BASICS ON BARANGAY FINANCE

PROCUREMENT LAW (RA 9184)BASIC INFORMATION USEFUL TO BARANGAYSDEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays Republic Act No. 9184 AN ACT PROVIDING FOR THE MODERNIZATION, STANDARIZATION AND REGULATION OF THE PROCUREMENT ACTIVITIES OF THE GOVERNMENT AND FOR OTHER PURPOSESDEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT BarangaysPROCUREMENT PRINCIPLESRA 9184Government procurement shall be governed by these principles:a) Transparency in the procurement process and in the implementation of procurement contracts through wide dissemination of bid opportunities and participation of pertinent non-government organizations.DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangaysb) Competitiveness by extending equal opportunity to enable private contracting parties who are eligible and qualified to participate in public bidding.c) Streamlined procurement process that will uniformly apply to all government procurement. The procurement process shall be simple and made adaptable to advances in modern technology in order to ensure an effective and efficient method.DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT BarangaysPROCUREMENT PRINCIPLES d) System of accountability where both the public officials directly or indirectly involved in the procurement process as well as in the implementation of procurement contracts and the private parties that deal with government are, when warranted by circumstances, investigated and held liable for their actions relative thereto.

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangayse) Public monitoring of the procurement process and the implementation of awarded contracts with the end in view of guaranteeing that these contracts are awarded pursuant to the provisions of the Act and its IRR-A, and that all these contracts are performed strictly according to specifications.PROCUREMENT PRINCIPLESDEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT BarangaysCompetitive BiddingMethod of procurement that is open to any interested and qualified partyPreferred over other methods of procurementProcuring Entity should see to it that its procurement program allows enough time to conduct a public biddingDEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays7Procedural Steps for Procurement of Goods/Services (IRR)Pre-ProcurementConf.Advertisement/PostingPre-BidConferenceOpening of 1st Env. (Eligibility &Technical reqmts)Opening of 2ndEnv. (Financial Proposal)Submission ofEligibility Req. & BidBid Evaluation& RankingPost-qualificationAward ofContractat least 12 c.d.1 c.d.1 c.d.within 7 c.d.within 7 c.d.Advertisement 1c.d.Posting 7 c.d.DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays8Procedural Steps for Procurement of Infrastructure Projects (Revised IRR)Pre-ProcurementConf.Advertisement/PostingPre-BidConferenceOpening ofEligibility Env. &Eligibility CheckOpening ofTech. Env. &Prel. Exam.Opening ofFinancial Env.Submission ofEligibility Req. & BidBid Evaluation& RankingPost-qualificationAward ofContractat least 12 c.d.1 c.d.1 c.d.ABC 50M & below- 5 daysABC above 50M- 7 daysIn no more than 7 c.d.Advertisement (newspaper) at least 1c.d.Posting 7 c.d.DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays9

ALTERNATIVE MODES OF PROCUREMENT

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT BarangaysConditions: - Subject to prior approval of the HOPE and justified by the conditions provided in this Act - Shall be resorted to only in the highly exceptional cases provided for in this Rule - Method of procurement shall be as indicated in the APP. If original mode cannot be pursued, BAC to recommend change subject to the approval of HOPEALTERNATIVE MODES OF PROCUREMENT

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays11Limited Source Bidding (Selective Bidding)Rule XVI, Sec. 49Also known as Selective Bidding. Method of Procurement of goods and consulting servicesInvolves issuance of a direct invitation to bid by Procuring Entity to a set of pre-selected suppliers with known experience and proven capability on the requirements of the contract

Conditions:Only a few suppliers of the goods are known to be available (ex.: highly specialized types of goods)Procurement of major plant components where it is deemed advantageous to limit bidding to known qualified bidders to maintain uniform quality and performance of the plantDEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays12Limited Source Bidding (Selective Bidding)There should be a list maintained by the relevant government authority, submitted to GPPB and posted in the PhilGEPSAll other procedures for competitive bidding shall be undertaken except advertisementBid and Performance Securities are requiredDEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays13Direct Contracting (Single Source Procurement)Rule XVI, Sec. 50Method of procurement of Goods.Supplier is simply asked to submit a price quotation or pro-forma invoice together with the conditions of sale. Offer may be accepted immediately or after negotiation

Conditions:Items of proprietary nature (ex.: patents, Trade Secrets, Copyrights)Critical plant components from a specific manufacturer, supplier or distributor as condition precedent to a guaranteed project performanceExclusive dealer or manufacturer with no sub-dealers selling at lower prices and no suitable substitute at more advantageous termsPerformance Security is not required.DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays14Repeat OrderRule XVI, Sec. 51Method of Procurement of Goods.Procurement from previous winning bidder to replenish goods procured through Competitive Bidding. May be used to fill gaps due to unforeseen demands

Conditions:Contract prices must be same or lower than original contract. Provided, such prizes are still the most advantageous to the GOP after price verification.

Should not result in Splitting of Contracts, Requisitions or P.O.s

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays15Repeat OrderExcept when approved by GPPB, should be availed of within 6 months from date of issuance of original Notice to Proceed

Should not exceed 25% of quantity of each item in original contract, and must be part of contingency provided in APP

Performance security is not required.DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays16ShoppingRule XVI, Sec. 52Method of procurement of goodsProcuring Entity simply requests for the submission of price quotations for readily available off-the-shelf goods or ordinary/regular equipment from suppliers of known qualifications

When allowed:There is an unforeseen contingency requiring immediate purchase of Goods. Amount should not exceed P50,000 (old threshold) per transaction, and aggregate amount should not exceed maximum allowed in the Annual Performance Budget

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays17THRESHOLDS FOR SHOPPINGDOF CLASSIFICATION OF LGUsMaximum Amount (In Philippine Pesos)ProvinceCityMunicipality1st Class100,000100,00050,0002nd Class100,000100,00050,0003rd Class100,000 80,00050,0004th Class 80,000 60,00050,0005th Class 60,000 50,00050,0006th Class 50,000 50,00050,000Shopping [Sec. 52.1 (a)] Unforeseen ContingencyIn the case of barangays, Fifty Thousand Pesos (P50,000.00).DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT BarangaysShoppingOrdinary or regular office supplies and equipment are not available in PS-DBM. Price should not exceed P250,000(old threshold). Needs at least 3 price quotations from bona fide suppliersOrdinary or regular office supplies - Supplies, Commodities, or materials that are necessary in the transactions of PEs official business and consumed in the day to day operations. Excluded are repair & maintenance of equipment & furniture, trucking, hauling, janitorial, security, and related or analogous servicesA performance security is not required.DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays19Negotiated ProcurementSection 53Method of procurement of Goods, Infrastructure Projects, and Consulting Services

Procuring Entity directly negotiates a contract with a legally, technically and financially capable supplier. It is advisable to have a registry of suppliers

Bid and Performance Securities are required

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays201.) TWO FAILED BIDDINGS (Sec. 53.1)Mandatory review of the terms, conditions, specifications and cost estimatesBAC shall revise & agree on the minimum technical specificationsABC cannot be increased by more than 20%BAC shall invite & negotiate with sufficient number of SuppliersMaintain Registry of Suppliers, Contractors and ConsultantsAll informations to be communicated equallyAfter negotiation, submission on a specified date, a best and final offer In all stages, observers shall be invitedWhen is Negotiated Procurement allowed?DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays2.) EMERGENCY CASES (Sec. 53.2):During a State of Calamity or when time is of the essence where immediate action is necessaryFor infrastructure projects, PE has option to undertake by administration. In high Security risk areas, through the AFP.

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays3.) TAKE-OVER OF CONTRACTS (Sec. 53.3)Negotiation to start with the second LCB/HRB at the bidders original bid price.If negotiation fails, then to third LCB/HRB at his original price.If negotiation fails again, invite and ask to submit bid at least 3 eligible contactors. Negotiation to start with LCB/HRB.Negotiation with prior approval of the HOPE

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays4.) ADJACENT OR CONTIGUOUS (Sec. 53.4)Original Contract is the result of Competitive BiddingContract has similar or related scopes of workWithin the contracting capacity of the contactor/consultantSame prices or lower unit prices as in the original contact less mobilization costAmount involved does not exceed the amount of on-going projectContractor/Consultant has no negative Slippage/ delayNegotiation started before the expiry of the original Contract

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays5.) AGENCY-TO-AGENCY (Sec. 53.5)Procurement of infrastructure projects, consulting services, or goods from another agency of the GOPExcluded are GOCCs incorporated under the Corporation Code of the Philippines DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays6.) PROCUREMENT AGENT (Sec. 53.6)GOP Agency or individual hired by the PE to undertake procurement for them or to assist them directly or train their staff in the management of the procurement function

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays7.) HIGHLY TECHNICAL CONSULTANTS (Sec. 53.7) Partnership or individual consultant hired to do work that is:- highly technical or proprietary- Primarily Confidential or-Policy Determining Term not to exceed 6 months. Renewable but not to exceed the term of HOPE.

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays8.) DEFENSE COOPERATION AGREEMENT (Sec. 53.8)Procurement of AFP major defense equipment or materiel and/or defense-related consultancy services.Negotiating directly with another Country with which the Philippines has a Defense Cooperation Agreement or diplomatic relations.Upon prior approval by the President of the PhilippinesPerformance Security is requiredDEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays9.) SMALL VALUE PROCUREMENT (Sec. 53.9)At least 3 suppliers, contractors, or consultants of known qualifications shall be invited to submit proposals or curriculum vitae where the PE shall choose the offer most advantageous to the governmentThe amount should not exceed the thresholds prescribed in Annex H of the Revised IRR

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT BarangaysTHRESHOLDS FOR SHOPPINGDOF CLASSIFICATION OF LGUsMaximum Amount (In Philippine Pesos)ProvinceCityMunicipality1st Class500,000500,000100,0002nd Class500,000500,000100,0003rd Class500,000 400,000100,0004th Class400,000 300,00050,0005th Class300,000 200,00050,0006th Class200,000100,00050,000Shopping [Sec. 52.1 (b)] Small Value Procurement [Sec. 53.9]In the case of barangays, Fifty Thousand Pesos (P50,000.00).DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays10.) LEASE OR REAL PROPERTY (Sec. 53.10)Lease of venue or privately owned real property for official use

11.) NGO PARTICIPATION (Sec. 53.11)When an ordinance or law ear marks an amount to be contracted out specifically to NGOsDEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays12.) COMMUNITY PARTICIPATION (Sec. 53.12)Subject to GPPB Approval, PE shall propose procedures, specifications, and contract packaging to call for participation of local communities in the delivery of servicesPurpose is project sustainability or achieve certain social objectives

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays13.) UNITED NATIONS AGENCIES (Sec. 53.13)Procurement of off-the-shelf goods primarily in the fields of education and health, and specialized products where suppliers are limited, such as vaccines or drugs.

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT BarangaysTERMS & CONDITIONS FOR THE USE OF ALTERNATIVE METHODS(Section 54)Splitting of Contracts is not allowedAdvertisement and posting maybe dispensed withInvitation or request for submission of price quotation for shopping Sec. 52.1 (b) and Negotiated Procurement-Sec. 53.1 and 53.9 must be posted in the Phil GEPS, website of PE and conspicuous place for seven (7) calendar daysDEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT BarangaysTERMS & CONDITIONS FOR THE USE OF ALTERNATIVE METHODS(Section 54)In all instances, Notice of Award must be postedBid security is not required except for Limited Source BiddingPerformance and Warranty Securities are required except for: Shopping Negotiated Procurement:Emergency CasesSmall Value ProcurementLease of Real PropertyUN AgenciesDEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays"It is not only what we do, but also what we do not do, for which we are accountable." -Moliere

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT R-VLaying the Foundation for GRassroots Empowerment for Accountable and Transparent BarangaysGREAT Barangays