APPROVE BUDGET FOR

THE CONTRACT (ABC)

ABC FOR THE PROCUREMENT OF GOODS
AND SERVICES
• The ABC must consider the following cost components:
• The cost or market price of the product or service itself;
• Incidental expenses like freight, insurance, taxes, installation costs, training costs, if necessary, and cost of
inspection;
• Cost of money;
• Inflationary factor;
• Quantities, considering that buying in bulk usually means lower unit prices; and
• The supply of spare parts and/or maintenance services, if these are going to be part of the contract package.
• Regardless of the mode of procurement involved, submission of a Market Study shall be required. The
Market Study shall include at least three (3) price references from different prospective bidders.
ABC FOR THE PROCUREMENT OF GOODS
AND SERVICES
• The requirement for a Market Study may be waived when the End-User
submits a previously awarded price for the same or similar goods and
services, provided, that such was awarded within the last six (6) months
prior to the submission of the End-User’s proposed PR.
• For Common Use Supplies and Equipment, the Market Study may be replaced
by the prices found in the List of Common-Use Supplies and Equipment
(updated as of 31 July 2023).
• For Drugs and Medicines, the Market Study may be replaced by prices found
in the Drug Price Reference Index (updated as of 26 July 2023).
ABC FOR THE PROCUREMENT OF
CONSULTANCY SERVICES
• The ABC shall include the cost of actual services to be rendered by the
consultant plus a reasonable level of management fee.
• The ABC shall be the sum of all individual cost components which are
Remuneration Costs, Reimbursable Costs, and Contingency
• The sum of the basic salary, overhead, social charges, and management fee as
percentage of the basic salary represents the billing factor or multiplier. The
multiplier shall range from 2.0 to 3.0 for the technical personnel, and shall not
exceed 1.8 for the administrative personnel directly hired for the project.
ABC FOR THE PROCUREMENT OF
CONSULTANCY SERVICES
• The End-User shall submit a Market Study which shall include at
least three (3) quotations which shall be based on the monthly
salaries paid to the consultant’s staff, per diems, transportation,
and other out-of-pocket expenses.
• For consultancy services with contract duration of more than one
(1) year, a reasonable percentage to cover inflation may be added
to the ABC.
ABC FOR THE PROCUREMENT OF LEASE OF
REAL PROPERTY AND VENUE
• The ABC shall include the rental rate and additional expenses such as
association dues, if applicable.
• The comparative market price analysis is conducted as follows: the End-User
shall set the ABC using the midpoint of the range after obtaining at least
three (3) price quotations for the rates of real property or venue within the
vicinity of the selected location complying with the criteria and technical
specifications of the End-User. If the End-User fails to include at least three (3)
price references, the BAC shall evaluate and decide whether or not to accept
the submission.