PHILIPPINE CONSTRUCTORS

ASSOCIATION
AUTHORIZED MANAGING OFFICERS COURSE
SMX CONVENTION CENTER
NOVEMBER 10, 2011

The Government Procurement System

An Overview

What is
Public
Procurement?

What is Procurement?
3

Procurement refers to the acquisition

of goods, consulting services, and the
contracting for infrastructure projects by
procuring entity. (Sec. 5(aa), IRR, R.A.
9184)
Procurement means the acquisition by
any means of goods, construction or
services. (UNCITRAL Model Law on
Procurement)

What is Procurement?
4

Acquisition means the acquiring by

contract with appropriated funds of
supplies or services (including
construction) by and for the use of the
Federal Government through purchase
or lease, whether the supplies or
services are already in existence or must
be created, developed, demonstrated,
and evaluated. (FAR, US)

What is Procurement?
5

Procurement encompasses the whole

process of acquiring property or services.
It begins when an agency has identified a
need and decided on its procurement
requirement.
Procurement
continues
through the processes of risk assessment,
seeking
and
evaluating
alternative
solutions, contract award, delivery of and
payment for the property or services and,
where relevant, the ongoing management
of a contract and consideration of options
related to the contract. (CPG, 2008)

What is Procurement?
6

Procurement we define as the whole

of life-cycle process of acquisition of
goods, services and works from third
parties beginning when a requirement
is first defined and ending with the
ultimate disposal of an asset or end of a
service contract. (P. Gershon, OGC, UK)

What is Procurement?
7

Value for Money is the optimum

combination of whole of life costs and
quality to meet the customers
requirements (P.G.)
It must be governments policy that all
public procurement, should be based on
value for money, having due regard to
propriety and regularity. (P.G.)

What is Procurement?
8

LCC Life Cycle Costing

Cost should consider all costs
throughout the life-cycle acquisition
cost, utility costs (energy/water
consumption, maintenance), and
disposal costs.
C to G vis--vis C to C

What is Procurement?
9

5 Rights in Public Procurement:

Right

Source
Right Quality Satisfaction of End-User?
Quality may refer to the overall relationship
and integration of effects of performance,
lifespan, integrity, durability, and conformity
of the goods with the technical requirements
of the project.
Right Quantity (J.I.T / Lean Procurement)
Right Price
Right Time/Delivery

Pre-Procurement Reform Situation

10

Legislative

Executive

Judicial

Outdated,
fragmented
and
inconsistent
procurement
laws and
regulat ions

No oversight
policy body

Very few
procurement
cases filed

No standard
procurement
documents

Very few
convictions

Nontransparent
procurement
process

COA

Lack of
monitoring
and feedback
mechanism

Ombudsman

Lack of trust and confidence in Public Procurement System

(CSOs, Peoples Orgs, NGOs, Private Sector)

Problem Areas and Reform Measures

11

PROBLEMS

REFORMS

Confusion caused by
fragmented legal system

Enactment of the
Government Procurement
Reform Act (GPRA)

Inconsistent policies, rules,

and regulations due to lack
of standards

Creation of the
Government Procurement
Policy Board (GPPB)

Lack of transparency

Use of PhilGEPS

Lack of check and balance

Participation of civil society

Enactment of GPRA
12

Implementing
Rules and
Regulations

Executive
Orders

Administrative
Issuances

over 100 procurement rules & regulations

Government Procurement
Reform Act
10 January 2003

Goods, Infrastructure,
Consulting Services
Coverage: NGAs and LGUs

Memorandum
Circulars

Creation of GPPB
13

Inter-Agency Body

Big procuring entities (defense, education, health, public

works, transportation and communications)
Oversight agencies (budget, planning, finance, trade,
science and technology, interior and local government,
energy)

Private Sector

Resource Persons (audit, anti-corruption agencies)

Creation of the GPPB

14

Policy-Making

Amend implementing rules and regulations of

procurement law (quasi-legislative function)

Prepare generic procurement manual and standard

bidding forms
Capacity Development

Establish a sustainable training program

Monitoring

Assist procuring entities improve their compliance

Review effectiveness of procurement law

Application
15

R.A. 9184 Applies to:

a) National Government Agencies (NGAs)
b) State Universities and Colleges (SUCs)
c) Government Owned or Controlled Corporations (GOCCs)
d) Government Financial Institutions (GFIs)
e) Local Government Units (LGUs)
R.A. 9184 governs the procurement of:
a) Infrastructure Projects
b) Goods (incl. Supplies, Materials, and Related Services)
c) Consulting Services

Scope and Coverage

16

Section 4, Revised IRR

All fully domestically-funded procurement activities

All foreign-funded procurement activities, unless
otherwise provided in a treaty or intl/executive
agreement
As may be agreed upon by the GOP and IFI in their
treaty or intl/executive agreement

Projects funded from foreign grants

Projects for International Competitive Bidding

Consulting Services for National Competitive Bidding

Scope and Coverage

17

GOP negotiating panels shall:

Adopt as default position, use of the IRR or selection

through competitive bidding

Explain in writing if treaty or intl/executive agreement

states otherwise

Governing Principles
18

Transparency

Wider dissemination of bid opportunities

Competitiveness

Equal opportunity to all eligible bidders

Streamlined Process

System of Accountability

Uniformly applicable to all government agencies

Effective and efficient method
Answerable

Public Monitoring

Awareness and vigilance

Key Features of GPRA

19

Covers procurement of all government agencies

General Rule is Public/Competitive Bidding

Alternative Methods of Procurement allowed in highly exceptional

cases
Use of the Approved Budget for the Contract (ABC) as ceiling for
the bid price

Use of transparent, objective, and non-discretionary criteria

Increased transparency in the procurement process

Professionalization of procurement officials

Inclusion of Penal and Civil Liabilities

General Provisions of R.A.

9184 and its IRR
The Philippine Government Electronic
Procurement System (PhilGEPS)

PhilGEPS shall serve as the primary and definitive

source of information on all government procurement.
Utilized for the procurement of common-used supplies
Features of the PhilGEPS
a) Electronic Bulletin Board
b) Registry of Manufacturers, Suppliers,
Distributors, Contractors and Consultants
c) Electronic Catalogue
d) Virtual Store
e) Electronic Payment
f) Electronic Bid Submission

General Provisions of R.A.

9184 and its IRR
Procurement of Common-Use Supplies,
Materials and Equipment

- DBM-Procurement Service (PS)

- DBM-PS Catalogue in the PhilGEPS

Procurement Methods
22

All Procurement shall be done through competitive

bidding except as provided in R.A. 9184
Resort to alternative methods shall be made

Only in highly exceptional cases

To promote economy and efficiency

Justified by conditions specified in R.A. 9184 and its

IRR

Procurement Methods
23

Method

Goods

Infra

Cons

1.

Competitive Bidding

2.

Limited Source Bidding

3.

Direct Contracting

4.

Repeat Order

9
9
9

5.

Shopping

6.

Negotiated Procurement

Bidding Process
24

PreProcurement
Conference

Bid
Submission

Bid Evaluation

Advertisement

and/or
Posting

Opening of
Technical Proposal
(incl. eligibility docs)

Post-qualification

Pre-Bid
Conference

Opening of
Financial Proposal

Contract
Award

THANK YOU
25

Comments, questions?
Address:
Unit 2506 Raffles Corporate Center, F.
Ortigas Jr. Road, Ortigas Center, Pasig
City
Telephone: (+632) 9006741 to 44
Website:

http://www.gppb.gov.ph

Email:

gppb@gppb.gov.ph

Forum:

http://gppb.topicsolutions.net

DEFINITION (INFRASTRUCTURE
PROJECTS)
Include

Construction
Improvement
Rehabilitation
Demolition
Repair
Restoration
Maintenance
(Sec. 5.u, IRR of R.A.
9184)

Roads and bridges

Railways
Airports and seaports
Communication facilities
Civil works components of IT projects
Irrigation
Flood control and drainage
Water supply
Sanitation
Sewerage and solid waste management
systems
Shore protection
Energy/power and electrification
facilities
Buildings (National, School, Hospital)
Other related construction projects

Public Bidding

All Procurement shall be

done through competitive
bidding except as provided
in RA 9184
Resort to alternative
methods shall be made
only in highly exceptional
cases (Sec. 10, R.A. 9184
and its IRR)

Bidding Process
1st day of posting to
bid submission

7 cd
Advertisement
/Posting

1 cd
Bid
Submission

7 cd
Detailed
Bid Evaluation

1 cd
Pre-Bid
Conference

Distribution/ Sale of
Bidding Documents

12 cd to 30 cd
Opening of
Technical Proposal
(incl. eligibility docs)

Opening of
Financial Proposal

7 cd to 30 cd
Post-qualification

Bidding Process

7 cd
Issuance of Notice
of Award

10 cd
Contract
Signing

3 cd
Issuance of
a Notice to
Proceed

ADVERTISEMENT OF THE
INVITATION TO BID
Medium

Above
2M/5M

2M/5M
and below

Newspaper of General
Nationwide Circulation

PhilGEPS website

PEs Website, if available

Conspicuous Place

3
3
3

3
3
3

Website prescribed by the

foreign government/foreign or
international funding institution,
in case of foreign funded
procurement (Sec. 21.2.1 and
21.2.1, IRR of R.A. 9184)

SALE AND DISTRIBUTION OF BID DOCS

Period for the availability of bidding documents

Goods & infra projects

IBs date of advertisement - bid submission
(Sec. 17.3, IRR of R.A. 9184)
4th Edition of Standard Bidding Documents
-

approved by the GPPB through Res. No. 06-2010, dated 17

December 2010
Mandatorily to be use last 21 February 2011.

Post at the PEs website and at the PhilGEPS from the

time the ITB/REI is advertised. (Sec. 17.5, IRR of
R.A. 9184)

SALE AND DISTRIBUTION OF BID DOCS

Prospective

bidders may download

documents (Sec. 17.5, IRR of R.A. 9184)

the

bidding

Pay

the bid fee upon bid submission (Sec. 17.5, IRR of

R.A. 9184)
Cost

for the sale of bidding shall be in a reasonable

amount to recover the cost of its preparation and
development. (Sec. 17.4, IRR of R.A. 9184)

PRE-BID CONFERENCE

Forum where the PEs representatives & the bidders

discuss the different aspects of the project

Mandatory ABC 1M or more; Discretionary ABC less

than 1M

Statements made during the conference should be

included in the Supplemental/Bid Bulletin in order to be
considered as modifications to the terms of the bid docs
Held at least 12 cd before deadline for bid submission. May
be extended to at least 30 cd considering:
x
Method, nature, and complexity of contract
x
International participation is more advantageous (Sec.
22.2, IRR of R.A. 9184)

PRE-BID CONFERENCE

At the option of procuring entity, only bidders who purchased

bid documents are allowed to attend or ask questions (Sec.
22.3, IRR of R.A. 9184)

SUPPLEMENTAL BID BULLETIN

Request for clarifications must be submitted at least 10

cd before bid submission (Sec. 22.5.1, IRR of R.A. 9184)
Supplemental/Bid Bulletins must be issued at least 7 cd
before bid submission to answer requests for
clarification/interpretation, and upon BACs initiative to
clarify/modify any bid docs provision (Sec. 22.5.2, IRR of
R.A. 9184)
Posted in PhilGEPS and PEs website (Sec. 22.5.3, IRR of
R.A. 9184)
Supplemental Bid Bulletin shall be duly signed by the BAC
Chairperson (Sec. 22.5.1, IRR of R.A. 9184)

SUPPLEMENTAL BID BULLETIN

Bidders who have submitted bids before issuance of

Supplemental/Bid Bulletin have to be informed in writing
and allowed to modify/withdraw their bids. (Sec. 22.5.3,
IRR of R.A. 9184)

SUBMISSION, OPENING AND

EXAMINATION OF BIDS

Goods and Infra same procedure

In case of infra projects, Technical Proposal, containing
the eligibility requirements, and Financial Proposal
Envelopes will now be submitted at the same time.
Two-Envelope System
x
1st Envelope - Eligibility Req. & Technical Component
x
2nd Envelope Financial Component
Submitted to the BAC on the date, time, and place
specified in the Invitation to Bid.
Bids submitted after the deadline should not be accepted

SUBMISSION, OPENING AND

EXAMINATION OF BIDS

Date of submission should not be later than the following

period from the last day of posting of the Invitation to Bid
(Sec. 25.4, IRR of R.A. 9184)
Category

Maximum Period
(cd)

Goods

45

Infra (50M and

below)

50

Infra (above 50M)

65

Documentary requirements trimmed down

SUBMISSION, OPENING AND

EXAMINATION OF BIDS

A bidder may modify or withdraw its bid provided this is

done before the deadline for the submission and receipt of
bids (Sec. 26.1, IRR of R.A. 9184)
Bid modifications received after the deadline shall not be
considered and shall be returned to the bidder unopened.
(Sec. 26.1, IRR of R.A. 9184)
Withdrawal of bids after the applicable deadline shall be
subject to appropriate sanctions. (Sec. 26.2, IRR of R.A.
9184)

SUBMISSION, OPENING AND

EXAMINATION OF BIDS

Contents of the 1st Envelope (Technical Component)

(Sec. 23.1, IRR of R.A. 9184)
1.
Eligibility requirements
2.
Bid security
3.
Goods - Technical specifications
- production/delivery schedule;
- manpower requirements; and/or,
- after-sales service/parts
Project Requirements - Infra - Project
Requirements
- Organizational chart;
- List of contractors personnel; and;
- List of contractors equipment units)

SUBMISSION, OPENING AND

EXAMINATION OF BIDS

Contents of the 1st Envelope (Technical Component)

4.

Omnibus sworn statement Project Related

statements lumped into one statement

Non-inclusion in blacklist
Authenticity of documents
Verification authority
Signatorys authority
Disclosure of relations
Responsibilities of bidders
Labor laws and standards

ELIGIBILITY REQUIREMENTS
GOODS/INFRA (SEC. 23.1, IRR OF R.A. 9184)
Class A Documents
1. DTI/SEC/CDA Registration Certificate or other proofs of
registration
2. Mayors permit from the bidders principal place of business
3. Statement of ongoing & completed contracts / Valid PCAB
License and Registration for the type and cost of the contract to be
bid.
4. Latest audited financial statement stamped received by
the BIR or its duly accredited institution.
5. Net Financial Contracting Capacity Computation / CLC
Class B Document
JVA or notarized statement from the partners that they will enter
into joint venture if awarded the contract

ELIGIBILITY REQUIREMENTS

If foreign bidder (Sec. 23.2, IRR of R.A. 9184)

x
- Submit equivalent documents issued by the country
of origin
x
- Accompanied by English translation certified by the
appropriate embassy or consular office in the
Philippines
Government corporate entities eligible only if
x
Legally and financially autonomous
x
Operate under commercial law
x
Not dependent agencies of GOP or procuring entity

ELIGIBILITY CRITERIA

Legal Eligibility Criteria

General rule: 60% (Goods) or 75% (Infra) Filipino

Foreign bidders eligible allowed (Sec. 23.5.1.2, IRR of

R.A. 9184)
If stated in treaty or international or executive
agreement
National of a country offering reciprocity rights to
Filipinos
Goods not available from local suppliers
To prevent situations that defeat competition or
restrain trade
44

ELIGIBILITY CRITERIA

Technical Eligibility Criteria (Goods - Sec. 23.5.1.3,

IRR of R.A. 9184)
General Rule

1. Expendable
Supplies
25% of the ABC
2. Services and Nonexpendable
Supplies
50% of the ABC

Exceptions

Require the ff.:

If, at the outset and

a) At least 2 similar
after market research,
contracts aggregate
applying the general rule
amount at least
will likely result to:
equivalent to
required
1.Failure of bidding; or
percentage; and
2.Monopoly
b) Largest of the
similar contracts
amounts to at least
50% of required
percentage
45

Eligibility Criteria
46

Technical Eligibility Criteria (Infra, Section 23.5.2.5)

The prospective bidder must have an experience of having
completed, within a period of ten (10) years from the date of
submission and receipt of bids, at least one (1) contract that is
similar to the contract to be bid, and whose value, adjusted to
current prices using the NSO consumer price indices, must be at
least fifty percent (50%) of the ABC to be bid:

Provided, however, That contractors under Small A and Small B

categories without similar experience on the contract to be bid may
be allowed to bid if the cost of such contract is not more than fifty
percent (50%) of the Allowable Range of Contract Cost (ARCC) of
their registration based on the guidelines as prescribed by the PCAB.

ELIGIBILITY CRITERIA

Financial Eligibility Criteria

NFCC at least equal to ABC (Sec. 23.5.1.4, IRR)

NFCC = [Current Assets Current liabilities (K)] minus

the value of all outstanding or uncompleted contracts,
including awarded contract not yet started

CLC at least equal to 10% of ABC

Issued by Universal or Commercial Bank

Option to submit cash deposit certificate deleted

47

OPENING AND EVALUATION OF BIDS

Contents of the 2nd Envelope

(Financial Component)
1.

2.

3.

Financial Bid Form (includes bid prices and bill of

quantities, as well as applicable price schedules)
In case of Goods, Certification from the DTI, SEC, or
CDA, if claiming preference as Domestic Bidder or
Domestic Entity
Other documents required in the bidding documents
(Sec. 25.3, IRR of R.A. 9184)

BID & PERFORMANCE SECURITY

Deleted certified check and

guarantee from acceptable forms

In general, bank issued securities must be issued by a

universal/commercial bank

foreign

government

Surety Bonds must be accompanied by certification from

Insurance Commission that issuer is authorized to issue
such security

Bidder has option to choose among acceptable forms of

security

Procuring entity may not limit options available to

bidders (Sec. 27.2, IRR of R.A. 9184)

BID & PERFORMANCE SECURITY

Form of Bid and
Performance Security

a)Cash or
cashiers/managers check
b)Bank guarantee/draft or
Irrevocable LC
c)Surety bond callable upon
demand
d)Combination of the
foregoing

Amt of Bid
Security
(% = ABC)

Amt of
Performance
Security
(% = Contract
Price)

2%

5% (Goods &
Consulting)
10% (Infra)

5%

30%

Proportionate to share of form

with respect to the total amount of
security

DETAILED EVALUATION OF BIDS

Determine the LCB by

1.
Establishing correct calculated prices of bids; and
2.
Ranking calculated total bid prices from lowest to
highest (Sec. 32.3, IRR)
A non-discretionary criteria shall be used, which shall
include consideration of:
1.
completeness of bids; and
2.
minor arithmetical corrections (Sec. 32.2.1, IRR of
R.A. 9184)
7 cd from the deadline for receipt of proposals.
In the case of infra. Proj. costing 50M and below 5
cd (Sec. 32.4, IRR of R.A. 9184)

DETAILED EVALUATION OF BIDS

In case of discrepancies, the ff. shall prevail:

words over figures

unit prices over total prices

bill of quantities over detailed estimate

(Sec. 32.2.4, IRR of R.A. 9184)
Unless the ITB specifically allows partial bids, those not
providing all required items shall be considered nonresponsive

Placing no price is considered as non-responsive

Specifying a 0 or - means it is offered for free

DETAILED EVALUATION OF BIDS

No Contact Rule (Secs. 32 & 33)

x

General Rule:
Members of the BAC, Secretariat and TWG, as well as its staff
and personnel are prohibited from making/accepting any
communication w/in the ff. periods
a) Goods and Infra
Bid submission until issuance of NOA (Sec. 32.1, IRR of R.A.
9184)
b) Consulting
Bid submission until HOPEs approval of the ranking of shortlisted bidders (Sec. 33.1, IRR of R.A. 9184)
Exception:
BAC, through its Secretariat, may request in writing bidders
for clarification of its bid. in writing

POST-QUALIFICATION

3 days from notice of LCB, submit the ff:

Tax clearance
Latest income and business tax returns
Certificate of PhilGEPS registration
Other appropriate licenses & permits required by law
& stated in the Bid Docs. (Sec. 34.2, IRR of R.A.
9184)
Completed in 7 cd. But, may be extended by the HOPE
to not more than 30 cd (Sec. 34.8, IRR of R.A. 9184)

54

POST-QUALIFICATION
Verify, validate and ascertain the following:

1.
2.

1.

1.
2.
3.

Legal Requirements
licenses and agreements
legal documents under eligibility envelope
Technical Requirements
sufficiency of the bid security as to type, amount, form
wording and validity period
Financial Requirements
bid price proposal
NFCC computation
credit line certificate, to ensure that bidder can sustain the
operating cash flow transaction
(Sec. 34.3, IRR of R.A. 9184)

DISCLOSURE OF RELATIONS

Disclosure of Relations (Sec. 47)

Relatives within the 3rd civil degree of the following shall

be disqualified:
Head of the procuring entity
Members of the BAC, Secretariat and TWG
Head of the end-user unit/PMO
Project consultants

AWARD OF CONTRACT

Contract shall be awarded to the bidder with the LCRB or

SCRB at its submitted price or total calculated bid price,
whichever is lower (Sec. 34.4, IRR of R.A. 9184)
3 mos. - procurement process from opening of bids up to
award of contract or a shorter period (Sec. 38.1, IRR of
R.A. 9184)
NOA conditioned on the following:
If joint venture, submission of JVA
If foreign-funded and stated in treaty, international or
executive agreement, PCAB License
Posting of Performance Security
Signing of Contract (within 10 cd)
If required, approvals by higher authority (Sec. 37.1.1,
IRR of R.A. 9184)

ISSUANCE OF NOTICE OF AWARD

Notice of Award (NOA) is issued by the HOPE (Sec. 37.1.1,

IRR of R.A. 9184)
NGAs and LGUs 7 cd | GOCCs and GFIs 15 cd (Sec.
37.1.2, IRR of R.A. 9184)
NOA posted within 3 cd from its issuance in the following:
a) PhilGEPS website;
b) PEs website; and
c) Conspicuous places (Sec. 37.1.6, IRR of R.A. 9184)

58

CONTRACT SIGNING

Contract Signing (Sec. 37.2)

Within 10 cd from receipt of NOA (Sec. 37.2.2, IRR of R.A.

9184)

Mandatory submission of other contract documents that

may be required by existing laws and/or the PE (infra):
a) Construction schedule and S-curve;
b) Manpower schedule;
c) Construction methods;
d) Equipment utilization schedule;
e) Construction
safety
and health
program
approved by DOLE; and,
f)
PERT/CPM (Sec. 37.2.3, IRR of R.A. 9184)
59

ISSUANCE OF NOTICE TO
PROCEED

Issued to the successful bidder together with the copy of

the approved contract within 3 cd from date of approval
For infrastructure projects with ABC of 50M and
below, the maximum period is 2 cd
Contract effectivity date should be provided in the NTP,
which should not be later than 7 cd from its issuance
BAC Secretariat should post a copy of the NTP and the
approved contract in the PhilGEPS and PEs website
within 15 cd from issuance of NTP

61

THANK YOU