GENERAL PRINCIPLES

All procurement of the national government, its department, bureaus, offices and agencies, including state universities
and colleges, government-owned and/or – controlled corporations, government financial institutions and local
government units, shall, in all cases, be governed by these principles:

a) Transparency in the procurement process and in the implementation of procurement contracts.

b) Competitiveness by extending equal opportunity to enable private contracting parties who are eligible and qualified
to participate in public bidding.
c) Streamlined procurement process that will uniformly apply to all government procurement. The procurement process
shall simple and make adaptable to advances in modern technology in order to ensure an effective and efficient
method.
d) System of accountability where both the public officials directly involved in the procurement process as well as in the
implementation of procurement contracts and the private parties that deal with government are, when warranted by
circumstances, investigated and held liable for their actions relative thereto.
e) Public monitoring of the procurement process and the implementation of awarded contracts with the end in view of
guaranteeing that these contracts are awarded pursuant to the provisions of this Act and its implementing rules and
regulations, and that all these contracts are performed strictly according to specifications.
SCOPE OF APPLICATION

Applies to Procurement of Infrastructure projects, Goods and Consulting

services, regardless of source of funds, whether local of foreign, by all
branches and instrumentalities of government, its departments, offices and
agencies, including government-owned and/or-controlled corporations and
local government units, subject to the provisions of Commonwealth Act No.
138.

Any treaty or international or executive agreement affecting the subject

matter of this law to which the Philippine government is signatory shall be
observed.
COMPETITIVE BIDDING
General Rule: All Procurement shall be done through Competitive Bidding

Competitive Bidding – refers to a method of procurement which is open to

participation by any interested party and which consist of the following
processes: advertisement, pre-bid conference, eligibility screening of bids,
post – qualification, and award of contract, the specific requirements and
mechanics of the law.

Exception: When Alternative Modes of Procurement applies

BIDS AND AWARDS COMMITTEE
Composition: The Head of Procuring Entity(HoPE) shall designate at least five(5) but not more that
seven (7) members to the BAC of unquestionable integrity and procurement proficiency.

Functions:
• Advertise and/or post the invitation to bid
• Conduct pre-procurement and pre-bid conference
• Determine the eligibility of prospective bidders
• Receive bids
• Conduct the evaluation of bids
• Undertake post-qualification proceedings
• Recommend award of contracts to the Head of the Procuring Entity of his duly authorized
representative
• Recommend the imposition of sanctions, and perform such other related functions as may necessary,
including the creation of a Technical Working Group from a pool of technical, financial and/or legal
experts to assist in the procurement process.
PHILGEPS
-Single portal that shall serve as the primary source of information on all government
procurement.
-The PhilGEPS shall serve as the primary and definitive source of information on
government procurement.
-The PhilGEPS shall have a centralized electronis bulletin board for posting procurement
opportunities, notices, awards and reasons for awards. All Procuring Entities are required to
post all procurement opportunities, results of bidding and related information in the
PhilGEPS bulletin board.
-The PhilGEPS shall have a centralized electronic database of all manufacturers, suppliers,
distributors, contractors and consultants registered under the system.
OVERVIEW OF THE PROCUREMENT PROCESS

Preparation of Receipt and

Pre-Procurement Advertising of Pre-Bid
Bidding Conference
Opening of
Invitation to Bid Conference
Documents Bids

Winning bidder
Post- shall post Execution of
Bid Evaluation Notice of Award performance
Qualification Contract
security

Contract
Notice to Proceed Notice of Award implementation
and termination
I. PREPARATION OF BIDDING DOCUMENTS
Bidding Documents – refer to
documents issued by the Procuring
Entity as the basis for Bids,
furnishing all information necessary
for a prospective bidder to prepare
a bid for the Goods, Infrastructure
Projects, and Consulting Services to
be provided
II. INVITATION TO BID
a. Pre-procurement Conference-assess the readiness of the procurement in terms
of confirming the certification of availability of funds, as well as reviewing all
relevant documents and the draft Invitation to Bid, as well as consultants hired by
the agency concerned and the representative of the end-user.
b. Advertising and Contents of the Invitation to Bid – posting in the Procuring
Entity’s premises, in newspapers of general circulation, the PHILGEPS and the
website of the Procuring Entity, if available.
c. Pre-bid conference- For contacts with an Approved Budget Contract (ABC) of
1,000,000 or more, the BAC shall convene at least one (1) pre-bid conference to
clarify and/or explain any of the requirements, terms, condition, and
specifications stipulated in the Bidding Documents.
III. RECEIPT AND OPENING OF BIDS
 III. RECEIPT AND OPENING OF BIDS
Bids shall be received by the BAC on the date, time, and place specified in the
Invitation to Bid/Request for Expression of Interest. The following periods from the
last day of posting of the Invitation to Bid/Request for Expression of Interest up to
the submission and receipt to bids shall be observed:

a) For Goods, a maximum period of forty-five(45) calendar days.

b) For Infrastructure Projects, the following maximum periods:

-With ABC of 50M and below-50 calendar days
-With ABC above 500 million – 65 calendar days

c) For Consulting Services, a maximum period of seventy-five (75) calendar days.

III. RECEIPT AND OPENING OF BIDS

Modification and Withdrawal of Bids

A bidder may modify his bid, provided that this is done before the deadline for the
receipt of bids. The modification shall be submitted in a sealed envelope duly
identified as a modification of the original bid and stamped received by the BAC.

A bidder may, through a letter, withdraw his bid or express his intention not to
participate in the bidding before the deadline for the receipt of bids. In such case,
he shall no longer be allowed to submit another Bid or the same contact either
directly or indirectly.
III. RECEIPT AND OPENING OF BIDS

Bid Security
All Bids shall be accompanied by a Bid security, which shall serve as guarantee that, after receipt of
the Notice of Award, the winning bidders shall enter into contract with the Procuring Entity within
the stipulated time and furnish the required performance security.

Bid Validity
Bids and Bid securities shall be valid for such reasonable period of time indicated in the Bidding
Documents. The duration for each undertaking shall take into account the time involved in the
process of Bid evaluation and award of contact.
IV. BID EVALUATION

ABSTRACT OF BIDS/ IDENTIFY

LOWEST CALCULATED BID
V. POST QUALIFICATION
The stage where the bidder with the Lowest Calculated Bid, in the case of Goods and Infrastructure
Projects, or the Highest Rated Bid, in the case of Consulting Services, undergoes verification and
validation whether he has passed all the requirements and conditions as specified in the Bidding
Documents.

If the bidder with the Lowest Calculated Bid or Highest Rated Bid passes all the criteria for
postqualification, his Bid shall be considered the “Lowest Calculated Responsive Bid”, in the case of
Goods and Infrastructure or the “Highest Rated Responsive Bid”, in the case of Consulting Services.
However, if a bidder fails to meet any of the requirements or conditions, he shall be “post-
disqualified” and the BAC shall conduct the post-qualification on the bidder with the second Lowest
Calculated Bid or Highest Rated Bid.

In all cases, the contract shall be awarded only to the bidder with the Lowest Calculated Responsive
Bid or Highest Rated Responsive Bid.
FAILURE OF BIDDING
There shall be a failure of bidding if:
(a)No bids are received;
(b) No bid qualifies as the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid; or,
-All prospective bidders are declared ineligible
-All bids fail to comply with all the bid requirements or fail post- qualification, or, in the
case of Consulting Services, there is no successful negotiation;
(c) Whenever the bidder with the highest rated/lowest calculated responsive bid refuses, without
justifiable cause to accept the award of contract, as the case may be.

Under any of the above instances, the contract shall be re-advertised and re-bid. The BAC shall
observe the same process and set the new periods according to the same rules followed during the
first bidding. After the second failed bidding, however, the BAC may resort to negotiated
procurement as provided for in Section 53 of this Act.
Single Calculated/Rated and Responsive Bid Submission
A single calculated/rated and responsive bid shall be considered for award if it falls under any of the
following circumstances:

a) If after advertisement, only one prospective bidder submits a Letter of Intent and/or applies for
eligibility check, and meets the eligibility requirements or criteria, after which it submits a bid,
which is found to be responsive to the bidding requirements;
b) If after the advertisement, more than one prospective bidder applies for eligibility check, but
only one bidder meets the eligibility requirements or criteria, after which it submits a bid which
is found to be responsive to the bidding requirements; or
c) If after the eligibility check, more than one bidder meets the eligibility requirements, but only
one bidder submits a bid, and its bid is found to be responsive to the bidding requirements.
VI. AWARD, IMPLEMENTATION AND TERMINATION OF CONTRACT

Determination and declaration by the BAC of the Lowest

Calculated Responsive Bid or Highest Rated Responsive Bid,
and the recommendation of the award

15 calendar days

Notice of award
10 calendar days
Submission of additional documents, postingof
performance security and signing and approval of
contract
7 calendar days

Notice to Proceed
VII. CONTRACT IMPLEMENTATION AND TERMINATION
The guidelines for contract implementation differs depending to the type of
procurement.

SPLITTING OF GOVERNMENT CONTRACTS

Splitting of Government Contracts is not allowed. Splitting of Government

Contracts means the division or breaking up of contracts into smaller quantities and
amount, or dividing contract implementation into artificial phases or sub-contracts
for the purpose of evading or circumventing the requirements of the law,
particularly the necessity of competitive bidding and the requirements for the
alternative methods of procurement.
VII. CONTRACT IMPLEMENTATION AND TERMINATION

Grounds for termination of contracts:

• In case of procurement of goods, failure to deliver at least 10% of the contract price
• In case of infrastructure, due to contractor’s fault, negative slippage of 15% or more while project
is ongoing, or 10% or more in the completion of work, neglect, negligence, sublets any part of the
contract without approval
• In contracts for Consulting Services, failure deliver or perform the Outputs and Deliverables
within the period(s) specified in the contract, unable to deliver or perform a material portion of
the Outputs and Deliverables for a period of not less than sixty (60) calendar days after the
Consultant’s receipt of the notice from the procuring Entity stating that the circumstance of force
majeure is deemed to have ceased or fails to perform any other obligation under the contract
VII. CONTRACT IMPLEMENTATION AND TERMINATION

Grounds for termination of contracts:

• For convenience
• Insolvency of the supplier, contractor or consultant
• Unlawful acts
• Termination by contractor/ consultant
ALTERNATIVE METHODS OF PROCUREMENT
METHOD DEFINITION WHEN IT MAY BE RESORTED TO
Limited Is a method of a) Procurement of highly specialized types of goods (e.g.,
Source procurement of Goods sophisticated defense equipment, complex air
Bidding, and Consulting Services navigation systems, coal) and consulting services where
otherwise that involves direct only a few suppliers or consultants are known to be
known as invitation to bid by the available, such that resorting to the competitive
Selective Procuring Entity from bidding method will not likely result in any additional
Bidding the list of pre-selected suppliers or consultants participating in the bidding; or
suppliers or consultants
with known experience b) Procurement of major plant components where it is
and proven capability deemed advantageous to limit the bidding to known
on the requirement of qualified bidders in order to maintain uniform quality
the particular contract and performance of the plant as a whole
ALTERNATIVE METHODS OF PROCUREMENT
METHOD DEFINITION WHEN IT MAY BE RESORTED TO:
Direct A method of a) Procurement of Goods of proprietary nature which can be
contracting or procurement of Goods obtained only from the proprietary source, i.e. when
single source that does not require patents, trade secrets, and copyrights prohibit others from
procurement elaborate Bidding manufacturing the same item;
Documents. The supplier
is simply asked to submit b) When the procurement of critical components from a
a price quotation or a pro specific supplier is a condition precedent to hold a
–forma invoice together contractor to guarantee its project performance, in
with the conditions of accordance with the provisions of its contract; or
sale. The offer may be
accepted immediately or c) Those sold by an exclusive dealer or manufacturer which
after some negotiations does not have sub-dealers selling at lower prices and for
which no suitable substitute can be obtained at more
advantageous terms to the government of the Philippines.
ALTERNATIVE METHODS OF PROCUREMENT
METHOD DEFINITION WHEN IT MAY BE RESORTED TO
Repeat Order When provided for a) Unit prices of the repeat order must be the same as or lower than those in
in the Annual the original contract: Provided, that such prices are still the most
Procurement Plan, advantageous to the GoP after price verification;
is a method of
procurement of b) The repeat order will not result in splitting of contracts, requisitions, or
Goods from the purchase orders
previous winning
bidder, whenever c) Except in cases duly approved by the GPPB, the repeat orders shall be
there is a need to availed of only within six (6) months from the date of the Notice to Proceed
replenish goods arising from the original contract: Provided, that there has been a partial
procured under a delivery, inspection and acceptance of the goods within the same 6-month
contract previously period; and
awarded through
Competitive d) Repeat orders shall not exceed twenty-five percent(25%) of the quantity of
Bidding. each item in the original contract. In order not to exceed the 25% threshold,
the goods under the original contract must be:
i. Quantifiable
ii. Divisible; and
iii. Consisting of at least four (4) units per item
ALTERNATIVE METHODS OF PROCUREMENT
METHOD DEFINITION WHEN IT MAY BE RESORTED TO:
Shopping A method of a) When there is an unforeseen contingency requiring immediate
procurement of Goods purchase:
whereby the Procuring
Entity simply requests Provided, however, that the amount shall not exceed the following
for the submission of amounts:
price quotations for
readily available off-the- i. For NGAs, GOCCs, GFIs, SUCs, and Autonomous Regional
shelf goods or Government, Two Hundred Thousand Pesos(₱200,000)
ordinary/regular
equipment to be ii. For LGUs, in accordance with the following schedule:
procured directly from DOF Classification of LGUs Province City Municipality
suppliers of known 1st Class 200,000 200,000 100,000
qualifications 2nd Class 200,000 200,000 100,000

In this case, at least 3rd Class 200,000 160,000 100,000

three(3) price quotations 4th Class 160,000 120,000 100,000
from bonafide suppliers
5th Class 120,000 100,000 100,000
shall be obtained.
6th Class 100,000 100,000 100,000
In the case of Barangays, Fifty Thousand Pesos (₱50,000)
ALTERNATIVE METHODS OF PROCUREMENT
METHOD DEFINITION WHEN IT MAY BE RESORTED TO:
Negotiated A method of procurement It may be availed in any of the following cases:
Procurement of Goods, Infrastructure
Projects and Consulting 1. Two Failed Biddings. Where there has been failure of
services, whereby the competitive bidding or Limited Source Bidding for the
Procuring Entity directly second time.
negotiates a contract with a 2. Emergency Cases
technically, legally and i. In case of imminent danger to life or property during a
financially capable supplier, state of calamity;
contractor or consultant ii. When time is of the essence arising from natural or
man-made calamities;or
iii. Other causes where immediate action is necessary to
prevent damage to or loss of life or property, or to
restore vital public services, infrastructure facilities
and other public utilities.
 EMERGENCY PROCUREMENT PROCEDURE

• The BAC or the End-user unit or any other appropriate bureau, committee, support or procuring unit shall request
for the approval of the APP from the HoPE to cover the Procurement Project. The APP may only be approved by the
HoPE upon confirmation of the existence and veracity of the ground(s) relied upon in resorting to Negotiated
Procurement (Emergency Cases) and the existence of funds for the purpose. Thus, by approving the APP, the HoPE
effectively confirms the existence of the grounds for emergency procurement, thereby dispensing with the
previous requirement for a written confirmation from the HoPE prior to the approval of contract.

• The BAC or the End-user unit or any other appropriate bureau, committee, support or procuring unit, authorized by
the HoPE shall then directly negotiate with a legally, technically, and financially capable supplier, contractor, or
consultant.
EMERGENCY PROCUREMENT PROCEDURE
• Upon recommendation of the BAC or End-user unit or any other appropriate bureau, committee,
support or procuring unit duly authorized by the HoPE, the contract shall be immediately
awarded to the legally, technically, and financially capable supplier, manufacturer, distributor,
contractor, and consultant, contractor, or consultant.

• Except for contracts with ABC of Fifty Thousand Pesos (PhP50,000.00) and below, the BAC,
through the Secretariat shall post for information purposes the Notice of Award, contract or
purchase order, including the Notice to Proceed, if necessary, in

i. the PhilGEPS website;

ii. the website of the PE or its electronic procurement service provider, if any; and
iii. any conspicuous place in the premises of the PE.
ALTERNATIVE METHODS OF PROCUREMENT
METHOD DEFINITION WHEN IT MAY BE RESORTED TO
Negotiated A method of procurement of 3. Take – over of Contracts.
Procurement Goods, Infrastructure 4. Adjacent or Contiguous
Projects and Consulting 5. Agency – to – Agency
services, whereby the 6. Scientific, Scholarly or Artistic Work Exclusive Technology
Procuring Entity directly and Media Services
negotiates a contract with a 7. Highly Technical Consultants.
technically, legally and 8. Defense Cooperation Agreement; Defense Inventory –
financially capable supplier, Based- Items
contractor or consultant
ALTERNATIVE METHODS OF PROCUREMENT
METHOD DEFINITION WHEN IT MAY BE RESORTED TO
Negotiated A method of procurement of 9. Small Value Procurement
Procurement Goods, Infrastructure
Projects and Consulting Procurement of (a) goods not covered by Shopping under (b)
services, whereby the infrastructure projects, and (c) consulting services, where the
Procuring Entity directly amount involved does not exceed the following threshold:
negotiates a contract with a i. For NGAs, GOCCs, GFIs, SUCs, and Autonomous Regional
technically, legally and Government, One Million Pesos (₱ 1,000,000)
financially capable supplier, ii. For LGUs, in accordance with the following schedule:
contractor or consultant DOF Classification of LGUs Province City Municipality

1st Class 1,000,000 1,000,000 200,000

2nd Class 1,000,000 1,000,000 200,000

3rd Class 1,000,000 800,000 200,000

4th Class 800,000 600,000 100,000

5th Class 600,000 400,000 100,000

6th Class 400,000 200,000 100,000

In the case of barangay, Fifty Thousand Pesos (₱50,000).

ALTERNATIVE METHODS OF PROCUREMENT
METHOD DEFINITION WHEN IT MAY BE RESORTED TO
Negotiated A method of procurement of 10. Lease of Real Property and Venue for official use
Procurement Goods, Infrastructure
Projects and Consulting 11. NGO Participation
services, whereby the 12. Community Participation
Procuring Entity directly
negotiates a contract with a 13. United Nations Agencies, International Organization or
technically, legally and International Financing Institutions
financially capable supplier,
contractor or consultant 14. Direct Retail Purchase of Petroleum Fuel, Oil and
Lubricant (POL) Products and Airline Tickets