelines state that the approved contract should be provided to the supplier,
contractor, or consultant within three days of approval. The Notice of Award,
Contract, and Notice to Proceed should be posted on the relevant websites and at
the Procuring Entity's premises within 10 days. Bid security may be waived, but
performance and warranty securities are required for certain alternative methods of
procurement. Blacklisting of suppliers, contractors, or consultants can occur based
on the Uniform Guidelines for Blacklisting. Direct contracting may be used for
goods that are patented or have no suitable substitute, but a survey of the
industry must be conducted beforehand. Repeat orders can be made from previous
winning bidders to replenish goods.

Repeat orders must be awarded through competitive bidding, with unit prices the
same or lower than those in the original contract. Repeat orders cannot result in
splitting contracts, and can only be made within six months of the original
contract if there has been a partial delivery. Repeat orders cannot exceed 25% of
the quantity in the original contract. Shopping is a method of procurement for
readily available goods, and can be used for unforeseen contingencies with specific
monetary limits. The BAC prepares the RFQ and sends it directly to suppliers, who
must demonstrate their qualifications and capabilities. The BAC then recommends the
award of the contract to the supplier with the lowest quotation.

The guidelines outline the procedures for shopping and negotiated procurement. In
shopping, the end-user submits a purchase request, the BAC prepares the RFQ and
obtains at least three price quotations. The BAC validates the supplier's
capabilities and recommends the award of contract to the supplier with the lowest
calculated and responsive quotation. In negotiated procurement, it can be used in
cases of two failed biddings or emergency situations. The BAC can revise the
eligibility requirements, invite at least three suppliers or consultants for
negotiations, and award the contract to the supplier with the lowest calculated and
responsive quotation.

In cases of calamities or other urgent situations where immediate action is

necessary, negotiated procurement may be used to prevent damage or restore vital
public services. The appropriate timing and proximity of the emergency to the
procurement activity should be considered. When there is an imminent danger to life
during a state of calamity, a declaration by a competent authority is required
before any procurement can take place. The procedure for negotiated procurement
involves the submission of a request accompanied by supporting documents,
negotiation with a capable supplier, contractor or consultant, and the immediate
awarding of the contract. The takeover of contracts may be resorted to when a
contract awarded through competitive bidding has been rescinded or terminated, or
when immediate action is necessary. The procedure involves negotiation with the
second lowest bidder and subsequent bidders if necessary, and if negotiation fails,
alternative methods of procurement may be considered. Adjacent or contiguous
contracts to an ongoing infrastructure project may be negotiated if certain
conditions are met, including using the same or lower prices as the original
contract and commencing negotiations before the expiry of the original contract.

In infrastructure projects, "adjacent or contiguous" refers to projects that are

physically connected or in close proximity. In consulting services, it refers to
the relationship between subject matters. The Procuring Entity must ensure that new
items have prices equal to or lower than market prices. The BAC negotiates with the
contractor or consultant and recommends the award of the contract. Agency-to-Agency
agreements involve procurement from another government agency. There are conditions
that must be met, such as efficiency and economical benefits to the government. The
End User unit justifies the use of Agency-to-Agency and secures a certificate from
the Servicing Agency. The BAC issues a resolution recommending the use of Agency-
to-Agency to the HOPE, and a Memorandum of Agreement is entered into if approved.
For scientific, scholarly, or artistic work, exclusive technology, and media
services, procurement can be contracted to a particular supplier or contractor
determined by the HOPE. There are specific reasons and circumstances for this.
Multiple suppliers may be awarded contracts for transparency and efficiency. For
infrastructure facilities with proprietary materials, equipment, or technology, the
same contractor must be used.

Through a negotiated modality, the end user is required to conduct a market study
to determine potential sources for the project. The study should ensure that the
chosen supplier, contractor, or consultant can provide more advantageous terms. The
market study must be conducted before the procurement process begins. The BAC will
negotiate with the selected supplier, contractor, or consultant based on the
technical specifications, scope of work, or terms of reference provided by the end
user. Upon successful negotiation, the BAC will recommend the award of the contract
to the HOPE. Highly technical consultants can be hired for work that is highly
technical, proprietary, primarily confidential, or policy determining. The
individual consultant's term should not exceed six months and the BAC will
negotiate with them based on the terms of reference. The BAC will recommend the
award of the contract to the individual consultant. Small value procurement
involves the procurement of goods, infrastructure projects, or consulting services
where the amount does not exceed a certain threshold. The end user will submit a
request to the BAC with the necessary details, and the BAC will prepare and send
RFQs/RFPs to at least three qualified suppliers, contractors, or consultants. After
the submission deadline, the BAC will prepare an abstract of quotations/ratings and
recommend the award of contract to the HOPE based on the single or lowest
calculated and responsive quotation/rating. Lease of real property and venue
procurement involves the leasing of land, buildings, and venues for official use.

The Consolidated Guidelines for Alternative Methods of Procurement includes

policies and procedures for the lease of real property and venue by government
agencies. It is preferred that government agencies lease publicly-owned real
property or venue from other government agencies. If privately-owned property is
needed, it should be justified as more efficient and economical. The location of
the property should be carefully selected, taking into consideration the prudence
and economy in government service. The rental rates should be based on market
analysis and should not exceed the Approved Budget for the Contract. Technical
specifications should be prepared and ratings will be determined based on these
specifications. The Bids and Awards Committee (BAC) will invite prospective Lessors
to submit price quotations, and the awarded contract will be based on the lowest
calculated and responsive quotation. Similar procedures apply for the lease of
venues. These Consolidated Guidelines repeal previous guidelines and will take
effect after publication and filing with the University of the Philippines Law
Center.

GPPB Resolutions dated November 23, 2009, May 31, 2007, and November 3, 2009 are
included in the document. Appendix A provides the documentary requirements for
alternative methods of procurement, while Appendix B discusses the rating factors
and determination of reasonable rental rates for the lease of real property.

There are several factors to consider when determining the reasonableness of rental
rates for a property. One method is to compute based on observed depreciation,
using a formula that takes into account the reproduction cost, depreciation rate,
monthly capitalization rate, and factor value. Another method is to compute based
on straight line depreciation, using a formula that takes into account the age of
the property, depreciation rate, reproduction cost, monthly capitalization rate,
and factor value. These methods help to determine a fair rental rate for the
property.
The given text contains a series of numbers and a set of definitions and
calculations related to real property appraisals. The text discusses the estimated
unit construction cost, reproduction cost, capitalization rate, rentable area, and
factor value. It also mentions the comparative market price analysis method for
determining lease rates. The text provides sample computations for observed
depreciation and straight-line depreciation of a 5-storey office building.

The rental rate for a venue is calculated using a formula rate multiplied by a
factor value. The rentable area is multiplied by the rental rate to determine the
monthly rental cost. A table of rating factors is provided to determine the factor
values. The guidelines for the termination of contracts in government procurement
are also outlined.

Termination of contracts can occur for different reasons. "Termination for Default"
refers to a contract being terminated when the supplier fails to deliver or perform
as specified, or fails to fulfill other obligations. "Termination for Convenience"
allows the procuring entity to terminate the contract at any time for its
convenience. "Termination for Insolvency" occurs when the
supplier/contractor/consultant is declared bankrupt or insolvent.

The contract can be terminated without compensation to the

Supplier/Contractor/Consultant if they have engaged in unlawful acts related to the
acquisition and implementation of the contract. The Contractor or Consultant can
also terminate the contract if the works are completely stopped for a continuous
period of at least sixty (60) calendar days due to certain reasons. There are
procedures for the termination of contracts, including verification, notice to
terminate, show cause, and a decision by the Head of the Procuring Entity. The Head
of the Procuring Entity may create a committee to assist in the termination
process, and if the contract is terminated, the Procuring Entity may enter into a
Negotiated Procurement. In the case of termination for convenience in contracts for
goods, the Procuring Entity has options for accepting partially completed goods or
canceling the remainder and paying the Supplier an agreed amount. The Supplier may
also be allowed to recover partially for any losses suffered in the initial
performance of the terminated contract.

The contract requires the Supplier to establish the fact of loss before recovery
can be made. The Contractor/Consultant must give a written notice of termination at
least 30 days before terminating the contract. Amendments to the guidelines may be
introduced by the Government Procurement Policy Board.