GOVERNMENT

PROCUREMENT ACT
THE 2016 REVISED IMPLEMENTING RULES AND REGULATIONS OF PUBLIC
REPUBLIC ACT NO. 9184
What is PROCUREMENT?
• 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)

• It is also the process of finding, agreeing terms and acquiring

goods, services or works from an external source, often via a
tendering or competitive bidding process.
PROCUREMENT

• used to ensure the buyer receives goods, services or works at the

best possible price, when aspects such as quality, quantity, time, and
location are compared

• intended to promote fair and open competition for corporation’s

business while minimizing risk, such as exposure to fraud and
collusion
GOODS
Refer to –

 All items, supplies and materials

 Including general support services
 Which may be needed in the project or activity, whether in the nature of equipment,
furniture, stationery, or contractual services, such as:

1. repair and maintenance of equipment and furniture

2. trucking, hauling, janitorial and security and other related and analogous services.

EXCEPT: consulting services and infrastructure projects

INFRASTRUCTURE PROJECTS
Refer to -
construction, improvement, rehabilitation, repair /restoration of civil works
components of :
1. IT projects
2. Irrigation
3. flood control and drainage
4. water supply
5. sanitation, sewerage and solid waste management
6. national buildings, hospital buildings, and other related constructions projects of the Government.

RA 9184 and its IRR does not apply to Public/Private Sector Infrastructure Projects under RA
6957 (Act Authorizing Financing, Construction, Operation and Maintenance of Infra Projects
by the Private Sector.) as amended by R.A. 7718 (BOT Law)
CONSULTING SERVICES
Refer to services for Infrastructure Projects and other types of projects or activities of
the Government requiring adequate external technical and professional expertise that
are beyond the capability and/or capacity of the Government to undertake such as, but
not limited to:

(i) advisory and review services;

(ii) pre-investment or feasibility studies;
(iii) design;
(iv) construction supervision;
(v) management and related services; and
(vi) other technical services or special studies.
MIXED PROCUREMENT

 In case of projects involving mixed procurements, the nature of the

procurement, shall be determined based on the primary purpose of
the contract.

 Determination shall be made by the procuring entity.

Procuring Entity (PE)

• -Refers to any branch, constitutional commission or office, agency,

• department, bureau, office, or instrumentality of the GoP (NGA),
including GOCC, GFI,
• SUC and LGU procuring goods, infrastructure projects and consulting
services.
DETERMINATION OF TYPE OF
PROCUREMENT
Classification of ICT Services
PE is in the best position to determine the correct classification of its
procurement based on its identified needs and the best way by which these
needs may be addressed, managed, and satisfied.

It is the motivation or intention of the PE in pursuing the project that will
determine the primary purpose of a project.

PE should be guided by the parameters and conditions in the relevant

provisions of RA 9184 and its IRR on what should be considered as Goods,
Infrastructure Projects or Consulting Services procurement. (NPM 11-2013)
PRINCIPLES OF PUBLIC
PROCUREMENT
Governing Principles
ublic Monitoring
 Awareness and vigilance

ccountability
 Responsibility over actions/decisions (“Answerable”)

ompetitiveness
 Equal opportunity to all eligible bidders
ransparency
 Wider dissemination of bid opportunities
treamlined Process
 Uniformly applicable to all government agencies
 Effective and efficient method
Essence of PUBLIC MONITORING
1. Allows public involvement of qualified and eligible Civil Society
Organizations (NGOs, PAs, academic institutions, and religious
groups) to observe and monitor the procurement process until
contract implementation.

2. Increased transparency of procurement transactions.

How to ensure COMPETITIVENESS
As a rule, procurement must be conducted through competitive bidding
process, unless otherwise provided under GPRA, its IRR and this
Manual, then the Alternative Methods of Procurement can be resorted
to.

This is to guarantee:

1. Equitable and fair grounds for competition among bidders.

2. That no single bidder significantly influences the outcome of the

bidding.
Essence of STREAMLINED
PROCUREMENT SYSTEM
1. Uniform application to all government procurements.

2. Simple and adaptable to advances in modern technology in

order to ensure an effective and efficient method of
procurement.

GPPB conducts a periodic review of government procurement

procedures, and whenever necessary, formulates and
implements changes thereto.
Procurement methods
and procedures
Procurement Methods
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

COMPETITIVE BIDDING
• Refers to a method of procurement which is open to participation by
any interested party and which consists of the following processes:
advertisement, pre-bid conference, eligibility screening of prospective
bidders, receipt and opening of bids, evaluation of bids, post-
qualification, and award of contract. For purposes of, and throughout
this IRR, the terms “Competitive Bidding” and “Public Bidding” shall
have the same meaning and shall be used interchangeably.
Procurement Methods
Bidding Process (Goods & Infra)
Advertisement
Pre-
and/or Pre-Bid
Procurement
Conference Posting Conference

Opening of
Opening of
Bid Submission Technical Proposal
Financial Proposal
(incl. eligibility docs)

Contract
Bid Evaluation Post-qualification Award
Bidding Process (Consulting)

Advertisement
Pre-
and/or Eligibility and
Procurement
Conference Posting Shortlisting

Opening of
Pre-Bid Bid Submission Bids
Conference (QBE or QCBE)

Post-qualification Contract
Bid Evaluation
Award
(QBE or QCBE)
Negotiation
HEAD OF PROCURING ENTITY
(HOPE)
FUNCTIONS AND RESPONSIBILITIES:
1. Establishes BAC and appoints its members
 Ensures that BAC members give their utmost priority to duties
 Ensures professionalization of members of the procurement
organization

2. Approves the Annual Procurement Plan (APP)

3. Approves/Disapproves the Contract Award

4. Resolves Protests
BIDS AND AWARDS COMMITTEE
(BAC)
As a general rule, HOPE must create a single BAC. However,
separate BACs may be created under any of the following
conditions:

1. The items to be procured are complex or specialized;

2. If the single BAC cannot reasonably manage the
procurement transactions as shown by delays beyond the
allowable limits; or
3. If the creation is required according to the nature of the
procurement.
PE’s creation of sub-BACs to be placed under a main BAC is not in
compliance with the requirements under Sec 11 of the IRR of RA
9184.

PE may, however, establish separate BACs with the composition of

the BAC members subject to the qualifications under Section 11.2.2
of the IRR of RA 9184. Each BAC shall not be considered as
decentralized committees pursuant to Section 11.1.2 of the IRR since
it will be headed by a single HOPE. (NPM 74-2013)
BIDS AND AWARDS COMMITTEE (BAC)

FUNCTIONS AND RESPONSIBILITIES:

Recommends Procurement Method

Creates a Technical Working Group (TWG)
Conducts the bidding activities
Resolves Requests for Reconsideration
Recommends Imposition of Sanctions
Invites Observers during all stages of the procurement process
Conducts due diligence review or verifications of the qualifications of
observers
Prepares Procurement Monitoring Report
TECHNICAL WORKING GROUP
(TWG)
FUNCTIONS:
1. Assist BAC in the following activities:

 Preparation of bidding documents

 Eligibility check/short-listing
 Bid evaluation and preparation of reports
 Post-qualification
 Preparation of post-qualification summary report
2. Assist BAC and BAC Secretariat in preparing BAC Resolutions
OBSERVERS
Observers represent the public, the taxpayers who are interested in
seeing to it that procurement laws are observed and irregularities are
averted.
In all stages of procurement process BAC must invite, in writing, at
least three (3) Observers, at least 3 calendar days before the date of
the procurement stage/activity, who shall be:
 Representative from COA
 Duly recognized private group in the sector or discipline of the
particular type of procurement involved
 Non-Government Organization (NGO)
OBSERVERS
RESPONSIBILITIES:

1. Prepare report (jointly or separately) indicating their

observations on the procurement activities

2. Submit report to the PE and furnish a copy to the GPPB

and the Office of the Ombudsman/Resident Ombudsman

3. Immediately inhibit and notify in writing the PE of any

actual or potential conflict of interest
HOW TO BE QUALIFIED FOR BIDDING
• Duly licensed Filipino citizens/sole proprietorships
• Partnerships(Joint Ventures, Corporations, Cooperatives, ) duly organized
under the laws of the Philippines and of which at least seventy five percent
(75%) of the interest belongs to citizens of the Philippines
• Procuring Entity may also invite foreign bidders when provided for under
any Treaty or International or Executive Agreement as specified in the BDS
• The Bidder must submit a computation of its Net Financial Contracting
Capacity (NFCC) or a Commitment from a Universal or Commercial bank to
extend a credit line in its favor if awarded the contract for this project
(CLC).
What is CONTRACT?
Contract is a legally binding or valid
agreement between two(2) parties.
How to consider if a contract is
VALID?
The law will consider a contract to be valid if the
agreement it contains the ff. elements:
• offer and acceptance;
• an intention between the parties to create binding relations;
• consideration to be paid for the promise made;
• legal capacity of the parties to act;
• genuine consent of the parties; and
• legality of the agreement.

NOTE: An agreement that lacks one or more of the elements listed above is not a valid
contract.
Must contracts be in writing?
• Not all contracts need to be in writing.

• Contracts that are required by law to be in writing include contracts:

to buy and sell land
to buy a motor car and door-to-door sales contracts.

However, it is always useful to have the terms agreed between the parties written
down and attached to or kept with any other relevant papers; for example, copies of
quotations, brochures, pamphlets, etc. that were supplied at the time the contract was
entered into. Receipts for money paid should always be kept. If a dispute arises, these
documents will assist in resolving differences between the parties.

• A written contract can be drawn up by listing all the terms agreed between
the parties and getting each of the parties to sign and date the document
at the end.
CONSTRUCTION CONTRACT
• a mutual or legally binding agreement between two parties based on
policies and conditions recorded in document form.

• The two parties involved:

>one or more owners (has full authority to decide what type of
contract should be used)
>one or more contractors
Types of Construction Contract:
• Lump sum contract
• Unit price contract
• Cost plus contract
• Target cost contract
CONSTRUCTION CONTRACT

Lump Sum Contract

• In this type of contract, an owner agrees to pay a contractor a
specified lump sum after the completion of work without a cost
breakdown
• can include incentives or benefits for early termination, or can also
have penalties, called liquidated damages, for a late termination
• preferred when a clear scope and a defined schedule has been
reviewed and agreed upon.
• After work no detailed measurements is required
CONSTRUCTION CONTRACT

Unit Price Contract

• commonly used by builders and in federal agencies
• the total price of the project is based on the price of each item’s unit
• the contractor is paid as per the rates of items specified in the bill of
quantity.
• by providing unit prices, the owner can easily verify that he's being
charged with un-inflated prices for goods or services being acquired
• can easily be adjusted up and/or down during scope changes, making
it easier for the owner and the builder to reach into agreements
during change orders.
• has more flexibility for design changing than the lump sum contract
CONSTRUCTION CONTRACT

Cost Plus Contract

• involves payment of the actual costs, purchases or other expenses
generated directly from the construction activity
• must contain specific information about a certain pre-negotiated
amount (some percentage of the material and labor
cost) covering contractors’ overhead and profit
• costs must be detailed and should be classified as direct or indirect
costs
• are used when the scope has not been clearly defined and it is the
owner responsibility to establish some limits on how much the
contractor will be billing
NOTE: COST PLUS CONTRACTS are difficult or harder to track and more supervision will be needed, normally do not put a lot of risk in the
contractor
COST PLUS CONTRACT

TYPES OF COST PLUS CONTRACT

• Cost Plus Fixed Percentage

• Cost Plus Fixed Fee
• Cost Plus with Guaranteed Maximum Price Contract
• Cost Plus with Guaranteed Maximum Price and Bonus Contract
CONSTRUCTION CONTRACT

Target Cost Contract

• has mutual features of the lump sum and cost plus contracts
• the contractor is paid based on the actual costs plus a certain fee
either fixed or percentage of total cost in case of the cost of the
project doesn’t exceed certain target cost specified by the owner
• there is risk carried by the contractor in case of increase in cost of
construction project.
• the contractor is also rewarded a percentage of any savings between
target and actual cost.
Types of documents in a construction contract:

• General conditions
• Special conditions
• Drawings and specifications
• B.O.Q (bill of quantity)
• Letter of acceptance
• Contractor bid
Conditions of Construction Contract

• terms which rule the relationships between the owner and the
contractor, define each party’s rights and obligations, specify method
of payment and determine actions required when existing any
disputes between the owner and the contractor
The conditions of contract for construction
projects:

• General conditions of contract

• Special conditions of contract
CONDITIONS OF CONTRACTS FOR CONSTRUCTION PROJECT

General conditions of contract:

They are standard terms that suit the majority of projects, they
include:

• Definition of the project

• Contract components
• Rights and responsibilities for the owner and the contractor
• Project schedule
• Payment method
• Warranty and delay penalty
CONDITIONS OF CONTRACTS FOR CONSTRUCTION PROJECT

Special conditions of contract:

• the modifications required to suit the uniqueness of the project,

make the contract flexible for the nature of the project and achieve
project objectives.
Subcontracts
• subcontracting of any portion shall not relieve the Bidder from any
liability or obligation that may arise from the contract for this Project.
• Subcontractors must submit the documentary requirements under
ITB Clause 12 and comply with the eligibility criteria specified in the
BDS.
• The Bidder may identify the subcontractor to whom a portion of the
Works will be subcontracted at any stage of the bidding process or
during contract implementation.
Contents of Bidding Document
• PRE-BID CONFERENCE
• Clarification and Amendment of Bidding Documents
PREPARATION OF BIDS
• Language of Bids
• Eligibility and Technical Components
• Financial Component
• Alternative Bids
• Bid Prices
• Bid Currencies
• Bid Validity
• Bid Security
PREPARATION OF BIDS
• Format and Signing of Bids
• Sealing and Marking of Bids
How to win Bidding
 How To Win Construction Bid
Step layout of what to include in your bid proposal to give your
business the best chance of winning the project:
• 1.) Your company name, logo, and contact information.
• 2.) The contractor’s name and contact information.
• 3.) The current date and proposal timeline.
• 4.) The project’s name and location.
• 5.) A breakdown of the cost of the project.
Include information regarding the proposal type in this section. If you
are specializing in a certain type of project, such as electrical or
heating, make that clear. If this project involves more than one
specialty, such as a combination of mechanical, HVAC, and plumbing
work, separate each of these trades in your proposal and give the
specific cost of each one in a line item sheet.
• 6) The overall price for the project.
Take the price of each of those broken down line items and include
your contractor’s fee (typically 10-25 percent) to create the total cost
of the project.
• 7) A summary of the scope of work.
Include every aspect of the project in this section, including the
original drawings as reference. Use your line item list as a guide to
detail each portion of the work you will be doing. Get specific about
the numbers and materials that will be required to finish the job. Also
use this as a way to clarify your intentions for any deviations from the
original bid documents and any fixtures that are yet to be
determined.
• 8) Any concerns or stipulations.
To alleviate your own worry (and liability), be upfront about any issues
specific to your company or concerns about the project itself. As a
contractor takes a risk with every project he or she takes on, include any
necessary information regarding code requirements and the need to
negotiate any potential changes to the plan. Base these on the specs
included in the bid invitation.
• 9) An estimated timeline and deadline for the project.
• 10) Any necessary equipment to complete the work.
• 11) An appreciative conclusion.
End on a note of thanks toward the person reading your bid, thanking
them for taking the time to consider it; invite them to contact you with any
questions as they move forward in their selection process.
• 12) The actual construction contract.
Along with your bid, attach a contract for your work. This will give the
owner a look at the conditions that come along with the bid, such as
payment expectations and dates, so they can negotiate these points
early on, if needed.
As a general rule, make sure that your bid proposal and contract have
been edited for grammar and clarity. You aren’t trying to win a
Pulitzer Prize in writing, but you do want to give a professional and
polite image for your company and yourself. Putting in a little extra
effort will help set you above the other companies bidding on the
project.