Revised IRR of RA 9184 finally signed

After several months of waiting, the Government Procurement Policy Board (GPPB) has finally signed on July 22nd, the Revised Implementing Rules and Regulation of RA 9184 or the Government Procurement Reform Act (GPRA).

Among those who witnessed the signing ceremony was World Bank Acting Country Director Maryse Gautier. The revised IRR which is contained in GPPB Resolution 03-2009, reduces the documentary requirements on bidder's eligibility; lessens transactions costs for bidders, and provides clearer rules on the scope and application of alternative modes of procurement, thus ensuring transparency and encouraging greater participation from a greater number of bidders.

Among the most notable features of the revised IRR which addresses the common dilemma of procuring entities in resorting to alternative modes of procurement, is to increase the thresholds or the maximum amount of ABC for Shopping and small value procurement.

The revised thresholds are:

1. Shopping during unforeseen contingency per Sec. 52.1(a)- P100,000 for NGAs, GOCCs, GFIs and SUCs. For LGUs, from P50,000 to P100,000 depending on their economic classification;

2. Shopping when the items are not available in the Procurement Service per Sec. 52.1(b) and Small Value Procurement (Negotiated Procurement) per Sec. 53.9 - P500,000 for NGAs, GOCCs, GFIs and SUCs. For LGUs, P50,000 to P500,000 depending on their economic classification.

The rest of the changes in the procurement rules per the revised IRR will be discussed in my next post.

Relevant changes to the IRR of RA 9184 (2nd draft)

This is a continuation of my post on February 3rd about the proposed changes/amendment to the Implementing Rules and Regulations (IRR) of RA 9184 or the GPRA.

After the completion of that series of consultation-workshops with procurement practitioners and other stakeholders, the GPPB-TSO came out with the second draft of the IRR and posted the same in the GPPB website for those who would like to download a copy.

Here are the additional changes:

Posting of procurement opportunities: Procuring entities shall also post the bidding documents at its website and at the PhilGEPS website from the time the Invitation to Bid is advertised. Prospective bidders may download the documents from the website and pay the corresponding fees upon submission of their bids.

Alternative Methods of Procurement: Another subsection was added in Section 48, thus: "the method of procurement to be used shall be as indicated in the approved APP. If the original mode of procurement in the APP was public bidding but cannot be ultimately pursued, The BAC through a resolution, shall justify and recommend the change in the mode of procurement to be approved by the Head of the Procuring Entity".

Shopping (Section 52): The maximum amount of goods that can be procured through shopping during unforeseen contingency has been increased from Php 50,000 to Php 100,000. On the other hand, the benchmark for shopping of ordinary or regular office supplies and equipment not available in the Procurement Service, has been increased from Php 250,000 to Php 500,000.

Negotiated Procurement (Section 53): The maximum amount that can be procured through negotiated procurement has been increased from Php 50,000 to Php 500,000. Another type of negotiated procurement is added that is, the procurement from specialized agencies of the United Nations but is limited to small quantities of off-the-shelf goods, primarily in the fields of education the and health; specialized products where the number of suppliers is limited such as vaccines or drugs.

Roll-out Training suspended

The GPPB has suspended the training on the roll-out of the new Procurement Manual for LGUs until such time that it has approved the revised Implementing Rules and Regulations (IRR) on RA 9184.

The GPPB expects to finally consider the IRR on or before June, 2009. In the meantime, requests by LGUs for training on procurement may be considered on a case-to-case basis, depending on the urgency.

Relevant changes in the IRR of GPRA

For the benefit of government procurement practitioners who have not yet downloaded a copy of the draft Revised Implementing Rules and Regulations (IRR) of the GPRA (RA 9184), and for those who did not have a chance to get invited to the GPPB-sponsored series of consultation workshops, here are some of the relevant changes to the IRR:

Coverage. The revised IRR now covers both domestically-funded and foreign-funded procurement activities whether wholly or partly. The previous rules (IRR-A) cover only domestically-funded projects. This means there will only be one IRR to cover all types of government procurement regardless of fund sources.

Scope and Application. A statement is included that “the loan negotiating panel of the government of the Philippines shall ensure that all foreign-funded procurement activities shall be through competitive bidding”.

Bid Envelopes. The two (2) envelope system will be implemented. From the previously required three (3) envelopes (Eligibility, Technical and Financial), prospective bidders will now have to submit the Technical and Financial envelopes, but that the eligibility requirements will now form part of the Technical envelope.

Eligibility Documents. The documents are still classified as Class "A" and Class "B". The Class "A" documents will still consist of Legal, Technical and Financial except that the number of documents to be submitted have been reduced from 11 to six (6). These are:

Legal - (a) DTI or SEC or CDA registration certificates whichever is appropriate under existing Philippine laws; (b) valid an current Mayor's permit issued by the city/municipality where the principal place of business of the bidder is located. The other documents required in the previous IRR-A like the TIN, Statement that the bidder is not blacklisted or barred from government bidding, GEPS certificate of registration, BIR Tax clearance, and other appropriate licenses will be submitted by the bidder within 30 calendar days from receipt of the BAC notice that it the lowest calculated responsive bidder. This is required prior to issuance of the Notice of Award.

Technical - Statement of the prospective bidder of all its ongoing and completed government and private contracts within the relevant period as provided in the Instructions to Bidders, including contracts awarded but not yet started, if any; and for Infra projects, a valid Philippine Contractors Accreditation Board (PCAB) license and registration for the type and cost of the contract to be bid.

Financial - (a) The prospective bidder’s audited financial statements, stamped “received” by the BIR; (b) the prospective bidder’s computation for its Net Financial Contracting Capacity (NFCC); and/or a credit line commitment (CLC) from a universal or commercial bank to be extended if awarded the contract to be bid in an amount not lower than that set by the procuring entity in the Bidding Documents, which shall be at least equal to ten percent (10%) of the Approved Budget for the Contract/Estimated Contract Cost to be bid. Please note that the cash deposit certificate which used to be among the financial documents that a bidder can offer is done away with.

Class "B" Documents - There used to be two (2) required documents, namely: Valid Joint Agreement (JVA), and letter authorizing the BAC or authorized representives to verify all documents submitted. The latter is now part of the Technical envelope. If the bidder is a joint venture, it is required to submit a valid Joint Venture Agreement (JVA), or in the absence of a JVA, written statements from all the potential joint venture partners stating that they will enter into and abide by the provisions of the JVA in the instance that the Bid is successful shall be included in the Bid. Failure to enter into a joint venture in the event of a contract award shall be ground for the forfeiture of the bid security. Each member of the joint venture shall submit the legal eligibility documents. Following the principle of collective compliance, the submission of technical and financial eligibility documents by any of the joint venture partners is allowed.

More of these changes on my next post.

IRR-A of GPRA up for revision

The GPPB has scheduled a series of consultation workshops on the proposed amendments to the Implementing Rules and Regulations of R.A. 9184. Twelve LGUs per region (3 provinces, 4 cities and 4 municipalities) have been invited. Schedule of the consultation is as follows:

February 3-4 in Manila for Regions IV-A, IV-B and NCR
February 5-7 in Baguio City for Regions I, II, III and CAR
February 17-19 in Cebu City for Regions VI, VII, VIII and IX
February 19-21 in Davao City for Regions X, XI, XII and XIII

For Region VI, the LGUs invited to the consultation are: provinces of Capiz, Iloilo and Negros Occidental, cities of Bacolod, Ilolo, Passi and San Carlos; and municipalities of Anilao, and Duenas in Iloilo, Kalibo, Aklan and Tobias Fornier, Antique.

The proposed amendment to the IRR can be downloaded from the GPPB web site.

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.