gppb proc manual vol 1

8/13/2019 Gppb Proc Manual Vol 1

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Guidelines on Establishing Procurement Systems and Organizations May 2007

TABLE OF CONTENTS

ABBREVIATIONSANDACRONYMS .................................................................4SECTION 1: GENERAL PROVISIONS...............................................................5

LEGAL BASIS FOR THE PROCUREMENT MANUAL .....................................................6 COVERAGE,SCOPE,AND APPLICATION ................................................................6 1. Coverage ........................................................................................................6

2. Scope.............................................................................................................6

3. Application......................................................................................................7

PRINCIPLES OF GOVERNMENT PROCUREMENT .......................................................7 1. Transparency ..................................................................................................72. Competitiveness ..............................................................................................73. Streamlining and use of technology in procurement .............................................7

4. Accountability..................................................................................................75. Public Monitoring .............................................................................................8

SECTION 2: PROCUREMENT ORGANIZATIONS...............................................9THE ORGANIZATIONAL STRUCTURE ...................................................................10

1. The Bureau of Internal Revenue and its Procurement Unit / Office........................ 10

2. The Bids and Awards Committee (BAC)............................................................. 113. BAC Members........................................................................................... 11-124. The Technical Working Group (TWG) ................................................................ 135. Observers..13-14

ROLES AND RESPONSIBILITIES ........................................................................15 1. The Bureau of Internal Revenue and the Procurement Unit/Office ................... 15-16

2. The BAC ....................................................................................................... 173. The TWG....................................................................................................... 184. The Observers ............................................................................................... 19

CONDITIONS FOR GRANTING HONORARIA..................................................... 20-21

PROFESSIONALIZATION OF PROCUREMENT UNITS,BAC,TWG...............................22 SECTION 3: PROCUREMENT PLANNING .......................................................23

PROCUREMENT PLANNING - PROCUREMENT PLANNING AND BUDGETLINKAGE24PROCUREMENT PLANNING PREPARATION OF THE PROJECT

PROCUREMENT MANAGEMENT PLAN (PPMP) ......................................................251. The PPMP...................................................................................................... 252. Developing the Project Requirements ............................................................... 253. Writing the Technical Specifications, Scope of Work and Terms of Reference ......... 26

4. Determining the Approved Budget for the Contract ............................................ 27

5. Procurement Milestones.................................................................................. 276. Method of Procurement.............................................................................. 28-297. Format of the PPMP........................................................................................ 30

PROCUREMENTPLANNINGPREPARATION OF THE ANNUAL PROCUREMENTPLAN (APP)................................................................................................30

1. The Annual Procurement Plan .......................................................................... 302. Procurement Strategy..................................................................................... 313. Format of the APP .......................................................................................... 314. Submission Timeline ..31


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SECTION 4: VARIOUS METHODS OF PROCUREMENT....................................32COMPETITIVE BIDDING ..................................................................................33 ALTERNATIVE METHODS OF PROCUREMENT .........................................................33

1. Conditions for Use of Alternative Methods of Procurement.............................. 33-34

SECTION 5: PROCUREMENT BY ELECTRONIC MEANS AND THEPHILGEPS....................................................................................................35

PROCUREMENT BY ELECTRONIC MEANS AND THE PHILIPPINE GOVERNMENTELECTRONIC PROCUREMENT SYSTEM .................................................................36

1. The PhilGEPS................................................................................................. 362. Features of the PhilGEPS............................................................................ 36-38

USE OF PROCUREMENT SERVICE PROVIDERS.......................................................39 1. Minimum Requirements for Service Providers .................................................... 39

SECTION 6: FOREIGN ASSISTED PROJECTS.................................................40FOREIGN ASSISTED PROJECTS .........................................................................41

1. Anti-corruption Measures ........................................................................... 42-46

SECTION 7: PENAL, CIVIL AND ADMINISTRATIVE LIABILITIES AND

SANCTIONS.................................................................................................47STANDARD OF ETHICS ....................................................................................48

1. Definition of Corrupt, Fraudulent, Collusive, and Coercive Practices...................... 482. Applicable penalty for fraud, misrepresentation and collusion .............................. 48

CONFLICT OF INTEREST ..................................................................................49 PENAL LIABILITIES AND SANCTIONS .................................................................50

1. Penal Liabilities of Public Officers ..................................................................... 502. Penal Sanctions for Public Officers.................................................................... 503. Penal Liabilities of Private Individuals ............................................................... 51

4. Penal Sanctions for Private Individuals.............................................................. 51

CIVIL LIABILITY ...........................................................................................52 1. Civil Liability in Case of Conviction ................................................................... 522. Liquidated Damages....................................................................................... 52

ADMINISTRATIVE LIABILITIES AND SANCTIONS ...................................................52 1. Administrative Liabilities ................................................................................. 522. Administrative Sanctions................................................................................. 53

BLACKLISTING GUIDELINES.............................................................................53 1. Prohibition on blacklisted persons/entities to participate in

the bidding of Government Projects/Contracts ................................................... 532. Sanctions and Grounds for Blacklisting ........................................................ 54-55

SECTION 8: LEGAL ASSISTANCE AND INDEMNIFICATION...........................56GENERAL CONDITIONS ...................................................................................57

1. Free Legal Assistance ..................................................................................... 572. Liability Insurance.......................................................................................... 583. Medical Assistance ......................................................................................... 58

PROCEDURE FOR GRANTING LEGAL ASSISTANCE AND INDEMNIFICATION ...................59GLOSSARY... 60-67

PROPOSE PROCUREMENT SUPPLY CHAIN STURCTURE AND STAFFING. .........................68FIGURE 1:BASIC PROCUREMENT SUPPLY CHAIN ORGANIZATION ..... 69

ANNEX A:NATIONAL BUDGET CIRCULAR NO.2004-5. 70ANNEX B:NATIONAL BUDGET CIRCULAR NO.2004-5A... 71ANNEX C:REVENUE MEMORANDUM ORDER NO.42-2004.. 72ANNEX D:TERMS OF REFERENCE .. 73

ANNEX E:PROJECT PROCUREMENT MANAGEMENT PLAN 74


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ABBREVIATIONS AND ACRONYMS

ABC Approved Budget for the ContractABM Agency Budget MatrixACIR Assistant Commissioner

ADB Asian Development BankAFP Armed Forces of the PhilippinesAFS Audited Financial StatementAPP Annual Procurement PlanARD Assistant Regional DirectorBAC Bids and Awards Committee

BDS Bid Data Sheet

BIR Bureau of Internal RevenueBRS Bureau of Research and Standards

BSP Bangko Sentral ng Pilipinas

BTr Bureau of TreasuryCAF Certificate of Availability of FundsCDA Cooperatives Development AuthorityCIAP Construction Industry Authority of the Philippines

CIF Cost, Insurance and FreightCIP Carriage and Insurance Paid to (named place of destination)CIR Commissioner of Internal RevenueCOA Commission on AuditCOFILCO Confederation of Filipino Consulting OrganizationsCPES Contractors Performance Evaluation System

CPESIU Contractors Performance Evaluation System Implementing UnitCSO Civic Society OrganizationCSC Civil Service Commission

DBCC Development Budget Coordination CommitteeDBM Department of Budget and ManagementDBM-PS/PS-DBM Department of Budget and Management-Procurement Service

DCIR Deputy CommissionerDILG Department of Interior and Local GovernmentDND Department of National DefenseDOST Department of Science and Technology

DTI Department of Trade and IndustryE.O. Executive OrderESAO Engineering Supervision and Administration Overhead

EXW Ex Works, Ex Factory or Off-the-Shelf

FAPs Foreign Assisted ProjectsFMIS Financial Management Information SystemGAA General Appropriations ActGCC General Conditions of Contract

GFI Government Financial Institution

GOCC Government-Owned or Controlled CorporationGOP Government of the PhilippinesGPPB Government Procurement Policy Board

GPPB-TSO Government Procurement Policy Board Technical Support OfficeGPRA Government Procurement Reform ActHRB Highest Rated BidHRRB Highest Rated and Responsive Bid

IAEB Invitation to Apply for Eligibility and to BidICB International Competitive BiddingICT Information and Communications Technology

IFI International Financing InstitutionIPR Intellectual Property RightsITB Instructions to Bidders


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ITR Income Tax ReturnJVA Joint Venture AgreementJBIC Japan Bank for International Cooperation

LC Letter of Credit

LCB Local Competitive BiddingLCB Lowest Calculated Bid

LCRB Lowest Calculated and Responsive Bid

LGU Local Government UnitLIB Limited International BiddingLOI Letter of IntentMOOE Maintenance and Other Operating Expenses

NACAP National Constructors Association of the PhilippinesNCB National Competitive BiddingNFCC Net Financial Contracting CapacityNGA National Government Agency

NGO Non-Government OrganizationNO National Office

NSO National Statistics OfficeNTP Notice to ProceedOS Obligation Slip

PA Professionals AssociationPAGASA Philippine Atmospheric, Geophysical and Astronomical Services AdministrationPBDs Philippine Bidding DocumentsPCA Philippine Constructors Association, Incorporated

PCAB Philippine Contractors Accreditation BoardPCCI Philippine Chamber of Commerce and IndustryPCAB Philippine Contractors Accreditation BoardPERT/CPM Project Evaluation Review Technique / Critical Path MethodPhilGEPS/G-EPS Philippine Government Electronic Procurement SystemPICE Philippine Institute of Civil Engineers

PICPA Philippine Institute of Certified Public AccountantsPMO Project Management OfficePNP Philippine National PolicePPA Programs, Projects and ActivitiesPPMP Project Procurement Management Plan

PRC Professional Regulation Commission

PWI Procurement Watch IncorporatedR.A. Republic ActR.A. 9184 Republic Act No. 9184, otherwise known as the Government Procurement

Reform ActRD Regional DirectorRIS Requisition and Issuance SlipRFP Request for Proposal

RFQ Request for QuotationROW Right-of-WayRR Revenue Region

SARO Special Allotment Release OrderSBD Standard Bidding DocumentsSCC Special Conditions of ContractSEC Securities and Exchange Commission

SME Small and Medium EnterprisesSOW Scope of WorkSUC State Universities and CollegesSWA Statement of Work AccomplishedTOR Terms of ReferenceTSO Technical Support Office

TWG Technical Working GroupUNDB United Nations Development BusinessVAT Value-Added TaxWB The World Bank

WFP Work and Financial Plan


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General Provisions


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Legal Basis for the Procurement Manual

Section 6 of IRR-A of RA 9184 otherwise known as The Government Procurement Reform Actprovides the legal basis for the development of this Procurement Manual (Manual).

This Manual aims to standardize the procurement process, in effect preventing confusion,ensuring transparency, and enabling procuring entities to conform to the principles thatgovern all government procurement activities. However, whenever necessary to suit theparticular needs of the BIR, it may be modified subject to the approval of the GPPB.

The GPPB shall review this Manual periodically, and whenever necessary, ensure itsapplicability to existing conditions. The BIR may submit to the GPPB its recommendations forspecific revisions to the Manual. Any such revisions must be approved by the GPPB and mustbe consistent with existing procurement laws, rules, regulations and policies.

In case of an inconsistency or conflict between this Manual and R.A. 9184 and/or its IRR-A,the latter shall govern.

Coverage, Scope, and Application

Sections 1, 4, and 5 of IRR-A provide the legal reference for the coverage, scope andapplication of this Manual.

Coverage

This Manual must be used for all procurement activities of the BIR and its Regional Offices.

Scope

The provisions of R.A. 9184 shall apply to the procurement of goods and services,infrastructure projects, and consulting services, regardless of source of funds, whether localor foreign. However, procurement funded partly or fully by IFIs shall follow the proceduresspecified under the loan or grant agreement; provided that in the absence of suchprocurement guidelines, or if the guidelines provided are silent on specific procurement

procedures, then the procurement processes and procedures provided in R.A. 9184 and itsIRR-A will apply suppletorily.

In view of the above, and in due regard to the harmonization efforts among GOP, WB, ADB,and JBIC, this Manual will not only cover R.A. 9184 and its IRR-A, but the harmonizedprocedures found in the PBDs as well. Unless otherwise indicated herein, this Manual shall

apply to foreign-assisted projects as well.

This Manual does not cover private sector infrastructure or development projects, such as thebuild-operate-transfer scheme and its variants. Likewise, this Manual does not cover theacquisition of right-of-way site or location for infrastructure projects, and the leasing out ofgovernment-owned buildings or spaces for private use.

For application of procurement methods needed to address peculiar situations, agencies are

advised to consult the GPPB.


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Application

The procurement procedures provided in this Manual shall apply to the following:

1. Goods and Services;2.

Infrastructure Projects; and

3. Consulting Services.This Manual shall be used together with the PBDs prescribed by the GPPB.

Principles of Government Procurement

Section 3 of IRR-A provides the legal reference for the principles of government procurement.

Government procurement shall be governed by the following principles:

Transparency

The procurement process and the implementation of procurement contracts must betransparent. Procuring entities must ensure the widest dissemination of bid opportunities andthe participation of pertinent non-government organizations. Towards this end, posting in theBIR website (www.bir.gov.ph) , in the PhilGEPS website, and in a conspicuous place within thepremises of the BIR is required for all procurement. Moreover, in addition to the COArepresentative, the BAC of the BIR is required to invite observers coming from eligible and

qualified PAs and NGOs to observe any or all stages of the procurement process. Finally, eachprocurement transaction must be properly documented and such records must be maintainedand made available to proper parties.

Competitiveness

Public procurement must be competitive and, as a rule, be conducted through public bidding,except as otherwise provided for under the GPRA, its IRR-A and this Manual. A competitivebidding process treats bidders equitably and provides fair grounds for competition amongthemselves, thereby ensuring that no single bidder significantly influences the outcome of thebidding. Competition among bidders will urge them to offer more beneficial terms to thegovernment. Hence, the alternative methods of procurement must only be resorted to whencompetitive bidding is not a feasible option, in accordance with the conditions laid down inR.A. 9184, its IRR-A and this Manual.

Streamlining and use of technology in procurement

A streamlined procurement process that will uniformly apply to all government procurementmust be adopted. The procurement process must be simple and made adaptable to advancesin modern technology in order to ensure an effective and efficient method. The GPPB conductsa periodic review of government procurement procedures, and whenever necessary,formulates and implements changes thereto.

Accountability

A system of accountability must be established. Thus, both the public officials directly orindirectly involved in the procurement process as well as in the implementation ofprocurement contracts, and the private parties that deal with government are, whenwarranted by circumstances, investigated and held liable for their actions relative thereto. Inrelation to this, the CIR/RD are responsible for establishing and maintaining a transparent,effective, and efficient procurement system in the BIR. The responsibilities of each official

involved in the procurement process must be clear and legally identifiable.


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Public Monitoring

Public monitoring of the procurement process and the implementation of contracts shallguaranty that these are awarded and performed strictly according to specifications. A systemof reporting to the GPPB is provided for, while eligible and qualified CSOs such as NGOs, PAs,

academic institutions, and religious groups are allowed to observe and monitor theprocurement process and contract implementation.

To fully abide by these principles, the BIR shall consistently follow the procedures prescribedin this Manual.


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SECTION 2Procurement Organizations


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The Organizational Structure

Sections 5(q), 11, 13, and 14 of IRR-A provide for the legal reference for the organizationalstructure.

1. The BIR and its Procurement Unit / Office

a. The BIRThe Head of the Procuring Entity shall be the CIR or his duly authorized

representative/s. For Revenue Region (RR), the RD or his duly authorizedrepresentative/s shall be considered as the Head of the Procuring Entitysubject to the limitations and authority delegated by the CIR.

The CIR may likewise issue the proper directives delegating variousprocurement related functions such as approval of notice of extension, notice

of award, notice to proceed, among others.

b. The BAC SecretariatThe CIR shall create a permanent BAC Secretariat with the discretion to createa new office or to merely designate an existing organic office to be the BACSecretariat. The CIR may consider designating the existing ProcurementDivision at the National Office as the BAC Secretariat to ensure continuity aswell as professionalization of the procurement function.

For the RR, the RD may create or consider the existing Administrative Divisionas its BAC Secretariat.

The number of personnel comprising the BAC Secretariat is dependent on thevolume of transactions involved and the level of expertise required from theprocurement officers.

The CIR/RD should consider the following factors in selecting the personnelwho will be assigned to the BAC Secretariat, among others:

i. Integrity;ii. Procurement proficiency, as shown by experience and trainings

attended;

iii. Satisfactory completion in a certification program conducted by theGPPB-TSO or its accredited institutions, if any;

iv. The appropriate Civil Service qualification standards;v. The appropriate rank of the head of the BAC Secretariat, which should

be:

At the National Office At least a fifth ranking (Division Chief) permanent employee

At the Regional Office At least a third ranking (Division Chief) permanent employee


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In designating members of the Procurement Unit/Office and the BACSecretariat, the CIR/RD must ensure that check and balance is maintained,and procurement personnel are not given assignments that may conflict withtheir designation as such.

The CIR/RD shall ensure that the Procurement Unit/Office will have a

sufficient number of personnel who will provide secretariat support to the BACand perform the other functions of the Procurement Unit/Office, as provided inthis Manual. The said Unit/Office shall be strengthened through continuingprocurement training and education of the staff and deployment of additionalpersonnel, if necessary.

2. The Bids and Awards Committee (BAC)

The CIR/RD must create a single BAC in the NO/RR . However, separate BACs maybe created under the following circumstances:

a. The items to be procured are complex or specialized, e.g., ICT resources,infrastructure projects, and other specialized procurements; or

b. If, even after undergoing jury duty, the single BAC cannot manage theprocurement transactions as shown by delays beyond the allowable limits.

3. BAC Members

The CIR/RD must designate the Members of the BAC in accordance with the followingrules:

i. The BAC must consist of at least five (5) members but not to exceed seven(7). Of the five (5) members, three (3) must be regular members, and thetwo (2) must be provisional members. Should the CIR/RD desire to create aseven (7)-member BAC, he/she may designate two (2) additional regular

members, or two (2) additional provisional members, or one (1) additional

regular and one (1) provisional member.

The regular members are:

An officer, who is at least a third-ranking permanentofficial of the BIR, Assistant Commissioner (ACIR)(preferably from theLegal Service) at the NO, and AssistantRegional Director (ARD) at the RR, who shall be designated asthe Chairman;

An officer, who holds at least a third ranking permanentplantilla position, with knowledge, experience and/orexpertise in procurement who represents the legal,

operations, information system, resource management andother concerned groups at the NO, and assessment, legal and

collection divisions at the RR;

An officer, who holds at least a third ranking permanentplantilla position, with knowledge, experience and/orexpertise in procurement who represents the Financial andAdministrative Service (FAS) at the NO, and AdministrativeDivision at the RR.


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The provisional members are:

For the NO An Officer, who is at least a Division Chief, with technical

expertise relevant to the procurement at hand, and, to the

extent possible, has knowledge, experience and/orexpertise in procurement;

An Officer, who is at least a Division Chief, representing theend user unit who has knowledge of procurement laws andprocedures.

For the RR An Officer, who is at least an Assistant Division Chief, with

technical expertise relevant to the procurement at hand,and, to the extent possible, has knowledge, experienceand/or expertise in procurement;

An Officer, who is at least an Assistant Division Chief,representing the end user unit who has knowledge ofprocurement laws and procedures.

ii. The Chairman and Vice-Chairman shall be regular members of theBAC.

iii. The CIR/RD shall designate the BAC Chairman, and may likewisedesignate the Vice-Chairman from the remaining regularmembers.

iv. The BAC members shall be designated for a term of one (1) year only,reckoned from the date of designation. However, the CIR/RD may

renew such designation at his discretion.It is noted that appointment to the BAC is in the nature of a designation, inaddition to the regular duties of the subject official, and is not an appointmentcontemplated under the Civil Service rules.

In accordance with the thrust to professionalize the procurement organization,the CIR/RD is encouraged to re-appoint BAC members who have shownefficiency and probity in the performance of their duties.

v. In case of resignation, retirement, separation, transfer, re-assignment, or removal of a BAC member, the CIR/RD may designatea replacement, who shall be similarly qualified as the official replaced.The replacement shall serve for the unexpired term. In case of leaveor suspension, the replacement shall serve only for the duration of the

leave or suspension.

vi. The CIR/RD may suspend or remove a member of the BAC forjustifiable causes, including, but not limited to, violations of theprovisions of the R.A. 9184 or its IRR-A.

vii. The following officers of the BIR are disqualified from membership inthe BAC:

CIR; DCIRs who approve procurement transactions;

ACIR-FAS/ISOS;

Regional Director;


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other officials who approve procurement transactions; Chief, Accounting Division (NO) / Chief, Finance Division (RR),

unless the Accounting Division/ Chief, Finance Division is theend-user unit, in which case the Chief, Accounting

Division/Chief, Finance Division may be designated as an end-

user member.

4. The Technical Working Group (TWG)

a. The BAC may create a TWG from a pool of technical (operations, resourcemanagement, information systems and other concerned groups),financial/administrative and/or legal experts to assist in the procurementprocess.

b. In creating the TWG, the BAC shall consider the expertise required based onthe nature of the procurement. It may create several TWGs to handle differentprocurements, for example:

Infrastructure Projects, whose membership shall include experts in civilworks like civil engineers, an architect, an accountant or finance expertto handle the financial aspect of the procurement, etc.;

ICT Projects, whose membership shall include experts in ICT like acomputer engineer, a systems analyst, a programmer, etc.; and

For a specific procurement, particularly if the procurement at hand ishighly technical or is a major or priority project of the government.

c. In highly meritorious cases, the BIR may also engage the services ofconsultants in accordance with the IRR-A and Volume 4 of this Manual,subject to the availability of funds, who will assist the TWG and the BAC on

the procurement at hand. For this purpose, the CIR shall certify that the in-house experts cannot provide adequate technical, financial, legal or project orcontract management advice related to the procurement. These consultants,

however, shall only have an advisory capacity, and may not vote duringdeliberations.

5. Observers

a. Purpose of the Observers. To enhance the transparency of theprocess, the BAC is required to invite Observers who may attend and observeall stages of the procurement, especially:

i. pre-bid conference;ii. opening of bids;iii. bid evaluation;iv. post-qualification;v. contract award; andvi. special meetings of the BAC.


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b. Notice to Observer/s

Observers will be informed at least two (2) days before the stages ofprocurement to which observer/s shall be invited: pre-bid conference; openingof bids; post qualification; and contract award; and special meetings of the

BAC. The absence of observer/s will not nullify the BAC proceedings, provided

that they have been duly invited in writing. ( Section 13.3 of IRR-A)

c. The BAC must invite four Observers, who shall be:

i. COA representative;

ii. representative from the Internal Audit Division, Inspection Service forthe National Office and a representative from the SID for the RegionalOffice;

iii. at least one (1) observer who shall come from a duly recognizedprivate group in a sector or discipline relevant to the procurement athand, for example:

for infrastructure projects National Constructors Associations duly recognized by

the CIAP, such as, but not limited to, the PCA; and the

NACAP; or PICE

for goods A specific relevant chamber-member of the PCCI or

the PICPA

for consulting services a project-related professional organization accreditedor duly recognized by the PRC or the Supreme Court,

such as, but not limited to, the PICE; and the PICPA;or

the COFILCOiv. at least one (1) observer who shall come from an NGO.

d. Criteria for Observers from the Private Sector. In accordance withSection 13.2 of the IRR-A, the Observers coming from the private sector (e.g.,

organization of experts and NGOs) should belong to an organization dulyregistered with the SEC. Moreover, they should meet the following criteria:

i. knowledge, experience or expertise in procurement or in the subjectmatter of the contract to be bid;

ii. absence of direct or indirect financial interest in the contract to be bidout;

iii. any other criteria that may be determined by the BAC (for example,the BAC in decentralized units may require thatthe Observers shouldbe based in the area to ensure their attendance during the meetings.)


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Roles and Responsibilities

Sections 12, 13 and 14 of IRR-A provide the legal reference for the roles and responsibilities.

1. The BIR and the Procurement Unit/Office

a. Responsibilities of the CIR/RD. The CIR/RD shall have the following

responsibilities in the procurement process:

i. Ensure that the APP is regularly prepared, reviewed and updated bythe FAS and Administrative Division, and end-user units, for the NOand RR, respectively, in coordination with their respective BACSecretariat, in accordance with the guidelines set forth herein.

ii. Approve the APP or delegate the approval authority to a second-ranking official.

iii. Ensure that all procurements are in line with the approved APP.iv. Establish the BAC and the BAC Secretariat in accordance with the

foregoing guidelines.

v. Upon submission by the BAC of the recommendation for award, theCIR/RD must approve the same. Such recommendation may,however, be disapproved only on valid, reasonable and justifiablegrounds to be expressed in writing, and furnished to the BAC.

vi. Ensure that the BAC and the BAC Secretariat gives utmost priority toBAC assignments over all other duties and responsibilities, until therequirements for the said assignments at hand are completed.( Section 14.3 of IRR-A)

vii. Ensure that the staff of the Procurement Unit/Office and the membersof the BAC, BAC Secretariat and TWG are given ample training onprocurement and related matters, with the end in view ofprofessionalizing the procurement organization of the BIR.

viii. Impose the necessary administrative sanctions on errant members ofthe BAC Secretariat/BAC/TWG, in accordance with Section 70 of theIRR-A.

ix. Ensure that the members of the BAC and the TWG shall receive theirincentives.

Under Sections 37 and 38 of R.A. 9184, in cases where the CIR is required to approvespecific contracts, he shall ensure that the same are approved within the time frameindicated in the IRR-A, that is, within 10 calendar days from receipt of the transmittalto his office. Otherwise, such contracts, if not acted upon within the reglementaryperiod, shall be deemed approved.


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b. Responsibilities of the BAC Secretariat.

i. As the main support of the BAC, it shall have the followingresponsibilities:

Provide administrative support to the BAC and the TWG, ifnecessary;

Organize and make all necessary arrangements for the BACmeetings as well as TWG meetings, if necessary;

Attend BAC meetings as Secretary; Prepare Minutes of the BAC meetings; Take custody of procurement documents and be responsible

for the sale and distribution of bidding documents tointerested bidders;

Assist in managing the procurement process;

Monitor procurement activities and milestones for properreporting to relevant agencies and/or end-users, whenrequired;

Be the central depository of all procurement relatedinformation and continually update itself with the most currentGPPB resolutions issuances, circulars and events, anddownstream the same to all relevant officer, employees, andparties requiring information. For this purpose, all informationreleased by the GPPB can be secured electronically fromwww.gppb.gov.ph;

Consolidate PPMPs submitted by the various projectproponents and end-user units of the BIR into APP, to makethem available for review as indicated in Section 7 of the IRR-A;

Make arrangements for the pre-procurement and pre-bidconferences and bid openings;

Be the central channel of communications for the BAC with theproject proponents, end-users, other government agencies,providers of goods, civil works and consulting services, andthe general public;

Assist the BAC in preparing drafts of BAC resolutions; Provide utmost priority to BAC assignments over all other

duties and responsibilities, until the requirements for theprocurement at hand are completed (Jury Duty);

Create, maintain and update the registration database ofsuppliers, contractors, and consultants;

Manage and undertake procurements using the followingalternative methods - Repeat order and shopping - upon priorresolution of the BAC and approval by the CIR;

Transact with the PhilGEPS in behalf of the BIR; and


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Ensure that all procurements undertaken by the BIR areproperly documented, to provide an audit trail of theprocurement process.

c. Responsibilities of the Procurement Division/Administrative Division

Based on inputs from the BAC and the TWG, prepare theprocurement documents, i.e., purchase orders, job orders,contracts, and their attachments, for processing by the Budget,

Accounting, Legal and Finance Offices, and routing to the signingand approving authorities;

Monitor the status of the procurements routed for approval, andcause the correction of any formal deficiencies in the saidprocurement documents to facilitate action on the part of theapproving authorities;

2. The BAC

a. Responsibilities of the BAC.

i. Recommend to the CIR/RD whether to use public bidding or any of thealternative methods in procuring the goods, consulting services andinfrastructure projects included in the APP;

ii. Creation of the TWG, if necessary, from a pool of technical,(operations, resource management, information systems and otherconcerned groups), financial and legal experts to assist in theprocurement process;

iii. Advertise and/or post the invitation to bid.iv. Conduct pre-procurement and pre-bid conferences.v. Determine the eligibility of prospective bidders in accordance with the

guidelines set forth in R.A. 9184 and its IRR-A.

vi. Issuance of Certificate of Eligibility. (refer to RMO No. 3-2007)vii. Sole authority to receive and open bids.viii. Conduct the evaluation of bids with the assistance of the TWG.ix. Undertake post-qualification proceedings, with the assistance of the

TWG.

x. Resolve motions for reconsideration filed by prospective bidders andother concerned parties with respect to the conduct of the biddingprocess.

xi. Recommend award of contracts to the CIR/RD or to the dulyauthorized representative.

xii. Recommend the imposition of sanctions in accordance with Rule XXIIIof the IRR-A.

xiii. Prepare a procurement monitoring report that shall be approved andsubmitted by the CIR/RD to the GPPB on a semestral basis orwhenever required.


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xiv. For each procurement transaction, accomplish a checklist showing itscompliance with R.A. 9184, its IRR-A and this Manual. This will besubmitted to the CIR/RD and made a part of the transaction record.

xv. Invite the Observers required by law to be present during all stages ofthe procurement process, in accordance with the guidelines stipulated

in R.A. 9184, its IRR-A and this Manual.

xvi. Furnish the Observers, upon the latters request, with the followingdocuments:

Minutes of the proceedings of BAC meetings; Abstract of bids; Post-qualification summary report; APP and related PPMP; and Copies of opened proposals.

xvii. Recommend to the CIR/RD extensions of existing contracts, asproposed by the project proponents, for projects undergoingprocurement process.

xviii. Give utmost priority to BAC assignments over all other duties andresponsibilities, until the requirements for the procurement at handare completed (Jury Duty).

xix. Perform such other related functions as may be necessary to theprocurement process.

b. Quorum

The majority (one-half of membership plus one) of the BAC members shallconstitute a quorum, provided that the Chairman or the Vice-Chairman should

be present in all meetings and deliberations. The Chairman or, in hisabsence, the Vice-Chairman shall preside over the meetings. The Presiding

Officer shall vote only in case of a tie.

It should be noted that the designation of an alternate BAC member is notprovided for by R.A.9184, and that BAC representatives are not counted forpurposes of determining quorum.

All BAC decisions should be embodied in resolutions signed by all members

and the Chairman or Vice-Chairman thereof, as the case may be, who arepresent during the deliberations/meetings.

3. The TWG

Responsibilities of the TWG.

A. Assist the BAC in the following:

i. Preparation of the bidding documents in conformity with the standards setforth by R.A. 9184, its IRR-A, PBDs and this Manual.

ii. Conduct of eligibility screening of prospective bidders, and in the short listingof prospective bidders in case of biddings for consulting services.

iii. Evaluation of bids and prepare the accompanying reports for the BACsconsideration and approval.


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iv. Conduct of post-qualification activities and prepare the post-qualificationsummary report for the BACs approval.

v. Preparation of the resolution recommending award, with regard to thetechnical aspect, if necessary.

B. Provide utmost priority to BAC assignments over all other duties andresponsibilities, until the requirements for the procurement at hand arecompleted (Jury Duty).

4. The Observers

They represent the public and the taxpayers who are interested in seeing to it thatprocurement laws are observed and irregularities are averted, thus, enhancetransparency of the procurement process.

Responsibilities of the Observers.

a. Preparation of the Procurement Observation Report, either jointly or

separately, indicating their observations made on the bidding activityconducted by the BAC.

The report shall indicate:

i. An assessment of the extent of the BACs compliance with thesubstantive and procedural requirements of R.A. 9184, its IRR-A andthis Manual.

ii. The areas of improvement in the BACs proceedings.The report shall be submitted to the CIR/RD, and a copy thereof will befurnished the BAC Chairman, who shall forward it to the BAC Secretariat forinclusion in the procurement documents that will be submitted to the proper

authorities for approval. This will be part of the official record of the bidding,and part of the audit trail. The Observer may also give a copy of the Report tothe Office of the Ombudsman or the Resident Ombudsman in any of thefollowing instances:

i. when the BAC has failed to follow the prescribed bidding procedures;or

ii. for any justifiable and reasonable ground where the award of thecontract will not redound to the benefit of the Government.

b. For the purpose of preparing the report, the Observer/s may request forcopies of the following documents from the BAC:

i. Minutes of related proceedings of BAC meetings;ii. Abstract of bids;iii. Post-qualification summary report;iv. Pertinent portions of the APP and related PPMP; andv. Copies of opened proposals.

c. The Observer/s must sign as witness in the Abstract of Bids. If the BAC failedto correctly observe the proper procedure, the Observer/s must indicate in theProcurement Observation Report the procedural and/or substantive lapses ofthe BAC. This will enable the CIR/RD to be apprised of any irregularities inthe bidding process, for consideration.


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d. The Observer/s shall sign as witness in the post-qualification summary reportif, in their independent observation, the BAC followed the procedure describedin the IRR-A of R.A. 9184 and this Manual, and that the Observer/s isamenable to the results of the post-qualification. If the Observer/s finds the

post-qualification procedures irregular or the report does not match the actualfindings, he shall so state in writing addressed to the BAC Chairman, and thesame shall be attached to the Post-qualification Summary Report submitted tothe approving authority. The Observers written dissent will be part of theofficial record of the procurement.

Honoraria

Section 15 of IRR-A provides for the conditions in granting honoraria.

The BIR is authorized to grant honoraria to the members of the BAC and the TWG, provided:

1. the amount so granted does not exceed twenty-five percent (25%) of their respectivebasic monthly salary;

2. funds are available for the purpose; and3. the grant of honoraria conforms to the guidelines promulgated by the DBM under

Budget Circular Nos. 2004-5 and 2004-5A, as implemented by RMO No. 42-2004dated August 24, 2004 (Annexes A, B and C).

The Circulars provide, among others, the following :

1. The chairman and members of the BAC and the TWG may be paid honoraria only forsuccessfully completed procurement projects. In accordance with Section 7 of the

IRR-A of R.A. 9184, a procurement project refers to the entire project identified,described, detailed, scheduled and budgeted for in the PPMP prepared by the BIR.Furthermore, a procurement project shall be considered successfully completed oncethe contract has been awarded to the winning bidder.

2. The payment of honoraria shall be limited to procurement that involves competitivebidding. Competitive bidding activities are present only in:

a. Open and competitive bidding;b. Limited source bidding;c. Negotiated procurement under Section 53 (a) of the IRR-A, where there has

been failure of bidding for the second time; and

d. Negotiated procurement under Section 53 (b) of the IRR-A following theprocedures under Section 54.2 (b) thereof, whereby the Procuring Entity shall

draw up a list of at least (3) suppliers or contractors which will be invited tosubmit bids.

Conversely, honoraria will not be paid when procurement is thru:

a. Direct contracting;b. Repeat order;

c.

Shopping;


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d. Negotiated procurement under Section 53 (b) of the IRR-A following theprocedures under Section 54.2 (d) thereof, whereby the Procuring Entitydirectly negotiates with previous supplier, contractor or consultant; or whenthe project is undertaken by administration or thru the AFP, in case of

infrastructure projects; and

e.

Negotiated procurement under Section 53 (c) to (g) of the IRR-A.

3. To be entitled to honoraria, personnel should be duly assigned as chair or member ofthe BAC or the TWG by the head of the department/agency concerned.

4. The members of the BAC Secretariat who are performing the attendant functions inaddition to their regular duties in other non-procurement units of the agency maylikewise be paid honoraria at the same rate as the TWG chair and members, subject

to the same regulations.

The members of the BAC Secretariat whose positions are in the Procurement Unit ofthe agency shall not be entitled to honoraria. The payment of overtime services maybe allowed, subject to existing policy on the matter.

5. In lieu of honoraria, the payment of overtime services may be allowed for theadministrative staff, such as clerks, messengers and drivers supporting the BAC, the

TWG and the Secretariat, for procurement activities rendered in excess of officialworking hours. The payment of overtime services shall be in accordance with theexisting policy on the matter.

6. Those who are receiving honoraria for their participation in procurement activitiesshall no longer be entitled to overtime pay for procurement-related services renderedin excess of official working hours.

7. The amount necessary for the payment of the honoraria and overtime pay authorizedherein shall be sourced only from the following:

a. proceeds from sale of bid documents;b. fees from contractor/supplier registry;c. fees charged for copies of minutes of bid openings, BAC resolutions andd. other BAC documents;e. protest fees;f. liquidated damages; andg. proceeds from bid/performance security forfeiture.

8. Pursuant to the DOF-DBM-COA Permanent Committee Resolution No. 2005-2 datedJune 2005, all agencies are authorized to treat the collections from the sourcesidentified above as trust receipts to be used exclusively for the payment of honorariaand overtime pay duly authorized. Agencies may utilize up to one hundred percent(100%) of the said collections for the payment of honoraria and overtime pay subjectto the guidelines in the Budget Circular. Any excess in the amount collected shall beremitted by NGAs to the BTr. In the case of GOCCs and LGUs, the same shall formpart of their corporate or local government funds, respectively.

Also see GPPB Resolution 21-2005 on the Guidelines for Legal Assistance andIndemnification of BAC Members and its Support Staff, which provide the generalconditions, procedures and funding source for free legal assistance, liability insurance

and medical assistance.


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In addition, DOF-DBM-COA Permanent Committee Resolution No. 2005-2 dated June 2005, allagencies are authorized to treat the collections from the sources identified above as trustreceipts to be used exclusively for the payment of honoraria and overtime pay dulyauthorized. Agencies may utilize up to one hundred percent (100%) of the said collections forthe payment of honoraria and overtime pay subject to the guidelines in the Budget Circular.Any excess in the amount collected shall be remitted to the BTr.

Professionalization of Procurement Units, BAC, TWG

Section 16 of IRR-A provides for the professionalization of personnel of Procurement Divisionor Administrative Division, members of the BAC, BAC Secretariat, and the TWG, and othersconcerned.

It is the responsibility of the CIR/RD to ensure that all officials and employees involved in theprocurement process will avail of the procurement training conducted by the GPPB and other

GPPB accredited bodies offering the different modules on procurement-related training (visitwww.gppb.gov.ph). The BIR must also develop and implement its own in-house trainingprograms in accordance with the guidelines and standards prescribed by the GPPB-TSO. Forthis purpose, it should include provisions for such training in its annual budget proposalssubmitted to the DBM and Congress.

Moreover, the CIR/RD must regularly monitor the work quality of the ProcurementDivision/Administrative Division and other concerned offices, through a review of theprocurement monitoring reports regularly submitted by the BAC. ManagementCommittee/Regional Meetings may likewise be conducted for this purpose.

In line with the standardization of the procurement procedures and the thrust towards

strengthening the procurement function to increase operational efficiency and effectiveness,the CIR/RD must aim to consolidate or unify all procurement activities of the organization,whether locally funded or foreign assisted, and whether pertaining to goods, infrastructure

projects or consulting services, subject to the provision of Section 11.1 of the IRR-A.


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SECTION 3

Procurement Planning


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PROCUREMENT PLANNING - Procurement Planning and BudgetLinkage

Section 7 of IRR-A provides the legal reference for the procurement planning and budget

linkage.

Plans may cover short-term, medium-term, or long-term periods. But in all cases, a planinvolves resource allocation and scheduling. This is particularly true for procurement planning,which is a critical component of the BIR budget. Plans ensure that the overall goal of theparticular project will be achieved effectively and efficiently. Through plans, the BIR is able toeffectively manage and track procurement all the way to contract performance. As such, itallows managers to determine how to allocate limited cash and other appropriate resources

under a given time line and identify choke-points, weaknesses, and delays in the entireactivity that can be addressed or eliminated.

Every year, upon issuance of the Budget Call by the DBM, the BIR prepares the AgencyBudget Proposal for the succeeding calendar year, taking into consideration the budgetframework for that year. At this stage, the Project Proponent/end-user units or the differentoperating units of the BIR prepare their respective WFP for their different PPA, using formsprovided by the DBM as annexes to the Budget Call.

The BIRs Budget Proposal embodies the agency thrusts and the resources needed to producethe key services it delivers to the public. Procurement planning should be done within thisbudgetary context, reflecting the BIRs priorities and objectives for the budget period.Procurement Planning therefore involves two levels: the Agencys over-all strategic plan andthe project and/or operational plans that contain the details of the manner in which thestrategic plan will be carried out. In the context of budget preparation, the project and/or

operational plans are reflected in the WFP for each PPA. The WFP contains the initial list ofprojects/requirements of each Project Proponent/end-user and corresponding estimatedbudgetary requirement. It is submitted to the BIRs Budget Division on or about March ofeach year , to coincide with the submission of their respective budget proposals. These WFPswill be evaluated and, if warranted, included in the BIRs Budget Proposal. The WFPs willsupport the Budget Proposal submitted to DBM, and becomes basis for the proposed PPMP.The PPMP, including the Terms of Reference, shall likewise be submitted to the BAC

Secretariat not later than March 31 of each year, for consolidation of the initial list of items /projects for procurement into the proposed APP. Finalization of the PPMPs and theirconsolidation into an APP for approval by the CIR/RD shall be done as soon as the NationalExpenditure Program (NEP) for a given budget year is released by the DBM, which is aroundJuly of each year. The NEP shows the DBM recommended budget for the BIR for the budgetyear under consideration.

The ABC referred to in R.A. 9184 and its IRR-A basically refers to the proposed budget for the

project approved by the CIR/RD based on the APP, as consolidated from the various PPMPs,which is contained in the BIR Budget as reflected in the GAA and/or continuing appropriations.Thus, BIR may post and /or advertise procurement opportunities for projects proposed in theGAA even prior to its enactment but cannot award contracts until after the allotment has beenreleased by the DBM.


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PROCUREMENT PLANNING Preparation of the ProjectProcurement Management Plan(PPMP)

Section 7 of IRR-A provides for the preparation of the PPMP.

1. The PPMP

The PPMP serves as a guide document in the procurement and contractimplementation process, as well as a vital reference in procurement monitoring.Moreover, it serves as an important tool in resource and financial management,allowing the BIR the flexibility to optimize the utilization of scarce resources. Well-planned procurement will significantly minimize the practice of doing short-cuts to

ensure that the BIR is able to purchase its requirements for the delivery of publicservices.

A PPMP deals primarily with:

a. planning for the procurement of project requirements;b. bidding or procurement strategy;c. source of fund;d. contract duration/termination;e. delivery and payment schedules; andf. other major milestones.

2. Developing the Project Requirements

The development of the project requirements should be done during the preparation

of the proposed PPMP. At this stage of the procurement planning process, the ProjectProponent/end-user must:

a. Identify their needs

What is the purpose of the procurement? What are the problem/s or needsthat the project or procurement aims to address?

b. Identify the alternative solutions/products/services

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

market? What are the sources of these products and services? What is theprofile of the supply market? Are they easily obtainable? How much is thecost of each alternative?

The Project Proponent/end-user should conduct the market research at this point,and gather as much information about the Goods, Services or expertise required. Atthe end of this activity, it should know the market or the industry well enough tomake an informed choice.

c. Compare the alternatives (consider qualitative and quantitative factors)

Consider how the Project Proponent/end-user would rate the variousalternatives in terms of the following:

i. Value for money

The concept of value for money is not restricted to price alone. Inaddition to costs, other considerations are non-cost factors likesuitability or fitness to the purpose, quality, among others. In


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comparing costs, all relevant costs should be considered, e.g.,acquisition costs, life-cycle costs (including maintenance andoperating costs for goods and infrastructure, spare parts of goods,etc.).

ii. Risk assessment and management

Some risks that may be identified are the obsolescence of equipment,the availability of support services, the capacity of contractors toimplement the project, among others. It is recommended, especiallyfor high-technology, complex, or high value procurement, that theProject Proponent/end-user identifies the risks involved and come upwith its own risk management plan. Or the bidders could be requiredto submit, as part of their technical document, a risk assessment andrisk management plan.

iii. Government policies that have an impact on the project orprocurement

Are there any restrictions on the procurement contemplated? Whatrelevant government policies should be considered in determining thegoods, infrastructure or consulting services that will bepurchased/procured?

iv. Other relevant factors that may be identified by the ProjectProponent/end-user.

d. Choose from among the alternatives the most beneficial to the BIR, and makethe necessary recommendation to the approving authority.

In developing the project requirements and TOR, the BIR shall engage theservices of technical experts, whether in-house or consultants, to ensure thatthe requirements and the TOR are adequate to achieve the objectives of theparticular procurement.

3. Writing the TOR

The TOR is the document that provides the details of the project to be procured. TheTOR in standard format for all procurement by the BIR containing the TechnicalSpecifications, Scope of Work, etc., is shown in Annex D.

The following guidelines are, however, considered helpful in writing the TOR:

a. It is important that all stakeholders are consulted, and the actualrequirements of the Project Proponent/ end-user are determined and put inwriting.

b. If the procurement is complex, highly technical, or high value, and the BIRdoes not have sufficient technical proficiency, it would be prudent to engage

the services of technical experts who will serve as consultants in thepreparation of the TOR. In engaging these consultants, the BIR shall followthe procedures for procurement of consulting services as laid down in Volume4 of these Manuals. Moreover, care should be taken that possible conflict ofinterest is avoided; that is, the consultant/s engaged should not be connectedwith the prospective bidders/contractors, and are barred from being engagedby the latter for any purpose related to the procurement at hand.

c. The description should be generic and flexible, not product-specific orseemingly tailored for a particular brand, product, contractor or consultant,unless the procurement involves products or services that have intellectual

property rights attached to it, or are exclusively offered by a single source,and there are no suitable substitute products or services. If the procurement


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involves products or services that have intellectual property rights attached,or are exclusively offered by a single source without any suitable substitute,then the Project Proponent/ end-user must be able to satisfactorily justify theneed for such a product or service.

d. The description should be clear and unambiguous, to avoid confusion and tofacilitate the evaluation process. It is noted that the TOR is also the basis ofthe evaluation or, when applicable, the testing parameters.

e. Considering that planning is done sometime before actual procurement andeven farther from the date of actual delivery or project implementation,changes in technology or changes in the concerned industry or field ofexpertise should already be taken into account in writing the TOR. This willallow the BIR to procure the latest products and/or services available in themarket.

4. Determining the Approved Budget for the Contract

The ABC refers to the budget for the contract duly approved by the concernedDCIR/RD, as provided for in the GAA and/or continuing appropriations. (Section 5 of

IRR-A).Thus, it refers to the proposed budget for the project as reflected in the APPduly approved by the CIR/RD. (GPPB Resolution 011-2005 dated 26 May 2005)

In determining the ABC, the Project Proponent/ end-user has to consider severalfactors, namely: the appropriation for the project or procurement (whether takenfrom the current years appropriations or continuing appropriations), the market priceof the goods and/or services being procured, inflation and cost of money which aredirectly related to the procurement time table.

The determination of the ABC for each type of procurement (Goods, Infrastructure

Projects and Consulting Services) is discussed in Volumes 2, 3 and 4.

5. Procurement Milestones

The PPMP, like any plan, is not complete without including therein the schedule of

significant activities. The procurement milestones for public bidding referred to arethe following:

o Pre-procurement conference;o Preparation of bidding documents;o Advertisement and/or posting of the IAEBo LOI (for procurement of infrastructure projects and consulting

services);o Eligibility check (for procurement of infrastructure projects and

consultingo Issuance and availability of bidding documentso Pre-bid conference;

Request for clarification Supplemental/Bid Bulletin

o Submission and opening of bids;o Bid evaluation;o Notification for negotiation (for consulting services)o Negotiation (for consulting services)o Post-qualification and determination of LCRB or HRRB;o Approval of resolution;o Issuance of notice of award;o Contract preparation and signing;o Approval of contract by higher authorityo Issuance of notice to proceed;o Project implementation.


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For details on the specific activities for each type of procurement, pleaserefer to Volumes 2 (for Goods), 3 (for Infrastructure Projects) and 4 (forConsulting Services). Each of these significant activities should bescheduled so as to provide the Project Proponent/ end-user unit with a

guide in each procurement undertaken by the BIR. This will ensure thatlogistical support and other requirements of the BIR are promptlyaddressed, hence contributing to more efficient and effective delivery ofpublic service.

The procurement milestones for alternative modes of procurement referred to are thefollowing:

Limited Source Bidding

o Pre-procurement conference;o Preparation of bidding documents;o Posting of the IAEBo Issuance and availability of bidding documentso Submission and opening of bids;o Bid evaluation;o Post-qualification and determination of LCRB or HRRB;o Notification for negotiation;o Negotiation;o Approval of resolution;o Issuance of notice of award;o Contract preparation and signing;o Approval of contract by higher authorityo Issuance of notice to proceed;o Project implementation

Direct Contracting

o

Pre-procurement conference;o Preparation of request for quotation;o Posting of the IAEBo Issuance of request for quotation, TOR with annexes;o Submission and opening of financial proposal together with the latest

certificate of exclusivity duly authenticated by the appropriatePhilippine Consulate, Authority of the Signatory or Representative toattend and negotiate in behalf of the company and Terms of

Reference signed in all pages by the authorized signatory;o Bid evaluation;o Post-qualification;o Notification for negotiation;o Negotiation;o Approval of resolution;o Issuance of notice of award;o Contract preparation and signing;o Approval of contract by higher authorityo Issuance of notice to proceed;o Project implementation


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Repeat Order

o Request of Project Proponento BAC Resolution and approval;o Preparation of request for quotation;o Posting of the IAEBo

Issuance of request for quotation and TOR with annexes;o Submission and opening of financial proposal and Terms of Reference

signed in all pages by the authorized signatory;o Bid evaluation;o Post-qualification;o Notification for negotiation;o Negotiation;o Approval of resolution;o Issuance of notice of award;o Contract preparation and signing;o Approval of contract by higher authorityo Issuance of notice to proceed;o Project implementation

Shopping

o Preparation and issuance of request for quotation;o Submission and opening of quotaions;o Bid evaluation;o Preparation of Purchase Order/Job Orders, Certificate of Emergency

Purchase and Abstract of Canvass;o Approval of Purchase Order/Job Order;o Issuance of Approved Purchase Order/Job Order;o Delivery or commencement of project

Negotiated Procurement

o Pre-procurement conference;o Preparation of bidding documents;o Posting of the IAEBo Issuance and availability of bidding documentso Submission and opening of bids;o Bid evaluation;o Post-qualification;o Notification for negotiation;o Negotiation;o Approval of resolution;o Issuance of notice of award;o Contract preparation and signing;o Approval of contract by higher authorityo Issuance of notice to proceed;o Project implementation

6. Method of Procurement

As a general rule, all procurement should be through public bidding. However, the lawrecognizes that certain unique circumstances require the use of alternative methodsof procurement. These are discussed in Section 4 (Various Methods of Procurement)of this Volume, and in Volumes 2, 3 and 4.


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7. Format of the PPMP (prepared by the Project Proponent/end-user unit)(Annex E)

The PPMP shall contain the following information:

a. Title of the project;

b. General description of the project;c. Duration of the contract (indicate if with MYOA);d. Mode of procurement;e. Procurement activity schedules; and

f. ABC.

8. Submission Timeline

The PPMP for the following year shall be submitted by the respective Projectproponent/end-user to the BAC Secretariat for consolidation on or beforeApril 30 of the current year.

PROCUREMENT PLANNING Preparation of the AnnualProcurement Plan (APP)

1. The Annual Procurement Plan

The APP is the document that consolidates the various PPMPs submitted by the

Project Proponent/end-user within the BIR. It reflects the entirety of theprocurement activities that will be undertaken by the BIR within the calendar year.

The APP as consolidated by the BAC through the BAC Secretariat upon submission bythe Project Proponent/end-user of their respective PPMPs, in coordination with theFAS/RMG and Budget Section/Finance Division for the latters review andrecommendation prior to the approval of the CIR/RD.

In the preparation of the APP, the following shall be considered:

a. The APP shall include projects that are considered crucial to the efficientdischarge of governmental functions. Only projects listed in the APP shall beprocured during the year. A project is considered crucial if:

i. it is required for the day-to-day operations of the BIR; or

ii. it is in pursuit of the principal mandate of the BIR.

b. The APP shall include provisions for foreseeable emergencies based onhistorical records. The BAC, through the BAC Secretariat, shall include thereina lump sum to cover for these emergencies or contingencies, which amountshall not be more than four percent (4%) of the BIRs total appropriations forMOOE.

c. Scheduling of procurement activities should be done in such a manner thatthe BAC in coordination with the Project Proponent/end-user andProcurement Division/Administrative Division efficiently manage the conduct

of procurement activities. Moreover, it is paramount that projectimplementation timelines are met.

Project Proponent/end-user shall review and update of the individual PPMPs and theAPP shall be done regularly, at least once every six months or as often as necessary.They may avail of the services of technical experts to review the individual PPMPs. The


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updated PPMPs will then be submitted to the BAC Secretariat for subsequent inclusionin the updated APP. For flexibility and to encourage advance procurement actions,the APP and PPMP should also be based on proposed budget to allow for advanceplanning for the succeeding budget year.

The APPs of the Regional Offices would have to be submitted to the RMG, Attention:

FAS, copy furnished Inspection Service, Attention: Internal Audit Division forinformation and monitoring purposes.

2. Procurement Strategy

The procurement strategy refers to the approach that will be adopted by the BAC inthe procurement of the goods, infrastructure projects and consulting services includedin the APP.

Examples of PPMPs with Procurement of Mixed Types:

a. ICT project involving procurement of goods (e.g., licenses, workstations,network equipment, internet facility and peripherals);

b. civil works (e.g., the installation of cables might involve the repair ofsome offices and other related civil works);

c. consulting services (e.g., licenses, development hardware, design anddevelopment of information systems).

In the above cases, the BAC will have to exercise judgment in determining thebid lots and contract package. There are two approaches to this case theproject could be bid out as one package, or it could be divided into several bidlots (i.e., supply of hardware, supply and installation of cables, design and

development of information systems, and repair of facilities). There areadvantages and disadvantages to either approach, and the BAC, through thehelp of the TWG and the Secretariat as well as the technical experts (if

necessary), shall determine which is the best option for the BIR.

Under Section 5(p) of IRR-A, project involving mixed procurement, the nature of theprocurement shall be determined based on the primary purpose of the project. This ishelpful in determining which type of procurement procedure to apply. However, theremay be instances when the Project Proponent/end-user or the BIR itself may havedifficulty determining or agreeing upon the primary purpose. In these cases,ascertaining the component with the highest price may be useful as an indicator ofpurpose, though not necessarily as a determining factor. In the example given above,it seems that the purpose is actually to computerize the internal operations of theBIR; hence, the single most important component of the project is the design and

development of information systems. This being the case, the project could be bidout as a consulting service.

3. Format of the APP

The APP shall have an Executive Summary which shall include the followinginformation (Annex F):

a. Summary title of major categories which are similar in nature (i.e., IT andnon-IT);

b. Classification by Groups/Divisions or District Offices (e.g., mandatoryrequirements, sub-major projects, etc.); and

c. ABC.4. Submission Timeline

The APP for the following year shall be submitted by the BAC Secretariat to

the CIR/RD on or before July 31 of the current year.


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SECTION 4

Various Methods ofProcurement


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Competitive Bidding

Section 10 of IRR-A provides that all procurement shall be done through competitive or publicbidding, except as provided in Rule XVI of the same IRR-A, on the use of the alternativemodes of procurement.

Competitive or Public Bidding refers to the 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.

Alternative Methods of Procurement

Sections 48 to 54 of IRR-A provide reference for the alternative methods of procurement.

1. Conditions for Use of Alternative Methods of Procurement

In highly exceptional cases provided for in Article XVI of R.A. 9184 and Rule XVI of its

IRR-A, the BIR is allowed to resort to the alternative methods of procurement in order

to promote economy and efficiency, only upon approval by the CIR/RD or his duly

authorized representative of the BAC Resolution recommending the use of any of the

alternative methods of procurement.

a. Limited Source Bidding, otherwise known as selective bidding, is a

method of procurement of goods and consulting services that involves

direct invitation to bid by the concerned entity of all pre-selected suppliers or

consultants with known experience or proven capability on the requirements

of the particular contract. The pre-selected suppliers or consultants shall be all

those appearing in the list maintained by the relevant Government authority

(e.g.,Bureau of Food and Drugs for medicines, National Telecommunications

Commission for telecommunication equipment, etc.) that has expertise and

experience in the type of procurement concerned, which list should have been

submitted to, maintained and updated with, theGPPB. For highly specializedgoods and consulting services, where no such list is being maintained by a

relevant Government authority, competitive bidding shall be conducted. It isnoted that the purpose of the list is to regulate the quality of goods being

offered and the qualifications of consultants in the particular field of expertise.

The particular conditions under which this alternative method of procurement

may be used are outlined in Section 5, Vol. 2 (for procurement of goods, and

Section 4, Vol. 4 (for procurement of consulting services), of this Manual.

b. Direct Contracting or single source procurement is a method of

procurement of goodsthat 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 or after some negotiations.


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may be used are outlined in Section 5, Vol. 2 of this Manual.

c. Repeat Order is a method of procurement of goods from the previous

winning bidder, whenever there is a need to replenish goods procured under a

contract previously awarded through Competitive Bidding.



d. Shopping is a method of procurement of goodswhereby the BIR 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.



e. Negotiated procurement is a method of procurement of goods,infrastructure projects and consulting services, whereby the BIR directly

negotiates a contract with a technically, legally and financially capable

supplier, contractor, consultant or, where allowed, an individual consultant,

only in the cases provided for in Section 53 of R.A. 9184 and Section 53, Rule

XVI of its IRR.


may be used are outlined in Section 5, Vol. 2, Section 4, Vol. 3 and Section 4,

Vol. 4 of this Manual.


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SECTION 5

Procurement by ElectronicMeans and the PhilGEPS


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Procurement by Electronic Means and the PhilippineGovernment Electronic Procurement System

Section 8 of IRR-A provides the legal reference for the procurement by electronic means andthe PhilGEPS.

1. The PhilGEPS

Consistent with the policies of transparency and streamlining of the procurementprocess, and to achieve efficiency, ICT shall be utilized in the conduct of governmentprocurement. A two-pronged approach has been adopted to achieve this:

a. institutionalization of the PhilGEPS, which will be used for procurement ofcommon-use items and as repository of all Government procurementinformation; and

b. use or engagement of electronic procurement service providers by theindividual Procuring Entities for procurement of non-common use items.

The PS-DBM manages the PhilGEPS under the supervision of the GPPB. The PhilGEPSserves as the single portal and primary source of information on all governmentprocurement.

All Procuring Entities shall utilize the PhilGEPS, through its Electronic Catalogue

facility, for the procurement of common-use supplies. Moreover, all IAEB, notices ofaward, and all other procurement-related notices shall be posted in the PhilGEPS,regardless of the method of procurement used by the Bureau of Internal Revenue.

The GPPB shall issue the necessary procedural guidelines covering procurementthrough the PhilGEPS.

2. Features of the PhilGEPS

a. Electronic Bulletin Board

The PhilGEPS shall have a centralized electronic bulletin board.

Procuring Entities are required to post the following in the PhilGEPS ElectronicBulletin Board:

i. IAEB for competitive bidding and notices of other procurementopportunities using the alternative methods of procurement;

ii. Supplemental/Bid bulletins;iii. Contract awards, the corresponding Notices of award, including the

reasons for award of contract;

iv. Results of bidding and related information; andv. Other notices, announcements, information for interested parties.Failure to post a procurement opportunity will render the resulting contractnull and void.


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Failure to post a Notice of Award shall render the erring government official/sadministratively liable in accordance with R.A. 6713 and other pertinent laws,rules and regulations, and appropriate sanctions shall be imposed.

Posting of notices and other transactions with the PhilGEPS shall be done

through the BAC Secretariat of the BIR.

Posting of the IAEB shall follow the guidelines in Section 21 of the IRR-A,Section 4, Vol.2, Section 3, Vol.3, and Section 3, Vol. 4 of this Manual.

b. Registry of Manufacturers, Suppliers, Distributors, Contractorsand Consultants

The PhilGEPS shall have a centralized electronic database of allmanufacturers, suppliers, distributors, contractors and consultants registeredunder the system.

Registration shall entail the submission of the requirements specified by thePS-DBM. Details of the requirements may be obtained from the PS-DBM

website (www.procurementservice.org), or the PhilGEPS website

(www.procurementservice.net). Submission of these requirements may bedone on-line at the PhilGEPS website or physically at the PhilGEPS office.Registration shall be effective for one (1) year and may be renewed, providedthat the manufacturer, supplier, distributor, contractor or consultantconcerned maintains its registration current and updated at least once a year,or more frequently when needed.

Manufacturers, suppliers, distributors, contractors and consultants applyingfor registration must also indicate their account number with a bank dulylicensed by the BSP to facilitate payment as well as the posting of bid andperformance security, when applicable.

The PhilGEPS shall deny registration to or exclude from the registry any partythat is found to have willfully misrepresented any of the information providedin the application for registration or who is in the blacklist of theGovernment or any of its procuring entities from participating in any of itsprocurement opportunities.

A manufacturer, supplier, distributor, contractor or consultant applying for

registration shall be required to provide an e-mail address to which allcommunications from the BAC and the BIR shall be sent. The e-mail addressprovided shall be considered as such applicants information system forpurposes of reckoning the date of sending or receipt of electronic messages ordocuments.

Once the PhilGEPS allows electronic bid submission and other on-linetransactions requiring digital signatures, registered manufacturers, suppliers,

distributors, contractors and consultants shall secure a digital certificate fromthe appropriate certification authority to be able to participate in theprocurement activities of the PhilGEPS.

Registration with the PhilGEPS is not tantamount to a finding of eligibility, noris it a guaranty that a manufacturer, supplier, distributor, contractor or

consultant may participate in a public bidding without first being determinedto be eligible for that particular public bidding.


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c. Electronic Catalogue

The PhilGEPS features a centralized electronic catalogue of common and non-common use goods, supplies, materials and equipment.

Procuring Entities are required to procure common-use goods, supplies,

materials and equipment from the PS-DBM through the Electronic Cataloguein the PhilGEPS. Once the PhilGEPS is fully operational, the procedures fortransacting with the PhilGEPS shall be provided for in detail in the websites ofthe PhilGEPS (www.procurementservice.net) and the PS-DBM(www.procurementservice.org).

The Electronic Catalogue may also feature non-common use items that maybe procured directly and without public bidding by procuring entities fromsuppliers: Provided, however,That for an item to be carried in the ElectronicCatalogue for this purpose, the supplier thereof must have been determinedas the Lowest Calculated Responsive Bidder in a previous bidding conductedby PS-DBM or by a Procuring Entity for PS-DBM: Provided, further,That suchitem will be featured in the Electronic Catalogue for a maximum period of six

(6) months unless another supplier offers a price lower by at least five percent(5%) and such supplier is determined by the Procuring Entity that conductedthe previous bidding to meet the eligibility and bidding requirements for theitem, in which case the item from the latter supplier will be that featured inthe Electronic Catalogue for the remainder of the six (6)-month period.

Procuring entities without internet access may avail of the PhilGEPS PublicAccess Terminals which shall be installed at DBM-designated locations in theprovinces and in Metro Manila.

d. Additional Features

The PhilGEPS will also feature the following:

i.

A Virtual Store that will enable the ordering of common-use and non-common use items online called a virtual store. This virtual store shallbe open only to registered Procuring Entities and may not be accessedby suppliers.

ii. An Electronic Payment function that will allow the system to managethe generation of purchase orders and the payment of bids processedthrough the system. The focus of this feature is to facilitate the

electronic transfer of funds from PS-DBM to and from ProcuringEntities and suppliers, and from Procuring Entities to suppliers for bidsmanaged directly by the BIR. This system will:

Generate purchase orders from a bid notice, award notice orcontract;

Support approval process for purchase orders before anypayment or fund transfer is processed;

Have a process to submit request for payment upon deliveryof goods and/or services and the completion of the approvalprocess; and

Have the ability to interface with the designated bank of theBIR and suppliers to support the electronic transfer of funds.

iii. An Electronic Bid Submission that will support the implementation ofe-Bid submission processes, which includes creation of electronic bidforms, creation of bid box, delivery of bid submissions, notification tosupplier of receipt of bids, bid receiving and electronic bid evaluation.


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This facility will cover all types of procurement for goods,infrastructure projects and consulting services.

iv. Other features that may be developed in the future under the policyguidance of the GPPB.

The PhilGEPS will also feature a Virtual Store, Electronic Payment, Electronic

Bid Submission, and such other features that may be developed in the future.Procedures for the use of these features will be published once these becomeoperational.

Use of Procurement Service Providers

Section 8 of IRR-A provides for the use of procurement service providers.

The BIR may hire service providers who will provide electronic procurement systems and/orservices for the procurement of non-common use supplies, infrastructure projects andconsulting services. The BIR shall conduct a public bidding for this service.

Minimum Requirements for Service Providers

Electronic procurement service providers must meet the following minimum requirements toqualify as a service provider to the BIR:

1. the system must comply with the provisions of R.A. 9184, its IRR-A, R.A. 8792(Electronic Commerce Act);

2. the system must be linked to the PhilGEPS, particularly with regard to the posting ofall bid opportunities and awards;3. the system must allow parallel manual submission of bids to the BIR;4. the system must ensure that the BAC shall have complete control of the bidding

process, and that the BACs sole authority to open bids is strictly observed;

5. the system must be virus-resilient and the infrastructure must provide sufficientsecurity which is at least equivalent to that employed by the PhilGEPS, such as, butnot limited to, firewall and encryption devices;

6. must provide for use of electronic signatures and other current electronicauthentication devices;

7. the service provider must have sufficient redundant back-up facilities;8. the system must have provisions for linkage to the BIRs Financial Management

Information System, Logistics Management System, and other internal informationsystems that may interact with the procurement process; and

9. Electronic payment facilities, if used, shall comply with all laws, rules and regulationsissued by the Government.

The GPPB shall determine and certify compliance with the above requirements. However, itmay delegate this task to technically capable agencies/offices of the Government. For this

purpose, it shall issue the necessary Guidelines.


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SECTION 6

Foreign Assisted Projects


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Foreign Assisted Projects

R.A. 9184 adopts international best practices in public procurement processes, andinstitutionalizes the need for a procurement manual, standard bidding documents and forms.With this, the next logical step is the harmonization of the GOPs pr