Updates on the Revised Implementing Rules and Regulations of R.A. 9184

1. Updates on the Revised Implementing Rules and Regulations of R.A. 9184 Association of Government Accountants of the Philippines (AGAP) The Legend Palawan Puerto Princesa, Palawan 21 October 2011

2. What is Procurement?

3. 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) • Procurement means the acquisition by any means of goods, construction or services. (UNCITRAL Model Law on Procurement)

4. What is Procurement? • Acquisition means the acquiring by contract with appropriated funds of supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. (FAR, US)

5. What is Procurement? • Procurement encompasses the whole process of acquiring property or services. It begins when an agency has identified a need and decided on its procurement requirement. Procurement continues through the processes of risk assessment, seeking and evaluating alternative solutions, contract award, delivery of and payment for the property or services and, where relevant, the ongoing management of a contract and consideration of options related to the contract. (CPG, 2008)

6. What is Procurement? • Procurement we define as the whole of life-cycle process of acquisition of goods, services and works from third parties – beginning when a requirement is first defined and ending with the ultimate disposal of an asset or end of a service contract. (P. Gershon, OGC, UK)

7. What is Procurement? • Value for Money – is the optimum combination of whole of life costs and quality to meet the customer’s requirements… (P. G.) • It must be government’s policy that all public procurement, should be based on value for money, having due regard to propriety and regularity. (P.G.)

8. What is Procurement? • LCC – Life Cycle Costing • “Cost” should consider all costs throughout the life-cycle – acquisition cost, utility costs (energy/water consumption, maintenance), and disposal costs. • “C to G” vis-à-vis “C to C”

9. What is Procurement? • 5 Rights in Public Procurement: • Right Source • Right Quality – Satisfaction of End-User? • Quality may refer to the overall relationship and integration of effects of performance, lifespan, integrity, durability, and conformity of the goods with the technical requirements of the project. • Right Quantity – (J.I.T / Lean Procurement) • Right Price • Right Time/Delivery

10. Updates on the IRR

11. IRR Revisions Background Harmonization Alignment with International Best Practices Address the Needs of PEs Concerns raised by procuring entities, bidders and observers

12. IRR Revisions • Scope and Application (Sec. 4) • All domestically-funded procurement activities • All foreign-funded procurement activities, unless otherwise stated in the treaty, international or executive agreement • But procurement funded thru foreign grants are excluded

13. IRR Revisions Scope and Application (Sec. 4) GOP negotiating panels shall: Default position - use of the IRR or selection thru competitive bidding Explain in writing if treaty, international or executive agreement states otherwise Revised IRR defines treaty, international or executive agreements, foreign loans & grants

14. IRR Revisions Procurement Planning (Sec. 7) No procurement shall be undertaken unless it is in accordance with the approved APP End-user units shall prepare their PPMP which shall be submitted to the budget office Budget office shall evaluate and include in budget proposal for approval of HOPE Upon approval by HOPE, budget office shall furnish a copy of budget proposal and PPMP to BAC Secretariat

15. IRR Revisions Procurement Planning (Sec. 7) BAC Secretariat shall review and consolidate into the proposed APP Upon approval of GAA/corporate budget/ordinance, end-user 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

16. IRR Revisions Bids and Awards Committee (Sec. 11) Alternate BAC member allowed: 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

17. IRR Revisions Observers (Sec. 13) 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

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

19. IRR Revisions Pre-Bid Conference (Sec. 22) May be extended at least 30 cd before bid submission Method, nature and complexity of contract Encourage international participation At the option of procuring entity, only bidders who purchased bid documents are allowed to attend or ask questions

20. IRR Revisions Eligibility Requirements (Secs. 23 & 24) Reduced to 5-6 documents Others to be submitted during – Post-qualification Prior to Award of Contract

21. IRR Revisions • Submission and Receipt of Bids (Sec. 25) • Two-Envelope System (Eligibility requirements included in the Technical Proposal) • Documentary requirements trimmed down • Project related documents lumped into one document • In Infrastructure Projects, Technical (incl. eligibility requirements) and Financial Proposals will now be submitted at the same time

22. IRR Highlights • Bid & Performance Securities (Secs. 27 & 39) • Deleted certified check from acceptable forms • In general, bank issued securities must be issued by a universal/commercial bank • However, in biddings conducted by LGUs, securities may be issued by banks certified by BSP as authorized to issue said instruments • Surety Bonds must be accompanied by certification from Insurance Commission that issuer is authorized to issue such security

23. IRR Revisions

24. IRR Revisions Bid & Performance Securities (Secs. 27 & 39) Bidder has option to choose among acceptable forms of security Procuring entity may not limit options available to bidders

25. IRR Revisions No Contact Rule (Sec. 32) BAC, thru Secretariat, may request for clarification of bid as long as it is in writing Bidder’s response to the BAC’s inquiry must also be in writing 25

26. IRR Revisions • Post-qualification (Sec. 34) • 3 cd from notice of LCB, submit the ff: • 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. • Failure to submit on time / dubious veracity = forfeiture of Bid Security / disqualification for award

27. IRR Revisions • Notice of Award (Sec. 37) • Conditioned on the following: • If joint venture, submission of JVA • Posting of Performance Security • Signing of Contract • If required, approvals by higher authority

28. IRR Revisions • Disclosure of Relations (Sec. 47) • Relatives within the 3rd civil degree of the following shall be disqualified: • Head of the procuring entity • Members of the BAC, Secretariat and TWG • Head of the end-user unit or project management office • Project consultants

29. IRR Revisions • Alternative Methods of Procurement (Secs. 48 to 53) • Alignment with international best practices • Recognized additional instances of Negotiated Procurement (e.g., procurement from UN Agencies, Community Participation) • Increase in shopping/small value procurement thresholds

30. IRR Revisions • Alternative Methods of Procurement (Secs. 48 to 53) • Address concerns raised by stakeholders • Clearer rules on negotiated procurement due to 2-failed bidding – submission of BAFO • Increase in thresholds • Lease of venue • Distinguishes Agency-to- Agency Agreements from Procurement Agents • Shopping clarified – Only 52.1(b) needs 3 quotations.

31. IRR Revisions • Effectivity • 2 September 2009 • 30 days from publication in the Official Gazette (3 August 2009) • Transitory • When was Invitation to Bid/Request for Expression of Interest published?

32. GPPB Issuances • GPPB Resolution No. 08-2009 (Implementing Guidelines for Lease of Privately-owned Real Estate and Venue) • GPPB Resolution No. 09-2009 (Guidelines for Shopping and Small-Value Procurement)

33. GPPB Issuances • GPPB Resolution No. 05-2010 (Approving the Guidelines on the Procurement of Printing Services) • GPPB Resolution No. 06-2010(Approving and Adopting the 4th Edition of the Philippine Bidding Documents for Goods and Infrastructure Projects (As Harmonized with Development Partners) and Consulting Services)

34. GPPB Issuances • GPPB Resolution No. 04-2011 (Approving Amendments to the Guidelines on the Procurement of Printing Services) • GPPB Resolution No. 05-2011 (Approving the Pre-selection Procedure in the conduct of Limited Source Bidding under Section 49 of Republic Act 9184 and its Revised Implementing Rules and Regulations)

35. Non-Policy Matter Opinions

36. Repeat Order • NPM No. 03-2010 • What stage in the procurement process can repeat order be considered to be within the reglamentary period of 6 mos. as provided under Section 51 (c) of the of the revised IRR) of RA 9184?

37. Repeat Order • NPM No. 03-2010 • The reckoning period for computing the 6 mo. period is the effectivity date of the contract as stated in the Notice to Proceed (NTP) – Sec. 51, IRR of R.A. 9184. • The contract effectivity date, as provided in the NTP, shall not be later than 7 cd from its issuance (Sec. 37.4.1 of the IRR)

38. Agency-to-Agency Agreements • NPM No. 04-2010 • Can a GOCC having its own charter, directly engage its wholly-owned subsidiary created under the Corporation Code under Section 53.5 [Negotiated Procurement (Agency-to-Agency Agreement)] of the revised IRR) of RA 9184?

39. Agency-to-Agency Agreements • NPM No. 04-2010 • As a general rule, GOCCs formed under the Corporation Code cannot enter into Agency-to-Agency Agreements • Except when a parent-subsidiary relationship exists between the 2 GOCCs. As long as the parent GOCC owns directly or indirectly more than half of the voting power of its subsidiary, then it may directly engage the services of said subsidiary.

40. Post-qualification Requirement • NPM No. 06-2010 • Whether all the requirements under Section 34.2 of the IRR would have to be submitted by all the parties to a joint venture, for purposes of post-qualification, viz: • Tax clearance; • Latest income and business tax returns; • PhilGEPS registration certificate; and • Other appropriate licenses and permits required by law and stated in the bidding documents.

41. Post-qualification Requirement • NPM No. 06-2010 • The principle that all the parties to a joint venture were required to submit all legal requirements provided under the previous IRR-A is still applicable under the revised IRR. • All the parties to a joint venture must still submit all the legal documents, regardless of the time/stage when these documents are required to be submitted.

42. Post-qualification Requirement • NPM No. 06-2010 • The documents enumerated under Section 34.2 of the revised IRR would have to be complied with not only by one but by all the parties to a joint venture for purposes of passing the post-qualification.

43. Surety Bonds as Bid and Performance Securities • NPM No. 13 & 24-2010 • What is the correct form of certification that should accompany the surety bond which is submitted as a bid or performance security?

44. Surety Bonds as Bid and Performance Securities • NPM No. 13 & 24-2010 • The certification which must be submitted must : • Unequivocally state that the surety /insurance company is specifically authorized to issue surety bonds callable on demand, and • Issued by the Insurance Commission

45. Bidding Documents • NPM No. 14-2010 • Whether a procuring entity may set a deadline for the availability of bid documents at a date earlier than the deadline for the submission and receipt of bids?

46. Bidding Documents • NPM No. 14-2010 • No. Sec. 17.3 of the revised IRR of RA 9184 mandates the BAC to make available the bid docs from the time the invitation to bid is first advertised/posted until the deadline for the submission and receipt of bids.

47. Bidding Documents • NPM No. 14-2010 • Whether a procuring entity may be allowed to partially upload bidding documents in its website and the PhilGEPS considering the large sizes of the files and the high degree of security and discretion which BSP infrastructure projects require?

48. Bidding Documents • NPM No. 14-2010 • No. Pursuant to Sec. 17.5 of the IRR, it is mandatory for procuring entities to post all its bidding documents on both its website and the PhilGEPS.

49. Survey of Supreme Court Decisions on Public Procurement

50. Section 4, R.A. 9184 • Abaya vs. Ebdane 14 February 2007 • DBM-PS vs. Kolonwel Trading 8 June 2007 • Loan Agreement, through Exchange of Notes, executed by the President with an IFI is an “Executive Agreement” and must be observed pursuant to “pactasuntservanda.”