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10/30/2009

Revised Implementing
Rules and Regulations

Republic Act No. 9184


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IRR Revisions
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Background
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Harmonization
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Application of Domestic Preference


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Alignment with International Best Practices

AO 227, Flag Law

Learning from Experience


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Concerns raised by procuring entities, bidders and


observers
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10/30/2009

IRR Revisions
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Scope and Application (Sec. 4)


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All domestically-funded procurement activities

All foreign-funded procurement activities, unless


otherwise stated in the treatyy or international or
executive agreement
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But procurement funded through foreign grants are


excluded
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IRR Revisions
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Scope and Application (Sec. 4)


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GOP negotiating panels shall:


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Adopt as default position, use of the IRR or selection


thru competitive bidding
Explain in writing if treaty, international or executive
agreement states otherwise

IRR now includes definition of treaty, international


or executive agreements, and foreign loans and
grants
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10/30/2009

IRR Revisions
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Procurement Planning (Sec. 7)


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End-user units shall prepare their PPMP which shall be


submitted to the budget office

Budget office to evaluate and include in budget proposal


for approval of HOPE

Upon approval,
approval budget office shall furnish a copy of budget
proposal and PPMP to BAC Secretariat

BAC Secretariat shall review and consolidate into the


proposed APP
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IRR Revisions
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Procurement Planning (Sec. 7)


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Upon approval of GAA/corporate budget/ordinance, enduser shall revise/adjust PPMP and submit to BAC
Secretariat

BAC shall finalize modes of procurement under the


proposed APP

APP shall be approved by HOPE or 2nd ranking official


designated by HOPE
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10/30/2009

IRR Revisions
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Bids and Awards Committee (Sec. 11)


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Alternate BAC member allowed:


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Same qualification and term as principal


Attend meetings and receive honoraria
Accountability limited to their acts and decisions

Honoraria for BAC Secretariat subject to DBM


Rules
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IRR Revisions
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Observers (Sec. 13)


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Allows observers from cooperatives

Requires 3 days prior written notice for invitation of


observers

Requires observers to inhibit in case of actual or potential


conflict of interest

Access to documents upon signing of a confidentiality


agreement
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10/30/2009

IRR Revisions
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Advertising of Invitation to Bid (Sec. 21)


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IAEB to Invitation to Bid (goods and infra) or


Request for Expression of Interest (consulting)

Includes posting in the website prescribed by the


foreign government/foreign or international
financing institution, for foreign-funded
procurement
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IRR Revisions
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Pre-Bid Conference (Sec. 22)


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May be extended at least 30 cd before bid


submission
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Method, nature, and complexity of contract


International participation is more
advantageous

At the option of procuring entity, only


bidders who purchased bid documents are
allowed to attend or ask questions
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10/30/2009

IRR Revisions
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Eligibility Requirements (Secs. 23 & 24)


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Reduced to 5-6 documents

Others to be submitted during


z Post-qualification
z Prior
P i tto Award
A
d off C
Contract
t t

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IRR Revisions:
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Eligibility Requirements Goods and Infra (Sec. 23)


Class A
z Legal Documents
z DTI / SEC / CDA Registration
z Mayors permit for principal place of business
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Technical Documents
z Statement of all on-going and completed contracts
z PCAB license and registration (Infra only)

Unless otherwise stated in treaty or international or executive


agreement

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10/30/2009

IRR Revisions:
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Eligibility Requirements Goods and Infra (Sec. 23)


Class A
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Financial Documents
z Audited Financial Statement received by the BIR
z NFCC computation or Credit Line Commitment from a
universal or commercial bank

For LGUs,
LGUs other banks authorized by BSP to issue said instrument

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IRR Revisions
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Eligibility Requirements Goods and Infra


(S
(Secs.
23-24)
23 24)
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Class B Documents: If Joint Venture z JVA


z If no JVA, sworn statements by each partner that they will
enter into and abide by provisions of the JVA if awarded the
contract

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10/30/2009

IRR Revisions:
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Eligibility Criteria Goods (Sec. 23)


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Legal Eligibility - Goods


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General rule: 60% Filipino


Foreign bidders eligible allowed

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
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IRR Revisions:
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Eligibility Criteria (Sec. 23)


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Legal Eligibility - Infra


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General rule: 75% Filipino (LOI 630)


Foreign contractors allowed if stated in treaty or
international or executive agreement
If joint venture,
venture less than 75% is allowed if

Structures to be built require techniques not possessed by


75% Filipinos
Not less than 25% Filipino
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10/30/2009

IRR Revisions
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Eligibility Requirements (Sec. 23)


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If foreign bidder
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Submit equivalent documents issued by country

Accompanied by English translation certified by appropriate


embassy or consulate in the Philippines

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IRR Revisions
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Eligibility Criteria (Sec. 23)


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Technical Eligibility (Goods) - Single Largest Contract


General Rule
1. Expendable
Supplies
25% of the ABC

2. Services and NonNon


expendable
Supplies
50% of the ABC

Exceptions

Then require the ff.:

If, at the outset and


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

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10/30/2009

IRR Revisions
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Eligibility Criteria (Sec. 23)


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Expendable Supplies (Sec. 5 [m])


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Articles normally consumed within 1 year or value is


substantially decreased after 1 year
Examples: medicines, stationery, fuel, and spare
parts

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IRR Revisions
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Eligibility Criteria (Sec. 23)


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Non-expendable Supplies (Sec. 5 [w])


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Not consumed in use


Serviceable life more than 1 year
Examples: furniture, fixtures, transport, and other
equipment

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10/30/2009

IRR Revisions
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Eligibility Criteria (Sec. 23)


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Technical Eligibility (Infra)


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Track Record: Single Largest Contract

Retain at 50%
But within a period of ten years

For foreign funded procurement


procurement, a different track
record may be agreed upon

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IRR Revisions
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Eligibility Criteria (Sec. 23)


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Financial Eligibility (Goods and Infra)


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NFCC at least equal to ABC


Credit Line Certificate at least equal to 10% of ABC

Issued by Universal or Commercial Bank


For LGUs: other banks certified by BSP as authorized to
issued said CLC

Option to submit cash deposit certificate deleted

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10/30/2009

IRR Revisions
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Eligibility Criteria (Secs. 23 & 24)


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Government corporate entities eligible only if


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Legally and financially autonomous


Operate under commercial law
Not dependent agencies of GOP or procuring entity

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IRR Revisions
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Submission and Receipt of Bids (Sec. 25)


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Two-envelope system (Eligibility Documents


included in Technical Proposal)

Documentary requirements trimmed down

Project related statements lumped into one


document
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10/30/2009

IRR Revisions
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Submission and Receipt of Bids (Sec. 25)


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First Envelope
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Eligibility requirements
Bid security
Technical specifications (Goods)/
Project requirements (Infra)
Omnibus sworn statement

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IRR Revisions:
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Submission and Receipt of Bids (Sec. 25)


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Second Envelope
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Financial information/documents specified in the


Philippine Bidding Documents

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10/30/2009

IRR Revisions
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Bid & Performance Securities (Secs. 27 & 39)


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Deleted certified check from acceptable forms

In general, bank issued securities must be issued


by a universal/commercial bank
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However, in biddings conducted by LGUs, securities


may be issued by banks certified by BSP as
authorized
h
d to issue said
d instruments

Surety Bonds must be accompanied by certification from


Insurance Commission that issuer is authorized to issue
such security

IRR Revisions
Form of Bid and
Performance Security
a) Cash or
cashiers/managers
check

Amt of Bid Security


(% = ABC)

2%

5% (Goods & Consulting)


10% (Infra)

5%

30%

Proportionate to share of
form with respect to the
total amount of security

Proportionate to share of
form with respect to the
total amount of security

b) Bank guarantee/draft or
Irrevocable LC
c) Surety bond callable
upon demand
d) Combination off the
foregoing

Amt of Performance
Security
(% = Contract Price)

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10/30/2009

IRR Revisions
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Bid & Performance Securities (Secs. 27 & 39)


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Bidder has option to choose among acceptable


forms of security
Procuring entity may not limit options available
to bidders

IRR Revisions
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Ceiling for Bid Prices (Sec. 31)


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Enumerated conditions for application of ABC as


ceiling for foreign-funded procurement

Definition of ABC includes estimated contract cost


in the case of foreign-funded procurement [Sec.
5(b)]

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10/30/2009

IRR Revisions
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No Contact Rule (Sec. 32)


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BAC, thru Secretariat, may request for clarification


of bid as long as it is in writing

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IRR Revisions
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Post-qualification (Sec. 34)


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3 days from notice of lowest calculated/highest


rated bid, submit the following documents:
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Tax clearance
Latest income and business tax returns
Certificate of PhilGEPS registration
Other appropriate licenses and permits required by
law and stated in the Bidding Documents.

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10/30/2009

IRR Revisions
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Failure of Bidding (Sec. 35)


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Mandatory review after each failed bidding

Based on findings
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Revise terms, conditions, specifications


Adjust ABC, subject to required approvals

Rebid

IRR Revisions
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Notice of Award (Sec. 37)


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Conditioned on the following:


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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
If required, approvals by higher authority

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10/30/2009

IRR Revisions
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Domestic and Foreign Goods (Sec. 43)


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Provides procedures in determining entitlement to


domestic preference

Applies only where the lowest bid has a foreign


component (foreign bid/entity) and the next lowest
bid has a domestic component (domestic
bidder/entity)
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IRR Revisions
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Domestic and Foreign Goods (Sec. 43)


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Requires procuring entity to give preference to


domestic entities and to materials and supplies
produced, made, and manufactured in the
Philippines (domestic bidder).
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Domestic entities can only claim preference if certified


by SEC/DTI/CDA

Domestic bidder can only claim preference if certified


by DTI
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10/30/2009

IRR Revisions
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Domestic and Foreign Goods (Sec. 43)


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Domestic entities (Sec. 5 [k])


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75% Filipino
Habitually established in business and engaged in the
manufacture or sale of product to be bid
In existence for at least 5 consecutive years
Domestic entities can only claim preference if certified
by SEC/DTI/CDA
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IRR Revisions
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Domestic and Foreign Goods (Sec. 43)


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Domestic bidder (Sec. 5 [j])


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Any person or entity


Offering articles/materials/supplies

If unmanufactured, grown or produced in the Philippines


If manufactured,
manufactured substantially from those grown or produced
in the Philippines

Domestic bidder can only claim preference if certified


by DTI
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10/30/2009

SAMPLE APPLICATION OF PREFERENCE

Sample Computation

Lowest Calculated Bid

Next Lowest Calculated


Bid

Foreign Bidder

Domestic Bidder/Entity

Bid

2,653,360.00

% Preference

3,009,492.00

15%
398,004.00

+ 2,653,360.00
Bid as iincreased
d

Result

3 051 364 00
3,051,364.00

3 009 492 00
3,009,492.00

Award to Domestic Bidder/Entity at 2,653,360.00, or


Award to Foreign Bidder if Domestic Bidder/Entity refuses
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IRR Revisions
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Warranty Security Goods (Sec. 62)


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Expendable Supplies 3 months, unless


consumed earlier

Non-expendable Supplies 1 year

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10/30/2009

IRR Revisions
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Warranty Security Infra (Sec. 62)


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Warranty period vs. Warranty security period


Warranty security period reduced to 1 year
Liability per stage
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From project construction to final acceptance


From project completion to final acceptance
From final acceptance to warranty security period

Bidding

Construction

Completion

Acceptance

Warranty
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IRR Revisions
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Alternative Methods of Procurement (Secs.


48 to 53)
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Alignment with international best practices


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Recognized additional instances of Negotiated


Procurement (e.g., procurement from UN Agencies,
C
Community
it P
Participation)
ti i ti )
Increase in shopping/small value procurement
thresholds

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10/30/2009

IRR Revisions
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Alternative Methods of Procurement (Secs.


48 to 53)
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Address concerns raised by stakeholders


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Clearer rules on negotiated procurement due to 2failed bidding


Increase in thresholds
Lease of venue

IRR Revisions
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Limited Source Bidding (Sec. 49)


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Procedure for pre-selection shall be outlined in


Generic Procurement Manual
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Invitation shall be advertised


Those who meet specified criteria shall be preselected
l t d
List shall be updated periodically

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10/30/2009

IRR Revisions
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Limited Source Bidding (Sec. 49)


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List to be maintained by relevant government


authority
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Procuring entity may be the relevant government


authority
S b itt d tto GPPB
Submitted

IRR Revisions
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Shopping and Small Value Procurement


(Secs. 52 & 53.9)
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Higher thresholds set for shopping and small


value procurement
z Guidelines to follow

For Foreign-funded procurement, thresholds


shall be agreed upon between GOP and foreign
government/institution

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10/30/2009

IRR Revisions
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Higher Threshold Amount for Unforeseen


Contingencies
g
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NGAs, GOCCs, GFIs, SUCs P100,000


LGUs
Classification
1st Class
2nd

Maximum Amount (in Philippine Pesos)


Province

City

Municipality

100,000

100,000

50,000

Class

100 000
100,000

100 000
100,000

50 000
50,000

3rd Class

100,000

80,000

50,000

4th Class

80,000

60,000

50,000

5th

Class

60,000

50,000

50,000

6th Class

50,000

50,000

50,000

In the case of Barangays, the maximum amount is P50,000

IRR Revisions
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Higher Threshold Amount for Regular Office Supplies and Small


Value Procurement
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NGAs, GOCCs, GFIs, SUCs P500,000


LGUs
Classification
1st

Class

2nd

Maximum Amount (in Philippine Pesos)


Province

City

Municipality

500,000

500,000

100,000

Class

500,000
,

500,000
,

100,000
,

3rd Class

500,000

400,000

100,000

4th Class

400,000

300,000

50,000

5th Class

300,000

200,000

50,000

6th

200,000

100,000

50,000

Class

In the case of Barangays, the maximum amount is P50,000

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10/30/2009

IRR Revisions
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Negotiated Procurement (Sec. 53)


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Clearer rules on two-failed bidding

Additional instances of negotiated procurement

IRR Revisions
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Recap: Failure of Bidding (Sec. 35)


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Mandatory review after each failed bidding

Based on findings
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Revise terms, conditions, specifications


Adjust ABC
ABC, subject to required approvals

Rebid
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Invite previous bidders

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10/30/2009

IRR Revisions
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Two-Failed Bidding (Sec. 53.1)


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Mandatory review and agree on the following:


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Minimum technical specifications


ABC adjusted only up to 20%

Invite sufficient number to ensure competition

Information communicated on an equal basis

IRR Revisions
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Two-Failed Bidding (Sec. 53.1, cont.)


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Simultaneous negotiations

Submission of best and final offer on a specified


date

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10/30/2009

IRR Revisions
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Two-Failed Bidding (Sec. 53.1, cont.)


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Successful offer to be selected:


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Meet minimum technical specifications


Does not exceed ABC

Observers shall be invited in all stages

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IRR Revisions
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Distinction between the following:


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Agency-to-Agency (Sec. 53.5)


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z

GOCCs formed under the Corporation Code excluded


Implementing Guidelines on A2A

Procurement Agent (Sec. 53.6)

By Administration (Sec. 7.3.2[a])

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10/30/2009

IRR Revisions
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Additional instances of Negotiated


Procurement:
z

Lease of Real Property (Sec. 53.10)


z
z

Include lease of venues


Guidelines to follow

IRR Revisions
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Additional instances of Negotiated


Procurement:
z

Community Participation (Sec. 52.12)


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Local community participation in service delivery

Project sustainability
M t social
Meet
i l objectives
bj ti

Procuring entity shall propose (procedures,


specifications and contract packaging)
Subject to GPPB approval

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10/30/2009

IRR Revisions
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Additional instances of Negotiated


Procurement:
z

United Nations Agencies (Sec. 52.13)


z

Small quantities of off-the-shelf goods (education and


health)
S
Specialized
i li d products
d t ((vaccines
i
or d
drugs))

IRR Revisions
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Other Terms and Conditions


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In all instances, the most advantageous price for


government should be obtained (Sec. 48.1)

Splitting
p
g of contracts is not allowed ((Sec. 54.1))

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10/30/2009

IRR Revisions
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Other Terms and Conditions (Sec. 54)


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Posting not necessary, except:


z
z
z

shopping [Sec. 52.1(b)],


two-failed biddings [Sec. 53.1]
small value procurement [Sec. 53.9]

But all awards to be posted

IRR Revisions
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Other Terms and Conditions (Sec. 54)


z

Bid securities not necessary, except:


z

Limited Source Bidding (Sec. 49)

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10/30/2009

IRR Revisions
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Other Terms and Conditions (Sec. 54)


z

Performance and Warranty Securities necessary,


except
z Shopping [Sec. 52]
z Emergency Cases [Sec. 53.2]
z Small value procurement [Sec. 53.9]
z Lease of real property [Sec. 53.10]
z Procurement from UN agencies [Sec. 53.13]

IRR Revisions
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Effectivity
z

2 September 2009
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30 days from publication in the Official Gazette (3


August 2009)

Transitory
z

When was Invitation to Bid/Request for


Expression of Interest published?

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10/30/2009

Thank you
z

Comments, questions?

GPPB Online

z http://www.gppb.gov.ph
z http://gppb.topicsolutions.net

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