GOVERNMENT

PROCUREMENT 101

1
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 PHILIPPINE GOVERNMENT
PROCUREMENT LAWS:
THEN AND NOW

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ENACTMENT OF THE GPRA OR REPUBLIC ACT NO. 9184

Government Procurement Act

10 January
2003 (GPRA)
Executive
Orders
Implementing Rules and Administrative
Issuances
08 October
2003 Regulations (Part A)

02
Revised IRR Memorandum
September Circulars
2009

Implementing
28 October Revised IRR Rules and
2016 Regulations

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Development

CHALLENGES BEFORE SOLUTIONS BROUGHT

GPRA ABOUT BY GPRA

Confusion caused by Enactment of the GPRA

fragmented legal system Creation of the Government
Inconsistent policies, rules, and Procurement Policy Board
regulations due to lack of (GPPB)
standards
Use of Philippine Government
Lack of transparency Electronic Procurement System
Lack of check and balance
Participation of Civil Society

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4
PURPOSE

Modernize

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Procurement as a Legal Concept

Simply stated,
Procurement is the
process of selecting
the process and
services which fit our
needs and provides
Sec 5, R.A. No. 9184 value for money
PHILIPPINE PROCUREMENT
Philippine Procurement Paradigm
PARADIGM
HOPE • Review studies HOPE
• Post/Advertise
• Consolidate into opportunity
Budget APP BAC
• Open and
Officer Assess • Decide Selection End User
evaluate bids
procurement TWG
• Post-qualify
BAC method • Award and enter
• Approve APP BAC Sec
into contract
BAC Sec
• Determine
readiness

End User Procurement Planning and Contract Management Unit End User
Management Unit

Identify • Cost-benefit • Oversee Implement

analysis implementation
• Feasibility study • Inspect and
• Market study accept deliveries
• PPMP

NEEDS SATISFACTION
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distribution without the
author’s approval is prohibited.
PHILIPPINE PROCUREMENT
Philippine Procurement Paradigm
PARADIGM
HOPE • Review studies HOPE
• Post/Advertise
• Consolidate into opportunity
Budget APP BAC
• Open and
Officer Assess • Decide Selection End User
evaluate bids
procurement TWG
• Post-qualify
BAC method • Award and enter
• Approve APP BAC Sec
into contract
BAC Sec
• Determine Procurement
Procurement readiness Management
Planning and Office
Management Unit

End User Procurement Planning and Procurement Management Office End User
Management Unit

Identify • Cost-benefit • Oversee Implement

analysis implementation
• Feasibility study • Inspect and
• Market study accept deliveries
• PPMP

NEEDS SATISFACTION
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distribution without the
author’s approval is prohibited.
POLICIES APPLICABLE TO SK
GPPB CIRCULAR 07-2019:
Item 3.0

By virtue of Section 20(b) of RA No. 10742, the SK shall have

financial independence in its operations, disbursements, and
encashment of their fund, income and expenditures.

Accordingly, it has the capacity to act as a procuring entity as

defined under Sections 5(o) 4 of RA No. 9184 and 5(bb) of its
2016 revised IRR.
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POLICIES APPLICABLE TO SK
GPPB CIRCULAR 07-2019:
4.2 The HoPE shall undertake the following:
4.2.1 Establish a BAC with at least five (5) but not more
than seven (7) members;

4.2.2 Designate the Chairperson, Vice Chairperson and the

BAC members, who are SK members except the SK
Treasurer;

4.2.3 create a BAC Secretariat;

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POLICIES APPLICABLE TO SK
GPPB CIRCULAR 07-2019:

4.2 The SK, in its conduct of procurement

activities, shall strictly adhere to the
provisions of RA No. 9184, its IRR, and
associated guidelines.

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POLICIES APPLICABLE TO SK

GPPB CIRCULAR 07-2019:

7.3 The SK shall conduct its procurement activities through Competitive

Bidding or any of the Alternative Methods of Procurement in
accordance with RA No. 9184 and its 2016 revised IRR.

7.4 Should the SK resort to Shopping or Negotiated Procurement (Small

Value) under Sections 52 and 53.9 of the 2016 revised IRR of RA No.
9184, the amount shall not exceed the thresholds prescribed for the
barangays, which is Fifty Thousand Pesos (Ph₱50,000.00).

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Government Procurement Policy Board (GPPB)
Composed of the following:

▪ Chairperson: Secretary of Department of Budget

and Management
▪ Alternate Chairperson: Director-General of the
National Economic and Development Authority
▪ Thirteen (13) Regular Members
▪ Invited Resource Persons (audit, anti-corruption
agencies)

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13
Functions of the GPPB

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without the author’s approval is prohibited.
14
GPPB- Technical Support Office (TSO)

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without the author’s approval is prohibited.
15
Functions of the GPPB-TSO

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without the author’s approval is prohibited.
16
GPPB AND ITS TSO WEBSITE

www.gppb.gov.ph

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17
 PRINCIPLES OF PUBLIC
PROCUREMENT

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5 GOVERNING PRINCIPLES

1 3 5 STREAMLINED

PUBLIC MONITORING COMPETITIVENESS PROCESS

2 4
TRANSPARENCY
ACCOUNTABILITY

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 KEY CONCEPTS ON
GOVERNMENT PROCUREMENT

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 ?
?
GOODS & ?
SERVICES
SUPPLIES &
SUBSCRIPTIONS MATERIALS
& LICENSES

All items, supplies, materials and general support

services, except Consulting Services and
REPAIRS
Infrastructure Projects, which may be needed in the SECURITY &
JANITORIAL
transaction of the Procuring Entity. SERVICES

LEASE OF FURNITURES &

OFFICE SPACE OFFICE FIXTURES
EQUIPMENT

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WHAT IS INFRASTRUCTURE PROJECTS?
construction, improvement,
rehabilitation, demolition,
repair, restoration or
maintenance of:

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 CONSULTING
SERVICES Other Technical
Services
or
Special
Advisory and Review Studies
Services

Design

Management and Related

Services
Pre-Investment or
Feasibility Studies

Construction
Supervision

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Key Concepts on Government Procurement

Increased transparency
in the procurement
process

Use of the Approved

Budget for the Contract
(ABC) as ceiling of bid
price
Key Concepts on Government Procurement

Use of objective and non-

discretionary criteria

Use of Lowest Calculated

and Responsive Bid (LCRB) or
Highest Rated and Responsive Bid
(HRRB)

Simplified eligibility checking

Key Concepts on Government Procurement

Use of Lowest Calculated

and Responsive Bid (LCRB) or
Highest Rated and Responsive Bid
(HRRB)
POLICIES APPLICABLE TO SK
GPPB CIRCULAR 07-2019

7.3 The SK shall conduct its procurement activities through Competitive

Bidding or any of the Alternative Methods of Procurement in
accordance with RA No. 9184 and its 2016 revised IRR.

7.4 Should the SK resort to Shopping or Negotiated Procurement (Small

Value) under Sections 52 and 53.9 of the 2016 revised IRR of RA No.
9184, the amount shall not exceed the thresholds prescribed for the
barangays, which is Fifty Thousand Pesos (Ph₱50,000.00).

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WHAT ARE THE PROCUREMENT METHODS?

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WHAT ARE THE PROCUREMENT METHODS?

Highly Exceptional
Cases

To promote Economy
and Efficiency

Justified by conditions

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BIDDING PROCESS FOR GOODS AND INFRASTRUCTURE PROJECTS

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 SCOPE AND COVERAGE OF
GPRA AND ITS 2016 REVISED
IMPLEMENTING RULES AND
REGULATIONS

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Scope and Coverage

National Government
Agencies State Universities and
Colleges

Government Owned
or Controlled
Corporations

Government Financial Local Government

Institutions Units

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32
Scope and Coverage

(with exceptions)
Scope and Coverage
SCOPE AND COVERAGE
Activities that are NOT CONSIDERED as
procurement undertakings under R.A. No.
9184 and its IRR

Direct financial or material assistance given

to beneficiaries

Participation to both local or foreign

scholarships, trainings, continuing education,
conferences, seminars or similar activities that
are governed by Commission on Audit, Civil
Service Commission, and Department of Budget
and Management rules.

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 PROCUREMENT
ORGANIZATION

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PROCUREMENT ACTORS

End-User

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HEAD
Head of OF THE PROCURING
Procuring Entity (HoPE) ENTITY (HoPE)

LGUs

Local Chief
Executive

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POLICIES APPLICABLE TO SK
GPPB CIRCULAR 07-2019
4.2 The HoPE shall undertake the following:
4.2.1 Establish a BAC with at least five (5) but not more
than seven (7) members;

4.2.2 Designate the Chairperson, Vice Chairperson and the

BAC members, who are SK members except the SK
Treasurer;

4.2.3 create a BAC Secretariat;

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 FUNCTIONS
Head AND
of Procuring RESPONSIBILITIES
Entity (HoPE) OF THE HoPE

Establishes Ensures
professionalization
BAC and Approves the
of the BAC, its
designates Secretariat and Annual
its members TWG Members Procurement
Plan (APP)

Approves or
Disapproves
Resolves
the Contract
of Award Protest

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BIDS AND AWARDS COMMITTEE (BAC)

Head of the Procuring Entity

Approving Official of procurement contracts

Internal Auditors

Local Treasurers and Assistant Local

Treasurers

Chief Accountant or Head of the

Provincial/City/ Municipal Accounting Office
and staff

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BIDS AND AWARDS COMMITTEE (BAC)

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BIDS AND AWARDS COMMITTEE (BAC)

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BIDS AND AWARDS COMMITTEE (BAC)

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BIDS AND AWARDS COMMITTEE (BAC)

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BIDS AND AWARDS COMMITTEE (BAC)

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BIDS AND AWARDS COMMITTEE (BAC)

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MEMBERSHIP AND COMPOSITION FOR LGUS

For Provinces, Cities

For Barangays
and Municipalities

5-7 regular
Representative from the members of the
regular offices under the End-User Sangguniang
Office of the Local Chief Representative Barangay
Executive except Punong
Barangay

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FUNCTIONS AND RESPONSIBILITIES OF THE BAC

Recommend award
Recommend
of contract to the
approval and/or Conduct bidding
HoPE or his/her duly
revision of the APP process
authorized
and other reports
representative

Recommend to the
Conduct periodic
HoPE or his/her duly
assessment of the Creation of
authorized
procurement Technical Working
representative the
process and Group (TWG)
imposition of
procedures
sanctions

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BAC SECRETARIAT

HoPE may create a procurement unit to

act as BAC Secretariat

Head shall be at least 5th or 3rd Ranking

Permanent Employee or if not
available, permanent employee of lower rank
There is no minimum or maximum number of
members of the BAC Secretariat

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 FUNCTIONS and RESPONSIBILITIES OF THE BAC SECRETARIAT

Provide administrative support to the BAC and

1 TWG Advertise/post bidding opportunities, including
Bidding Documents, and notices of awards 6
Organize BAC and the TWG meetings and
2 conferences
Assist in managing procurement process 7
Prepare Minutes of Meetings and Resolutions
3 of the BAC

Monitor procurement activities and milestones 8

Take custody of procurement of procurement
4 records
Consolidate PPMPs and prepare the APP 9
Manage the sale and distribution of Bidding
5 Documents
Act as central channel of communications 10

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TECHNICAL WORKING GROUP (TWG)

Legal Experts Review of the Technical Specifications, Scope of

Work, and Terms of Reference
Technical Experts Financial Experts

Shortlisting of Consultants and Eligibility

screening

Review of Bidding Documents

Evaluation of Bids and Evaluation of Bids

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END-USERS

Prepare actual Plan, prepare,

requirements of the finalize, revise
procurement project PPMPs

53
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OBSERVERS

Prepare and
Submit
Observation
Report Notify PE of
Conflict of Eligibility Pre-bid
Interest Shortlisting Conference
Checking
Simplified Posting and Eectronic
Submission of Proc Reports?

Preliminary
Post-
Non- Examination Bid Evaluation
Private
Government Qualification
Organization of Bids
Commission
on Audit

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OBSERVERS

Post-
Minutes of
Abstract of Qualification
BAC
Bids Summary
Meeting
Report

APP and Opened

PPMP Proposals

Subject to signing of Confidentiality Agreement

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ONLINE ACCESS TO OBSERVERS

1 Online monitoring for

observers using the mPhilGEPS

2 PEs to provide online access to

observers for monitoring all stages of
procurement using the mPhilGEPS

3 PEs to inform the GPPB-TSO via

email (observers@gppb.gov.ph) if
online access cannot be provided

GPPB Circular No. 01-2021

 PROCUREMENT
PLANNING

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What is Procurement?

It is the process of selecting services

from a supplier who fits best the need.

It includes the process of selecting

products and services that will provide
value for money.

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without the author’s approval is prohibited.
Procurement Planning
Planning ensures that the overall goal of the Procurement Project will be achieved effectively and
efficiently. Through plans, a Procuring Entity is able to effectively manage and track procurement all the
way to contract performance.

Defining Procurement
Scope of
Requirements Project
Work or
Costing
Technical
• Annual Procurement (ABC)
Specifications
Plan
• Project Procurement
Management Plan Procurement
• Market Study/Scoping Mode of Milestones
(Schedule of
• Cost-Benefit Analysis Procurement
Procurement
• Feasibility Study Activities)
Who are the Players in Procurement Planning?

End-User
Bids And Awards
Committee (BAC)
& Secretariat

Technical
Budget Office
Working Group

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without the author’s approval is prohibited.
What is Procurement Planning?

Process of determining the following:

How many do What are the

What to buy?
you need? details?

What is the When you How to

cost? need it? source it?
IT AIMS TO MANAGE THE EXPECTATIONS FOR FULFILLMENT OF PROCUREMENT NEEDS.
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5 RIGHTS IN PUBLIC PROCUREMENT

Right QUALITY,
in Right QUANTITY,
to Right PLACE,
at Right TIME,
for Right PRICE
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distribution without the author’s approval is prohibited.
 PROCUREMENT PLANNING
AND BUDGET LINKAGE

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Procurement Planning and Budget Linkage

PLANNING

Section
7.1 of IRR

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without the author’s approval is prohibited.
Procurement Planning and Budget Linkage

Section 7.2 of IRR

No procurement shall be undertaken

unless it is accordance with the
approved Annual Procurement Plan
(APP)

Approval of the APP by the Head

of Procuring Entity (HoPE) or
designated second-ranking official
is mandatory

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without the author’s approval is prohibited.
 PROCUREMENT PLANNING
- Cost-Benefit
Analysis
Submission of Consolidation of Approval of the
- Market Study
PPMP PPMP to APP Indicative APP
- Preparation of
PPMP

End-user Unit End-user Unit BAC & Sec HoPE

August-
June July-August October
September

Prepares and
Budget Call Prepare and submit
budget proposal
Conducts budget submits Local
Expenditure
(June 16) hearings
Program

Local Budget Office Department Heads LFC LCE

BUDGET PREPARATION
 PROJECT PROCUREMENT
MANAGEMENT PLAN (PPMP)

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PPMP

A guide document in the procurement and contract

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

Tool allowing the PE the flexibility to optimize the utilization of scarce

resources.
Minimize the practice of doing short-cuts

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

The end-user or implementing units shall be responsible for the preparation of all documents
necessary for the procurement activity, including but shall not be limited to, the technical
specifications, scope of work, or terms of reference

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without the author’s approval is prohibited.
PPMP Sample Format

Downloadable at https://www.gppb.gov.ph/downloadables.php

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without the author’s approval is prohibited.
PPMP Market Scoping

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without the author’s approval is prohibited.
PPMP Market Scoping

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 ANNUAL PROCUREMENT
PLAN (APP)

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APP

The entirety of the procurement activities that will be undertaken

by the procuring Entity within the calendar year using the
prescribed format issued by the GPPB.

Shall be consolidated by the BAC Secretariat from the PPMPs of end-user

units. The BAC shall take into consideration the following factors:

One year planning Emergency or

Schedule of Activities
perspective Contingency Fund

Should be maintained and updated regularly

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without the author’s approval is prohibited.
Preparation of APP
Once Appropriation Ordinance Becomes Final

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without the author’s approval is prohibited.
Tips in Consolidating PPMPs into APP

Sort by Type of
Procurement

Check for Items which

can be merged
Goods Infrastructure Consulting
i.e: IT Equipment, Design and Build
projects, Office Furniture, etc
Common Use Supplies

CSE NON-CSE
Mode of Procurement

Sources of Funds

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without the author’s approval is prohibited.
1 2 3 4 5 7 9

6 8

Column 1: Code (UACS/PAP) Column 5:Mode of Procurement

Column 2: Procurement Program/Project Column 6:Schedule of Each Stage of the Procurement Activity
Column 3: PMO/End-user Column 7:Source of Funds
Column 4: EPA or not Column 8:Estimated Budget
Column 9 Remarks (Brief Description of the P/A/P)

Downloadable at https://www.gppb.gov.ph/downloadables.php

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without the author’s approval is prohibited.
APP VIS-À-VIS APP-CSE

APP being referred to in the IRR of RA 9184 is different from the

APP-CSE

APP-CSE serves as basis of DBM – PS in projecting its inventory

requirements, scheduling of activities, and over-all management
of the central procurement of common-use goods (DBM Circular
Letter 2011-6 & 2011-6a)

Common-use supplies – refers to those supplies and materials

and equipment included in the price list of the PS which are
necessary in the transaction of the official business of the
procuring entity and consumed in its day-to-day operations

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without the author’s approval is prohibited.
APP-CSE

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without the author’s approval is prohibited.
 SIMPLIFIED POSTING AND
ELECTRONIC SUBMISSION OF
PROCUREMENT REPORTS

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Reportal Requirements to GPPB

PMR for 1st PMR for 2nd

Approved Updated Updated Approved
Semester Semester
APP shall be APP shall be APP shall be APCPI shall
shall be shall be
submitted to submitted to submitted to be submitted
submitted to submitted to
GPPB by the GPPB by the GPPB by to GPPB by
GPPB by GPPB by
January 30 July January March 31
July 14 January 14

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Electronic Submission of Reports
GPPB Resolution No. 11-2020

Mandatory submission through electronic mail

Procurement Reports Procurement Certification on Posting of APP/

in Microsoft Excel Reports in PDF PMR signed by BAC Sec Head

Mandatory posting of the APPs and PMRs in the agency website and discontinuance of
posting the same in the GPPB website

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without the author’s approval is prohibited.
Electronic Submission of Reports
GPPB Resolution No. 11-2020

All PEs shall submit to the GPPB their approved APPs,

PMRs and APCPI Results through the electronic mail
address below:

REPORT eMAIL ADDRESS

APP app@gppb.gov.ph
PMR pmr@gppb.gov.ph
APCPI apcpi@gppb.gov.ph

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without the author’s approval is prohibited.
 PINOY SALESMAN IN AMERICA

The Boss asks: 'Do you have any sales experience?'

The Pinoy says: 'Sir, I was a salesman back home in Manila.'

Well, the boss liked the Pinoy so he gave him the job. 'You
start tomorrow. I'll come down after we close and see how
you did.'

His first day on the job was rough but he got through it. After
the store was locked up, the boss came down. 'How many
sales did you make today?'

Pinoy boy says: 'Sir, Just ONE sale.'

The boss says: 'Just one? No! No! No! You see here
our sales people average 20 or 30 sales a day. If you
want to keep this job, you'd better be doing better than
just one sale. By the way, how much was the sale for?'

Pinoy boy says: ' $101 237. 64'

Boss says: '$101 237. 64? What the hell did you sell?'

Pinoy boy says:'Sir, First I sell the Mayor a small

fishhook.
Then I sell him medium fishhook.
Then I sell him large fishhook.
Then I sold him new fishing rod and some fishing gear.
 Then I ask him where he's going fishing and he
said down on the coast, so I told him he'll be
needing a boat, so we went down to the boating
department and I sell him twin engine Chris Craft.

Then he said he didn't think a government vehicle

would pull it, so I took him down to our automotive
department and sell him that 4X4 Blazer.

I then ask him where he'll be staying, and since he

had no accommodation, I took him to camping
department and sell him one of those new igloo 6
sleeper Camper Tents.
 Then the guy said, while we're at it, I should
throw in about $100 worth of groceries and cases of beverages.

The boss said: 'You're not serious? A government guy came in

hereto buy a fishhook and you sold him a boat, a 4X4 truck and
a tent?’

Pinoy boy says: 'No Sir, actually he came in to

buy Paracetamol for his headache and I said:

'Well, fishing is the best way to relax your

mind!'
Identifying the Need

Suggested basis for

identifying needs

This learning module was developed by the Government Procurement Policy Board – Technical Support Office, and any form of reproduction and distribution
without the author’s approval is prohibited.
PREPARATION OF TECHNICAL
SPECIFICATIONS, SCOPE OF
WORK, AND TERMS OF
REFERENCE
“Every purchase requires some
form of technical specification
no matter how simple.”
Constitutes the “statement
of the requirements”
• Described such that Technical
they fulfil the use for Specifications
which they are
intended by the
Procuring Entity.
 • states the needs to
be satisfied
• defines what it
Technical specification is
wishes to buy
the heart of the
• defines
procurement transaction expectations
• establishes the
standard directly
affects the quality
and performance
 Technical
Specifications

Section 17.2 of 2016 IRR:

The specifications and other terms in
the Bidding Documents shall reflect
the necessary specifications
required to meet the needs of the
Procuring Entity in clear and
unambiguous terms.
Technical Specification
for Each Type of Procurement

Scope of Work
(SOW)

Infrastructure Projects
WHAT ARE THE DIFFERENT
SOURCES OF TECHNICAL
SPECIFICATIONS?
SOURCES FOR SPECIFICATIONS
SPECIFICATIONS WRITING FOR
THE PROCUREMENT OF
GOODS AND SERVICES
TYPES OF SPECIFICATIONS

Design Functional Performance

Specifications Specifications Specifications
PROCUREMENT OF GOODS

Design
Specifications
Design Specifications are
typically used in the
procurement of raw materials
and simple off-the-shelf goods
or pharmaceutical drugs etc.
PROCUREMENT OF GOODS

Functional
Specifications
Focus on the purpose or use
of the object.
PROCUREMENT OF GOODS

What are the functional specifications of the following?

Used for writing and drawing primarily on blackboards.

To hold sheets of paper together.

Intended for laser printer, standard office copier, lithographic

printing/ duplicating machine.
PROCUREMENT OF GOODS

Performance
Specifications
• Performance Specifications
emphasize the output performance
needed rather than its design and
structure and are therefore easier to
compile.
PROCUREMENT OF GOODS

What are the performance specifications of the following?

Must produce visible and distinct marks that can easily be erased
either a piece of dry cloth or felt eraser.

Must secure a file of 2mm thickness sheets of paper and retain in

this position for 24 hours and when removed from the paper shall
spring back into its original position.

Brightness, % (Photovolt) < 90 Opacity, % < 90

Stiffness, (Gurley), MD, µN.m < 250 Dirt Count, mm2,m2 < 0.08
COA CIRCULAR NO. 2012-003
Updated Guidelines for the Prevention and Disallowance of Irregular,
Unnecessary, Excessive, Extravagant and Unconscionable Expenditures

DEFINITION OF EXCESSIVE EXPENDITURES

Unreasonable expenses – immoderate quantity and
exorbitant price

❑ Expenses exceeding what is usual or proper

❑ Unreasonably high expenses and beyond just
measure or amount
❑ Expenses in excess of reasonable limits
COA CIRCULAR NO. 2012-003
Updated Guidelines for the Prevention and Disallowance of Irregular,
Unnecessary, Excessive, Extravagant and Unconscionable Expenditures

PENALTIES
Disallowance
❑ The disapproval in audit of a
transaction, either in whole or
in part
❑ Miralles vs. COA
 General Principles and
Considerations of Ethics in
Public Procurement

This learning module was developed by the Government Procurement Policy Board – Technical Support Office, and any form of reproduction and distribution without the author’s approval is prohibited.
Importance of Ethics in Public Procurement

Procurement Corruption/unethical
behavior of procurement
is susceptible agents will undermine
to corruption the achievement of
agency goals
Concept of Public Trust

OBLIGATION to
Affirmative DUTY to refrain from conduct
PUBLIC
pursue public that uses public office
interest TRUST for private benefit or
partisan advantage

Source: Queensland Criminal Justice Commission, 1993

Prohibited Practices

Collusive Corrupt Coercive Fraudulent

Corrupt Practices
Practices Practices Practices Practices

Scheme or arrangement Improper and unlawful Harming or threatening Misrepresentation of

between two (2) or more enrichment of one’s self to harm, directly or facts in order to influence
bidders to establish bid or others indirectly a procurement process
prices at artificial levels
Due Diligence in Government Undertakings
• Due diligence is:
✔the process through which enterprises identify, prevent, and mitigate actual and potential
The standard
adverse of ethics
impacts and required
accounts for howtothese
be observed
impacts are byaddressed.
procuring
✔ an integral entities and bidders, manufacturers,
part of decision-making and risk management systems and is an ongoing
suppliers
proactive andorreactive
distributors during
process that isthe procurement
to be and
carried out throughout the lifecycle of a project.
execution of contract. (OECD, 2017)

• In Philippine law, due diligence is embedded in the

New Civil Code (NCC):
✔ Ordinary diligence or diligence of a good
father of the family (Art. 1163 NCC)
✔ Extraordinary diligence for common carriers
(Art. 1733-1736 NCC)
Due Diligence Process and Supporting Measures
Due diligence is a flexible, risk-based process and not a
specific formula for enterprises to follow. It requires them to
Thedescribe
know and standardthe of
riskethics required
of adverse to be
impacts as aobserved
result of by
procuringand
their operations, entities
on thatand bidders,
basis manufacturers,
take steps to address the
risk. suppliers or distributors during the procurement and
execution of contract.
(OECD, 2018)

In public procurement, risk assessment and management is a

critical factor to be undertaken in developing the project
requirements whereby the end-user or implementing unit
must identify the risks and come up with its own risk
management plan.

(Generic Procurement Manual, Vol.1)

 Offenses and Penalties
Relating to
Public Procurement

This learning module was developed by the Government Procurement Policy Board – Technical Support Office, and any form of reproduction and distribution without the author’s approval is prohibited.
Sanctions and Penalties under RA No. 9184
Art. XXI of RA No. 9184 & • COVERAGE OF THE PENAL CLAUSE
Rule XXI of the 2016 IRR The penalties and offenses under RA 9184 and its revised
The standard
(PENAL CLAUSE) of ethics required to be observed by
IRR shall cover all types of procurement whether done
procuring entities and bidders, manufacturers,
manually or electronically. (Sec. 65.4 of the IRR)
suppliers or distributors during the procurement and
execution of contract.
• THREE LIABILITIES FOR WRONGFUL ACT OR
OMISSION UNDER RA NO. 9184:

1. Criminal Liability – Sec. 65 of the 2016 IRR

1. Civil Liability – Sec. 67 of the 2016 IRR
1. Administrative Liability – Sec. 69. 1 (a) to (i) of the
2016 IRR
Criminal Penalties under RA No. 9184 vs. RA No. 3019

Sec. 65 of RA No. 9184 Sec. 3 of RA No. 3019

The standard of ethics required to be observed by
procuring entities and bidders, manufacturers,
✔Principal Penalty: Imprisonment ✔Imprisonment of not less 6 years
suppliers orofdistributors during the procurement
not less than 6 years & 1 day, and
and 1 month, but not more than
execution ofbut
contract.
not more than 15 years. 15 years.

✔Accessory Penalty: ✔One may be charged with

• Public Officer: Temporary violating RA No. 3019 in addition
disqualification from public office to a felony under the RPC for the
• Private Individual: Permanent
same act. (No double jeopardy)
disqualification from transacting
business with government
Offenses Committed by Public Officers
Sec. 65.1(a) of the 2016 IRR
Sec. 3(k) of RA No. 3019
RA No. 9184
The standard of ethics required to be observed by
procuring •entities
Opening anybidders,
and sealed Bid without
manufacturers, • Divulging valuable information of
authority or prior to scheduled
suppliers ordate
distributors during
including but the procurement
not limited to Bids aand
confidential character
execution ofthat may have been submitted
contract.
through the electronic system

Sec. 65.1(b) of the 2016 IRR

RA No. 9184 Sec. 3(f) of RA No. 3019

• Delaying, without justifiable cause, • Neglecting or refusing to act

the screening for eligibility, opening within a reasonable time on any
of bids, evaluation and post matter pending before him for the
evaluation of bids, and awarding of purpose of obtaining benefit or
contracts beyond the prescribed
periods of action. advantage
Offenses Committed by Public Officers

Sec. 3(c) of RA No. 3019 Sec. 3(d) of RA No. 3019

The standard of ethics required to be observed by
procuring •entities
Directlyand bidders, requesting
or indirectly manufacturers,
or • Accepting or having any member of
suppliers or receiving
distributors
any during thepecuniary
gift or any procurement his
andfamily accept employment in a
execution oforcontract.
material benefit for any private enterprise within one year
government license or permit. after termination.

• Exception: Unsolicited gifts of

small or insignificant value
offered/given as a mere token of
Family relation shall include
gratitude or friendship according to the spouse or relatives by
local customs or usage. (Sec. 14 consanguinity or affinity in the
of RA No. 3019) 3rd civil degree.
Offenses Committed by Public Officers
Sec. 65.1(c) of the 2016 IRR Sec. 3(a) of RA No. 3019
The standard of ethics RA required
No. 9184to be observed by
procuring •entities
Unduly and bidders,
influencing or manufacturers,
exerting • Persuading, inducing, influencing
suppliers orundue
distributors
pressureduring
on anythe procurement
member of and
another public officer to:
execution ofthecontract.
BAC or any officer or employee a) perform an act constituting a
of the procuring entity violation of rules and regulations
b) allowing himself to be so
persuaded, induced, or influenced
to commit such violation or offense
Offenses Committed by Public Officers
Violation re: persuading, inducing, or influencing another public officer
The standard of ethics required to be observed by
A public officer can still be liable sans proof
Article 1337 entities
procuring New Civil Code
and of the manufacturers,
bidders, that he received any material remuneration
Philippines
suppliers or distributors during the procurement and
from the transaction.
execution of contract.
“There is undue influence when a
person takes improper advantage of
his power over the will of another,
depriving the latter of a reasonable
freedom of choice.”
Offenses Committed by Public Officers
Sec. 65.1(d) of the 2016 IRR Procurement by Lot
RA No.
The standard of9184
ethics required to be observed by
procuring
• Splitting entities
of contracts which and bidders,
exceed manufacturers,
procedural PEs are allowed to conduct procurement by lots/items of
purchasesuppliers
limits and or distributors
competitive bidding.during the procurement
a project, whichandmay be awarded as a single or separate
contracts. (Section 21.1(b) of the 2016 revised IRR of RA
execution of contract.
• Two instances: No. 9184)
a) Breaking up of contract into smaller quantities and
amounts Procurement by lots attracts maximum competition and
b) Dividing contract implementation into artificial facilitates the efficient and economical procurement since
phases or sub-contracts only one bidding is conducted for the lots/items

• Purpose:
To evade or circumvent the requirements of RA No.
9184 and its IRR, particularly the necessity of
competitive bidding and the requirements for the
alternative methods of procurement.
Offenses Committed by Public Officers
Sec. 65.1(e) of the 2016 IRR Sec. 3(e) of RA No. 3019
RA required
The standard of ethics No. 9184to be observed by
• Causing any undue injury to any
procuring entities and bidders, manufacturers, party, including the Government, or
• Head of Agency abusing the giving any private party any
suppliers orexercise
distributors during the procurement
of his/her power and
unwarranted benefits, advantage or
execution ofunder
contract.
Sec. 41 of RA No. 9184 preference in the discharge of his
(Reservation Clause), with official administrative or judicial
functions.
manifest preference to any bidder
who is closely related to him. Sec. 3(g) of RA No. 3019
• Entering, on behalf of the
Government, into any contract or
transaction manifestly and
grossly disadvantageous to the
same, whether or not the public
officer profited or will profit thereby.
Offenses Committed by Public Officers

Sec. 3(j) of RA No. 3019

The standard of ethics required to be observed by
procuring entities and bidders, manufacturers,
• Knowingly approving any
suppliers or distributors
license, permit, privilege and
during the procurement or
execution of contract.benefit in favor of any person
not qualified for or not legally
entitled to such license.
Offenses Committed by Private Individuals
Sec. 65.2(a) of the 2016 IRR Sec. 65.2(b) of the 2016 IRR
RA required
The standard of ethics No. 9184to be observed by RA No. 9184
procuring entities and bidders, manufacturers,
• Two or more persons/ entities • A bidder maliciously
suppliers oragreeing
distributors
andduring the procurement
submitting bids and
submitting different bids
execution ofascontract.
bona fide bidders with pre- through two or more persons,
arranged lowest bid. corporations, partnerships, or
any other business entities
where he/she has interest to
simulate competition.

*Public officers conspiring with the private individuals shall also be liable
under this Section.
Offenses Committed by Private Individuals
Sec. 65.2(c) of the 2016 IRR Sec. 65.2(d) of the 2016 IRR
RA required
The standard of ethics No. 9184vto be observed by RA No. 9184
procuring entities and bidders, manufacturers,
• Two or more persons/ entities • A bidder, by himself or in
suppliers orentering
distributors
intoduring the procurement
agreement to and
connivance with another,
execution ofrefrain
contract.
from submitting bid employing other acts or
or withdraw from bidding, to schemes that suppress
secure an undue advantage to competition that is
any of the remaining bidders. disadvantageous to to public.

*Public officers conspiring with the private individuals shall also be liable
under this Section.
Offenses Committed by Private Individuals
Sec. 65.3(a) of the 2016 IRR Sec. 65.3(c) of the 2016 IRR
RA No. 9184 RA No. 9184
The standard of ethics required to be observed by
• Submission
procuring of
entities • Using name of another or allowing
and bidders, manufacturers,
eligibility
requirements
suppliers orcontaining
distributorsfalse another to
during the procurement use one’s name in the bid
and
information
executionoroffalsified
contract.documents
Sec. 65.3(b) of the 2016 IRR Sec. 65.3(d) of the 2016 IRR
RA No. 9184 RA No. 9184

• Submission of bidding documents • Withdrawal of bid after post-qualified

containing false information or or refusing to accept the award
falsified documents without just cause
*Public officers conspiring with the private individuals shall also be liable
under this Section.
Offenses Committed by Private Individuals

Two ways of Committing Sec. 65.3(c) of the 2016 IRR RA No. 9184
The standard of ethics required to be observed by
procuring entities and bidders, manufacturers,
PARTICIPATING IN COMPETITIVE BIDDING
suppliers or distributors during the
THROUGH procurement
ANOTHER and
PERSON
execution of contract.
Bidder submits a bid using another’s name. Bidder submits a bid using another’s
name with his consent.
The 3rd party does not know that his name The 3rd party has knowledge that his
was used in the bidding. name was used to join the bidding.
Purpose is to make it appear that there is Purpose is to make it appear that there
competition. is competition.
The bidder is the only one liable. The Bidder and the Name-Lender are
both liable.
Administrative Offenses Committed by Bidders
Sec. 69.1 of RA No. 9184
Criminal Acts Warranting a Separate Purely Administrative in
The standard Administrative
of ethics required to be
Investigation observed by
Nature
procuring entities and bidders, manufacturers,
suppliers a)
or distributors
Submission during the procurement
of falsified eligibility f) and
Contract termination due to the
fault of the bidder
execution of documents
contract.
b) Submission of bids with false g) Refusal to clarify or validate in
information or fake documents writing its Bid during post-
qualification within 7 c.d. from PE’s
c) Allowing the use of one’s name or request for clarification
using the name of another
h) Any documented unsolicited
d) Withdrawal of Bid, refusal to attempt to unduly influence the
accept award or enter into contract outcome of bidding in his/her favor
without valid cause
i) All other acts that tend to defeat the
e) Refusal or failure to post the purpose of competitive bidding
performance security
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