PROCUREMENT PLANNING

AND BUDGETING LINKAGE

Atty. Karina Antonette A. Agudo, CESE

Director IV, Administrative Service ; Procurement Specialist
Outline:
1. The Legal Basis of Procurement Planning
2. Definition and Importance of Procurement
Planning
3. What is in the PPMP (CSE & Non-CSE)
4. Early Procurement Activity (EPA)
5. Framework Agreement
6. Discussion on Commonly Used Alternative
Methods of Procurement
7. Important Timelines
WHAT IS PROCUREMENT?

It is the process of selecting

services from a supplier who fits
best the need.

It includes the process of

selecting products and services
that will provide value for
money.
WHO ARE THE PLAYERS IN PROCUREMENT
PLANNING?

Bids and Awards

Approving
Committee (BAC) End-User
Authority/HoPE & Secretariat

Technical
Budget Office
Working Group
WHAT IS PROCUREMENT PLANNING?
Process in determining the following:

What are the

What to buy? How many do details?
you need?

What is the When you need How to source

cost? it? it?

IT AIMS TO MANAGE THE EXPECTATION FOR FULFILLMENT OF

PROCUREMENT NEEDS
PROCUREMENT PLANNING
OBJECTIVE

For the Procuring Entity to schedule its procurement activities

in advance, consistent with its approved budget and its target
date of implementation
Ensures that the overall goal of a particular project will be
achieved effectively and efficiently
Precludes occasions for unnecessary government purchases and
circumventions of the prescribed procurement procedures

Advance Deliveries
Suki System
Unwarranted resort to alternative methods of procurement
Fit for purpose
It must be done within
Value for money budgetary context.
PROCUREMENT PLANNING AND BUDGET
LINKAGE
Section 7.1 of IRR
All procurement shall be within the approved budget of the
Procuring Entity (PE) and should be meticulously and
judiciously planned by the PE.

Consistent with government fiscal discipline measure

Considered crucial to the efficient discharge of government
functions

Required for the day-to-day operations; and

In pursuit of the principal mandate of the procuring
entity concerned

The APP shall include provision for foreseeable emergencies

based on the historical records
PROCUREMENT PLANNING AND BUDGET
LINKAGE

Section 7.2 of IRR

No procurement shall be undertaken unless it is accordance

with the approved Annual Procurement Plan (APP)

Approval of the APP by the Head of the Procuring Entity (HoPE)

or designated second-ranking official is mandatory
PROCUREMENT PLANNING vis-à-vis
BUDGET CYCLE
PROJECT PROCUREMENT MANAGEMENT
PLAN (PPMP)

A guide document in the procurement and contract

implementation process, as well as a vital reference in
procurement monitoring.

Tool allowing the PE the flexibility to optimize the utilization of

scarce resources.

Minimize the practice of doing short-cuts

Each end-user unit shall prepare the PPMP during the budget preparation to support the cost estimates
in the budget proposal.

The end-user or implementing units shall be responsible for the preparation of all documents
necessary for the procurement activity, including but shall not be limited to, the technical specifications,
scope of work, or terms of reference.
 PREPARATION OF PPMP –
TIPS AND BEST PRACTICES
PREPARATION OF PPMP

Developing the Project Requirements

What is the purpose of the procurement? What are the

Identify the need of problem/s or needs that the project or procurement aimsconduct the market research at this
the PMO or end-user to address? point, and gather as much
information about the goods,
unit infrastructure projects or expertise
required. At the end of this activity,
it should know the market or the
industry well enough to make an
informed choice.

What alternative solutions to the problem/s or need/s are

Identify the
available in the market? What are the sources of these
alternative
products and services? What is the profile of the supply
solutions/products/ market? Are they easily obtainable? How much is the
services cost of each alternative?
PREPARATION OF PPMP

Developing the Project Requirements

i. value for money

Compare the ii. risk assessment and management
alternatives iii. Government policies that have an impact on the
project or procurement

Choose from among the Considering unpredictable environmental changes, must

alternatives the one that is take into account those factors that will achieve a
most beneficial to the
Procuring Entity, and make the sustainable and green procurement.
necessary recommendation to
the approving authority.
PREPARATION OF PPMP

Writing the Technical Specifications, Scope of Work and Terms of Reference

● Deliverables are decided at this time

● Technical experts who will serve as consultants in the preparation
of the TS/SOW/TOR.
● The description should be generic and flexible, not product-
specific or seemingly tailored for a particular brand, product,
contractor or consultant,
● The description should be clear and unambiguous, to avoid
confusion and to facilitate the evaluation process.
PREPARATION OF PPMP
Determining the Approved Budget for the Contract (ABC)

● In determining the ABC, the PMO or end-user unit has to consider

several factors, namely:
○ the appropriation for the project or procurement (whether
taken from the current year’s appropriations or continuing and
automatic appropriations) or the budget as proposed to the
approving authorities;
○ the market price of the goods and/or services being
procured;
○ inflation and cost of money which are directly related to the
procurement time table;
○ Quantities, considering that buying in bulk usually means lower
unit prices; and
○ The supply of spare part and/or maintenance services, if these
are part if the contract package
PREPARATION OF PPMP

Procurement Milestones

The PPMP, like any plan, is not complete without including therein
the schedule of significant activities.
PPMP NON-CSE SAMPLE FORMAT
PPMP CSE SAMPLE FORMAT
PPMP CSE SAMPLE FORMAT
EARLY PROCUREMENT
ACTIVITIES
EARLY PROCUREMENT ACTIVITIES
GPPB Resolution No. 14-2019

What is “EPA”?

EPA refers to the conduct of procurement activities, from

posting of the procurement opportunity, if required, until
recommendation of the BAC to the HoPE as to the awards of
the contract, for goods to be delivered, infrastructure projects
to be implemented and consulting services to be rendered in
the following fiscal year, pending approval of their respective
funding sources.
EARLY PROCUREMENT ACTIVITIES
GPPB Resolution No. 14-2019

What is “EPA”?

EPA is applicable for Procurement Projects undertaken through

Competitive Bidding and Alternative Methods of Procurement,
except for the following:

1. Repeat Order (Sec. 51);

2. Shopping (Sec. 52);
3. Negotiated Procurement- Emergency Cases (Sec. 53.2);
4. Negotiated Procurement- Take-Over of Contracts (Section
53.3); and
5. Negotiated Procurement - Small Value Procurement (Sec. 53.9).
WHY CONDUCT EPA?

Early completion Timely

of procurement implementation
projects of projects

Effectively
managed
procurement
projects
FRAMEWORK
AGREEMENT
FRAMEWORK AGREEMENT
GPPB Resolution No. 12-2017 dated 10 April 2017

Definition

It is in the nature of an ‘option contract’ between the PE and

the bidder(s) granting the PE the option to either place an
order for any of the goods and services identified in the
Framework Agreement List or not to but at all within a
minimum period of one (1) year to a maximum period of three
(3) years.
FRAMEWORK AGREEMENT
GPPB Resolution No. 12-2017 dated 10 April 2017

Instances for Entering into a Framework Agreement

 For necessary and desirable goods that are repeatedly required by

the PE, but by their nature, use, characteristics, the quantity and/or
exact time of need cannot be accurately pre-determined

 Applicable to hotel accommodation, air travel, including simple and

non-complex services, such as, but not limited to, janitorial, security,
catering, maintenance and repair services

 Shall not cover procurement of consulting services and infrastructure

projects
FRAMEWORK AGREEMENT
GPPB Resolution No. 12-2017 dated 10 April 2017

General Conditions

 Procurement shall be conducted following the procedures of

Competitive Bidding provided under RA 9184 and its IRR

 The Invitation to Bid shall indicate that the procurement shall be

subject to a Framework Agreement arrangement shall state whether
the Framework Agreement is subjected to Mini-Competition or
Outright Determination of the LCRB

 Prices shall be fixed price per unit or item or identified service

 Payment of an amount of One Peso by the PE as consideration for

the option granted to the PE
FRAMEWORK AGREEMENT
GPPB Resolution No. 12-2017 dated 10 April 2017

General Conditions

 Shall not state or imply any agreement by the PE to place future

contracts or make orders with the supplier/service provider

 No modification of the Framework Agreement during its lifetime shall

be allowed

 Valid only for the period stated in the Bidding Documents which, in no
case, shall exceed three (3) years from the time the Framework
Agreement is executed
FRAMEWORK AGREEMENT
GPPB Resolution No. 12-2017 dated 10 April 2017

General Conditions

 Without prejudice to the provisions of applicable laws, rules and

guidelines, the Framework Agreement shall automatically terminate
under the following conditions:

a. When the total maximum quantity specified in the Framework

Agreement has been exhausted; OR

b. When the specified duration of the Framework Agreement has

already expired
FRAMEWORK AGREEMENT
GPPB Resolution No. 12-2017 dated 10 April 2017

Two (2) Types of Framework Agreement

(1) OUTRIGHT DETERMINATION OF LCRB

 For a duration of one (1) year

 Upon determination of the Bidder with the LCRB, the HOPE

shall award the Option Contract (Framework Agreement), in
the form of Notice to Execute Framework Agreement. This,
notwithstanding, the actual purchase of the PE shall only be
made upon issuance of Call-Off
FRAMEWORK AGREEMENT
GPPB Resolution No. 12-2017 dated 10 April 2017

Two (2) Types of Framework Agreement

(2) DETERMINATION OF LCRB AFTER MINI-COMPETITION

 For a duration of two (2) to three (3) years

 The BAC shall initially determine compliance of Bidders with

the technical and financial aspects of the project, and
recommend the execution of the Framework Agreement to all
complying bidders

 The determination of LCRB will conducted after a Mini-

Competition each time that a Call-Off is made by the end-user
FRAMEWORK AGREEMENT
GPPB Resolution No. 12-2017 dated 10 April 2017

Call-Offs

 No limit in the number of Call-Offs that may be executed.

However,

a. Subsequent Call-Offs shall not exceed the maximum

quantity in the Framework Agreement
b. The fixed contract prices rules shall be observed
c. The executed Call-Offs shall not exceed the total contract
price specified in the Framework Agreement
FRAMEWORK AGREEMENT
GPPB Resolution No. 12-2017 dated 10 April 2017

Repeat Order

 Allowed after the PE has exhausted the maximum quantity for

the same item or after the Framework Agreement has expired:

a. Subject to conditions under Section 51

b. Shall be availed only within six (6) months from the last of
final Call-Off for a specific item or upon the expiration of the
Framework Agreement
COMMONLY-USED
METHODS OF
PROCUREMENT
 GENERAL
GUIDELINES
 Procurement Standard:
Procuring Entities shall adopt Public Competitive Bidding as
the GENERAL mode of procurement.

Alternative Methods of Procurement shall be resorted

ONLY:
In highly exceptional case

To promote economy and efficiency

Justified by conditions specified in IRR

 General Guidelines:
Prohibition on Splitting of Government Contracts
[Sec. 54.1]

Division or breaking up of government contracts into smaller quantities and

amounts, or dividing contract implementation into artificial phases or sub-
contracts for the purpose of evading or circumventing the requirements of law
and its IRR, particularly the necessity of competitive bidding and the
requirements for the alternative methods of procurement.

However, a mere act of dividing a contract into smaller quantities or phases does
not automatically constitute splitting of contract.

PE is authorized to divide a procurement project into lots to attract the

maximum competition and carry out procurement in an efficient and economic
manner and when doing so, should ensure that the same is not made to
circumvent any provisions of RA No. 9184 and its revised IRR.
 General Guidelines:
Reference to Brand Names
[Sec. 18]

Specifications for the procurement of Goods shall be based on

relevant characteristics, functionality and/or performance
requirements. Reference to brand names shall not be allowed except
for items or parts that are compatible with the existing fleet or
equipment of the same make and brand, and to maintain the
performance, functionality and useful life of the equipment.

This rule shall also apply to the goods component of Infrastructure

Projects and Consulting Services.
Limited Source Bidding

Direct Contracting

Repeat Order

Shopping

Negotiated Procurement
 Direct
Contracting
Background Applicability
Single Source
Goods
Procurement
Does not require Requirements
elaborate bidding
documents
End-user to conduct survey of
the industry and determine the
supply source. End-user
should also justify the
Offer may be accepted necessity for the item that may
immediately or after be only procured through
Direct Contracting and prove
some negotiations that there is no suitable
substitute in the market.
Conditions
Items of proprietary nature from
proprietary source, i.e patents, trade
secrets, and copyrights;
Critical components from a specific
supplier to hold a contractor to
guarantee its project performance;
or
Items sold by an exclusive manufacturer or
dealer, subject to the following conditions:
● No other suppliers selling it at lower
prices; and
● No suitable substitute can be obtained at
more advantageous terms to the
Government
 Shopping
Shopping

Background Applicability Conditions

PE request price Shopping A

quotations
[ Section 52.1(a) ]
Goods
Procurement of readily
available off-the-shelf
goods or Shopping B
ordinary/regular
equipment [ Section 52.1(b) ]

Procured directly from

suppliers of known
qualifications
 Shopping
Shopping

Conditions Threshold
Shopping B Latest Update:
Shopping B
[Section 52.1(b)] [Section 52.1(b)]
Procurement of
ordinary or regular CSE Items not available in
office supplies and DBM-PS may be procured
equipment not PhP1,000,000.00 from other sources without the
available in PS-DBM; need of securing of Certificate
and For NGA’s, GOCCs, of Non-Availability of Stocks
GFIs, SUCs & (CNAS), subject to conditions
Amount does not Autonomous Regional set forth in GPPB-Resolution
exceed the threshold Government No. 17-2020
Shopping

Procedures

Shopping B
[Section 52.1(b)]

BAC shall send RFQs to at

least three (3) suppliers of
known qualifications, & at
least three (3) price quotations
must be obtained.

Deadline may be extended

thrice in case no or less than
the required number of
quotation is received.
Negotiated Procurement
Negotiated Procurement
Emergency Cases

Applicability Conditions
In case of imminent danger to life or property
during a state of calamity
Goods

When time is of the essence arising from

natural or man-made calamities
Infrastructure
Projects Other causes where immediate action is
necessary:
● to prevent damage to or loss of life or
property
Consulting Services ● to restore vital public services,
infrastructure facilities and other public
utilities
Negotiated Procurement
Emergency Cases

Reminders:
PE should consider appropriate timing or the proximity of the time
between the actual procurement activity to be conducted and the
emergency sought to be addressed.

When the reason or cause for the emergency has already been abated,
adoption of competitive bidding shall be considered.

When the ground is based on imminent danger to life during a state

of calamity, there must be a declaration by a competent authority of a
state of calamity before any procurement activity may be undertaken.
Negotiated Procurement
Agency-to-Agency

Background Applicability Conditions

PE shall justify that entering into

Goods A-to-A with Servicing Agency is
Procurement from more efficient & economical to
another government the government
agency (Servicing
Agency) that has the
mandate to deliver Infrastructure Projects Servicing Agency has the
goods or services or to absorptive capacity to undertake
undertake infrastructure the project
projects or consultancy
services as required by Servicing Agency owns ot has
the PE. Consulting Services
access to necessary tools &
equipment required for the
projectS
Negotiated Procurement
Agency-to-Agency

Procedural Guidelines

The End-user
The End-user shall secure a The HoPE shall
shall justify to certificate from The BAC shall enter into a MOA
the BAC the the relevant issue a with the
report to A-to-A officer of the Resolution Servicing
is more efficient Servicing Recommending Agency upon
and economical Agency that the the use of A-to- approval of the
to the latter complies A to the HoPE BAC
government with the recommendation
conditions
 Small Value
Negotiated Procurement Procurement

Background Applicability Procedures

The BAC shall prepare and sent
Procurement not RFQs/RFPs to at least three (3)
covered by Shopping suppliers, contractors of known
under Sec. 52 Goods qualifications

For procurement activities with

ABC of above PhP50,000.00,
Threshold Infrastructure Projects RFQ shall be posted in the
PhilGEPS and PEs Websites &
PhP1,000,000.00 conspicuous places in the
For NGAs, GOCCs, premises of the PE
GFIs, SUCs, & Consulting Services
Autonomous Regional Receipt of at least one (1)
Government quotation/proposal is sufficient to
proceed with the evaluation
 Lease of Real Property
Negotiated Procurement & Venue

Conditions
Background
The End-user shall submit a justification based on a cost- There is no threshold for
the use of this modality
benefit analysis and/or market study indicating that so long as it covers lease
Procurement covering leasing privately owned real property or venue is more of privately-owned real
lease of property or efficient and economical to the government property or venue.
venue for official use
The ABC shall be set using the mid- point
of the range obtained from the results of the
market analysis on the prevailing lease
rates.
Applicability
Rental rates should also be within the
prevailing market rates

Goods
Technical Specifications shall be prepared taking into
considerations the Rating Factors under Appendix B
 Lease of Real Property &
Negotiated Procurement Venue

Procedural Guidelines Publicly owned vis-a-vis Renewal of Contract of Lease of

privately owned real Real Property
property or venue

BAC shall invite at least It is preferred that government Prior to the extension of the lease of
three (3) prospective agencies lease publicly owned real contract, the end-user must conduct a
lessors/venues within the property or venue from other cost-benefit analysis to assess the
vicinity of the selected government agencies quality of service under the lease of
location to submit sealed contract
price quotations for real
property and open
quotations for venue
If there is an available publicly
If the result of the CB continue to
owned real property or venue that
result to favor the existing lessor, then
complies with the requirements of
the PE may simply renew its lease
the procuring entity it may enter
contract. If it does not, then the PE
Receipt of one (1) price into a contract of lease with the
should procure a new lease of
quotation is sufficient to government agency owner
contract
proceed with the evaluation
IMPORTANT TIMELINES
 
 Particulars Date of Submission Where to Submit

Indicative Annual Procurement Plan for Non- September 30, 2022 Posted in the Agency’s
CSE based on NEP Transparency Seal Webpage
 

Annual Procurement Plan - Commonly Used September 30, 2022 Submission through PhilGEPS
Supplies and Equipment (APP-CSE) Virtual Store; Manual Submission
will not be accepted

Maintain/update PhilGEPS posting of all Updated on or before Updated in the PhilGEPS Website
Invitation to Bids and awarded Contracts from January 31, 2023
January 01 to December 31, 2022, including
EPA of FY 2022 Non-CSE items
(https://open/philgeps.gov.ph/pbb)

Conduct of Early Procurement Activities (50% December 31, 2022 GPP-Technical Support Office
of the Indicative APP) (actual conduct);
Submission of
Certification (one
month from approval
of the GAA or January
31 of the following
year)