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.