GPPB'S definition of Exclusive dealership.

What constitute exclusive dealership for purposes of resorting to Direct Contracting as an alternative mode of procurement?

The GPPB has recently issued a policy clarifying the term "exclusive dealer". It envoked Sec. 50(c) of IRR-A, that an exclusive dealer is one which does not have sub-dealers selling at lower prices and for which no suitable substitute can be obtained at more advantageous terms to the government.

The GPPB also cited the guidelines prescribed in the Generic Procurement Manual Vol. II, "that procurement unit or office should first study the supply market by conducting an extensive survey of the industry in order to confirm the exclusivity of the source, prior to engaging in Direct Contracting. The GPM also emphasizes that exclusive dealership does not per se give rise to the use of Direct Contracting. The supplier/contractor/manufacturer must prove, through proper documentation, that it is the sole source of said goods, equipment or services required".

Procurement can commence even prior to issuance of SARO.

We have since received several queries on the issue of whether a procuring national agency will first have to wait for the issuance of Special Allotment Release Order (SARO) before they can commence the procurement process.

The GPPB has issued a clarification through Circular No. 02-2008 dated 1 August 2008 on the matter. The said circular clarifies that "procurement may commence as long as such activity is included in the APP of the procuring entity concerned. Prior issuance of the SARO is not pre-condition to the advertisement and/or posting of the invitation to apply for eligibility and to bid, in the case of public bidding, or posting of the notice of procurement, in the case of alternative methods of procurement." Issuance of the SARO is, however, required before issuance of the notice of award by the procuring entity.

Bidders not required to submit clearances from SSS, DOLE, Pag-ibig, etc. as part of bidding requirements.

The GPPB has issued on March 7, 2008, Circular Letter No. 01-2008 advising government agencies or procuring entities that Memorandum Circular No. 80 issued on February 10, 1994 which requires the submission of certain documents and incorporation of certain provisions in Security and Janitorial contract awards - was impliedly repealed by R.A. 9184 and its IRR-A.

The circular clarified that as a general policy, imposition of additional eligibility or technical documents is discourage because it increases transaction cost and reduces competition. Thus the additional requirements for bidders to submit clearances from DOLE, SSS, PhilHealth or Pag-IBIG, as part of the eligibility or technical documents should be discouraged. In addition, the submission of a clearance or certificate that the bidder has no pending administrative or labor case is violative of due process and therefore, prohibited.

In lieu of the above mentioned requirements, the procuring entity will simply require the bidder to submit a certification under oath that it complies with existing labor laws and standards as provided for under Section 25.3 of IRR-A. However, during post qualification the procuring entity may verify, validate and ascertain the statement submitted under oath. The procuring entity may also require the submission of subject clearances during contract implementation.

LGU Procurement Manual has been approved by the GPPB.

The GPPB has passed Resolution No. 30-2007 adopting and approving the Local Government Procurement Manual.

The said manual was made possible by the technical assistance from the Asian Development Bank (ADB), and the inputs coming from BAC members, Secretariat and TWGs of selected LGUs throughout the country. Upon its effectivity, this will replace the Generic Procurement Manual (GPM) already in use in so far as LGUs are concerned.

The roll-out of the manual could take place between March or April.

Proposed 3-point amendment on the Procurement law

A bill was recently filed by Senator Chiz Escudero seeking to amend certain provisions of the Government Procurement Reform Act (GPRA) or R.A. 9184.

Senate Bill No. 1963 seeks to address the weaknesses of the current procurement law particularly along three areas, namely:

- putting under the coverage of RA 9184 the procurement of infrastructure projects, goods and consulting services funded by loan or credit under the Official Development Act, RA No. 8182, as amended;

- strengthen and advance transparency by mandating the posting of decisions of the Bids and Awards Committee (BAC) relative to criteria, ratings and calculations of bids as well as all other bids, responsive or otherwise, on the procuring agency's website or that of the Government Procurement Policy Board (GPPB). This will bolster and reinforce accountability of public officials by making public how BAC members decide and why.

- lessen the discretion of procuring entities specifically in the consideration of single calculated/rated and responsive bid submissions by subjecting it to the approval of the GPPB; and the use of observers. The current rule on allowing a single calculated/rated and responsive bid submission opens up an avenue of a rig bidding through consensus among bidders in a particular procuring entity. On the hand, the proposed amendment to the attendance of private observers is to limit the number of times they can be invited in the bidding of procuring entities. Observers who are regularly invited in public biddings have a tendency to become friendly and sometimes become cohorts in anomalous biddings.

According to Senator Escudero, the proposed amendments will address the problems and issues resulting from the highly publicized ZTE and Cyber Ed projects.