Notes on Ra 9184 Government Procurement Reform Act
Notes on Ra 9184 Government Procurement Reform Act
SEC. 2. Declaration of Policy. - It is the declared policy of the State to promote the
ideals of good governance in all its branches, departments, agencies, subdivisions,
and instrumentalities, including government-owned and/or controlled corporations,
and local government units.
SEC. 4. Scope and Application. - This Act shall apply to the Procurement of
Infrastructure Projects, Goods, and Consulting Services, regardless of source of
funds, whether local or 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 Act to which the Philippine government is a signatory shall be observed.
SEC. 5. Definition of Terms. - For purposes of this Act, the following terms or words
and phrases shall mean or be understood as follows:
(a) Approved Budget for the Contract (ABC) - refers to the budget for
the contract duly approved by the Head of the Procuring Entity, as
provided for in the General Appropriations Act and/or continuing
appropriations, in the case of National Government Agencies; the
Corporate Budget for the contract approved by the governing Boards,
pursuant to E.O. No. 518, series of 1979, in the case of Government-
Owned and/or Controlled Corporations, Government Financial
Institutions and State Universities and Colleges; and the Budget for the
contract approved by the respective Sanggunian, in the case of Local
Government Units.
(h) Goods - refer to all items, supplies, materials and general support
services, except consulting services and infrastructure projects, which
may be needed in the transaction of public businesses or in the pursuit
of any government undertaking, project or activity, whether in the
nature of equipment, furniture, stationery, materials for construction, or
personal property of any kind, including non-personal or contractual
services such as the repair and maintenance of equipment and furniture,
as well as trucking, hauling, janitorial, security, and related or analogous
services, as well as procurement of materials and supplies provided by
the procuring entity for such services.
(j) Head of the Procuring Entity - refers to: (i ) the head of the
agency or his duly authorized official, for national government agencies;
(ii) the governing board or its duly authorized official, for government-
owned and/or controlled corporations; or (iii) the local chief executive,
for local government units. Provided, That in a department, office or
agency where the procurement is decentralized, the Head of each
decentralized unit shall be considered as the Head of the Procuring Entity
subject to the limitations and authority delegated by the head of the
department, office or agency.
In addition to the powers granted under this Act, the GPPB shall absorb all the
powers, functions and responsibilities of the Procurement Policy Board created
under Executive Order No. 359, series of 1989. All affected functions of the
Infrastructure Committee of the National Economic and Development Authority
Board are hereby transferred to the GPPB.
SEC. 64. Membership. - The GPPB shall be composed of the Secretary of the
Department of Budget and Management, as Chairman, the Director-General of the
National Economic and Development Authority, as Alternate Chairman, with the
following as Members; the Secretaries of the Departments of Public Works and
Highways, Finance, Trade and Industry, Health, National Defense, Education,
Interior and Local Government, Science and Technology,
Transportation and Communications, and Energy, or their duly authorized
representatives and a representative from the private sector to be appointed by the
President upon the recommendation of the GPPB. The GPPB may invite a
representative from the Commission on Audit to serve as a resource person.
V. PROCUREMENT PROCEDURES
SEC. 10. Competitive Bidding. - All Procurement shall be done through Competitive
Bidding, except as provided for in Article XVI of this Act. (Alternative Methods of
Procurement).
SEC. 11. The BAC and its Composition. - Each procuring entity shall establish a
single BAC for its procurement. The BAC shall have at least five (5) members,
but not more than seven (7) members. It shall be chaired by at least a third
ranking permanent official of the procuring entity other than its head, and its
composition shall be specified in the IRR. Alternatively, as may be deemed fit by
the head of the procuring entity, there may be separate BACs where the number
and complexity of the items to be procured shall so warrant. Similar BACs for
decentralized and lower level offices may be formed when deemed necessary by
the head of the procuring entity. The members of the BAC shall be designated by
the Head of Procuring Entity.
However, in no case shall the approving authority be a member of the BAC.
Unless sooner removed for a cause, the members of the BAC shall have a fixed
term of one (1) year reckoned from the date of appointment, renewable at
the discretion of the Head of the Procuring Entity. In case of resignation,
retirement, separation, transfer, re-assignment, removal, the replacement shall
serve only for the unexpired term: Provided, That in case of leave or suspension,
the replacement shall serve only for the duration of the leave or suspension. For
justifiable causes, a member shall be suspended or removed by the Head of the
Procuring Entity.
In proper cases, the BAC shall also recommend to the Head of the Procuring Entity
the use of Alternative Methods of Procurement as provided for in Article XVI hereof.
The BAC shall be responsible for ensuring that the Procuring Entity abides by the
standards set forth by this Act and the IRR, and it shall prepare a procurement
monitoring report that shall be approved and submitted by the Head of the
Procuring Entity to the GPPB on a semestral basis. The contents and coverage of
this report shall be provided in the IRR.
SEC. 17. Form and Contents of Bidding Documents. - The Bidding Documents
shall be prepared by the Procuring Entity following the standard forms and
manuals prescribed by the GPPB. The Bidding Documents shall include the
following:
(b) Instructions to Bidders, including criteria for eligibility, bid evaluation and
post-qualification, as well as the date, time and place of the pre-bid
Conference (where applicable), submission of bids and opening of bids;
(f) Form of Bid, Price Form, and List of Goods or Bill of Quantities;
SEC. 18. Reference to Brand Names. - Specifications for the Procurement of Goods
shall be based on relevant characteristics and/or performance requirements.
Reference to brand names shall not be allowed.
SEC. 19. Access to Information. - In all stages of the preparation of the Bidding
Documents, the Procuring Entity shall ensure equal access to information. Prior to
their official release, no aspect of the Bidding Documents shall be divulged
or released to any prospective bidder or person having direct or indirect
interest in the project to be procured.
SEC. 21. Advertising and Contents of the Invitation to Bid. - In line with the
principle of transparency and competitiveness, all Invitations to Bid for
contracts under competitive bidding shall be advertised by the Procuring
Entity in such manner and for such length of time as may be necessary
under the circumstances, in order to ensure the widest possible dissemination
thereof, such as, but not limited to, posting in the Procuring Entity's premises, in
newspapers of general circulation, the G-EPS and the website of the Procuring
Entity, if available. The details and mechanics of implementation shall be provided
in the IRR to be promulgated under this Act.
(c) The date, time and place of the deadline for the submission and receipt of
the eligibility requirements, the pre-bid conference if any, the submission
and receipt of bids, and the opening of bids;
(f) The period of availability of the Bidding Documents, and the place where
these may be secured;
The pre-bid conference(s) shall be held within a reasonable period before the
deadline for receipt of bids to allow prospective bidders to adequately prepare their
bids, which shall be specified in the IRR.
SEC. 23. Eligibility Requirements for the Procurement of Goods and Infrastructure
Projects. - The BAC or, under special circumstances specified in the IRR, its duly
designated organic office shall determine the eligibility of prospective bidders for
the procurement of Goods and Infrastructure Projects, based on the bidders'
compliance with the eligibility requirements within the period set forth in the
Invitation to Bid.
The eligibility requirements shall provide for fair and equal access to all prospective
bidders. The documents submitted in satisfaction of the eligibility requirements
shall be made under oath by the prospective bidder or by his duly authorized
representative certifying to the correctness of the statements made and the
completeness and authenticity of the documents submitted.
SEC. 25. Submission and Receipt of Bids. - A bid shall have two (2)
components, namely the technical and financial components which should
be in separate sealed envelopes, and which shall be submitted
simultaneously. The bids shall be received by the BAC on such date, time and
place specified in the invitation to bid. The deadline for the receipt of bids shall be
fixed by the BAC, giving it sufficient time to complete the bidding process and
giving the prospective bidders sufficient time to study and prepare their bids. The
deadline shall also consider the urgency of the procurement involved.
SEC. 26 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 for the same
contract either directly or indirectly.
SEC. 27. Bid Security. - All Bids shall be accompanied by a Bid security, which
shall serve as a guarantee that, after receipt of the Notice of Award, the
winning bidder shall enter into contract with the Procuring Entity within
the stipulated time and furnish the required performance security. The
specific amounts and allowable forms of the Bid security shall be prescribed in the
IRR.
SEC. 28. 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 contract.
SEC. 29. Bid Opening. - The BAC shall publicly open all bids at the time, date,
and place specified in the bidding documents. The minutes of the bid opening
shall be made available to the public upon written request and payment of a
specified fee.
SEC. 30. Preliminary Examination of Bids. - Prior to Bid evaluation, the BAC shall
examine first the technical components of the bids using "pass/fail" criteria to
determine whether all required documents are present. Only bids that are
determined to contain all the bid requirements of the technical component
shall be considered for opening and evaluation of their financial
component.
SEC. 32. Bid for the Procurement of Goods and Infrastructure Projects. - For the
procurement of Goods and Infrastructure Projects, the BAC shall evaluate the
financial component of the bids. The bids that passed the preliminary examination
shall be ranked from lowest to highest in terms of their corresponding calculated
prices. The bid with the lowest calculated price shall be referred to as the
"Lowest Calculated Bid."
SEC. 33. Bid Evaluation of Short Listed Bidders for Consulting Services. - For the
Procurement of Consulting Services, the Bids of the short listed bidders shall
be evaluated and ranked using numerical ratings in accordance with the
evaluation criteria stated in the Bidding Documents, which shall include
factors such as, but not limited to, experience, performance, quality of personnel,
price and methodology. The Bids shall be ranked from highest to lowest in terms of
their corresponding calculated ratings. The Bid with the highest calculated
rating shall be the "Highest Rated Bid."
After approval by the Head of the Procuring Entity of the Highest Rated Bid, the
BAC shall invite the bidder concerned for negotiation and/or clarification on the
following items: financial proposal submitted by the bidder, terms of reference,
scope of services, methodology and work program, personnel to be assigned to the
job, services/facilities/data to be provided by the Procuring Entity concerned, and
provisions of the contract.
When negotiations with the first-in-rank bidder fails, the financial proposal
of the second rank bidder shall be opened for negotiations:
Provided, That the amount indicated in the financial envelope shall be made as the
basis for negotiations and the total contract amount shall not exceed the amount
indicated in the envelope and the ABC. Whenever necessary, the same process
shall be repeated until the bid is awarded to the winning bidder.
X. POST-QUALIFICATION
If the bidder with the Lowest Calculated Bid or Highest Rated Bid passes all the
criteria for post qualification, 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.
In all cases, the contract shall be awarded only to the bidder with the
Lowest Calculated Responsive Bid or Highest Rated Responsive Bid.
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.
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.
In all instances, the Procuring Entity shall ensure that the ABC reflects the
most advantageous prevailing price for the Government.
SEC. 37. Notice and Execution of Award. - Within a period not exceeding
fifteen (15) calendar days from the determination and declaration by the
BAC of the Lowest Calculated Responsive Bid or Highest Rated Responsive
Bid, and the recommendation of the award, the Head of the Procuring Entity or his
duly authorized representative shall approve or disapprove the said
recommendation.
In case of approval, the Head of the Procuring Entity or his duly authorized
representative shall immediately issue the Notice of Award to the bidder with
the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid.
Within ten (10) calendar days from receipt of the Notice of Award, the
winning bidder shall formally enter into contract with the Procuring Entity.
When further approval of higher authority is required, the approving authority for
the contract shall be given a maximum of twenty (20) calendar days to approve or
disapprove it.
In the case of government owned and/or controlled corporations, the concerned
board shall take action on the said recommendation within thirty (30) calendar days
from receipt thereof.
The Procuring Entity shall issue the Notice to Proceed to the winning bidder not
later than seven (7) calendar days from the date of approval of the contract by the
appropriate authority. All notices called for by the terms of the contract shall be
effective only at the time of receipt thereof by the contractor.
SEC. 39. Performance Security. - Prior to the signing of the contract, the winning
bidder shall, as a measure of guarantee for the faithful performance of and
compliance with his obligations under the contract prepared in accordance with the
Bidding Documents, be required to post a performance security in such form
and amount as specified in the Bidding Documents.
SEC. 40. Failure to Enter into Contract and Post Performance Security. - If, for
justifiable causes, the bidder with the Lowest Calculated Responsive Bid or Highest
Rated Responsive Bid fails, refuses or is otherwise unable to enter into contract
with the Procuring Entity, or if the bidder fails to post the required performance
security within the period stipulated in the Bidding Documents, the BAC shall
disqualify the said bidder and shall undertake post-qualification for the
next-ranked Lowest Calculated Bid or Highest Rated Bid. This procedure shall
be repeated until an award is made. However, if no award is possible, the contract
shall be subjected to a new bidding.
In the case of a failure to post the required performance security, the bid security
shall be forfeited without prejudice to the imposition of sanctions prescribed
under Article XXIII.
SEC. 41. Reservation Clause. - The Head of the Agency reserves the right to
reject any and all Bids, declare a failure of bidding, or not award the contract in
the following situations:
b) If the BAC is found to have failed in following the prescribed bidding procedures;
or
c) For any justifiable and reasonable ground where the award of the contract will
not redound to the benefit of the government as defined in the IRR.
SEC. 43. Procurement of Domestic and Foreign Goods. - Consistent with the
country's obligations under international treaties or agreements, Goods may be
obtained from domestic or foreign sources and the procurement thereof shall be
open to all eligible suppliers, manufacturers and distributors. However, in the
interest of availability, efficiency and timely delivery of Goods, the Procuring Entity
may give preference to the purchase of domestically produced and manufactured
goods, supplies and materials that meet the specified or desired quality.
SEC. 46. Lease Contracts. - Lease of construction and office equipment, including
computers, communication and information technology equipment are subject to
the same public bidding and to the processes prescribed under this Act.
SEC. 48. Alternative Methods. - Subject to the prior approval of the Head of the
Procuring Entity or his duly authorized representative, and whenever justified by
the conditions provided in this Act, the Procuring Entity may, in order to promote
economy and efficiency, resort to any of the following alternative methods of
Procurement:
In all instances, the Procuring Entity shall ensure that the most
advantageous price for the Government is obtained.
SEC. 49. Limited Source Bidding. - Limited Source Bidding may be resorted to only
in any of the following conditions:
a) Procurement of highly specialized types of Goods and Consulting
Services which are known to be obtainable only from a limited number
of sources; or
SEC. 50. Direct Contracting. - Direct Contracting may be resorted to only in any of
the following conditions:
SEC. 51. Repeat Order. - When provided for in the Annual Procurement Plan,
Repeat Order may be allowed wherein the Procuring Entity directly procures Goods
from the previous winning bidder whenever there arises a need to replenish goods
procured under a contract previously awarded through Competitive Bidding, subject
to post-qualification process prescribed in the Bidding Documents and provided all
the following conditions are present:
a) The unit price must be equal to or lower than that provided in the
original contract;
d) The repeat order shall not exceed twenty-five percent (25%) of the
quantity of each item of the original contract.
SEC. 52. Shopping. - Shopping may be resorted to under any of the following
instances:
a) When there is an unforeseen contingency requiring immediate purchase:
Provided, however, That the amount shall not exceed Fifty Thousand Pesos
(P50,000); or
b) Procurement of ordinary or regular office supplies and equipment not available in
the Procurement Service involving an amount not exceeding Two Hundred Fifty
Thousand Pesos (P250,000): Provided, however, That the Procurement does not
result in Splitting of Contracts: Provided, further,That at least three (3) price
quotations from bona fide suppliers shall be obtained.
The above amounts shall be subject to a periodic review by the GPPB. For this
purpose, the GPPB shall be authorized to increase or decrease the said amount in
order to reflect changes in economic conditions and for other justifiable reasons.
SEC. 55. Protests on Decisions of the BAC. - Decisions of the BAC in all stages of
procurement may be protested to the head of the procuring entity and shall
be in writing. Decisions of the BAC may be protested by filing a verified position
paper and paying a non-refundable protest fee. The amount of the protest fee and
the periods during which the protests may be filed and resolved shall be specified in
the IRR.
SEC. 59. Arbitration. - Any and all disputes arising from the implementation of a
contract covered by this Act shall be submitted to arbitration in the Philippines
according to the provisions of Republic Act No. 876, otherwise known as the
"Arbitration Law": Provided, however, That, disputes that are within the
competence of the Construction Industry Arbitration Commission to resolve shall be
referred thereto.
The process of arbitration shall be incorporated as a provision in the
contract that will be executed pursuant to the provisions of this Act: Provided,
That by mutual agreement, the parties may agree in writing to resort to alternative
modes of dispute resolution.
SEC. 61. Contract Prices. - For the given scope of work in the contract as
awarded, all bid prices shall be considered as fixed prices, and therefore
not subject to price escalation during contract implementation, except under
extraordinary circumstances and upon prior approval of the GPPB
(a) For the procurement of Goods, in order to assure that manufacturing defects
shall be corrected by the supplier, manufacturer, or distributor, as the case may be,
for a specific time after performance of the contract, a warranty shall be
required from the contract awardee for such period of time as may be
provided in the IRR, the obligation for which shall be covered by either
retention money in the amount equivalent to a percentage of every
progress payment, or a special bank guarantee equivalent to a percentage
of the total contract price, to be provided in the IRR. The said amounts shall
only be released after the lapse of the warranty period, provided that the Goods
supplied are free from defects and all the conditions imposed under the contract
have been fully met.
convenience of his personnel, third parties, and the public at large, as well as
the works, equipment, installation and the like to be affected by his
construction work and shall be required to put up a warranty security in the
form of cash, bank guarantee, letter of credit, Government Service Insurance
System bond, or callable surety bond.
The contractor shall undertake the repair works, at his own expense, of
any defect or damage to the infrastructure projects on account of the use
of materials of inferior quality within ninety (90) days from the time the
Head of the Procuring Entity has issued an order to undertake repair. In
case of failure or refusal to comply with this mandate, the government shall
undertake such repair works and shall be entitled to full reimbursement of
expenses incurred therein upon demand.
Any contractor who fails to comply with the preceding paragraph shall
suffer perpetual disqualification from participating in any public bidding
and his property or properties shall be subject to attachment or
garnishment proceedings to recover the costs. All payables of government
in his favor shall be offset to recover the costs.
See Sections 65 – 71
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