ALTERNATIVE METHODS OF PROCUREMENT CAPACITY

slide1. ALTERNATIVE METHODS OF PROCUREMENT CAPACITY DEVELOPMENT DIVISION
Government Procurement Policy Board
Technical Support Office (GPPB-TSO) 1<br>
slide2. PROCUREMENT STANDARD GENERAL RULE : Sec. 10

All procurement shall be done through competitive bidding, except as provided in Rule XVI of the IRR.

EXCEPTION

Alternative methods shall be resorted only:

In highly exceptional case
To promote economy and efficiency
Justified by the conditions specified in IRR
Prior approval of the HOPE
GPPB approval as required under EO 423, S. 2005 (as amended)
Most advantageous price for the Government 2<br>
slide3. ALTERNATIVE METHODS Limited Source Bidding
Direct Contracting
Repeat Order
Shopping
Negotiated Procurement 3<br>
slide4. LIMITED SOURCE BIDDING(Sec. 49) APPLICABILITY:
Goods
Consulting services

CONDITIONS:
Highly specialized types where only a few bidders are known to be available
Major plant components beneficial to limit bidding to known qualified bidders to maintain uniform quality and performance of the plant 4<br>
slide5. LIMITED SOURCE BIDDING List shall be maintained by the relevant government authority (RGA)
PE may be the relevant government authority
List shall be updated periodically and submitted to the GPPB

Pre-selection shall based on capability and resources to perform the contract taking into account:
Experience and past performance on similar contracts
Capabilities with respect to personnel, equipment, and/or manufacturing facilities
Financial position 5<br>
slide6. LIMITED SOURCE BIDDING PRE-SELECTION PROCEDURES PER GPM
GPPB Resolution 06-2012 6<br>
slide7. LIMITED SOURCE BIDDING PRE-SELECTION PROCEDURES
GPPB Resolution 06-2012 7<br>
slide8. LIMITED SOURCE BIDDING In order to apply LSB on the procurement of motor vehicle, PE should first establish that the motor vehicle sought to be procured is either a highly specialized type of goods or a major plant component; otherwise, Competitive Bidding shall apply. (NPM 63-2013)

Catering Services does not involve highly specialized requirements, and is undoubtedly not a major plant component. Limited Source Bidding cannot be resorted to in the procurement of Catering Services. Competitive Bidding should be resorted to in the acquisition of the contemplated service. (NPM 61-2013) 8<br>
slide9. APPLICABILITY:
Goods

CONDITIONS:

Items of proprietary nature from proprietary source
Critical components from a specific supplier to hold a contractor to guarantee its project performance
Items sold by an exclusive manufacturer or dealer

no other suppliers selling it at lower prices
no suitable substitute can be obtained at more advantageous terms to the Government DIRECT CONTRACTING 9<br>
slide10. Since there are other Passport Readers available in the market apart from that manufactured by 3M Corporation, Direct Contracting cannot be utilized for the acquisition of brand new passport readers.

Even though 3M Passport Reader is proprietary in nature and can be obtained from the proprietary source, there may be other Passport Readers in the market, which are likewise proprietary in nature that can be obtained. (NPM 41-2013) DIRECT CONTRACTING 10<br>
slide11. APPLICABILITY:
Goods

CONDITIONS:
Same or lower unit prices, provided that such prices are still the most advantageous to the GOP after price verification
No splitting of contracts
Availed of within 6 months from the contract effectivity date stated in the NTP arising from the original contract, except in cases duly approved by the GPPB
Not to exceed 25% of the quantity of each item
Original contract awarded through competitive bidding REPEAT ORDER 11<br>
slide12. Repeat Order under Section 51 of RA 9184 does not require post-qualification.

The phrase “subject to post-qualification process described in the Bidding Documents”, as stated in the provision refers to Competitive Bidding and not to Repeat Order. (NPM 13-2013) REPEAT ORDER 12<br>
slide13. APPLICABILITY [52.1(A) AND (B)]:
Goods

CONDITIONS [SHOPPING UNDER §52.1(A)]:
There is an unforeseen contingency requiring immediate purchase
Amount does not exceed the threshold

CONDITIONS [SHOPPING UNDER §52.1(B)]:
Procurement of ordinary or regular office supplies and equipment not available in PS-DBM
Amount does not exceed the threshold SHOPPING 13<br>
slide14. THRESHOLD FOR UNFORESEEN CONTINGENCIES [S. 52.1(a)] NGAs, GOCCs, GFIs, SUCs – PhP100,000
LGUs – 14<br>
slide15. APPLICABILITY
All types of Procurement

CONDITIONS:
Procurement does not fall under Shopping [§52]
Amount does not exceed the threshold NEGOTIATED PROCUREMENTSMALL VALUE PROCUREMENT 15<br>
slide16. NGAs, GOCCs, GFIs, SUCs – PhP500,000

LGUs – SHOPPING [S 52.1(b)] ANDSMALL VALUE PROCUREMENT 16<br>
slide17. Decision to resort to shopping/SVP shall be reflected in the Annual Procurement Plan (APP)
After approval, BAC may delegate execution
Posting in PhilGEPS required if amount is > PhP50,000
Request for Quotation
Extension of deadline for submission of quotation
Award
PE to validate legal, technical, and financial capability through relevant documents or other means SHOPPING and SMALL VALUE PROCUREMENT 17<br>
slide18. Attach copy of DILG Department Order SHOPPING and SMALL VALUE PROCUREMENT COMMITTEE (SSVPC) 18<br>
slide19. PROCEDURAL GUIDELINES: SHOPPING and SMALL VALUE PROCUREMENT 19<br>
slide20. APPLICABILITY
All types of Procurement

CONDITIONS:
Two failed biddings
Mandatory review of the following:
Minimum technical specifications
ABC, which may be adjusted up to 20% from last bidding NEGOTIATED PROCUREMENTTWO FAILED BIDDINGS 20<br>
slide21. BAC shall invite and engage in negotiations with sufficient number of suppliers, contractors or consultants to ensure effective competition

Requirements, guidelines, documents, clarifications, or other information relative to the negotiations shall be communicated on an equal basis NEGOTIATED PROCUREMENTTWO FAILED BIDDINGS 21<br>
slide22. Submission of best and final offer by suppliers, contractors, or consultants on a specified date.

Criteria in selecting the successful offer:
Offer should meet the PE’s minimum technical requirements.
Offer should not exceed ABC

Observers shall be invited in all stages NEGOTIATED PROCUREMENTTWO FAILED BIDDINGS 22<br>
slide23. PROCEDURAL GUIDELINE NEGOTIATED PROCUREMENTTWO FAILED BIDDINGS 23<br>
slide24. Where the PE failed to receive any quotations for the procurement of the services of a private counsel despite posting twice in the PhilGEPS website, the procuring entity has the discretion to resort to alternative methods of procurement, subject to compliance with the parameters and factors laid out in RA 9184 and its associated IRR. (NPM 09-2013) NEGOTIATED PROCUREMENTTWO FAILED BIDDINGS 24<br>
slide25. PE can only resort to Negotiated Procurement under Section 53.1 (Two-Failed Biddings) of the IRR of RA 9184 for the procurement of the Project if the two-failed biddings were due to circumstances enumerated under Section 35 of the same IRR.

If the failure of bidding is due to the declaration by the HOPE pursuant to Section 41 of the IRR , Negotiated Procurement (Two Failed Biddings) cannot be resorted to. (NPM 72-2013) NEGOTIATED PROCUREMENTTWO FAILED BIDDINGS 25<br>
slide26. APPLICABILITY:
All types of Procurement

CONDITIONS:
In case of imminent danger to life or property during a state of calamity
When time is of the essence arising from natural or man-made calamities
Other causes where immediate action is necessary
To prevent damage to or loss of life or property
To restore vital public services, infrastructure facilities and other public utilities NEGOTIATED PROCUREMENTEMERGENCY CASES 26<br>
slide27. APPLICABILITY:
All types of Procurement

CONDITIONS:
Rescinded or terminated contract
Immediate action is necessary:
To prevent damage to or loss of life or property
To restore vital public services, infrastructure facilities, and other public utilities NEGOTIATED PROCUREMENTTAKE-OVER OF CONTRACTS 27<br>
slide28. Negotiate starting with the 2nd LCB or HRB at the bidder’s original bid price, then to the next if negotiation fails

If negotiation fails, invite a short list of at least 3 to submit bids and negotiate starting with the LCB or HRB NEGOTIATED PROCUREMENTTAKE-OVER OF CONTRACTS 28<br>
slide29. APPLICABILITY:
Infrastructure
Consulting Services

CONDITIONS:
Subject contract is adjacent or contiguous to an on-going infra or consulting
Original contract is a result of competitive bidding
Subject contract has similar or related scopes of work NEGOTIATED PROCUREMENTADJACENT OR CONTIGUOUS 29<br>
slide30. Within the contracting capacity of the contractor/consultant
The same prices or lower unit prices as the original contract less mobilization cost
Amount does not exceed amount of the on-going project
No negative slippage
Negotiations commenced before expiry of original contract NEGOTIATED PROCUREMENTADJACENT OR CONTIGUOUS 30<br>
slide31. NEGOTIATED PROCUREMENTAGENCY TO AGENCY APPLICABILITY:
All types of Procurement

CONDITIONS:
Cost-benefit analysis indicating A-to-A is more efficient and economical
A-to-A does not exceed 25% of PE’s total budget for each category (goods, infra, consulting)
Servicing agency has mandate to undertake the project
Servicing agency owns or has access to necessary tools required for the project

Other requirements provided in Implementing Guidelines on Agency-to-Agency Arrangements (GPPB Resolution 18-2007) 31<br>
slide32. NEGOTIATED PROCUREMENTAGENCY TO AGENCY PITC Pharma, Inc. (PPI) has been given express mandate to be the central/lead agency for procurement of all government agencies’ requirements for drugs and medicines pursuant to RA 9501. However, RA 9501 does not exempt it from the procurement policies, rules and regulations established under RA 9184 and its IRR.

PPI is not exempt from posting a Performance Security under §39 of RA 9184 and its IRR when entering into a contract with other government agencies and the PE requires such security. (NPM 37-2013) 32<br>
slide33. NEGOTIATED PROCUREMENTAGENCY TO AGENCY For the procurement of CTC, the more appropriate method to be used is A to A rather than Direct Contracting

In cases where procurement from another agency of the government is more efficient and economical, Negotiated Procurement under Section 53.5 (Agency-to-Agency Agreements) may be resorted to. This rule allows a government entity to procure from another government entity without need of public bidding, subject to compliance with the prescribed conditions and procedures under existing rules and the Guidelines on Agency-to-Agency Agreements (Guidelines). (NPM 52-2013) 33<br>
slide34. NEGOTIATED PROCUREMENTPROCUREMENT AGENT APPLICABILITY:
All types of Procurement

CONDITIONS:
HOPE has determined that PE does not have procurement proficiency or capability to undertake a particular procurement

ACTIONS AVAILABLE:
Request other GOP agencies to undertake such procurement for them
Recruit and hire consultants or procurement agents to assist them directly and/or train their staff in the management of the procurement function 34<br>
slide35. NEGOTIATED PROCUREMENTPROCUREMENT AGENT Where a PE has determined that it lacks the proficiency or capability to undertake its rehabilitation project, which need not be based solely on the PE’s failure to constitute its BAC, the PE may request another government agency to be its Procurement Agent as Section 53.6 of the IRR may also apply in cases where a BAC is validly constituted, but due to the number of bidding activities to be undertaken by the procuring entity; magnitude and complexity of the project; experience of the members of the BAC; location and situs of both the principal and the agent; and, other valid and reasonable circumstances, the procuring entity may not have the proficiency or capability to undertake the particular procurement activity. (NPM 38-2013) 35<br>
slide36. NEGOTIATED PROCUREMENTHIGHLY TECHNICAL PROCUREMENT APPLICABILITY:
Consulting Services

CONDITIONS:
Individual consultant
Work involves:
Highly technical or proprietary
Primarily confidential or policy determining, where trust and confidence are the primary consideration
Term is, at the most, 6 months, renewable at the option of the appointing HOPE, but in no case to exceed the term of the latter 36<br>
slide37. NEGOTIATED PROCUREMENTLEASE OF REAL PROPERTY APPLICABILITY:
Goods (Real Estate and Venue)

CONDITIONS:
Cost-benefit analysis indicating leasing privately-owned real estate or venue is more efficient and economical
APP reflect the proposed lease
Selection to follow the guidelines (GPPB Resolution 08-2009)

Eligibility documents need not be submitted, but PE must validate whether lessor is technically, legally, and financially capable through other means

Lease contracts costing > PhP50,000 should be posted in the PhilGEPS 37<br>
slide38. NEGOTIATED PROCUREMENTNGO PARTICIPATION APPLICABILITY:
All types of Procurement

CONDITIONS:
Appropriation law or ordinance earmarks an amount to be contracted to NGOs

PE may opt to conduct public bidding or negotiated procurement for the selection of NGO, subject to the rules provided in the guidelines (GPPB Resolution 12-2007) 38<br>
slide39. NEGOTIATED PROCUREMENTCOMMUNITY PARTICIPATION APPLICABILITY:
Delivery of goods, including non-consulting services and simple infrastructure projects

CONDITIONS:
In the interest of project sustainability or to achieve certain specific social objectives
PE to propose procedures, specifications, and contract packaging for GPPB approval 39<br>
slide40. NEGOTIATED PROCUREMENTUN AGENCIES APPLICABILITY:
All types of Procurement

CONDITIONS:
Procure from UN Agencies
Small quantities of off-the-shelf goods, primarily in the fields of education and health
Specialized products where the number of suppliers is limited (e.g., vaccines or drugs) 40<br>
slide41. OTHER TERMS AND CONDITIONS Most advantageous price for government should be obtained (S48.1)

Splitting of contracts strictly prohibited (S54.1)

Advertisement and posting for the following methods may be dispensed with provided that the BAC through its Secretariat shall post the Invitation or Request for Submission of Price Quotations:

Shopping [§52.1(b)]
Except: PhP50,000 and below

Negotiated Procurement under Two Failed Biddings [§53.1]

NGO Participation [§53.11]

Small Value Procurement [§53.9]
Except: PhP50,000 and below<br>
slide42. OTHER TERMS AND CONDITIONS ALL awards should be posted, except
Shopping and Small Value Procurement with ABC of PhP50,000 and below

Bid security NOT necessary, except in Limited Source Bidding

Performance and warranty securities necessary, except:
Shopping [§52]
Emergency Cases [§53.2]
Small Value Procurement [§53.9]
Lease of Real Property [§53.10]
Procurement from UN agencies [§53.13] 42<br>
slide43. SUMMARY 43<br>
slide44. SUMMARY 44<br>
slide45. SUMMARY 45<br>
slide46. THANK YOU!! Contact us at:

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F. Ortigas Road, Ortigas Center
Pasig City, Philippines 1605

TeleFax: (632)900-6741 to 44 46<br>