LARGE Day 3 Purchase or Construction of PPE

PURCHASE /
CONSTRUCTION OF
PROPERTY, PLANT AND
EQUIPMENT
Purchase/Construction of PPE
This session discusses the purchase and
construction of property, plant and equipment
(classified under the IPSAS and IFRS) thru public
bidding or any of the alternative methods of
procurement under the 2016 Revised IRR of RA
9184 and other laws and regulations
At the end of the session participants
will be able to:
▰ Know the existing laws and regulations governing

purchase and construction of capital assets; and
▰ Identify the documents to support the

expenditures from the start of the procurement
process, payment and recording.
Applicable Laws, Rules and regulations on
Purchase / Construction of PPE
1. R.A. 9184 , 2016 Revised IRR and GPPB Resolutions

2. R.A. 6957 (Build , Operate & Transfer)
3. General Appropriations Act (Applicable GAA)
4. COA & DBM issuances
➢ DBM Budget Circular No. 2022-1 dated February 11, 2022-
Omnibus Guidelines on the Acquisition, Use, Rental, and Replacement of
Government Motor Vehicles
Definition of Terms
Property, Plant and Equipment as

defined under IPSAS 17
and PAS 16
Property, Plant and Equipment – IPSAS
17
TANGIBLE
held for:
ASSETS 1)use in the production
purchased, or
constructed, supply of goods or
developed or services
otherwise acquired 2) rental to others
3)administrative
purposes
expected to be used
during more than
one reporting not intended for
period resale in the ordinary
course of operations
Definition of Terms
PURCHASE
to acquire by the payment of money or
its equivalent; to buy
Definition of Terms
Construction-
is the process of constructing a

building or infrastructures.
Typically takes place on location
for a known client
Definition of Terms
INFRASTRUCTURE - Includes the construction,

improvement, rehabilitation, demolition, repair,
restoration or maintenance of roads and bridges,
railways, airports, seaports, communication facilities,
civil works components of information technology,
irrigation, flood control and drainage, water supply,
sanitation, sewerage and solid waste management
systems, shore protection, energy/power and
electrification facilities, national buildings, school
buildings and other related constructions projects of the
government.(Sec. 5(u)2016 IRR, RA 9184)
Definition of Terms
GOODS refer to all items, supplies, materials and general

support services, except consulting services and infrastructure
projects, which may be needed in the transaction of public
businesses or in the pursuit of government undertaking,
project or activity, whether in the nature of equipment, furniture,
stationery, materials for construction, or personal property of any
kind… (Sec. 5r), 2016 Revised IRR, RA 9184)
Definition of Terms
GOODS refer to all items, supplies, materials and general

support services,
...including non-personal or contractual services such as the repair

and maintenance of equipment and furniture, as well as trucking,
hauling, janitorial, security, and related or analogous services, as
well as procurement of materials and supplies provided by the
procuring entity. (Sec. 5(r), 2016 Revised IRR, RA 9184)
Basic Concepts
PPE that qualifies for recognition as an asset shall be measured at
cost. This include:
a. Purchase price, including import duties and non- refundable

purchase taxes, after deducting trade discounts and rebates; and
b. Any cost directly attributable to bringing the asset to the

location and condition necessary for it to be capable of
operating in the manner intended by management.(IPSAS 17)
Basic Concepts
Attributable costs-(IPSAS 17)
1. Costs of employee benefits arising from the

construction or acquisition of PPE;
2. Site preparation costs;
3. Initial handling and delivery costs;
4. Installation and assembly costs;
5. Cost of testing; and
6. Professional fees
Basic Concepts
Some costs that are not capitalized-(IPSAS 17)
1. Costs of opening a facility;

2. Cost of introducing a new product or services,
including advertising and promotional costs;
3. Cost of conducting a business in new location or
with a new class of customers including staff
training; and
4. Administration and other general overhead costs
Session 4.1: Audit of Capital Outlay 1.1-15
Basic Concepts –
Criteria for Recognizing PPE(IPSAS 17)
future economic benefits will flow

to the entity
cost or fair value can be

measured reliably
ownership and control rest with
the entity
used to achieve government

objectives
meets the capitalization

threshold of P50,000.00 COA Purchase/Construction of PPE
Circular No.2022 – 004
Basic Concepts
PURCHASE/CONSTRUCTION OF
PROPERTY, PLANT & EQUIPMENT
MODES OF ACQUIRING PPE-(IPSAS 17)
1. Purchase
2. Construction
3. Exchange transactions
4. Non-exchange transactions
5. Transfer and Finance Lease
Basic Concepts
PROPERTY, PLANT & EQUIPMENT

As Listed in the-
1. Revised Chart of Accounts for GOCCs (COA Cir. 2015-010
updated RCA, COA Circular No. 2020-002 dated January 28,
2020 ;
2. Government Accounting Manual (GAM) COA Cir. 2015-007
dated October 22, 2015 for NGAs, and Revised Chart of
Accounts, COA Circular No. 2020-001 dated January 08,
2020;
3. Updated RCA, (COA Circular No. dated January 31, 2020
for LGUs) Purchase/Construction of PPE
Major Types of PPE under IPSAS &IFRS (
Revised Chart of Accounts)
• Land
• Land improvements
• Infrastructure Assets / Const. in Progress
• Buildings and Other Structures
• Machinery &Equipment
• Transportation Equipment
• Furniture, Fixtures & Books
• Leased Assets
• Leased Assets Improvements
• Heritage Assets
• Other PPE (Vol. III, GAM)
1.1-19
Session 4.1: Audit of Capital Outlay
❑Procurement is done through Competitive Bidding.
(Sec. 10, RA 9184; NPM 67-2012)
❑Exception: Alternative Methods of Procurement( Sec.48-

53)
WHAT IS COMPETITIVE BIDDING?
It is a method of procurement which is open to participation by any

interested party and which consists of the following processes:
advertisement, pre-bid conference, eligibility screening of prospective
bidders, receipt and opening of bids, evaluation of bids, post-qualification,
and award of contract. (Section 5(h), IRR of RA 9184)
Pre-Procurement Pre-Bid
Advertisement
Conf. Conference
Opening of
Submission of Opening of 2nd
1st Env. - Eligibility
Bids Envelope – Financial
Docs & Technical
Proposal
Proposal
Bid Evaluation Post-qualification Award of

& Ranking Contract
❑ PE prepare the bid documents following the standard forms and
manuals prescribed by the GPPB(Sec. 17)
❑ Include the following:

1. ABC
2. Invitation to Bid/ Request for Expression of Interest
3. Eligibility Requirements
4. Instructions to Bidders
5. Terms of Reference for Consulting Services
6. Plans/Drawings/Technical Specifications
7. Form of bid, Price, Bill of Quantities
8. Delivery time/ Schedule
9. Bid Security/form, amount and validity
10.General and Special Conditions of the Contract Purchase/Construction of PPE
❑ Purpose: Determine the readiness of the PE to procure
❑ Conducted prior to advertisement/posting of the Invitation to Bid
❑ Mandatory for projects with ABC above Php 2M (goods) or 5M

(infra projects) (Section 20.2)
❑ Attended by the following:

a. BAC
b. BAC Secretariat
c. TWG
d. Consultants
e. End-user unit/Other officials (Sec. 20, Rev. IRR)
Importance:
❑ Signals the start of the bidding process.
❑ Signals the availability of the bidding documents to the
prospective bidders. (if not mentioned in the Invitation to
Bid) (Sec. 17.3, IRR of RA 9184)
❑ Not required for projects with ABC of 10M and below for Goods or 15M and
below for Infrastructure Projects and P5 Million and below for Consulting
Services (Sec. 21.2.1(c), 2016 IRR of RA 9184)
Two (2) years after the effectivity of the IRR, advertisement shall
no longer be required unless the PE cannot post its opportunities in
the PhilGEPS for justifiable reasons.
❑ Posted continuously for 7 calendar days (cd) (Sec.21)
1. PhilGEPS;
2. Website of the PE, if any;
3. Website of IFI, if applicable; and
4. At any conspicuous place in the premises of the PE.
10M for Goods/
Above 10M for 15M for Infra
Medium Goods/ 15M for
Infra/5M for CS and below/5M
for CS
Newspaper of General Nationwide
x x
Circulation
PhilGEPS website  
PE’s Website, if available  
Conspicuous Place  
Website prescribed by the foreign 
government/foreign or international
funding institution, in case of foreign
funded procurement 
(To be posted continuously for seven(7)
calendar days)
❑ The pre-bid conference shall discuss, clarify and explain, among other things,
the eligibility requirements and the technical and financial components of the
contract to be bid including questions and clarifications raised by the
prospective bidders before and during the Pre-Bid Conference. (Sec. 22 Rev. IRR
of RA 9184)
❑ May be held at least 30 cd before the deadline for the submission and receipt
of bids considering the following:
a. Method, nature, and complexity of contract
b. International participation is more advantageous
❑ Open to prospective bidders but attendance is not mandatory. (Sec.
22.3, 2016 IRR of RA 9184)
❑ Mandatory – ABC 1M or more; Discretionary – ABC less than 1M
❑ Held at least 12 cd before deadline for bid submission but not earlier
than seven (7) cd from the PhilGEPS posting of the Invitation to Bid or
Bidding Documents.
❑ Pre-bid conference may be conducted in person or face-to-face through
videoconferencing, webcasting, or similar technology, or a combination thereof.
❑ PEs with videoconferencing capabilities that have manufacturers, suppliers,

distributors, contractors and/or consultants that also have videoconferencing
capabilities may conduct their pre-bidding conferences electronically.(Sec. 22.3)
❑ Supplemental/Bid Bulletins– issued by BAC to answer requests for
clarification (query submitted 10 cd before deadline) or
interpretation, and upon BAC’s initiative to clarify or modify any
provision of Bidding Docs. (at least 7 cd before deadline for bids).
❑ Posted in PhilGEPS and PE’s website, and at any conspicuous place

within the premises of the Procuring Entity.
❑ Bidders who have submitted bids before issuance of

Supplemental/Bid Bulletin must be informed in writing and
allowed to modify or withdraw their respective bids(Sec. 22.5.3)
❑ Bidders shall submit their bids through their authorized
representative using the forms specified in the Bid Documents in
two separate sealed envelopes, viz:
▪ 1st Envelope – Technical component (Eligibility Requirements

and Technical information/documents)
▪ 2nd Envelope – Financial Component
❑ To be submitted to the BAC on the date, time, and place specified

in the Invitation to Bid. Bids submitted after the deadline should
not be accepted (Sec. 25).
Requirements Under 2016 IRR of RA 9184(Sec.25.2)
GOODS INFRASTRUCTURE
First Envelope (Class A Documents-Sec. 25.2
LEGAL Sec. 25.2(a) Sec. 25.2(b)
1. PhilGEPS Certificate of Registration and 1. PhilGEPS Certificate of Registration and
Membership (Also represents AFS in Membership
addition to legal documents) 2. Philippine Contractors Accreditation
Board (PCAB) License and Registration
TECHNICAL:
1. Statement of all ongoing contracts. 1. Statement of all ongoing contracts
2. Statement of Single Largest Completed 2. Statement of SLCC
Contracts (SLCC)
FINANCIAL:
1. Net financial Contracting Capacity 1. NFCC Computation
(NFCC)computation or committed Line of
Credit
Re q u i r e m e n t s U n d e r 2 016 I R R o f R A 91 8 4 ( S e c . 2 5 . 2 )
First Envelope (Class A Documents)
2. Joint Venture Agreement (JVA) or the 2. JVA or the duly notarized statement in
duly notarized statement in accordance accordance with Sec.25.1(b)
with Sec.25.1(b)
3. Bid Security( in prescribed amount, form and
3. Bid Security( in prescribed amount, validity)
form and validity- Sec. 27)
4. Technical Specifications(production, 4. Project requirements

delivery schedule, manpower a.Organizational chart of the contract to be
requirements, after sales service/parts… bid
b. List of personnel to be assigned to the
contract, with complete qualification and
experience data;
c. List of major equipment with proof of
ownership or certification of availability of
these equipment for the duration of the
Re q u i r e m e n t s U n d e r 2 016 I R R o f R A 91 8 4 ( S e c . 2 5 . 2 )
First Envelope (Class A Documents)
5. Omnibus Sworn Statement (new 5. Omnibus Sworn Statement(new form)
form)
6. For foreign bidders, certification
from relevant govt. office of their
country stating that Filipinos are
allowed to participate in their
procurement
❑ Only 1 form of Bid Security is required to be submitted
❑ In general, bank issued securities must be issued by a universal or

commercial bank
▪ However, in biddings conducted by LGUs, securities may be issued

by banks certified by BSP as authorized to issue said instruments
❑ Surety Bonds must be accompanied by certification from Insurance

Commission that issuer is authorized to issue such security
❑ Bidders have the option to choose their preferred form of bid security
(Sec. 27.2, 2016 IRR of RA 9184)
❑ Bid securities shall be returned only after the bidder with the Lowest
Calculated Responsive Bid has signed the contract and furnished the
performance security, except to those declared by the BAC as failed or
post-disqualified in accordance with this IRR, upon submission of a
written waiver of their right to file a request for reconsideration and/or
protest.
Amount
Form of Bid Security Bid Security
(% = ABC)
a) Cash or cashier’s/manager’s check
b) Bank guarantee/draft or Irrevocable 2%

LC
c) Surety bond callable upon demand 5%

e) Bid Securing Declaration No percentage required
Bid Securing Declaration (Sec. 27.2 / GPPB Res. 023-2012 as amended by
Res. No. 16-2020 dated Sept. 16, 2020)
❑ an additional form of bid security
❑ A document/undertaking signed by the bidder committing to pay the
corresponding fine and be suspended for a period of time from being
qualified to participate in any government activity in the event of
violation of any of the conditions stated therein as required by the
GPPB Guidelines. (GPPB Resolution No. 03-2012, 27 January 2012)
CONTENTS:
❑The second envelope shall contain the financial
information/documents as specified in the PBDs e.g. financial
bid form(Sec. 25.4)
❑It shall be opened on the same day, only when the first envelope
has been found to be compliant with the eligibility requirements
and rated as “passed”(Sec. 30.2)
❑ Purpose is to determine the Lowest Calculated Bid (LCB), by:
1. Establishing correct calculated prices of bids; and
2. Ranking calculated total bid prices from lowest to highest
❑ A non-discretionary criterion shall be used, which shall include

consideration of:
1. Completeness of bids; and
2. Minor arithmetical corrections(Sec. 32)
❑ No Contact Rule - prohibition on communication w/ bidders from
bid evaluation until award of contract.
❑ The “no contact” rule applies only to those whose bids are being
evaluated by the BAC after passing the preliminary examination
until the issuance of Notice of Award.
❑ No communication should be made by bidders until a decision to

award a contract is made by the BAC (Sec. 32.1)
❑ Bidders who waived their right to utilize the protest mechanism or

those whose request for reconsideration and/or protest were
subsequently denied are not covered by the prohibition under
Sec. 32.1 of RA 9184 IRR. (NPM 07-2013)
❑ Unless the ITB specifically allows partial bids, those not
providing all required items shall be considered non-
responsive
❑ Placing no price is considered as non-responsive
❑ Specifying a “0” or “-” means it is offered for free
❑ Applicable only for GOODS
❑ Applies where the lowest bid has a foreign component (foreign

bid) and the next lowest bid has a domestic component
(domestic bidder)
❑ Requires procuring entity to give preference to domestic bidder

PROVIDED that:
1. The lowest foreign bid is increased by 15%; and

2. The lowest domestic bidder matches the lowest bid of the
foreign bidder
SAMPLE COMPUTATION
LOWEST CALCULATED BID NEXT LOWEST CALCULATED BID
Foreign Bidder Domestic Bidder

Bid P2,653,360.00 P3,009,492.00
% Preference x 15%
398,004.00
+ 2,653,360.00
Bid as
P3,051,364.00 P3,009,492.00
increased
Award to Domestic Bidder at P2,653,360.00, or

Result Award to Foreign Bidder if Domestic Bidder refuses
❑ To determine whether bidder with LCB complies with and is
responsive to all requirements and conditions of eligibility and the
bidding of the contract – to be declared the Lowest Calculated
and Responsive Bid (LCRB)
❑ A non-discretionary pass/fail criterion shall be used to “Verify,

Validate and Ascertain” all statements and documents (licenses,
certificates, etc.) submitted by the LCB
❑ Completed in not more than 12 cd, or up to 45 cd in exceptional cases,
upon approval of the HOPE.
❑ In case of post-disqualification of the LCB, the BAC shall be given

the same fresh period to conduct the post-qualification of the next LCB.
(Sec. 34.8, 2016 IRR of RA 9184)
❑ BAC will notify the Bidder with the Lowest Calculated Bid that it was
determined as such
❑ Within 5 CD from receipt of Notice, submit the ff:
1. Latest Income and Business Tax Return
2. Other appropriate Licenses and permits required by law and stated in the
Bidding Documents.
❑ Failure to submit any of the post-qualification requirements on time, or a

finding against the veracity thereof, shall disqualify the bidder for award.
Should there be a finding against the veracity of any of the documents
submitted, the Bid Security shall be forfeited in accordance with Sec. 69 of the
2016 IRR of RA 9184.
For Goods, the BAC shall check:
a) Delay in the partial delivery of goods amounting to ten percent (10%) of the
contract price in its ongoing government and private contracts;
b) If any of these contracts shows the bidder’s failure to deliver or perform any or
all of the goods or services within the period(s) specified in the contract or within
any extension thereof granted by the PE pursuant to a request made by the
supplier prior to the delay, and such failure amounts to at least ten percent (10%)
of the contract price; or
c) Unsatisfactory performance of the supplier’s obligations as per contract terms
and conditions at the time of inspection.
If the BAC verifies any of these deficiencies to be due to the bidder's fault or negligence, the
BAC shall disqualify the bidder from the award, for the procurement of Goods. (Sec.
34.3(b), 2016 IRR of RA 9184)
For Infrastructure Projects, BAC shall check:
a) Negative slippage of at least 15% in any one project or a negative

slippage of at least 10% in each of 2 or more contracts;
b) Failure of the contractor to commence repair works on ongoing contracts

in accordance with Section 34.3
c) Failure of the contractor to commence repair works on contracts with

pending certificates of acceptance in accordance with Sec. 34.3
d) Substandard quality of work or unsatisfactory performance at the time

of inspection.
❑ The BAC shall recommend award of contract to the LOWEST
CALCULATED AND RESPONSIVE BID (LCRB) at submitted price or
calculated price, whichever is lower.
❑ The HOPE has 15 cd to decide whether or not to approve or

disapprove the recommendation.
❑ Contract shall be awarded to the bidder with the Lowest Calculated and
Responsive Bid (LCRB) at its submitted price or total calculated bid price,
whichever is lower.
❑ Notice of Award (NOA) is issued by the HOPE within the following

periods:
▪ NGAs and LGUs – 15 CD

▪ GOCCs and SUCs – 15 CD
❑ The BAC Sec shall post the NOA in the PhilGEPS, PE’s websites and in any
conspicuous place within 3 cd from its issuance.
❑ Award of contract is subject to the following conditions within 10 cd
from issuance of NOA:
▪ If joint venture, submission of JVA

▪ In the case of procurement by a Philippine Foreign Office or Post,
PhilGEPS Registration Number
▪ If foreign-funded and stated in treaty, international or executive
agreement, PCAB License
▪ Posting of Performance Security
▪ Signing of Contract upon compliance with all documentary
requirements
▪ If required, approvals by higher authority
❑ Posted by winning bidder to guarantee performance of obligation,
in such form and amount specified in the Bidding Documents.
EFFECTS OF FAILURE TO POST:
1. Ground for disqualification
2. Next-ranked LCB shall undertake post-qualification
3. Bid security shall be forfeited without prejudice to the imposition
of sanctions
Amount
FORM OF PERFORMANCE PERFORMANCE SECURITY
SECURITY (% EQUAL TO THE CONTRACT
PRICE)
a) Cash or cashier’s/manager’s
check
5% (Goods ) & 10% (Infra)
b) Bank guarantee/draft or
Irrevocable LC
c) Surety bond callable upon
30%
demand
❑ When required, the approving higher authority or his duly
authorized representative shall be given a maximum of 20 cd from
receipt to approve or disapprove the contract.
❑ In the case of GOCCs, the concerned board or its duly authorized

representative shall be given a maximum of 30 cd from receipt to
approve or disapprove the contract.
PROCUREMENT PROCESS
From Opening of Bids to Award of Contract shall
NOT EXCEED 3 MONTHS
In the case of Jacomille v. Abaya, et al., the petitioner contends that the public
respondents failed to comply with the periods provided by law, specifically the 3-
month period from the opening of the bids up to the award of the contract under
Section 38 of RA 9184. The Supreme Court held that “[t]he different periods provided
by RA 9184 within which certain stages of the procurement process must be
completed is not merely directory but mandatory.” Thus, it concluded that such
irregularity rendered the procurement process null and void.
(G.R. No. 212381, 22 April 2015)
❑ The concerned PE shall issue the Notice to Proceed (NTP) together with a copy
or copies of the approved contract to the successful bidder within 7 cd from the
date of approval of the contract by the appropriate government approving
authority.
❑ All notices called for by the terms of the contract shall be effective only at the
time of receipt thereof by the successful bidder.
❑ The BAC Sec shall post the NTP and the approved contract in the PhilGEPS and
PE’s websites within 15 cd from the issuance of the NTP.
❑ For Goods, retention money is at least 1% of contract price
(Sec. 62, 2016 IRR of RA 9184)
❑ For Infrastructure Projects, retention money is 10% of contract price
❑ Once the cumulative amount of liquidated damages reaches ten
percent (10%) of the amount of the contract, the PE may rescind or
terminate the contract, without prejudice to other courses of action and
remedies available under the circumstances.
Rule XVI – Alternative Modes of Procurement
In order to promote economy and efficiency, the PE may

resort to any of the following alternative modes of
procurement:
1. Limited Source Bidding (Section 49)
2. Direct Contracting (Section 50)
3. Repeat Order (Section 51)
4. Shopping (Section 52)
5. Negotiated Procurement (Section (53)
Limited Source Bidding (Section 49) – involves direct

invitation to bid by the PE from the list of pre-selected
suppliers or consultants with known experience and proven
capability. This may be employed for (a) Procurement of
highly specialized goods and (b) Procurement of major plant
component
Direct Contracting (Section 50) – does not require elaborate

bidding documents. This method may be resorted in the
following conditions:
1. Procurement of goods of proprietary in nature
2. Procurement of critical components for specific supplier
is a condition precedent to hold a contractor to
guarantee its project performance
3. Exclusive dealers or Manufacturer
Repeat Order (Section 51) – procurement of goods from

previous winning bidder, whenever there is a need to
replenish goods procured under a contract previously
awarded through Competitive Bidding.
Shopping (Section 52) - the PE simply requests for the

submission of price quotations. This method shall be
employed in (a) unforeseen contingency requiring
immediate purchase and (b) procurement of ordinary or
regular office supplies and equipment not available in the
Procurement Service
Negotiated Procurement (Section 53) - the PE directly negotiates

a contract with a technically, legally and financially capable supplier,
contractor or consultant in any of the following cases:
1. Two failed biddings (Section 53.1)
2. Emergency cases (Section 53.2)
3. Take-over of contracts (Section 53.3)
4. Adjacent or Contiguous (Section 53.4)
5. Agency-to-Agency (Section 53.5)
6. Scientific, Scholarly or Artistic Work,
Exclusive Technology and Media Services
(Section 53.6)
Negotiated Procurement (Section 53) - the PE directly negotiates

a contract with a technically, legally and financially capable supplier,
contractor or consultant in any of the following cases:
7. Highly Technical Consultants (Section 53.7)

8. Defense Cooperation Agreement (Section 53.8)
9. Small Value Procurement (Section 53.9)
10. Lease of Real Property and Venue (Section 53.10)
11. NGO Participation (Section 53.11)
12. Community Participation (Section 53.12)
13. United Nations Agencies, International
Organizations or International Financing Institutions
(Section 53.13)
1. Two Failed Biddings (Section 53.1). Where there has bee failure of competitive
bidding or Limited Source Bidding for the second time as provided in Section
35 of this Act and this IRR.
2. Emergency Cases (Section 53.2). . In case of imminent danger to life or property
during a state of calamity, or when time is of the essence arising from natural or
man-made calamities or other causes where immediate action is necessary to
prevent damage to or loss of life or property, or to restore vital public services,
infrastructure facilities and other public utilities.
3. Take-over of Contracts (Section 53.3). Take-over of contracts, which have been

rescinded or terminated for causes provided for in the contract and existing
laws, where immediate action is necessary to prevent damage to or loss of life
or property, or to restore vital public services, infrastructure facilities and other
public utilities.
4. Adjacent or Contiguous (Section 53.4). Where the subject contract is adjacent
or contiguous to an ongoing Infrastructure Project or Consulting Service where
the consultants have unique experience and expertise to deliver the required
service
5. Agency-to-Agency (Section 53.5). Procurement of Goods, Infrastructure Projects
and Consulting Services from another agency of the GoP, such as the DBM-PS,
which is tasked with a centralized procurement of Common-Use Supplies for
the GoP in accordance with Letters of Instruction No. 755 and E.O. 359, s. 1989
6. Scientific, Scholarly or Artistic Work, Exclusive Technology and Media

Services (Section 53.6). Where Goods, Infrastructure Projects and Consulting
Services can be contracted to a particular supplier, contractor or consultant and
as determined by the HoPE
7. Highly Technical Consultants (Section 53.7). In the case of individual
consultants hired to do work that is (i) highly technical or proprietary; or (ii)
primarily confidential or policy determining, where trust and confidence are the
primary consideration for the hiring of the consultant
8. Defense Cooperation Agreement (Section 53.8). Upon prior approval by the

President of the Philippines, and when the procurement for use by the AFP
involves major defense equipment or materiel and/or defense-related
consultancy services, when the expertise or capability required is not available
locally, and the Secretary of National Defense has determined that the interests
of the country shall be protected by negotiating directly with an agency or
instrumentality of another country with which the Philippines has entered into a
defense cooperation agreement or otherwise maintains diplomatic relations
9. Small Value Procurement (Section 53.9). Procurement of Goods, Infrastructure
Projects and Consulting Services, where the amount involved does not exceed
the threshold prescribed in Annex "H" of this IRR: Provided, That in case of
Goods, the procurement does not fall under shopping in Section 52 of this IRR
10. Lease of Real Property and Venue (Section 53.10). Lease of real property and
venue for official use
11. NGO Participation (Section 53.11). When an appropriation law or ordinance

earmarks an amount to be specifically contracted out to Non-Governmental
Organizations (NGOs), the Procuring Entity may enter into a Memorandum of
Agreement with an NGO, subject to the guidelines issued by the GPPB for the
purpose.
12. Community Participation (Section 53.12). Where, in the interest of project
sustainability or to achieve certain specific social objectives, it is desirable in
selected projects, or its components, to call for participation of local
communities in the delivery of goods
13. United Nations Agencies, International Organizations or International

Financing Institutions (Section 53.13). Procurement from specialized agencies
of the United Nations, International Organizations or International Financing
Institutions
Financing, Construction, Operation and Maintenance of
Infra Projects by the Private Sector (RA 6957)
Build-operate-and-transfer scheme. – A contractual arrangement whereby the

contractor undertakes the construction, including financing, of a given
infrastructure facility, and the operation and maintenance thereof.
Build-and-transfer scheme. – A contractual arrangement whereby the contractor

undertakes the construction, including financing, of a given infrastructure
facility, and its turnover after completion to the government agency or local
government unit concerned which shall pay the contractor its total investment
expended on the project, plus a reasonable rate of return thereon.
RA No. 9184 Infrastructure projects
76
RA No. 9184 Infrastructure Projects
Infrastructure projects focus on the development and
maintenance of services, facilities, and systems. These can be
funded by private companies, publicly, or combined as a public-
private partnership (a collaboration of government entities and
private sector companies).
77
Infrastructure Projects
What are the main kinds of infrastructure?
• Roads.
• Railways.
• Telecommunication facilities.
• Educational system including schools and colleges.
• Health system including hospitals.
• Sanitary system including clean drinking water facilities.
• Monetary system including banks, insurance, and other financial
institutions.
78
What are the main kinds of infrastructure?
• Roads.
• Railways.
• Telecommunication facilities.
• Educational system including schools and colleges.
• Health system including hospitals.
• Sanitary system including clean drinking water facilities.
• Monetary system including banks, insurance, and other financial
institutions.
79
Contract
By administration
80
Design and Build Infrastructure Projects
Procuring entity awards a single contract for the

architectural and or engineering design and
construction
Firm, partnership, corporation, joint venture or

consortium
81
Advance Payment
Not
exceeding
15% of
Contract
Price
Written
request
Irrevocable
standby
letter of
credit
82
Payment of Infrastructure Contract
Statement of Work
Accomplished
Completion and
Acceptance of the
project by the agency.
83
ADVANCE FINAL
PAYMENT PAYMENT
PROGRESS
BILLING CIP-Bldgs & Other Structures
DR
Advances to Contractors Accounts Payable
DR CIP-Bldgs & Other Structures DR CR
Cash – MDS Advances to Contractors
Accounts Payable CR
CR CR
Advances to Contractors CR
Accounts Payable DR Accounts Payable

Cash-MDS CR DR
Guaranty Deposits Payable CR Cash-MDS
Due to BIR CR CR
Guaranty Deposits Payable
CR
Due to BIR
CR
84
Release of Upon final
acceptance of
Retention the work;
Money
Irrevocable
standby letter of
credit
Project is on
schedule and
satisfactorily
undertaken
85
Liquidated damages
Exceeded Contract time / duration
Time extension and still in default
Penalty
1/10 of one percent
Not to exceed 10% of the contract price

Rescind the contract and impose appropriate
sanctions over and above the LD
86
Variation Order
Introduction of new
Increase / decrease in work items that are not
quantities included in the original
contract
Reclassification of work
items either due to Does not exceed 10% of
change of plans, design the original contract
or alignment to suit price
actual field conditions
87
Splitting
Purchase
Requisitions
Orders
Payments
88
Receipt, Inspection and Acceptance of PPE
PPE delivered
Supply and/or
Inspection conform to the
Property
officer / standards and
Custodian.
committee specifications
Acceptance
in the PO
89
Information & Publicity on
Programs/Projects/Activities of Government Agencies
Agency PPAs No. of

Location
extensions
Project Target Date

status1 Completion Total cost
started
Total cost COA Circular No. 2013-004

Remarks
incurred COA Circular No. 2015-006
90
Session 4.1 – Audit on Capital Outlay
Procurement Monitoring Report
PMO/End Mode of ABC

PPA
User Procurement
List of Actual
Invited Contract Source of
Procurement
Observers Cost Funds
Activity
Date of
receipt of Remarks RA No. 9184
observers
91
▰ Motor Vehicles
DBM Budget Circular No. 2022 - 1
February 11, 2022
Subject: OMNIBUS GUIDELINES ON THE ACQUISITION,
USE, RENTAL, AND REPLACEMENT OF
GOVERNMENT MOTOR VEHICLES
All Heads of Departments and Agencies in the National
Government, Including State Universities and Colleges
(SUCs), Government-Owned or -Controlled Corporations
(GOCCs) and their Subsidiaries, Government Financial
Institutions (GFIs), and Local Water Districts (LWDs); Local
Chief Executives of Local Government Units (LGUs); and All
Others Concerned
It is recognized that motor vehicles are indispensable for the efficient
and effective performance and delivery of essential government
services. Currently, the guidelines on the acquisition, use, rental,
and replacement of motor vehicles are contained in various circulars
issued by the Department of Budget and Management (DBM). The
issuances, as well as the recent developments in the automotive
industry, make it imperative to consolidate and update the same to
ensure the effective and efficient management and prudent use of
government resources.
1.0 Rationale and Purpose
This Circular is being issued to harmonize and update these DBM

issuances and provide an omnibus guidelines on the acquisition,
use, rental, and replacement of government motor vehicles as a
single reference document.
.
2.0 Policy Statement
It is the policy of the government to ensure the prudent and judicious

acquisition, use, rental, and replacement of government motor vehicles.
Motor vehicles to be acquired and/or rented by the government shall be:
a) limited to those necessary and appropriate for the officials authorized
to use official transport vehicles;
b) for the performance by government personnel of official functions or
activities requiring transport mobility; and
c) cost-effective, fuel-efficient, environment-friendly, and at par with the
improvements and developments in the automotive industry and
relevant technology.
3.0 Coverage
3.1 This Circular shall apply to all National Government Agencies

(NGAs) under the Executive Branch, including SUCs, GOCCs,
GFIs, LWDs, and the LGUs.
3.2 The Legislature, the Judiciary, Constitutional Commissions, and

Office of the Ombudsman are encouraged to adopt the provisions
of this Circular, as may be necessary and applicable.
3.0 Coverage
3.3 As provided under Administrative Order (AO) No. 14, s. 2018, the
acquisition of the following motor vehicles shall not be covered by this
Circular:
a. Vehicles used for security reasons and purposes for the President
and the Vice President;
b. Vehicles donated in kind to the Philippine Government or any of its
agencies and instrumentalities by foreign governments, and bilateral
and multilateral institutions;
3.0 Coverage
c. Vehicles used for visiting foreign dignitaries maintained by the Office

of the President (OP)-Proper and the Department of Foreign Affairs;
and
d. Vehicles acquired using funds from existing official development
assistance programs according to the terms thereof.
Other Provisions
4.0 Officials Authorized to Use Government Motor Vehicles

5.0 Classifications and Specifications of Motor Vehicles
6.0 Approving Authority for the Purchase of Motor Vehicles
7.0 Authority to Purchase Motor Vehicles (APMV)
8.0 Modes of Acquisition
9.0 Policy on the Acquisition of Secondhand/Reconditioned Motor
Vehicles
10.0 Rental of Motor Vehicles
11.0 Costing Parameters for Acquisition or Rental
Other Provisions
12.0 Re-fleeting and Replacement of Government Motor Vehicles

13.0 Supporting Documents for Requests to Purchase, Replace and
Rent Motor Vehicles
14.0 Submission of Requests for APMVs and ARMVs to the DBM
15.0 Reference to the General Appropriations Act
Other Provisions
16.0 Transitory Guidelines

17.0 Repealing Clause
18.0 Resolution of Issues
19.0 Separability Clause
20.0 Effectivity
Annex A UPDATED MOTOR VEHICLE
DESCRIPTION, CLASSIFICATIONS,
AND SPECIFICATIONS GUIDE
➢ Intended Use and/or User
➢ Vehicle Classification
➢ Vehicle Description and Allowed Specifications
Annex A UPDATED MOTOR VEHICLE DESCRIPTION,
CLASSIFICATIONS, AND SPECIFICATIONS GUIDE
A. FOR THE EXERCISE OF EXECUTIVE FUNCTIONS
B. FOR THE TRANSPORT OF PERSONNEL, EQUIPMENT, SUPPLIES, PRODUCTS AND
MATERIALS
C. FOR THE TRANSPORT OF SICK AND/OR INJURED PERSONS
D. FOR PATROL OPERATIONS
E. FOR DISASTER RESPONSE AND RESCUE/RELIEF OPERATIONS
F. FOR THE TRANSPORT OF CASH OR VALUABLE ITEMS
G. FOR FIREFIGHTING OPERATIONS
H. FOR ROAD CONSTRUCTION AND WASTE MANAGEMENT
Annex A UPDATED MOTOR VEHICLE DESCRIPTION,
CLASSIFICATIONS, AND SPECIFICATIONS GUIDE
I. FOR CARGO TRANSPORT AND DELIVERY OF EQUIPMENT
J. FOR AGRICULTURAL USE AND/OR SOIL CULTIVATION
K. FOR USE IN TECHNICAL/VOCATIONAL AND OTHER
EDUCATIONAL/TRAINING PURPOSES, AND LICENSING OF DRIVERS
L. FOR WATER TRANSPORT
M. FOR AIR TRANSPORT
N. FOR SPECIAL FUNCTIONS/PURPOSE
Annex B AUTHORITY TO PURCHASE MOTOR VEHICLE/S
❖ Addressee
❖ APMV No.
❖ Quantity
❖ Type
❖ Intended Use and/or User, and Specifications
❖ Cost
❖ Total amount in words and in figures
❖ Funding Source
❖ Conditions
❖ Approving Officer
Annex C AUTHORITY TO RENT MOTOR VEHICLE/S
❖ Addressee
❖ ARMV No.
❖ Quantity
❖ Type
❖ Intended Use and/or User, and Specifications
❖ Cost
❖ Total amount in words and in figures
❖ Funding Source
❖ Conditions
❖ Approving Officer
Annex D Motor Vehicle Inventory and Re-fleeting
Program (Sample filled out form)
❖ Agency
❖ Date
❖ No.
❖ Purpose
❖ User or Office of Deployment
❖ Brand and Model, Engine Displacement and Plate Number
❖ Vehicle Classification
❖ Date Acquired
Annex D Motor Vehicle Inventory and Re-fleeting
Program (Sample filled out form)
❖ Mileage and Status

❖ Proposed Action
❖ Year of Replacement
❖ Year 1 (2022)
❖ Year 2 (2023)
❖ Year 3 (2024)
Annex E INVENTORY AND INSPECTION REPORT OF
UNSERVICEABLE PROPERTY( IIRUP)
Summary
Property, plant and equipment can be acquired thru purchase

and construction in accordance with RA No. 9184 and the 2016
Revised IRR other laws and regulations. The purchase is charged
to the capital expenditures budget and recorded as asset / CIP
in accordance with IPSAS and IFRS. Must be supported with the
documentary requirements of COA Circular No. 2012-01 dated
June 14, 2012 and other related rules, laws and regulations. For
the Acquisition, Use, Rental, And Replacement Of Government
Motor Vehicles, compliance with DBM Budget Circular No. 2022-
1, dated February 11, 2022 must be strictly observed.
Questions?
Thank You and
May GOD Bless
us ALL !

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PURCHASE /

▰ Know the existing laws and regulations governing

▰ Identify the documents to support the

1. R.A. 9184 , 2016 Revised IRR and GPPB Resolutions

Property, Plant and Equipment as

is the process of constructing a

INFRASTRUCTURE - Includes the construction,

GOODS refer to all items, supplies, materials and general

GOODS refer to all items, supplies, materials and general

...including non-personal or contractual services such as the repair

a. Purchase price, including import duties and non- refundable

b. Any cost directly attributable to bringing the asset to the

Attributable costs-(IPSAS 17)

1. Costs of employee benefits arising from the

1. Costs of opening a facility;

future economic benefits will flow

cost or fair value can be

used to achieve government

meets the capitalization

MODES OF ACQUIRING PPE-(IPSAS 17)

PROPERTY, PLANT & EQUIPMENT

❑Exception: Alternative Methods of Procurement( Sec.48-

It is a method of procurement which is open to participation by any

Bid Evaluation Post-qualification Award of

❑ Include the following:

❑ Conducted prior to advertisement/posting of the Invitation to Bid

❑ Mandatory for projects with ABC above Php 2M (goods) or 5M

❑ Attended by the following:

❑ Mandatory – ABC 1M or more; Discretionary – ABC less than 1M

❑ PEs with videoconferencing capabilities that have manufacturers, suppliers,

❑ Posted in PhilGEPS and PE’s website, and at any conspicuous place

❑ Bidders who have submitted bids before issuance of

▪ 1st Envelope – Technical component (Eligibility Requirements

❑ To be submitted to the BAC on the date, time, and place specified

4. Technical Specifications(production, 4. Project requirements

❑ In general, bank issued securities must be issued by a universal or

▪ However, in biddings conducted by LGUs, securities may be issued

❑ Surety Bonds must be accompanied by certification from Insurance

a) Cash or cashier’s/manager’s check

b) Bank guarantee/draft or Irrevocable 2%

c) Surety bond callable upon demand 5%

❑ A non-discretionary criterion shall be used, which shall include

❑ No communication should be made by bidders until a decision to

❑ Bidders who waived their right to utilize the protest mechanism or

❑ Placing no price is considered as non-responsive

❑ Specifying a “0” or “-” means it is offered for free

❑ Applies where the lowest bid has a foreign component (foreign

❑ Requires procuring entity to give preference to domestic bidder

1. The lowest foreign bid is increased by 15%; and

LOWEST CALCULATED BID NEXT LOWEST CALCULATED BID

Foreign Bidder Domestic Bidder

Award to Domestic Bidder at P2,653,360.00, or

❑ A non-discretionary pass/fail criterion shall be used to “Verify,

❑ In case of post-disqualification of the LCB, the BAC shall be given

❑ Failure to submit any of the post-qualification requirements on time, or a

a) Negative slippage of at least 15% in any one project or a negative

b) Failure of the contractor to commence repair works on ongoing contracts

c) Failure of the contractor to commence repair works on contracts with

d) Substandard quality of work or unsatisfactory performance at the time

❑ The HOPE has 15 cd to decide whether or not to approve or

❑ Notice of Award (NOA) is issued by the HOPE within the following

▪ NGAs and LGUs – 15 CD

▪ If joint venture, submission of JVA

in such form and amount specified in the Bidding Documents.