ALTERNATIVE METHODS

OF PROCUREMENT

CAPACITY DEVELOPMENT DIVISION

GOVERNMENT PROCUREMENT POLICY BOARD
TECHNICAL SUPPORT OFFICE (GPPB-TSO)

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 ALTERNATIVE METHODS

1. Limited Source Bidding

2. Direct Contracting
3. Repeat Order
4. Shopping
5. Negotiated Procurement

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 LIMITED SOURCE BIDDING

Also known as Selective Bidding which

involves direct invitation to bid by the procuring
entity from the list of pre-selected suppliers or
consultants

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 LIMITED SOURCE BIDDING
APPLICABILITY:
 Goods
 Consulting services

CONDITIONS:
 Highly specialized types where only a few bidders are known to be
available
 Major plant components beneficial to limit bidding to known qualified
bidders to maintain uniform quality and performance of the plant

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 DIRECT CONTRACTING

Single Source procurement 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. The offer may be
accepted immediately o after some negotiations.

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 DIRECT CONTRACTING

APPLICABILITY:
 Goods
CONDITIONS:
 Items of proprietary nature from proprietary source
 Critical components from a specific supplier to hold a
contractor to guarantee its project performance
 Items sold by an exclusive manufacturer or dealer
 no other suppliers selling it at lower prices
 no suitable substitute can be obtained at more
advantageous terms to the Government

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 REPEAT ORDER
Procurement from the previous winning bidder
whenever there is a need to replenish goods
procured under a contract previously awarded
thru Competitive Bidding

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 REPEAT ORDER
APPLICABILITY:
 Goods

CONDITIONS:

1. Original contract awarded through competitive bidding

2. Same or lower unit prices, provided that such prices are still the most
advantageous to the GOP after price verification

3. Not to exceed 25% of the quantity of each item (quantifiable, divisible, at least 4
units)

4. No splitting of contracts

5. Availed of within 6 months from the contract effectivity date stated in the
NTP arising from the original contract, except in cases duly approved by the8
GPPB
 SHOPPING
Method where 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.

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 SHOPPING
APPLICABILITY [52.1(A) AND (B)]:
 Goods
CONDITIONS [SHOPPING UNDER §52.1(A)]:
1. There is an unforeseen contingency requiring immediate purchase
2. Amount does not exceed the threshold

CONDITIONS [SHOPPING UNDER §52.1(B)]:

3. Procurement of ordinary or regular office supplies and equipment not
available in PS-DBM
4. Amount does not exceed the threshold

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 THRESHOLD FOR UNFORESEEN
CONTINGENCIES [S. 52.1(a)]
NGAs, GOCCs, GFIs, SUCs – PhP200,000
LGUs –
Maximum Amount (in Philippine Pesos)
Classification
Province City Municipality
1st Class 200,000 200,000 100,000
2nd Class 200,000 200,000 100,000
3rd Class 200,000 160,000 100,000
4th Class 160,000 120,000 100,000
5th Class 120,000 100,000 100,000
6th Class 100,000 100,000 100,000
In the case of Barangays, the maximum amount is PhP50,000

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 SHOPPING [S 52.1(b)] AND
SMALL VALUE PROCUREMENT
NGAs, GOCCs, GFIs, SUCs – PhP1,000,000
LGUs –
Maximum Amount (in Philippine Pesos)
Classification
Province City Municipality
1st Class 1,000,000 1,000,000 200,000
2nd Class 1,000,000 1,000,000 200,000
3rd Class 1,000,000 800,000 200,000
4th Class 800,000 600,000 100,000
5th Class 600,000 400,000 100,000
6th Class 400,000 200,000 100,000
In the case of Barangays, the maximum amount is PhP50,000

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 NEGOTIATED PROCUREMENT
SMALL VALUE PROCUREMENT

APPLICABILITY
 All types of Procurement

CONDITIONS:
1. Procurement does not fall under Shopping
[§52]
2. Amount does not exceed the threshold

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 SHOPPING and SMALL VALUE
PROCUREMENT
 Decision to resort to shopping/SVP shall be reflected in the Annual
Procurement Plan (APP)
 After approval, BAC may delegate execution

 Posting in PhilGEPS required if amount is > PhP50,000

 Request for Quotation
 Extension of deadline for submission of quotation (3x)
 Award
 PE to validate legal, technical, and financial capability through relevant
documents or other means

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 SHOPPING and SMALL VALUE
PROCUREMENT
PROCEDURAL GUIDELINES:

Send RFQ to at least

3 suppliers Prepare Abstract of
Prepare RFQ
[may be 1 in case of Quotations
52.1(a)]

Award to LCB/HRB
Extend deadline if no
that complies with
quotation is received
specs and ABC

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 NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS

APPLICABILITY
 All types of Procurement

CONDITIONS:
1. Two failed biddings
2. Mandatory review of the following:
 Minimum technical specifications
 ABC, which may be adjusted up to 20% from last
bidding

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 NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS
 BAC shall invite at least three (3) suppliers, contractors, consultants,
including those disqualified in previous biddings for the project, for
negotiations to ensure effective competition.

 Even if only one (1) bidder respond to such invitation or posting, the BAC
shall proceed with the negotiation subject to the prescribed rules.

 Requirements, guidelines, documents, clarifications, or other information

relative to the negotiations shall be communicated on an equal basis

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 NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS

 Submission of best and final offer by suppliers, contractors, or

consultants on a specified date.

 Criteria in selecting the successful offer:

1. Offer should meet the PE’s minimum technical
requirements.
2. Offer should not exceed ABC

 Observers shall be invited in all stages

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 NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS

PROCEDURAL GUIDELINE

Submission and
Preparation of Invitation of
opening of 1st
RFQ bidders
offer

Submission and
Negotiation with opening of best Awarding of
bidders and final offer (2nd contract
offer)

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 NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS

 Where the PE failed to receive any quotations for the

procurement of the services of a private counsel despite
posting twice in the PhilGEPS website, the procuring entity
has the discretion to resort to alternative methods of
procurement, subject to compliance with the parameters and
factors laid out in RA 9184 and its associated IRR. (NPM 09-
2013)

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 NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS

 PE can only resort to Negotiated Procurement under Section 53.1 (Two-

Failed Biddings) of the IRR of RA 9184 for the procurement of the
Project if the two-failed biddings were due to circumstances enumerated
under Section 35 of the same IRR.

 If the failure of bidding is due to the declaration by the HOPE pursuant to

Section 41 of the IRR , Negotiated Procurement (Two Failed Biddings)
cannot be resorted to. (NPM 72-2013)

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 NEGOTIATED PROCUREMENT
EMERGENCY CASES
APPLICABILITY:
 All types of Procurement

CONDITIONS:
 In case of imminent danger to life or property during a state of calamity
 When time is of the essence arising from natural or man-made calamities
 Other causes where immediate action is necessary
• To prevent damage to or loss of life or property
• To restore vital public services, infrastructure facilities and other public
utilities

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 NEGOTIATED PROCUREMENT
TAKE-OVER OF CONTRACTS
APPLICABILITY:
 All types of Procurement

CONDITIONS:
 Rescinded or terminated contract
 Immediate action is necessary:
 To prevent damage to or loss of life or property
 To restore vital public services, infrastructure facilities, and other
public utilities

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 NEGOTIATED PROCUREMENT
TAKE-OVER OF CONTRACTS
 Negotiate starting with the 2nd LCB or HRB at the bidder’s
original bid price, then to the next if negotiation fails

 If negotiation fails,
1. invite a short list of at least 3 to submit bids and negotiate
starting with the LCB or HRB
2. Resort to any other appropriate alternative method of
Procurement

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 NEGOTIATED PROCUREMENT
ADJACENT OR CONTIGUOUS
APPLICABILITY:
 Infrastructure

 Consulting Services

CONDITIONS:
1. Subject contract is adjacent or contiguous to an on-
going infra or consulting
2. Original contract is a result of competitive bidding
3. Subject contract has similar or related scopes of work

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 NEGOTIATED PROCUREMENT
ADJACENT OR CONTIGUOUS

4. Within the contracting capacity of the

contractor/consultant (PCAB, SLCC, NFCC)
5. The same prices or lower unit prices as the original
contract less mobilization cost
6. Amount does not exceed amount of the on-going project
7. No negative slippage
8. Negotiations commenced before expiry of original
contract

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 NEGOTIATED PROCUREMENT
AGENCY TO AGENCY
APPLICABILITY:
 All types of Procurement

CONDITIONS:
1. Cost-benefit analysis indicating A-to-A is more efficient
and economical
2. Servicing agency has the mandate to undertake the project
3. Servicing agency has the absorptive capacity to undertake
the project

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 NEGOTIATED PROCUREMENT
AGENCY TO AGENCY
APPLICABILITY:
 All types of Procurement

CONDITIONS:
4. Servicing agency owns or has access to necessary tools
required for the project
5. Sub contracting is not allowed
6. Has a Track record of completed or supervised project by
administration or by contract, similar to and with a cost
of at least 50% of the project at hand

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 NEGOTIATED PROCUREMENT
HIGHLY TECHNICAL PROCUREMENT
APPLICABILITY:
 Consulting Services

CONDITIONS:
1. Individual consultant
2. Work involves:
 Highly technical or proprietary
 Primarily confidential or policy determining, where trust and
confidence are the primary consideration
3. Term is, at the most, 6 months, renewable at the option of the appointing
HOPE, but in no case to exceed the term of the latter

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 NEGOTIATED PROCUREMENT
SCIENTIFIC, SCHOLARLY, OR ARTISTIC WORK,
EXCLUSIVE TECHNOLOGY & MEDIA SERVICES

APPLICABILITY:
 All types of Procurement involving:

1. Work of art, commissioned work or services of an artist for

specific artistic skills (e.g. singer, performer, poet, writer,
painter, sculptor. Etc.);
2. Scientific, academic, scholarly work or research, or legal
services;
3. Highly-specialized lifesaving medical equipment, as
certified by the Department of Health;

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 NEGOTIATED PROCUREMENT
SCIENTIFIC, SCHOLARLY, OR ARTISTIC WORK,
EXCLUSIVE TECHNOLOGY & MEDIA SERVICES

APPLICABILITY:

4. Scientific, technical, economic, business, trade or legal journal,

magazine, paper, subscription or other exclusive statistical publications and
references;

5. Media documentation, advertisement, or announcement through

television, radio, newspaper, internet, and other communication media.

6. The construction or installation of an infrastructure facility where the

material, equipment, or technology under a proprietary right can only be
obtained from the same contractor.

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 NEGOTIATED PROCUREMENT
LEASE OF REAL PROPERTY & VENUE
APPLICABILITY:
 Goods (Real Estate and Venue)

CONDITIONS:
1. Cost-benefit analysis indicating leasing privately-owned real estate or
venue is more efficient and economical
2. Technical Specification shall be prepared taking into consideration
the rating factors under Appendix B.
 Lease contracts costing > PhP50,000 should be posted in the PhilGEPS
(NOA, Contract)
 Draw out at least Three RFQs, and at least one (1) quotation is sufficient to
proceed with the evaluation.

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 NEGOTIATED PROCUREMENT
NGO PARTICIPATION
APPLICABILITY:
 All types of Procurement

CONDITIONS:
 Appropriation law or ordinance earmarks an
amount to be contracted to NGOs

 PE may opt to conduct public bidding or negotiated

procurement for the selection of NGO, subject to the
rules provided in the guidelines (GPPB Resolution
12-2007)
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 NEGOTIATED PROCUREMENT
COMMUNITY PARTICIPATION

APPLICABILITY:
 All types of Procurement

CONDITIONS:
1. In the interest of project sustainability or to
achieve certain specific social objectives
2. PE to propose procedures, specifications, and
contract packaging for GPPB approval

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 NEGOTIATED PROCUREMENT
UN/International AGENCIES

APPLICABILITY:
 All types of Procurement

CONDITIONS:
 Procure from UN Agencies
 Small quantities of off-the-shelf goods, primarily in the fields of
education and health
 Specialized products where the number of suppliers is limited (e.g.,
vaccines or drugs)

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 OTHER TERMS AND CONDITIONS

 Most advantageous price for government should be obtained (S48.1)

 Splitting of contracts strictly prohibited (S54.1)

 PhilGEPS posting of procurement (RFQ or RFP) through alternative

methods of at least 3cd

 Shopping [§52.1(b)]above PhP50,000

 Two Failed Biddings [§53.1]
 Small Value Procurement [§53.9] above P50,000
 NGO Participation [§53.11]
 Limited Source Bidding [§54.2]

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 OTHER TERMS AND CONDITIONS

 ALL awards should be posted, except

 with ABC of PhP50,000 and below

 Bid security NOT necessary, except in Limited Source Bidding

 Delegation of Authority to end-user or other committee or support unit

duly authorized by the BAC thru a resolution approved by the JOPE:
 Shopping [§52]
 Emergency Cases [§53.2]
 Small Value Procurement [§53.9]
 Lease of Real Property or Venue [§53.10]

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 SUMMARY

Performance Warranty
Method
Security Security

1. Limited Source Bidding  *

2. Direct Contracting  
3. Repeat Order  
4. Shopping  
* In no case shall Warranty Security be required n Consulting Services

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 SUMMARY

Performance Warranty
Method
Security Security
5. Two – Failed Bidding  
PE may require PE may require
6. Emergency Cases depending on depending on
7. Small Value Procurement nature of nature of
procurement ** procurement*

8. Take Over of Contracts  

9. Adjacent/Contiguous  

** PS is required in Infra Pojects

* In no case shall Warranty Security be required n Consulting Services

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 THANK YOU!!
Contact us at:

Unit 2506 Raffles Corporate Center

F. Ortigas Road, Ortigas Center
Pasay City, Philippines 1605

TeleFax: (632)900-6741 to 44

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