Government Procurement Reform Act (Rep. Act 9184)

1. Government Procurement Reform Act (Rep. Act 9184) “Not just doing the right things, but doing it right”

2. Problem Areas and Reform Measures

3. Memorandum Circulars Administrative Issuances Executive Orders Implementing Rules and Regulations over 100 procurement rules & regulations R.A. 9184 10 January 2003 Goods, Infrastructure, Consulting Services Coverage: NGAs and LGUs Enactment of GPRA

4. Problem Areas and Reform Measures

5. Creation of GPPB Inter-Agency Body • Big procuring entities (defense, education, health, public works, transportation and communications) • Oversight agencies (budget, planning, finance, trade, science and technology, interior and local government, energy) • Private Sector • Resource Persons (audit, anti-corruption agencies)

6. GPPB Functions • Policy-Making • Amend implementing rules & regulations of procurement law (quasi-legislative function) • Prepare generic procurement manual and standard bidding forms • Capacity Development • Establish a sustainable training program • Monitoring • Assist procuring entities improve their compliance • Review effectiveness of procurement law

8. Problem Areas and Reform Measures

9. Problem Areas and Reform Measures www.philgeps.net

10. Problem Areas and Reform Measures

11. Governing Principles • Transparency • Wider dissemination of bid opportunities • Competitiveness • Equal opportunity to all eligible bidders • Streamlined Process • Uniformly applicable to all government agencies • Effective and efficient method • System of Accountability • “Answerable” • Public Monitoring • Awareness and vigilance

12. coverage • R.A. 9184 applies to all branches and/or instrumentalities of the government: • National Government Agencies (NGAs) • State Universities and Colleges (SUCs) • Government Owned or Controlled Corporations (GOCCs) • Government Financial Institutions (GFIs) • Local Government Units (LGUs)

13. scope and application • R.A. 9184 governs the procurement of: • Goods (Supplies & General Support Services) • Infrastructure Projects • Consulting Services • All domestically-funded procurement activities • All foreign-funded procurement activities, unless otherwise stated in the treaty or international or executive agreement

14. scope and application • Exceptions: • Procurement funded from Foreign Grants [R.A. 8182, as amended by R.A. 8555 (ODA Law)]; • Acquisition of Real Property (R.A. 8974); • Public-Private Sector Infrastructure or Development Projects [R.A. 6957, as amended by R.A. 7718 (BOT Law)]; • Disposal of government properties (rules on budget, accounting and audit) • JV Partnerships (NEDA Guidelines)

15. Definition (Goods) Items, supplies, materials & general support services, except consulting services & infra projects, which may be needed in the transaction of public businesses or in the pursuit of any government undertaking. Includes, but is not limited to the following: • equipment, • furniture, • stationery, • materials for construction, • personal property of any kind, • non-personal or contractual services, • repair & maintenance of equipment and furniture • trucking, hauling, and courier • janitorial, security and manpower

16. Definition (Goods) Related or analogous services shall include, but not limited to the following: • lease or purchase of office space • media advertisements • health maintenance services • other services essential to the operation of the procuring entity • rental of venues and facilities • catering services • lease of computers, copiers and other information technology equipment

17. Definition (Infrastructure Projects)

18. Definition (Consulting Services) Services for infrastructure projects and other types of projects or activities requiring adequate external technical and professional expertise that are beyond the capability and/or capacity of the GOP, such as: • Advisory and review services • Pre-investment or feasibility studies • Design • Construction supervision • Management and related services • Other technical services or special studies

19. PROCUREMENT ORGANIZATIONAL STRUCTURE Head of the Procuring Entity BAC BAC Secretariat Observers TWG

20. Procurement Organization Head of the Procuring Entity (HOPE) • Establish BAC and appoint its members • Ensure BAC members give utmost priority to assignments • Ensure professionalization of procurement organization • Approve the Annual Procurement Plan (APP) & Procurement Monitoring Report • Promptly act on BAC recommendations, i.e., award of the contract and mode of procurement • Approve/Disapprove Contract Award • Resolve Protests

21. Procurement Organization Head of the Procuring Entity (HOPE) • Ensure that the procurement officials and personnel receive ample training and proper incentives • Impose the necessary administrative sanctions to errant procurement officials and bidders – issues blacklisting orders • In case of consulting services, approves the method of evaluation, short-listed bidders and bidder having the Highest Rated Bid.

22. Procurement organization Bids and Awards Committee • General Rule: Single BAC • Exception: Expedite the procurement process for practical intents and purposes where the number and complexity of the items to be procured warrants • HOPE designates the BAC members, including the Chair and Vice-Chair

23. Procurement Organization Bids and Awards Committee • Composition: FIVE (5) but not more than SEVEN (7) MEMBERS designated by the HOPE • Members of the local sanggunian.

24. Procurement Organization Bids and Awards Committee Major Functions: • Recommend Procurement Method • Create TWG • Conduct the bidding activities • Resolve Requests for Reconsideration • Prepares the APP and PMR • Recommend Imposition of Sanctions vis-à-vis process blacklisting proceedings

25. Procurement Organization Bids and Awards Committee Other Responsibilities: • Invite Observers during all stages of the procurement process • Conduct due diligence review or verifications of the qualifications of observers • Prepare Procurement Monitoring Report • Suspend or blacklist bidders

26. Procurement Organization Bids and Awards Committee • Prohibited Members: • Head of the Procuring Entity • Approving Authority • Chief Accountant (Head of the Provincial/City/Municipal Accounting Office) and his/her staff, unless any of the former were designated as end-user of the project (COA Circular 2003-04)

27. Procurement Organization Technical Working Group Created by the BAC from a pool of legal, technical and financial experts Functions: • Assist BAC in the following activities: • Preparing bidding documents • Eligibility check/short-listing • Bid evaluation and preparation of reports • Post-qualification • Preparation of post-qualification summary report • Assist BAC and BAC Secretariat in preparing BAC Resolutions

28. Procurement Organization BAC Secretariat HOPE may create a new office or designate an existing organic office to act as BAC Secretariat Functions: • Provide administrative support to the BAC • Organize BAC meetings and conferences • Take custody of procurement documents and other records • Manage the sale and distribution of bidding documents

29. Procurement Organization BAC Secretariat Functions: • Advertise/post bidding opportunities and notices of awards • Assist in managing the procurement process • Monitor procurement activities and milestones • Consolidate PPMPs • Act as central channel of communications

30. Observers • Who are the Observers? • Representative from COA • Representative from a duly recognized private group in a relevant sector or discipline • Representative from an NGO • Qualifications: • Organization duly registered with the SEC or CDA • With knowledge, experience or expertise in procurement or in the subject matter of the contract to be bid • Without actual or potential conflict of interest in the contract to be bid • Any other relevant criteria that may be determined by the BAC

31. Observers • Invited at least 3 cd prior to the procurement stage/activity to enhance transparency of the process • Responsibilities: • Prepare report (jointly or separately) indicating their observations on the procurement activities • Submit report to the PE and furnish a copy to the GPPB and the Office of the Ombudsman/Resident Ombudsman • Immediately inhibit and notify in writing the PE of any actual or potential conflict of interest • Allowed access to documents upon signing of a confidentiality agreement

32. Bac Incentives • Honoraria • Legal Basis: • DBM Budget Circular 2007-3, dated 20 November 2007 • DBM Budget Circular 2004-5A, dated 7 October 2005 • Paid only for successfully completed procurement projects • Procurement contract has been awarded • Applies every procurement project that has been identified, described, detailed, scheduled and budgeted in the APP • Limited to procurement that involves competitive bidding

33. Bac Incentives • Honoraria: Ceiling Average amount of honoraria per month over one year should not exceed 25% of the basic monthly salary

34. Bac Incentives • Honoraria:Funding Source: • Collections from successfully completed project • proceeds from sale of bid documents • fees from contractor/supplier registry • fees charged for copies of: 1. minutes of bid openings, 2. BAC resolutions, and 3. other BAC documents • Protest fees • Proceeds from bid security forfeiture • Savings from the DBM approved corporate operating budget

35. Bac Incentives • Honoraria: BAC Secretariat • Ad hoc: paid honoraria at the same rate as the TWG chair and members • Procurement Unit: Overtime services • Those who are receiving honoraria shall no longer be entitled to overtime pay • Administrative staff, such as clerks, messengers and drivers supporting the BAC, the TWG and the Secretariat entitled to payment of overtime services

36. Philippine Procurement Paradigm Assess Procure HOPE HOPE • Post/Advertise opportunity • Open and evaluate bids • Post-qualify • Award and enter into contract • Review studies • Consolidate into APP • Decide procurement method • Approve APP • Determine readiness BAC BAC BAC Sec TWG Budget BAC Sec End User End User Implement Identify • Oversee implementation • Inspect and accept deliveries • Release payment • Cost-benefit analysis • Feasibility study • Market study • PPMP Needs Satisfaction

37. Procurement Planning • Procurement planning involves resource allocation and scheduling. • Involves identifying which project/program/activity needs of the procuring entity can best be met by procuring products or services. It includes deciding: • Whether to procure • What to procure • How to procure • Where to procure • How much to procure • When to procure

38. Procurement Planning Why Conduct Procurement Planning? • Overall goal of the particular project will be effectively and efficiently achieved • Precludes occasions for unnecessary government purchases and circumventions of the prescribed procurement procedures. Examples: • Advance deliveries; • Suki” system, or • Unwarranted resort to alternative methods procurement.

39. Procurement Planning Why Conduct Procurement Planning? • Done w/in budgetary context reflecting the LGU’s priorities and objectives for the budget period. • Government has the fiduciary responsibility to protect the taxpayers’ interests and safeguard the resources allotted to each department

40. Procurement Planning • The following competencies are required: • knowledge of the items to be procured • accounting, • warranty and contract laws, and • scheduling.

41. Procurement Planning • All procurement shall be within the approved budget of the procuring entity and should be meticulously and judiciously planned by procuring entity • Only those considered crucial to the efficient discharge of governmental functions shall be included in the Annual Procurement Plan (APP). • A procurement project shall be considered crucial to the efficient discharge of governmental functions if it is required for the day-to-day operations or is in pursuit of the principal mandate of the procuring entity concerned. (Sec. 7.1, Revised IRR) • No procurement shall be undertaken unless it is in accordance with the approved APP (Sec. 7.1, Revised IRR)

42. Project Procurement Management Plan • What is a PPMP? PPMP is the document reflecting the different programs, activities and projects (PAPs) of the various end-user units or Project Management Offices (PMOs) of the procuring entity. • When is the PPMP prepared? PPMP is prepared simultaneously with the budget proposal to provide details on the mode and schedule of procurement, technical description and specification of goods, equipment and civil works to be procured and their proposed budgets.

43. Project Procurement Management Plan • Who prepares the PPMP? The end-user units or the Project Management Office (PMO) shall prepare their respective PPMP for their PAPs. • Why is the PPMP prepared? PPMP is an important factor in determining and projecting the quantity and quality of the expected outputs of the PAPs.

44. Project Procurement Management Plan • Factors to consider in preparing the PPMP? • Assess the Needs • Strategize procurement of Needs • Consolidate identified Needs • Review studies and justifications for the Needs • Ascertain reasonableness of Needs • Prioritize acquisition of Needs

45. Project Procurement Management Plan Project Procurement Management Plan Name of the Project or Procurement General Description of the Project Contents Extent/Size of Contract Scopes/Packages Procurement Method Time Schedule / Procurement Milestones Estimated Budget for the Contract

46. Annual Procurement Plan • What is an APP? APP is the document that consolidates the various PPMPs submitted by the various procuring entity’s end-user units/PMOs. • Who prepares the APP? APP is prepared by the BAC, through the BAC Secretariat • Who approves the APP? APP should be approved by the HOPE or its duly authorized 2nd ranking official

47. Annual Procurement Plan • How is the APP prepared & maintained? • APP should be maintained and updated regularly • In the consolidation of PPMPs, the BAC may adopt a strategy through which similar items of procurement are packaged into one procurement undertaking and under a single PPMP, in which the original PPMPs shall be consolidated and revised. • A review and updating of the individual PPMPs and the APP shall be done regularly, at least once every 6 mos. or as often as necessary;

48. Annual Procurement Plan • Factors to consider in developing an APP? • Inclusion of all procurement activities planned for the year; • Include provisions for a lump sum to cover foreseeable emergencies or contingencies usually indicated by historical records; • Scheduling of procurement activities in the APP should be done in such a manner that the BAC and the other offices/units involved in the procurement process in the procuring entity are able to efficiently manage the conduct of procurement transactions.

49. Procurement Planning

50. Annual Procurement Plan Annual Procurement Plan Name of the Project PMO or End-user Unit Contents General Description of the Project Procurement Method Time Schedule of each Procurement Activity Approved Budget for the Contract (ABC)