ALTERNATIVE METHODS

OF PROCUREMENT

CAPACITY DEVELOPMENT DIVISION

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

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 PROCUREMENT STANDARD

GENERAL RULE : Sec. 10

All procurement shall be done through competitive bidding, except as
provided in Rule XVI of the IRR.
EXCEPTION
Alternative methods shall be resorted only:
1. In highly exceptional case
2. To promote economy and efficiency
3. Justified by the conditions specified in IRR
4. Prior approval of the HOPE
5. GPPB approval as required under EO 423, S. 2005 (as amended)
6. Most advantageous price for the Government

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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
(Sec. 49)
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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 LIMITED SOURCE BIDDING
 List shall be maintained by the relevant government authority (RGA)
 PE may be the relevant government authority
 List shall be updated periodically and submitted to the GPPB

 Pre-selection shall based on capability and resources to perform the

contract taking into account:
 Experience and past performance on similar contracts
 Capabilities with respect to personnel, equipment, and/or
manufacturing facilities
 Financial position

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 LIMITED SOURCE BIDDING
PRE-SELECTION PROCEDURES PER GPM
GPPB Resolution 06-2012

PE through BAC
Acquires/Issues a Pre-
identifies LSB as
selected List
applicable mode

HOPE transmits list to

the GPPB

GPPB-TSO
PE posts procurement
acknowledges receipt
opportunity and
and posts the list in the
conducts LSB
website (ministerial)

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 LIMITED SOURCE BIDDING
PRE-SELECTION PROCEDURES
GPPB Resolution 06-2012

Relevant Y Request for a

Government
List
Authority?

N
PE represents
itself as the RGA Y Limited Source
Issues a List?
(self-generated Bidding
list

Competitive
Bidding

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 LIMITED SOURCE BIDDING
 In order to apply LSB on the procurement of motor vehicle, PE
should first establish that the motor vehicle sought to be procured
is either a highly specialized type of goods or a major plant
component; otherwise, Competitive Bidding shall apply. (NPM
63-2013)

 Catering Services does not involve highly specialized

requirements, and is undoubtedly not a major plant component.
Limited Source Bidding cannot be resorted to in the procurement
of Catering Services. Competitive Bidding should be resorted to
in the acquisition of the contemplated service. (NPM 61-2013)

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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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 DIRECT CONTRACTING
 Since there are other Passport Readers available in the market
apart from that manufactured by 3M Corporation, Direct
Contracting cannot be utilized for the acquisition of brand
new passport readers.

 Even though 3M Passport Reader is proprietary in nature and

can be obtained from the proprietary source, there may be
other Passport Readers in the market, which are likewise
proprietary in nature that can be obtained. (NPM 41-2013)

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 REPEAT ORDER
APPLICABILITY:
 Goods

CONDITIONS:
1. Same or lower unit prices, provided that such prices are still the
most advantageous to the GOP after price verification
2. No splitting of contracts
3. 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 the GPPB
4. Not to exceed 25% of the quantity of each item
5. Original contract awarded through competitive bidding

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 REPEAT ORDER
 Repeat Order under Section 51 of RA 9184 does not require
post-qualification.

 The phrase “subject to post-qualification process described in

the Bidding Documents”, as stated in the provision refers to
Competitive Bidding and not to Repeat Order. (NPM 13-
2013)

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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 – PhP100,000

 LGUs –
Maximum Amount (in Philippine Pesos)
Classification
Province City Municipality
1st Class 100,000 100,000 50,000
2nd Class 100,000 100,000 50,000
3rd Class 100,000 80,000 50,000
4th Class 80,000 60,000 50,000
5th Class 60,000 50,000 50,000
6th Class 50,000 50,000 50,000
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 [S 52.1(b)] AND
SMALL VALUE PROCUREMENT
 NGAs, GOCCs, GFIs, SUCs – PhP500,000

 LGUs –
Maximum Amount (in Philippine Pesos)
Classification
Province City Municipality
1st Class 500,000 500,000 100,000
2nd Class 500,000 500,000 100,000
3rd Class 500,000 400,000 100,000
4th Class 400,000 300,000 50,000
5th Class 300,000 200,000 50,000
6th Class 200,000 100,000 50,000
In the case of Barangays, the maximum amount is PhP50,000

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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
 Award
 PE to validate legal, technical, and financial capability through
relevant documents or other means

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SHOPPING and SMALL VALUE PROCUREMENT
COMMITTEE (SSVPC)

Attach copy of DILG Department Order

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 SHOPPING and SMALL VALUE
PROCUREMENT
PROCEDURAL GUIDELINES:
Send RFQ to at least
3 suppliers
Prepare RFQ
[may be 1 in case of
52.1(a)]

Prepare Abstract of
Quotations

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 and engage in negotiations with sufficient

number of suppliers, contractors or consultants to ensure
effective competition

 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

Preparation of RFQ Invitation of bidders

Submission and
opening of 1st offer

Submission and
Negotiation with
opening of best and
bidders
final offer (2nd 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, invite a short list of at least 3 to submit

bids and negotiate starting with the LCB or HRB

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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
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. A-to-A does not exceed 25% of PE’s total budget for each category
(goods, infra, consulting)
3. Servicing agency has mandate to undertake the project
4. Servicing agency owns or has access to necessary tools required for
the project

 Other requirements provided in Implementing Guidelines on

Agency-to-Agency Arrangements (GPPB Resolution 18-2007)

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 NEGOTIATED PROCUREMENT
AGENCY TO AGENCY
 PITC Pharma, Inc. (PPI) has been given express mandate to be the
central/lead agency for procurement of all government agencies’
requirements for drugs and medicines pursuant to RA 9501.
However, RA 9501 does not exempt it from the procurement
policies, rules and regulations established under RA 9184 and its
IRR.
 PPI is not exempt from posting a Performance Security under §39 of
RA 9184 and its IRR when entering into a contract with other
government agencies and the PE requires such security. (NPM 37-
2013)

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 NEGOTIATED PROCUREMENT
AGENCY TO AGENCY
 For the procurement of CTC, the more appropriate method to be used is A
to A rather than Direct Contracting

 In cases where procurement from another agency of the government is

more efficient and economical, Negotiated Procurement under Section
53.5 (Agency-to-Agency Agreements) may be resorted to. This rule
allows a government entity to procure from another government entity
without need of public bidding, subject to compliance with the prescribed
conditions and procedures under existing rules and the Guidelines on
Agency-to-Agency Agreements (Guidelines). (NPM 52-2013)

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 NEGOTIATED PROCUREMENT
PROCUREMENT AGENT
APPLICABILITY:
 All types of Procurement

CONDITIONS:
 HOPE has determined that PE does not have procurement proficiency or
capability to undertake a particular procurement

ACTIONS AVAILABLE:
 Request other GOP agencies to undertake such procurement for them
 Recruit and hire consultants or procurement agents to assist them directly
and/or train their staff in the management of the procurement function

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 NEGOTIATED PROCUREMENT
PROCUREMENT AGENT
 Where a PE has determined that it lacks the proficiency or capability to
undertake its rehabilitation project, which need not be based solely on the
PE’s failure to constitute its BAC, the PE may request another government
agency to be its Procurement Agent as Section 53.6 of the IRR may also
apply in cases where a BAC is validly constituted, but due to the number of
bidding activities to be undertaken by the procuring entity; magnitude and
complexity of the project; experience of the members of the BAC; location
and situs of both the principal and the agent; and, other valid and reasonable
circumstances, the procuring entity may not have the proficiency or
capability to undertake the particular procurement activity. (NPM 38-2013)

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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
LEASE OF REAL PROPERTY

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. APP reflect the proposed lease
3. Selection to follow the guidelines (GPPB Resolution 08-2009)
 Eligibility documents need not be submitted, but PE must validate whether lessor is
technically, legally, and financially capable through other means

 Lease contracts costing > PhP50,000 should be posted in the PhilGEPS

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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:
 Delivery of goods, including non-consulting services and simple
infrastructure projects

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 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)

 Advertisement and posting for the following methods may be dispensed with
provided that the BAC through its Secretariat shall post the Invitation or Request
for Submission of Price Quotations:

 Shopping [§52.1(b)]
 Except: PhP50,000 and below
 Negotiated Procurement under Two Failed Biddings [§53.1]
 NGO Participation [§53.11]

 Small Value Procurement [§53.9]

 Except: PhP50,000 and below
 OTHER TERMS AND CONDITIONS

 ALL awards should be posted, except

 Shopping and Small Value Procurement with ABC of PhP50,000 and
below

 Bid security NOT necessary, except in Limited Source Bidding

 Performance and warranty securities necessary, except:

 Shopping [§52]
 Emergency Cases [§53.2]
 Small Value Procurement [§53.9]
 Lease of Real Property [§53.10]
 Procurement from UN agencies [§53.13]

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 SUMMARY

Method Goods Infrastructure Consulting

1. Limited Source Bidding   

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

Negotiated Procurement Goods Infra Consulting

1. Small Value Procurement   
  
2. Two Failed Biddings

 
3. Emergency Cases 

 
4. Take Over Contracts 


5. Adjacent or Contiguous  

  
6. Agency to Agency

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 SUMMARY

Negotiated Procurement Goods Infra Consulting

  
7. Procurement Agent

  
8. Highly Technical Consultants

  
9. Lease of Real Property

  
10. NGO Participation

  
11. Community Participation

  
12. UN Agencies

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 THANK YOU!!
Contact us at:

Unit 2506 Raffles Corporate Center

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

TeleFax: (632)900-6741 to 44

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