AFP Procurement System

VOLUME 1
AFP Procurement System and

Organization
Page 2 of 224
Page 3 of 224
AFP PROCUREMENT SYSTEM AND ORGANIZATION ..................................................1

AFP PROCUREMENT SYSTEM AND ORGANIZATION...................................................1
INTRODUCTION.......................................................................................................5
PROCUREMENT AND THE LOGISTICS FUNCTION IN THE AFP....................................................................7
LEGAL BASIS FOR THE A.F.P. PROCUREMENT MANUAL......................................................................12
Legal Reference...................................................................................................12
COVERAGE, SCOPE, AND APPLICATION.......................................................................................13
Legal Reference...................................................................................................13
Coverage............................................................................................................13
Scope................................................................................................................13
Application.........................................................................................................14
PRINCIPLES OF GOVERNMENT PROCUREMENT .................................................................................15
Legal Reference...................................................................................................15
Transparency......................................................................................................15
Competitiveness..................................................................................................15
Streamlining and use of technology in procurement..................................................15
Accountability.....................................................................................................15
Public Monitoring.................................................................................................15
THE PROCUREMENT ORGANIZATION IN THE AFP....................................................17
THE ORGANIZATIONAL STRUCTURE...........................................................................................19
Legal Reference...................................................................................................19
1. The Procuring Entity The AFP .......................................................................19
2.The AFP Bids and Awards Committees (AFPBAC).........................................................20
4.The AFP Procurement Service (AFPPS) and the BAC Secretariat..................................24
ROLES AND RESPONSIBILITIES................................................................................................29
Legal Reference...................................................................................................29
CONDITIONS FOR GRANTING HONORARIA.....................................................................................37
Legal Reference...................................................................................................37
PROFESSIONALIZATION OF THE AFPPS, BAC, SECRETARIAT, TWG ......................................................38
Legal Reference...................................................................................................38
PROCUREMENT PLANNING.....................................................................................39
PROCUREMENT PLANNING - PROCUREMENT PLANNING AND BUDGET LINKAGE......................................41
Legal Reference...................................................................................................41
PROCUREMENT PLANNING PREPARATION OF THE PROJECT PROCUREMENT MANAGEMENT PLAN (PPMP).........43
Legal Reference...................................................................................................43
1. The PPMP.......................................................................................................43
2. Developing the Project Requirements.................................................................43
3. Writing the Technical Specifications, Scope of Work and Terms of Reference............44
4. Determining the Approved Budget for the Contract .............................................45
5. Procurement Milestones ..................................................................................45
6. Method of Procurement...................................................................................46
7. Format of the PPMP (prepared by the PMO/end-user unit)......................................46
PROCUREMENT PLANNING PREPARATION OF THE ANNUAL PROCUREMENT PLAN (APP)..........................47
1. The Annual Procurement Plan..........................................................................47
2. Procurement Strategy ......................................................................................48
3. Format of the APP...........................................................................................48
SPECIFIC PROCEDURES FOR PROCUREMENT PLANNING .......................................................................50
.............................................................................................................................50
GENERAL PROCUREMENT ACTIVITIES AND TIMELINES...........................................53
VARIOUS METHODS OF PROCUREMENT........................................................................................72
Competitive Bidding.............................................................................................74
LEGAL REFERENCE............................................................................................................74
Alternative Methods of Procurement.......................................................................75
Guidelines on Establishing Procurement Systems and Organizations
September 2007
Page 4 of 224
Legal Reference...................................................................................................75
1. Conditions for Use of Alternative Methods of Procurement.....................................75
2. THE DIFFERENT ALTERNATIVE METHODS.................................................................................75
Ordering Agreement............................................................................................77
LEGAL REFERENCE............................................................................................................77
IMPLEMENTATION OF A.F.P. INFRASTRUCTURE PROJECTS BY ADMINISTRATION...78
PROCUREMENT BY ELECTRONIC MEANS AND THE G-EPS ..................................................................82
Procurement by Electronic Means and the G-EPS......................................................84
Legal Reference...................................................................................................84
1. The G-EPS......................................................................................................84
2. FEATURES OF THE G-EPS.............................................................................................84
Use of Procurement Service Providers.....................................................................87
Legal Reference...................................................................................................87
MINIMUM REQUIREMENTS FOR SERVICE PROVIDERS............................................87
OTHER SPECIALIZED TYPES OF PROCUREMENT................................................................................88
Procurement Sourcing..........................................................................................90
Legal Reference...................................................................................................90
1. Procurement of Foreign and Domestic Goods.......................................................90
2. BIDDING OF PROVINCIAL PROJECTS..................................................................91
CASE STUDIES...............................................................................................................94
Case Study: Procurement of Infrastructure Projects..................................................96
ANALYSIS:...................................................................................................................96
Case Study: Procurement of Consulting Services......................................................98
ANALYSIS:.............................................................................................................99
ACRONYMS.................................................................................................................102
ACRONYMS..........................................................................................................104
GLOSSARY..................................................................................................................108
GLOSSARY..................................................................................................................110
SUPPLY PROCESS THRU THE AFPBAC, AFPPS AND ICP................................................................120
PREPARATION/APPROVAL OF APP/PPMP..................................................................................124
AMENDMENT OF APP.......................................................................................................128
PROCUREMENT CENTERS/CONTRACTING OFFICES...........................................................................132
REPORTING AND MONITORING OF PROCUREMENT ...........................................................................136
PROCUREMENT THRU SHOPPING MODE......................................................................................140
PROCUREMENT THRU PUBLIC BIDDING BELOW P50M......................................................................144
PROCUREMENT THRU LIMITED SOURCE WITH AN AMOUNT BELOW P50M....................................................148
PROCUREMENT THRU DIRECT CONTRACTING BELOW P50M.................................................................152
PROCUREMENT THRU REPEAT ORDER WITH AN AMOUNT BELOW P50M.....................................................156
NEGOTIATED PROCUREMENT BELOW P50M.................................................................................160
PROCUREMENT WITH AN AMOUNT OF P50M AND ABOVE..................................................................166
PROCUREMENT THRU PS DBM............................................................................................170
EXECUTIVE ORDER NO. 235..............................................................................................174
DEPARTMENT ORDER NO. 165............................................................................................176
DEPARTMENT ORDER NO. 12..............................................................................................181
GPPB RESOLUTION NO. 18-2006......................................................................................191
Page 5 of 224
SECTION 1
Introduction
September 2007
Procurement and the Logistics Function in the AFP

The Mandated Mission and Functions of the Armed Forces of the Philippines
(AFP)
Under the 1987 Constitution, the mission of the Armed Forces of the Philippines (AFP) is to
protect the people, secure the sovereignty of the State and the integrity of the national
territory.
In the fulfillment of its mandated mission, the AFP performs the following functions:
1.
Uphold the sovereignty and territorial integrity of the Republic and secure the national
territory from all forms of intrusion and encroachment
2.
Organize, develop, maintain and deploy its regular and citizen reserve forces for national
security.
3.
Assist civilian agencies in the preservation of the national patrimony and other natural
resources located within its territory and Exclusive Economic Zone (EEZ).
4.
Protect the people not only from armed threats but from life threatening and destructive
consequences of natural and man-made disasters and calamities, and from all forms of
ecological damage.
5.
Assist other agencies in the enforcement of domestic and foreign policies as well as
international covenants against piracy, white slavery, smuggling, drug trafficking,
hijacking of aircraft and the transport of toxic and ecologically harmful substances in or
through Philippine territory.
6.
Assist the Philippine National Police in law enforcement and internal security operations.
7.
Fulfill the countrys international commitments.
8.
Support national development.
Based on this statement of its functions, it is evident that the AFP actually performs both a
primary military role as the States war-fighting instrument, and a secondary non-military role of
supporting national development.
The table of organization of the AFP is shown as Annex 1.
Definition of Logistics
In order for the AFP to accomplish its mandated mission and effectively fulfill its dual role as
military instrument of the State and support agency for national development, a sound logistics
support system is crucial to its operations.
Fundamentally, military logistics operation is concerned with the total sustainment of troops,
whether in times of war, conflict or peacetime. Taken operationally, it is the process of planning
and executing the supply, movement and maintenance of military forces. It includes design,
development, acquisition, storage, movement, equipage, distribution and disposal- (Logistics
Glossary, AFP, 1998).
Functional Areas of Logistics

In practice, the AFP Logistics system encompasses five (5) major functional areas. These are:
1.
Supply
2.
Maintenance
3.
Transportation
4.
Facilities
5.
Services
The supply process consists of:

1.
Requirement determination This is concerned with determining the type and level of
support requirements that the logistics system must provide in terms of manpower,
materiel, facilities, and logistics services. The determination of manpower requirements
takes into consideration the number of troops that have to be supplied or supported, and
consequently the number and skill level of logistics personnel needed to efficiently run
the logistics system.
2.
Procurement In the context of this Manual, this shall be defined as provided for in
Section 5(n) of RA 9184 which states Procurement refers to the acquisition of Goods,
Consulting Services, and the contracting for Infrastructure Projects by the Procuring
Entity. Procurement shall also include the lease of goods and real estate.
3.
Distribution The main purpose of the distribution system is to move supplies from the
source to the end-user. The considerations of responsiveness, flexibility, economy and
optimal use of manpower/physical resources are of concern here.
4.
Maintenance This is a supply activity which requires that materiel on inventory and the
facilities/equipment for their testing, storage, handling and distribution are kept in
serviceable condition.
5.
Inventory Inventory is a stock of items kept by an organization to meet internal or

external demand. The purpose of inventory management is to determine the amount of
inventory to keep in stock how much to order and when to replenish or order.
6.
Disposal This refers to the sale or destruction of assets (including inventory) and
property which are unserviceable and/or no longer needed in AFP operations. The
Commission on Audit (COA) prescribes rules for the disposal of property.
Maintenance is a logistics function of sustaining a material, equipment or a facility in operational

status, restoring it to serviceable condition, or upgrading and updating its functional utility
through modification. This applies to material and equipment, both issued and in-stock, and
facilities that are operational and in use.
Transportation includes those services related to the movement of personnel and materiel to
meet military requirements and commitments, which are normally tasked to the Philippine Air
Force, and the Navy. Everything provided by the supply system and the organization flows
through the transportation system. Transport services create a place-utility by moving an item
to an area where it is needed most and a time-utility by ensuring that an item is delivered to a
location at a given time.
The development of bases and facilities is an essential subset of the logistics system supporting
AFP operations. This includes real estate acquisition, development improvement, and expansion
or rehabilitation of facilities of an area/location for the support of forces employed or deployed in
accordance with strategic plans. Facilities development supports not only proposed tactical
operations, but all other support activities such as supply, equipment maintenance, and medical/
dental services. Implementation of infrastructure projects by the AFP Corps of Engineers and
the procurement of construction materials/inputs in the AFP are required in the discharge of this
sub-function of the logistics system.
Services provide combat service support to organization units. This includes food service,
commissaries, health services and graves registration. These services may be described as
personnel-oriented services.
AFP Doctrine and Logistics Strategy
As both a military instrument of the State and a support agency for national development,
operations within the AFP organization are shaped by the nature of war as recognized in its
Doctrine, as well as the laws, rules and regulations applicable to national agencies of
Government.
The following aspects of war and armed conflict influence the logistics Strategy of the AFP:
1.
Uncertainty Uncertainty stems from the fact that in every staged military operation,
there are unknown fields of operational environments and circumstances which might
not be recognized at the outset. During the planning stage, logisticians usually consider
a low uncertainty level in terms of logistics capability. But as a military campaign
advances and situations become variable, the manning and equipping of forces become
difficult to manage. The desire for absolute certainty, limited time in which to respond
are conflicting concerns which may only be resolved by accepting and dealing with
varying degrees of certainty. By employing thorough intelligence work, an integrated
planning process and synchronization of priorities at all levels, uncertainty may be
reduced to manageable levels.
2.
Time Time is an extremely essential but scarce commodity in war fighting, At all times,
AFP logistics should employ measures in order to effectively plan, decide, execute, and
assess operations in a rapid and flexible process. Within the AFP system of command,
these capabilities are effectively employed through the use of an effective information
and communication flow. A Logistics Management Information System (LMIS) has been
established to maximize time and enhance the efficiency of the AFP logistics system.
3.
Tempo An effective military campaign takes tempo as one of its most important
considerations in war fighting. Tempo is the capacity of the logistics system to maintain
a constant, uninterrupted operational rhythm, leaving the enemy with no time to reflect,
reorganize and react. To ensure that operational rhythm is maintained, logisticians must
anticipate when and where support must occur, taking into consideration some other
aspects of battlefield activities.
The following principles govern the logistics function in the AFP:

1.
Responsiveness This is the main goal of AFP logistics. It is the ability of the system to
provide adequate supply support at the right time and place in order that a staged
operation is effectively carried out and sustained. This capacity normally measures how
well a logistics system is being implemented and executed.
2.
Simplicity The efficiency of a logistics system is enhanced if the complexity of

procedures and policies are minimized. Standardization of procedures and establishing
clear and explicit priorities can simplify logistics support operation and control.
3.
Flexibility This is the adaptability of logistics structures and procedures to changing

situations, missions and concepts of operation. Programs and budget resources must
continually be adjusted to balance support within changing conditions. Plans and
operations should be flexible enough so that adequate support is delivered at the right
time.
4.
Economy It is a given fact that a substantial amount of natural resource is poured into
every military campaign. An efficient logistics system thus seeks to deliver requirements
ay the most strategic time and place at the least possible cost.
5.
Attainability This is the ability of the organization to supply and equip its forces with
essential war fighting requirements all throughout the duration of a military operation.
This can be achieved through effective short term and long term planning. The
capability of a commander to forecast and anticipate the needed resources from the time
a campaign is staged and all throughout the entire operation defines the attainability of
military success.
6.
Survivability All military campaigns bring with it the inherent risk of damaging military
resources. Bases and installations are likely targets of attacks from the enemy, thus the
AFP employs effective measures to protect its own force and war fighting resources. The
allocation of reserves and alternate sources in times of crisis and emergency ensures the
survivability of the institution.
The capability of the national defense system (of which the AFP is a part) to perform its
multifarious functions in whichever security condition, may be effectively attained through sound
logistics. Concomitant with the national defense objectives and in line with current AFP Doctrine
and the principles of logistics, AFP Logistics adopts a strategy by which to guide its operations.
Recognizing the crucial role played by logistics in the discharge of military duties, AFP Logistics
operates with the purpose to:
1.
Enhance logistics support to the AFP through sound management.
2.
Improve information technology (IT) applications.
3.
Optimize fund utilization.
4.
Increase local sourcing of military hardware.
5.
Develop and harness the full potential of logistics personnel.
6.
Create and maintain an ethical environment.
(SOURCE: AFP Basic Logistics Doctrine, AFPM 4-0, April 2002)

As shown in the preceding excerpt from the Manual describing the AFP Basic Logistics Doctrine,
the logistics principles and strategy adopted by the AFP are complementary to and consistent
with the declared policy of the State to promote the ideals of good governance and the following
Governing Principles on Government Procurement as enunciated in Sec. 3, RA 9184:
1.
Transparency
2.
Competitiveness
3.
Streamlining and the use of technology in procurement
4.
Accountability
5.
Public Monitoring
It is evident that procurement in the AFP is an activity subsumed in the broader support
functions of supply and logistics. The development of this customized manual has therefore
aimed to ensure that the processes and procedures for procurement described herein are
consistently linked and harmonized with the larger Supply and Logistics System of the AFP, while
complying with the laws, rules and regulations on government procurement as enunciated by RA
9184, its IRR-A, and the issuances of the Government Procurement Policy Board (GPPB).
Present Doctrine enunciates that the secondary role of the AFP as support agency for national
development should not compromise or detract from its capability to fulfill its primary war
fighting role. This is a statement of priorities that can also mean that certain administrative
procedures or modes of operation adopted by the AFP as a national government agency in
peacetime may cease to apply in the event of war and large scale conflicts. In anticipation of
such concerns, R.A. 9184 and its IRR-A under Sec. 53, provide for procurement methods
applicable in cases of emergency. Sections 63 and 74 likewise provide the mechanisms for a
regular review of effectiveness and the amendment of rules and regulations on procurement.
The issuance of GPPB Resolution No. 06-2005 April 1, 2005, approving the use of an Ordering
Agreement is a result of such concerns for responsiveness in the public procurement system. All
of the foregoing notwithstanding, there should be no inconsistency in the fact that the discipline
and efficiencies in procurement/logistics acquired by the AFP in peacetime, can likewise make it
a more effective military instrument during conflict and war.
Philippine Defense Reform (PDR) and Procurement Reform in the AFP
In an effort to address prevailing security challenges that have hindered lasting national
economic growth and development, the DND and the AFP are currently focused on four policy
thrusts to:
Implement the Philippine Defense Reform (PDR);
Upgrade the capability of the AFP;
Support the peace process; and
Enhance the capacity to fight terrorism.
The PDR which was the result of the Joint Defense Assessment (JDA), a series of
assessments of the AFP's capability that started in 1999 and was completed in 2003, is
composed of 10 interrelated programs that form its core, namely:
Multi-Year Defense Planning System;

Improvement of Operations and Training Capacity;
Improvement of Logistics Capacity;
Staff Development Program;
Improve of Personnel Management System;
Multi-Year Capability Upgrade to Push AFP Modernization;
Optimization of Defense Budget and Improvement of Management
controls;
Centrally-Managed Defense Acquisition System Manned by a Professional Acquisition
Workforce;
Improvement of Civil-Military Operations Capability; and
Development of Information Management Capability.
As a broad reform agenda, PDR will set in place long-term reforms in the defense establishment
while addressing short-term issues and concerns. It aims to address systemic deficiencies and
their root causes in areas such as strategic/policy planning, budgeting, resource management
and supply chain management.
(Source: DND and AFP: Transforming While Performing, AFP Official Website)
The development of this Procurement Manual for the AFP in accordance with the policies,
provisions, rules and regulations of the Government Procurement Reform Act or R.A. 9184, is an
important component of the program of the DND-AFP to establish a professional and centrally
managed defense acquisition system as advanced under the PDR.
Legal Basis for the A.F.P. Procurement Manual
Legal Reference
This manual shall serve as a guide for personnel, officers and units of the AFP involved in the
procurement of goods, infrastructure and consulting services. It has been developed and
prepared in line with the policies, guidelines, and procedures prescribed by the Generic
Procurement Manuals (GPM) developed by the Government Procurement Policy Board (GPPB) in
compliance with Section 6 of R.A. 9184 or the Government Procurement Reform Act.
The following laws, rules and regulations serve as references for the AFP Procurement Manual:
1.
R.A. 9184, Government Procurement Reform Act, and its IRR-A.
2.
R.A. 7898, AFP Modernization Act.
3.
Executive Order 235, dated 08 September 2003
4.
DND Department Order 165
5.
DND Department Order 115 (NOTE: Sec. 9.5 recommending acceptability of shopping
after the fact, is contrary to RA 9184 which requires prior approval)
6.
DND Department Order 53
7.
DND Department Order No. 12, dated April 5, 2006
The Deputy Chief of Staff for Logistics will review this Manual periodically, and whenever
necessary, ensure its applicability to existing conditions. Procuring entities and units, including
end-users within the AFP, may submit to the GPPB thru the Deputy Chief of Staff for Logistics,
its recommendations for specific revisions to the Manual. Any such revisions must be approved
by the GPPB and must be consistent with existing procurement laws, rules, regulations, and
policies.
Coverage, Scope, and Application
Legal Reference
Sections 1, 4, and 5 of the IRR-A of RA 9184 provide the legal reference for the coverage, scope
and application of the Procurement Manual.
Coverage
This Manual shall be used for the operational planning, implementation and monitoring of the
procurement of goods, infrastructure projects and consulting services by the Armed Forces of
the Philippines (AFP) and all Offices/Units under it.
Scope
The organization, policies and procedures for procurement as provided for in this manual are
aligned with those prescribed in R.A. 9184, its IRR-A and the Generic Procurement Manuals
(GPM) issued by the Government Procurement Policy Board (GPPB) for mandatory use by all
Procuring Entities of the Government. The planning, implementation and monitoring of
procurement by the AFP Bids and Awards Committee and the AFP Procurement Service (AFPPS)
are harmonized with the AFP supply and logistics system to ensure prompt, efficient and
effective delivery of quality goods, services, and infrastructure projects.
The modes of procurement under RA 9184 and its IRR-A, particularly on Public Bidding, Limited
Source Bidding, Direct Contracting, Repeat Order, Negotiated Procurement, and Shopping are
covered by the manual. The procurement guidelines provided by the following GPPB Resolutions
shall likewise be incorporated in the manual:
1.
GPPB Resolution No. 13-2005 Guidelines for the Implementation of Projects

Undertaken By Administration or Force Account
2.
GPPB Resolution No. 06-2005 Guidelines on the Use of an Ordering Agreement
3.
GPPB Resolution No. 09-2005 Guidelines on Implementation of Projects Undertaken

By the AFP Corps of Engineers
The Manual shall apply to the procurement of goods, infrastructure projects and consultancy
services in the AFP locally funded under the General Appropriations Acts, and the AFP
Modernization Act Trust Fund.
A logistics directive covering the procurement/acquisition thru the US Security Assistance

Programs (eg: FMF, FMS, EDA, etc.) and other grants, loans/credits or sales involving
government-to-government (bilateral or multilateral) arrangements/agreements will be issued
separately.
Procurements funded partly or fully by international funding institutions (IFI) shall follow the
procedures specified under the concerned IFIs guidelines.
If there are no procurement
guidelines provided by the IFI concerned, or if the guidelines provided are silent on specific
procurement procedures, the procurement processes and procedures provided in R.A. 9184 and
its IRR-A must apply suppletorily.
Application
The procurement of the following must follow the procedures provided in this Manual:
1.
Goods and Services;
2.
Infrastructure Projects; and
3.
Consulting Services.
This procurement manual for the AFP shall be used in conjunction with the Generic Procurement
Manuals issued by the GPPB for mandatory use by all Procuring Entities of the government,
pursuant to Sec. 6 of RA 9184. In case of conflicting provisions, the GPM, the IRR-A of RA 9184
and the various issuances of the GPPB shall prevail.
Since procurement is an activity subsumed by the broader functions of Supply and Logistics
within the AFP, manuals of procedures for these functions should be harmoniously linked and
synchronized with the AFP Procurement Manual and the Generic Procurement Manual of the
GPPB.
This Manual shall be used together with the Philippine Bidding Documents prescribed by the
GPPB.
Principles of Government Procurement

Legal Reference
The IRR-A Section 3 of RA 9184 provides the legal reference for the principles of government
procurement which shall be adhered to in the AFP.
Procurement in the AFP shall be governed by the following principles established under RA 9184:
Transparency
The procurement process and the implementation of procurement contracts must be
transparent. The AFP must ensure the widest dissemination of bid opportunities and the
participation of pertinent non-government organizations. Towards this end, posting in the AFPs
website and in the Government Electronic Procurement System (G-EPS) website shall be done
for all procurement, and Observers coming from eligible and qualified professionals associations
(PAs) and non-government organizations (NGOs) will be invited to observe any or all stages of
the procurement process.
In addition, each procurement transaction must be properly
documented and such records must be maintained and made available to proper parties.
Competitiveness
Procurement by the AFP must be competitive and, as a rule, be conducted through public
bidding, except as otherwise provided for under the GPRA, its IRR-A and this Manual. A
competitive bidding process treats bidders equitably and provides fair grounds for competition
among themselves, thereby ensuring that no single bidder significantly influences the outcome
of the bidding. Competition among proponents will urge them to offer lower prices and more
beneficial terms to the government. Hence, the alternative methods of procurement must only
be resorted to when competitive bidding is not a feasible option, in accordance with the
conditions laid down in RA 9184, its IRR-A and this Manual.
Streamlining and use of technology in procurement

A streamlined procurement process that will uniformly apply to all procurement in the AFP must
be adopted. The procurement process must be simple and made adaptable to advances in
modern technology in order to ensure an effective and efficient method. The AFP shall conduct a
periodic review of its procurement procedures, and whenever necessary, formulate and
implement changes thereto.
Accountability
A system of accountability must be established within the AFP. Thus, both the AFP 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. In relation to
this, the Chief of Staff of the Armed Forces of the Philippines (CSAFP) shall be responsible for
establishing and maintaining a transparent, effective, and efficient procurement system within
the Armed Forces. The responsibilities of each AFP official involved in the procurement process
must be clear and legally identifiable.
Public Monitoring
Public monitoring of the procurement process and the implementation of awarded contracts are
provided for in RA 9184, with the end in view of guaranteeing that these contracts are awarded
pursuant to the provisions of the RA 9184 and its Implementing Rules and Regulations Part A
(IRR-A), and that all these contracts are performed strictly according to specifications. A system
of reporting to the GPPB is provided for, while eligible and qualified Civil Society Organizations
(CSOs) such as - NGOs, PAs, academic institutions, and religious groups are allowed to observe
and monitor the procurement process and contract implementation.
To fully abide by these principles, procuring entities shall consistently follow the procedures
prescribed in this Manual.
SECTION 2
The Procurement Organization in

the AFP
Page 19 of 224
The Organizational Structure

Legal Reference
The IRR-A of RA 9184, Sections 5(m) and (q), 11, 13, and 14, and the Generic Procurement
Manuals issued by the GPPB, provide the legal reference for determining the structure of the
procurement organization within the AFP.
1. The Procuring Entity The AFP

As provided for in Section 18 of Executive Order No. 292, The Revised Administrative Code
of 1987, the Armed Forces of the Philippines shall be under the supervision and control of
the Department of National Defense.
In view of the foregoing and pursuant to Sec. 11 of R.A. 9184, and Sec. 2 of Executive
Order No. 235, dated September 8, 2003, the Armed Forces of the Philippines (AFP) shall
be considered as a decentralized lower level procuring entity of the Department of National
Defense, with the Department Proper (the Office of the Secretary of National Defense and
the staff units directly under it) as the Head Office referred to in the Generic Procurement
Manual. The Chief of Staff of the AFP (CSAFP) shall be deemed the Head of the Procuring
Entity for the AFP, with respect to Government contracts pertaining to it subject to the
limitations and authority delegated by E.O. 235 and the Secretary of National Defense
(SND). As a general rule, the procurement function shall be centralized in the Department
Proper/the Head Office, unless the SND issues a directive delegating such authority to
procure to its bureaus, offices or agencies.
The following issuances currently define the authority delegated to officials of the DND and
the AFP relative to the procurement function:
a.
Department Order No. 12, dated April 5, 2006, creating additional bids and awards
committees and the Procurement Service in the AFP. Refer to Annex 12.
b.
Sec. 1 of Executive Order No. 235 grants the CSAFP full authority to sign contracts
of the AFP involving an amount below P50 Million.
c.
Department Order No. 53, dated March 31, 2005, delegates the authority to approve
the Annual Procurement Plan (APP) of the bureaus/agencies/offices under the DND,
to the Undersecretary for Operations and the Undersecretary for Finance.
d.
Department Order No. 165, dated September 10, 2003 grants the authority to
Officials
of
the
AFP
to
approve
Purchase
Orders/Job
Orders/Work
Orders/Requisitions/Contracts for the procurement of services, supplies, materials
and equipment, as an amendment to D.O. 47. Refer to Annex 2.
On the basis of EO 235 and DO 12, the following officials shall have the authority to sign
and approve Purchase/Job/Work Orders and contracts for the procurement of goods,
services and infrastructure projects with corresponding amounts as indicated:
Chief of Staff, AFP
- up to P50,000,000.00
Vice-Chief of Staff/Major
Service Commanders
- up to P25,000,000.00
CO, Procurement
Centers/Chief, Contracting
Offices of the AFPPS
- up to P1,000,000.00
September 2007
2.
(AFPBAC)
The AFP Bids and Awards Committees
Executive Order No. 235, dated September 8, 2003, established a single Bids and Awards
Committee (BAC) in the General Headquarters (GHQ) of the AFP and granted the CSAFP
full authority to sign and approve contracts involving an amount below P50 Million. This,
in effect, established the AFP as a Procuring Entity for procurement involving an amount of
below P50 Million. Department Order No. 12, dated April 5, 2006, renamed the AFPBAC
created under EO 235 as GHQ BAC1.
As provided for in Volume 1 of the Generic Procurement Manual (GPM), Procurement
Organization:
The Head of the Procuring Entity/SND must create a single BAC in the Head Office of the
Procuring Entity. However, the SND upon recommendation of the CSAFP may create
separate BACs in the AFP under any of the following conditions:
a.
the items to be procured are complex or specialized; or
b.
if the single AFP BAC cannot manage the procurement transactions as shown by
delays beyond the allowable limits, , even after undergoing jury duty,.
The separate BACs may be organized according to:

a.
geographical location of the Project Management Office (PMO) or end-user units of

the Procuring Entity/AFP; or
b.
nature of procurement.
Thus, the AFP may have separate BACs in its Major Services (PA, PAF, PN) or other
decentralized offices/units (when warranted according to the above conditions), and/or
separate BACs in the Head Office to handle procurement of ordnance (firepower, mobility,
communications), supplies for troops and organizational support, base development and
facilities maintenance/other infrastructure, and other specialized procurement.
However, the Head of the Procuring Entity must limit the creation of separate BACs in
order to facilitate professionalization and harmonization of procedures and standards. If
the reason for creating a separate BAC is due to complexity of the procurement, it may be
unnecessary, considering that the rule that requires the designation of provisional
members (technical and end-user unit representative) is already responsive to the
requirement of having a separate BAC for procurements that are complex in nat ure.
3. AFPBAC Members
The CSAFP shall designate the Members of the Bids and Awards Committee (BAC)
including the Chairman and the Vice-Chairman in accordance with the following rules:
a. AFP BAC (GHQ BAC1):
i.
The AFPBAC must consist of at least five (5) members but not more than
seven (7) members. Of the five (5) members, three (3) must be regular
members, and two (2) must be provisional members. Should the CSAFP/Head
of the Procuring Entity desire to create a seven (7)-member BAC, he/she may
designate two (2) additional regular members, or two (2) additional provisional
members, or one (1) additional regular and provisional member each.
Guidelines on Establishing Procurement Systems and Organization
September 2007
The regular members are:
An officer, who is at least a third-ranking permanent official of the

procuring entity (A Major General/Rear Admiral, O8 grade), who shall also
be designated as the Chairman;
An officer, who holds at least a fifth ranking permanent plantilla

position (A Colonel/Captain of the Navy, O6 grade), with knowledge,
experience and/or expertise in procurement who, represents the legal or
administrative area of the procuring entity;
An officer, who holds at least a fifth ranking permanent plantilla

position (A Colonel/Captain of the Navy, O6 grade), with knowledge,
experience and/or expertise in procurement who, represents the finance
area of the procuring entity.
The provisional members are:

Commander of concerned Major Service/GHQ Logistics Unit (ie: ASCOM,
NSSC, NLC, ALC or GHQ&HSC), or Commander of concerned Procurement
Unit (ie: PAF Procurement Center; PA Procurement Center;
Materiel
Acquisition Division, Naval Logistics Center; or GHQ&HSC) to which the
procurement pertains; (Sec. 11.2.1 of the IRR-A of R.A. 9184 provides
that at least one of the provisional members shall be An officer who has
technical expertise relevant to the procurement at hand, who has
knowledge, experience and/or expertise in procurement);
Commander of Requesting Unit where the Procurement/Purchase Request
(PR) emanated, or the Commander of Unit where the items to be procured
are intended for, or their representatives. (Sec. 11.2.1 of the IRR-A of R.A.
9184 provides that at least one of the provisional members shall be A
representative from the end user unit who has knowledge of procurement
laws and procedures).
ii.
The Chairman and Vice-Chairman must be regular members of the BAC.
iii. The CSAFP must designate the AFPBAC Chairman, and may likewise
designate the Vice-Chairman from the remaining regular members.
In designating the provisional members, the Head of the Procuring Entity shall
consider the types of procurement normally undertaken by them, and identify the
relevant technical experts. For example, in procuring janitorial services, the
technical member should be an officer of the Building Maintenance Unit.
Provisional members will only participate in the deliberations of the BAC for
procurements over which they have a direct official interest. For example, in the
procurement of computers, the technical member for Information and
Communications Technology (ICT) will participate in BAC deliberations together
with the representative of the Project Management Office/end-user unit.
iv. The BAC members must be designated for a term of one (1) year only,
reckoned from the date of designation. However, the Head of the Procuring
Entity may renew such designation at his discretion.
It is noted that appointment to the BAC is in the nature of a designation, in
addition to the regular duties of the subject official, and is not an appointment
contemplated under the Civil Service rules.
September 2007
In accordance with the thrust to professionalize the procurement organization,

Heads of Procuring Entities are encouraged to re-appoint BAC members who
have shown efficiency and probity in the performance of their duties.
v.
In case of resignation, retirement, separation, transfer, re-assignment, or

removal of a BAC member, the Head of the Procuring Entity may designate a
replacement, who shall be similarly qualified as the official replaced,
and shall have the required ranking as provided for in RA 9184 and its
IRR-A. The replacement shall serve for the unexpired term. In case of leave
or suspension, the replacement shall serve only for the duration of the leave or
suspension.
vi.
Representatives designated by BAC members to attend meetings in their

absence, shall have no right to vote, nor shall they be authorized to sign in
behalf of the members represented.
vii.
The SND as Head of the Procuring Entity may suspend or remove a member of
the BAC for justifiable causes, including, but not limited to, violations of the
provisions of the RA 9184 or its IRR-A.
vii. The following officers of the procuring entity are disqualified from membership
in the BAC:
The CSAFP/Head of the Procuring Entity;
The official who approves procurement transactions;
The Chief Accountant / Head of the Accounting Department and his/her

staff, unless the Accounting Department is the end-user unit, in which case
the Chief Accountant, Head of the Accounting Department or his/her staff
may be designated as an end-user member.
b. Multiple or Lower Level BACS

Department Order No 12, date April 5, 2006, granted the CSAFP the authority to
create additional Bids and Awards Committees to handle procurement of contracts
with ABCs not exceeding certain prescribed limits in the following units, and
renamed the AFP BAC created under EO 235 as GHQ BAC1:
BAC
AMOUNT OF AUTHORITY
PROCUREMENT UNIT
GHQ BAC2
- not exceeding P25,000,000.00
GHQ, AFPMC,PMA, PSG,

other AFPWSSUs
PA BAC
Philippine Army
PAF BAC
Philippine Air Force
PN BAC
Philippine Navy
The head of the procuring entity for the AFP BACs shall be the CSAFP subject to
the limitations and authority delegated by the SND and under EO 235.
Members of the separate BACs created within the AFP under D.O. 12 and in
accordance with Sec. 11 of RA 9184 and its IRR-A, shall be designated by the
CSAFP.
i.
The lower level BACs in the AFP must consist of at least five (5) members
and not exceed seven (7). Of the five (5) members, three (3) must be regular
members, and the two (2) must be provisional members. Should the Head of
September 2007
the Procuring Entity/SND desire to create a seven (7)-member BAC, he/she

may designate two (2) additional regular members, or two (2) additional
provisional members, or one (1) additional regular and provisional member.
The regular members are:
An officer, who is at least a third-ranking permanent official of the

procuring entity who shall be designated as the Chairman (a Brigadier
General/Commodore as provided for by DO 12);
An officer, who holds at least a third ranking permanent plantilla

position (a Lieutenant Colonel/Commander as provided for by DO
12), with knowledge, experience and/or expertise in procurement who
represents the legal or administrative area of the procuring entity;
An officer, who holds at least a third ranking permanent plantilla

position (a Lieutenant Colonel/Commander as provided for by DO
12) with knowledge, experience and/or expertise in procurement who
represents the finance area of the procuring entity.
The provisional members are:
An officer who has technical expertise relevant to the procurement at

hand, and, to the extent possible, has knowledge, experience and/or
expertise in procurement;
A representative from the end user

procurement laws and procedures.
unit
who
has
knowledge
of
ii.
The Chairman and Vice-Chairman shall be regular members of the BAC.
iii.
The Head of the Procuring Entity/CSAFP shall designate the BAC Chairman, and
may likewise designate the Vice-Chairman from the remaining regular
members.
iv.
The BAC members shall be designated for a term of one (1) year only, reckoned
from the date of designation. However, the Head of the Procuring Entity may
renew such designation at his discretion.
It is noted that appointment to the BAC is in the nature of a designation, in
addition to the regular duties of the subject official, and is not an appointment
contemplated under the Civil Service rules.
In accordance with the thrust to professionalize the procurement organization,
Heads of Procuring Entities are encouraged to re-appoint BAC members who have
shown efficiency and probity in the performance of their duties.
v.
In case of resignation, retirement, separation, transfer, re-assignment, or

removal of a BAC member, the Head of the Procuring Entity may designate a
replacement, who shall be similarly qualified as the official replaced. The
replacement shall serve for the unexpired term. In case of leave or suspension,
the replacement shall serve only for the duration of the leave or suspension.
vi. The CSAFP may suspend or remove a member of the BAC for justifiable causes,
including, but not limited to, violations of the provisions of the RA 9184 or its
IRR-A.
September 2007
vii. The following officers of the procuring entity are disqualified from membership in
the lower level BACs of the AFP:
The Commander/Head of the Lower Level Unit or Office;
the official who approves procurement transactions;
the Chief Accountant / Head of the Accounting Unit and his/her staff, unless
the Accounting Department is the end-user unit, in which case the Chief
Accountant, Head of the Accounting Department or his/her staff may be
designated as an end-user member.
4. The AFP Procurement Service (AFPPS) and the BAC Secretariat

The CSAFP shall establish the AFPPS as the procurement unit of the AFP which shall also
provide administrative support to the AFP BACs through the BAC Secretariat. It shall be
categorized as an AFP Wide Support and Separate Unit (AFPWSSU) under the direct
supervision of the CSAFP through the DCS for Logistics, J4. The Chief of the AFPPS shall at
least be a fourth ranking permanent official of the AFP (i.e. with the rank of Brigadier
General//Commodore), with knowledge, experience and/or expertise in procurement.
The Chief of the AFPPS shall have command and control over four (4) Procurement
Centers, thirty one (31) Contracting Offices which shall be located in AFP major camps,
bases and stations, and the BAC Secretariat for the AFP BACs.
The CSAFP shall create a Secretariat under the AFPPS to assist the AFP BACs in the
conduct of its functions and serve as its main administrative support unit. The head of the
Secretariat shall be at least a fifth ranking permanent employee or officer (a
Colonel/Captain of the Navy, O6) of the AFP.
The head of the procuring entity shall ensure that the Secretariat is adequately
staffed
and strengthened by providing continuing procurement training for the personnel
assigned.
a. Procurement Centers
Four (4) Procurement Centers (PCs) shall be created under the AFPPS to serve the
procurement needs of each of the Major Services and the GHQ. The Commanding
Officer of the Procurement Centers shall be a fifth ranking permanent official of the
AFP (i.e. with the rank of Colonel/Captain or O6 grade) with knowledge, experience
and/or expertise in procurement.
The Procurement centers shall be deployed in major camps, bases and stations of
the AFP as follows:
PA Procurement Center
- Fort Bonifacio, Makati City
PAF Procurement Center
- Villamor Airbase, Pasay City
PN Procurement Center
- Bonifacio Naval Station, Makati City
GHQ Procurement Center
- Camp Aguinaldo, Quezon City
b. Contracting Offices
The Contracting Offices (COs) shall be deployed in 31 camps nationwide in close
proximity to the AFP field units.
The Chief of the Contracting Office shall be a sixth ranking permanent official of the
AFP (i.e. with the rank of Lieutenant Colonel/ Commander or O5 grade)
September 2007
Contracting Offices (COs) shall be created to undertake procurement for field units
based nearest them. Each CO shall be headed by an officer of O5 grade.
The following factors shall be considered in the selection of personnel to be assigned to the
AFPPS/PC/CO, among others:
i.
Integrity;
ii.
Procurement proficiency, as shown by experience and trainings
iii.
Satisfactory completion in a certification program conducted by the GPPBTechnical Support Office (GPPB-TSO) or its accredited institutions, if any;
iv.
The appropriate Civil Service or AFP qualification standards;
v.
The appropriate rank of the head of the procurement unit, which should be:
At least a fifth ranking permanent employee for the AFPPS
At least a third ranking permanent employee, for the Procurement Center and
Contracting Offices;
A permanent official of the next lower rank, if the fifth or third ranking
permanent employee is not available.
attended;
In designating members of the AFPPS/PC/CO and the BAC Secretariat, the CSAFP/Head of
the Procuring Entity must ensure that check and balance is maintained, and procurement
personnel are not given assignments that may conflict with their designation as such.
The organizational set-up for procurement in the AFP is shown in Annex 3.
The positions indicated in Figure 1 shall be filled up using the scrap and build scheme, i.e.,
reclassification or transfer of filled itemized positions, or abolition of vacant itemized
positions and reclassification of these positions into the above positions. If the latter scheme
is adopted, the equivalent Personal Services requirement should not exceed the amount
generated from the abolition of vacant positions.
In the AFP, a military officer with a rank and salary grade, equivalent to or higher than the
proposed civilian position in the Generic Procurement Manual, may be assigned to the
Procurement Unit / Office provided that the pertinent qualification standards are met.
The CSAFP as Head of the Procuring Entity shall ensure that the Procurement Unit/Office will
have a sufficient number of personnel who will perform the functions of the Procurement
Unit, as provided in this Manual. The said Unit shall be strengthened through continuing
procurement training and education of the staff and deployment of additional personnel, if
necessary.
5. The AFP BAC Technical Working Groups (TWGs)

a.
Pursuant to Sec. 12 of RA 9184 and its IRR-A, and Sec. 3 of EO 235, the AFP BAC
may, when necessary, create Technical Working Groups (TWGs) to assist in the
procurement process. For this purpose, each of the following Key Budgetary Units
(KBUs) shall maintain a pool of technical, financial and legal experts, from which the
AFP BAC shall create TWGs, depending on the type of procurement involved, to assist
in the procurement process, particularly in the review of bidding documents, in the
eligibility screening, evaluation of bids and post evaluation:
i.
General Headquarters (GHQ)Philippine Army
September 2007
ii.
iii. Philippine Navy

iv. Philippine Military Academy
v.
Presidential Security Group
vi. AFP Medical Center

The CSAFP shall issue a directive designating members to the pool of experts. The AFP
BAC shall create TWGs whenever in its discretion it finds it necessary, to assist in
different types of procurement and to designate its members drawn from the pool of
experts.
The AFP BAC is given the authority to select the respective members of the TWG who
can provide the necessary expertise for the efficient and effective conduct of public
bidding and other alternative modes of procurement. They shall include as their
members the respective Supply Officer of the requesting Unit/End User and other
personnel who have the technical knowledge related to the design, function,
performance and the acquisition of the particular goods/works/consulting services which
are the object of procurement by the agency. The TWG shall also assist in the
preparation of Contracts/POs/ WOs and other bid documents to ensure that these
documents properly reflect the requirements of the agency.
b.
In creating the TWGs, the AFPBAC shall consider the expertise required based on the
nature of the procurement.
It is recommended that the TWG should have as members, a representative or
representatives of the end-user unit and experts in various disciplines who can handle
the different aspects of the procurement at hand, namely, the technical, financial, legal
and, in certain cases, the project management aspects. The presence of the end-user
representative and the above-named experts will ensure that the bid documents
properly reflect the requirements of the Procuring Entity, and the bids submitted will
be rigorously evaluated.
c.
To be able to effectively study the requirements and evaluate the bids submitted, the
AFPBAC may create several Technical Working Groups for each of the KBUs to handle
different types of procurement, according to the nature of the items to be procured, for
example:
i.
TWG for Infrastructure Projects (Base Development and Facilities Maintenance/Other

Infrastructure Projects), whose membership shall include experts in civil works from
the AFPCOE, like civil engineers, an architect, an accountant or finance expert to
handle the financial aspect of the procurement, etc.;
ii.
TWG/s for Firepower, Mobility and Communication Projects;
iii.
TWG for Troops and Organizational Support Projects;
iv.
TWG for Information and Communications Technology (ICT) Projects, whose

membership shall include experts in ICT like a computer engineer, a systems
analyst, a programmer, etc.;
v.
The AFP BAC may also create a TWG for a specific procurement, particularly if the
procurement at hand is highly technical or is a major or priority project of the
government, such as the AFP Modernization Program.
vi.
In highly meritorious cases, the

Procuring Entity may also engage the services of consultants in accordance with the
IRR-A and Volume 4 of (these) the Generic Procurement Manuals, subject to the
September 2007
availability of funds, who will assist the TWG and the BAC on the procurement at
hand. For this purpose, the CSAFP as Head of the Procuring Entity shall certify that
the in-house experts cannot provide adequate
technical, financial, legal or project
or contract management advice related to the procurement. These consultants,
however, shall only have an advisory capacity, and may not vote during
deliberations.
6. Observers
a. Purpose of the Observers. To enhance the transparency of the process, the
AFPBAC is required to invite Observers who shall attend and observe all stages of the
procurement, especially:
i.
the pre-bid conference;
ii.
opening of bids;
iii. bid evaluation;

iv. post-qualification;
v.
contract award; and
vi. special meetings of the BAC.

b. Who the Observers are. The AFPBAC must invite three Observers, who shall be:
i.
a COA representative;
ii.
at least one (1) observer who shall come from a duly recognized private group in
a sector or discipline relevant to the procurement at hand, for example:
for infrastructure projects
National Constructors Associations duly recognized by the Construction

Industry Authority of the Philippines (CIAP), such as, but not limited to,
the Philippine Constructors Association, Inc. (PCA); and the National
Constructors Association of the Philippines (NACAP); or
The Philippine Institute of Civil Engineers (PICE)
for goods
A specific relevant chamber-member of the Philippine Chamber of

Commerce and Industry (PCCI).
for consulting services
a project-related professional organization accredited or duly recognized

by the Professional Regulation Commission (PRC) or the Supreme Court,
such as, but not limited to, the Philippine Institute of Civil Engineers
(PICE); and the Philippine Institute of Certified Public Accountants
(PICPA); or
the Confederation of Filipino Consulting Organizations (COFILCO)
September 2007
iii. at least one (1) observer who shall come from an NGO.
Criteria for Observers from the Private Sector. In accordance with Section
13.2 of the IRR-A, the Observers coming from the private sector (e.g.,
organization of experts and NGOs) should belong to an organization duly
registered with the Securities and Exchange Commission (SEC). Moreover, they
should meet the following criteria:
knowledge, experience or expertise in procurement or in the subject matter of
the contract to be bid;
absence of direct or indirect financial interest in the contract to be bid out;
belonging to an organization duly accredited by the GPPB or the PWI (to be
raised before the GPPB); and
any other criteria that may be determined by the BAC (for example, the BAC in
decentralized units may require that the Observers should be based in the area
to ensure their attendance during the meetings.)
c. Absence of Observers. Observers will be informed at least 2 days before the stages
of procurement to which observers shall be invited: pre-bid conference; opening of
bids; post-qualification; and contract award; and special meetings of the BAC. The
absence of observers will not nullify the BAC proceedings provided that they have
been duly invited in writing.
7. TECHNICAL INSPECTION AND ACCEPTANCE COMMITTEE (TIAC)

The TIAC shall ensure that the items delivered are in accordance with the specifications
stipulated in the procurement documents, and recommend its acceptance to the
Procurement Center/Contracting Office.
The TIAC shall be composed of the following:
Chairman The Commodity Manager concerned
Member -
Procurement Center/Contracting Office
Member -
Logistics staff Rep
Member -
End-User Tech Rep
Member -
MFO Rep
(TCE/TQMG/TSG/TCDS)
Member - AFPMPMO Modernization (for procurement under the AFP

Modernization Program)
September 2007
Roles and Responsibilities

Legal Reference
IRR-A Sections 12, 13 and 14 provide the legal reference for the roles and responsibilities.
1. Responsibilities of the CSAFP as Head of the Procuring Entity.

The CSAFP, or his duly authorized representative, shall have the following responsibilities
in the procurement process:
a.
The CSAFP shall ensure that the Annual Procurement Plan (APP) is regularly prepared,
reviewed and updated by the Project Management Offices (PMOs) and/or end-user
units, in accordance with the guidelines set forth herein. The CSAFP must also
approve the same, or delegate the approval authority to a second-ranking official. He
must ensure that all procurements are in line with the APP.
b.
The CSAFP must establish the BAC and the BAC Secretariat in accordance with the
guidelines previously discussed.
c.
Upon submission by the BAC of the recommendation for award, the CSAFP or his
representative must approve the same.
He may, however, disapprove the
recommendation but only on the basis of valid, reasonable and justifiable grounds
to be expressed in writing, and furnished to the BAC.
d.
He must ensure that the members of the BAC and the BAC Secretariat give utmost
priority to their BAC assignments over all other duties and responsibilities, until the
requirements for the said assignments at hand are completed. (IRR-A Sec. 14.3)
e.
Direct KBUs or other subordinate units of the AFP to maintain a pool of technical,
financial and legal experts, from which the AFP BAC may create Technical Working
Groups (TWGs) to assist in the procurement process. The designation of personnel to
the said pool shall be approved by the CSAFP.
e.
He must ensure that the staff of the AFPPS and the members of the BAC, BAC
Secretariat and TWG are given ample training on procurement and related matters,
with the end in view of professionalizing the procurement organization of the AFP.
f.
The CSAFP must impose the necessary administrative sanctions on errant members of
the BAC Secretariat/BAC/TWG, in accordance with Sec. 70 of the IRR-A.
g.
He must ensure that the members of the BAC and the TWG shall receive their
incentives.
In cases where the Head of the Procuring Entity is required to approve specific
contracts, he shall ensure that the same are approved within the time frame indicated
in the IRR-A, that is, within 20 calendar days from receipt of the transmittal to his
office.
September 2007
2. Responsibilities of the AFP BAC.

a. The following shall be the responsibilities of the AFP BAC:
i.
Recommend to the CSAFP as Head of the Procuring Entity, the method of

procurement of the goods, services, infrastructure projects included in the Annual
Procurement Plan, i.e., whether to use public bidding or any of the alternative
methods of procurement.
ii.
Create Technical Working Groups (TWGs), if necessary, from a pool of technical,

financial and/or legal experts maintained by the KBUs and other subordinate units
of the AFP, to assist in the procurement process.
iii.
Undertake the advertisement and/or posting of the invitation to bid.
iv.
Conduct pre-procurement and pre-bid conferences.
v.
Determine the eligibility of prospective bidders in accordance with the guidelines

set forth in RA 9184 and its IRR-A.
vi.
Exercise sole authority to receive and open bids.
vii.
Conduct the evaluation of bids with the assistance of the TWG.
viii.
Undertake post-qualification proceedings, with the assistance of the TWG.
ix.
Invite the Observers required by law to be present during all stages of the
procurement process, in accordance with the guidelines stipulated in RA 9184, its
IRR-A and this Manual.
x.
Furnish the Observers, upon the latters request, with the following documents
Minutes of the proceedings of BAC meetings;
Abstract of bids;
Post-qualification summary report;
APP and related PPMP; and
Copies of opened proposals.
xi.
Resolve motions for reconsideration filed by prospective bidders and other

concerned parties with respect to the conduct of the bidding process.
xii.
Recommend award of contracts to the head of the procuring entity or a duly

authorized second-ranking official.
xiii.
Recommend the imposition of sanctions in accordance with Rule XXIII of the

IRR-A.
xiv.
Prepare a procurement monitoring report that shall be approved and submitted

by the Head of the Procuring Entity to the GPPB on a semestral basis or
whenever required.
xv.
For each procurement transaction, accomplish a checklist showing its

compliance with RA 9184, its IRR-A and this Manual. This will be submitted to
the Head of the Procuring Entity and made a part of the transaction record.
xvi.
Conduct due diligence review or verification of the qualifications of Observers.
September 2007
In performing this due diligence review or verification of the qualifications of

Observers, the BAC shall require the organization nominating the Observer to
submit their Curriculum Vitae and proof of their technical expertise and
procurement proficiency. The certifications / documents showing technical
expertise and procurement proficiency should be issued by appropriate bodies
and authenticated by the latter. Verification may be done by the BAC by
inquiring with the bodies that issued the same.
xvii.
Give utmost priority to BAC assignments over all other duties and
responsibilities, until the requirements for the procurement at hand are
completed, and shall perform jury duty when so required.
xviii.
Perform such other related functions as may be necessary relative to the

procurement
b. Quorum
The majority (one-half of membership plus one) of the BAC members shall
constitute a quorum, but the Chairman or the Vice-Chairman should be present
in all meetings and deliberations. The Chairman or, in his absence, the ViceChairman shall preside over the meetings. The Presiding Officer shall vote only
in case of a tie.
All BAC decisions should be embodied in resolutions signed by at least a
majority of the members and the Chairman thereof.
3. Responsibilities of the AFPPS and the BAC Secretariat

The AFPPS shall have the following responsibilities:
a.
Provide administrative support to all the AFP BACs through the BAC Secretariat;
b.
Undertake procurement through alternative modes, i.e. repeat order, shopping,

direct contracting and negotiated procurement, except those under Section 53 (a)
and (g) of RA 9184 and its IRR, provided with prior resolution of the GHQ BAC 1 and
approval of the CSAFP;
c.
Prepare the procurement documents, i.e. purchase/job/work orders and

procurement contracts, for processing by the relevant offices and routing to the
signing and approving authorities;
d.
Monitor the implementation of contracts, resolutions and other documents in relatin

to procurement;
e.
Prepare documents for the payment of duly accepted supplies/services;
f.
Create, maintain and update the registry of suppliers, contractors and consultants;
and
g.
Create, maintain and update a price monitoring list of goods and services.
The BAC Secretariat shall have the following responsibilities:

a.
Act as the main support unit of the BAC;
b.
Provide administrative support to the BAC and the TWG, if necessary;
September 2007
c.
Organize and make all necessary arrangements for the BAC meetings as well as TWG
meetings, if necessary;
d.
Attend BAC meetings as Secretary;
e.
Prepare Minutes of the BAC meetings;
f.
Take custody of procurement documents and be responsible for the sale and
distribution of bidding documents to interested buyers;
The BAC Secretariat shall ensure that all procurements undertaken by the
Procuring Entity are properly documented, to provide an audit trail of the
procurement process.
g.
Assist in managing the procurement process;
h.
Monitor procurement activities and milestones for proper reporting to relevant

agencies and/or end-users, when required;
i.
Be the central depository of all procurement related information and continually

update itself with the most current GPPB resolutions issuances, circulars and events,
and downstream the same to all relevant parties requiring information.
All
information released by the GPPB can be secured electronically from
www.gppb.gov.ph;
j.
Prepare the APP from the consolidated PPMPs submitted by the various Project
Management Offices (PMOs) and end-user units of the Procuring Entity, to make
them available for review as indicated in Sec. 7 of the IRR-A;
k.
Make arrangements for the pre-procurement and pre-bid conferences and bid
openings;
l.
Act as the central channel of communications for the BAC with the end-users, PMOs,
other units of the line agency, other government agencies, providers of goods, civil
works and consulting services, and the general public;
m. Assist the BAC in preparing drafts of BAC resolutions; and

n.
Provide utmost priority to BAC assignments over all other duties and responsibilities,
until the requirements for the procurement at hand are completed, and shall perform
jury duty when so required.
o.
Administer the EPS, as the counterpart of the service provider, if the Procuring Entity
has outsourced the EPS for non-common use items. Depending on the Service Level
Agreement covering the contract, such administration may be limited to registration
of suppliers and other users, assigning access levels, and updating of data.
p.
Transact with the G-EPS and PS-DBM in behalf of the procuring entity.
4. Responsibilities of the TWG

The TWG shall provide assistance to the BAC in terms of the technical, financial, legal and
other aspects of the procurement at hand. It shall have the following responsibilities:
a.
Assist the AFPBAC in the preparation of the bidding documents, ensuring that the
same properly reflects the requirements of the Procuring Entity and that these
conform to the standards set forth by RA 9184, its IRR-A and the Philippine Bidding
Documents prescribed by the GPPB.
September 2007
b.
Assist the AFPBAC in the conduct of eligibility screening of prospective bidders, and
in the short-listing of prospective bidders in case of biddings for consulting services.
c.
Assist the AFPBAC in the evaluation of bids and prepare the accompanying reports
for the BACs consideration and approval.
d.
Assist the AFPBAC in the conduct of post-qualification activities and prepare the
post-qualification summary report for the BACs approval.
e.
Assist the AFPBAC and BAC Secretariat in preparing the resolution recommending
award, with regard to the technical aspect, if necessary.
f. Provide utmost priority to AFPBAC assignments over all other duties and
responsibilities, until the requirements for the procurement at hand are completed,
and shall perform jury duty when so required.
5. Responsibilities of the Observers

The attendance of Observers ensures the transparency of the procurement process. They
represent the public, the taxpayers who are interested in seeing to it that procurement
laws are observed and irregularities are averted. The Observers shall have the following
responsibilities:
a.
Preparation of the Procurement Observation Report either jointly or separately,

indicating their observations made on the bidding activity conducted by the BAC.
In the said report, they shall indicate:
i.
An assessment of the extent of the BACs compliance with the substantive

and procedural requirements of RA9184, its IRR-A and this Manual.
ii.
The areas of improvement in the BACs proceedings.
In instances where the BAC has fully complied with RA9184, its IRR-A and this
Manual, the Observers shall prepare a Procurement Observation Report. When
there are substantive or procedural irregularities in the procurement at hand,
the Report shall provide therein details of the alleged irregularity.
The report shall be submitted to the Head of the Procuring Entity, and a copy thereof will
be furnished the BAC Chairman, who shall forward it to the BAC Secretariat for inclusion in
the procurement documents that will be submitted to the proper authorities for approval.
This will be part of the official record of the bidding, and part of the audit trail. The
Observer may also give a copy of the Report to the Office of the Ombudsman or the
Resident Ombudsman and the COA Auditor of the Procuring Entity in any of the following
instances:
i.
ii.
b.
when the BAC has failed to follow the prescribed bidding procedures; or
for any justifiable and reasonable ground where the award of the contract
will not redound to the benefit of the Government as defined in Section 41.1
(c) of the IRR-A of RA 9184.
For the purpose of preparing the report, the Observer may request for copies of the
following documents from the BAC, which shall be promptly provided to the
observer:
i.
Minutes of related proceedings of BAC meetings;
ii.
Abstract of bids;
September 2007
iii. Post-qualification summary report;

iv. Pertinent portions of the APP and related PPMP; and
v.
Copies of opened proposals
c.
The Observer must sign as witness in the Abstract of Bids if, in their independent
observation, the bidding process was conducted in accordance with the procedures
described in the IRR-A of RA 9184 and this Manual. If the BAC failed to correctly
observe the proper procedure, the Observer must sign the Abstract of Bids, and
must indicate in the Procurement Observation Report the procedural and/or
substantive lapses of the BAC. This will enable the approving authority to be
apprised of any irregularities in the bidding process, for consideration.
d.
The Observers shall sign as witness in the post-qualification summary report if, in
their independent observation, the BAC followed the procedure described in the IRRA of RA9184 and this Manual, and that the Observer is amenable to the results of
the post-qualification. If the Observer finds the post-qualification procedures
irregular or the report does not match the actual findings, he shall so state in writing
addressed to the BAC Chairman, and the same shall be attached to the Postqualification Summary Report submitted to the approving authority. The Observers
written dissent will be part of the official record of the procurement.
The above described irregularities observed during the bidding process shall
not resolved before contract delay the bidding, but should be resolved before
contract award.
September 2007
Page 35 of 224
6. Responsibilities of
Committee (TIAC)
the
Technical
Inspection
and
Acceptance
a. TIAC shall conduct inspection, take samples, and see to it that the required
tests are performed to ensure that the items delivered are in accordance with
the quantities and specifications stipulated in the procurement documents.
b. If the delivered items are found to be in order, TIAC shall recommend their
acceptance by the responsible Inventory Control Point, thru the PC/CO

concerned. The TIAC shall also be responsible for seeing to it that replacements
for items previously rejected are re-inspected and tested.
c. The TIAC shall accomplish the Certificate of Technical Inspection, Testing and
Acceptance, and forward this to the concerned Procurement Center/Contracting
Office.
9. The Supply Process Within the AFP

The supply process within the AFP as depicted in Annex 4, outlines the roles of the
and responsibilities of the different primary entities involved in the procurement and
supply functions within the AFP, namely:
a.
The head of the procuring entity (CSAFP/SND depending on the limits of their
approving authority);
b.
The Logistics Staff represented by the DCS for Logistics, J4;
c.
The logistics units represented by the Inventory Control Points (ICPs);
d.
The AFP BAC;
e.
The AFPPS;
f.
The KBU/End-User Units;
g.
The Accounting Office and;
h.
The RMO.
The supply process within the AFP as shown in Annex 4 also identifies the interface
between the procurement and supply functions while describing the following major
activities:
a.
Requirements determination
The Key Budgetary Units/Units Logistics Offices determine their requiremenst
based on the logistics data provided by the ICPs to the RMO. The Logistics
data/inventory provided by the ICP and the budgetary guidance from the RMO
serve as the basis for the KBUs/Unit Logistics Offices in the formulation of their
respective Project Procurement Management Plans/Annual Procurement Plans.
b.
Determination of the procurement strategy

The Major Services directly submit their APPs to the AFP BAC for evaluation and
validation. The Office of the DCS for Logistics, OJ4, initially reviews and
compiles the APPs of the Unified Commands and the AFPWSSUs prior to
submission to the AFPBAC. The APP for the entire AFP is then consolidated by
the AFPBAC for the formulation of the required procurement strategy, before
the same is forwarded thru the OJ4, to the CSAFP for approval. In accordance
with DO 12, the Undersecretary for Operations shall be furnished with copies of

2007
September
the APP, SPP and any amendments thereto, for monitoring purposes, to ensure
compliance with the provisions of RA 9184 and its IRR.
c.
Implementation of procurement and the APP

The AFPBAC conducts all public bidding activities and alternative methods of
procurement for contracts that require approval by the CSAFP. The AFPPS
conducts procurement thru the alternative modes authorized in the APP, for
contracts that do not require the approval of the CSAFP.
The AFPPS implements the PPMP/APP thru the Unit Procurement Request (UPR)
initiated by the KBUs/Unit Logistics Offices. The AFPPS submits
bidding/procurement requests and requests for amendment to the APP, to the
AFPBAC. The AFPPS is responsible for the implementation of procurement
contracts and effects the delivery of the items to the ICPs.
d.
Distribution, maintenance and inventory management

The ICP facilitates distribution and conduct inventory management and
maintenance of supply and equipment. Primary ICP shall ensure that supply
inventory of secondary ICP are captured at the Primary ICP, Inventory receipts
and distribution shall be provided to Accounting Office and RMO thru SAO.
e.
Receipt, employment and utilization of supplies and equipment

End-User units receives supplies and equipment from the ICP thru the SAO with
appropriate documentation such as Inventory Receipt for Property (IRP),
Property Acknowledgement Receipt (PAR) and Requisition and Issue Slip (RIS).
f.
Disposal
As far as practicable, all property and equipment shall be disposed of at the
ICPs. Turn-in of Property and equipment should be properly documented
(PTIS, I & I Report, etc). Disposal activity including the proceeds thereof shall
be undertaken with clearance from the Accounting Office thru the SAO, and
such activity shall be reported to RMO for updating of database on logistics
resources.

2007
September
Conditions for Granting Honoraria

Legal Reference
IRR-A Section 15 provides the legal reference for the conditions for granting honoraria.
The Procuring Entity is authorized to grant honoraria to the members of the BAC and the
TWG, provided:
1.
the amount so granted does not exceed twenty-five percent (25%) of

their respective basic monthly salary;
2.
funds are available for the purpose; and
3.
the grant of honoraria conforms to the guidelines promulgated by the

DBM.
Budget Circular No. 2004-5A (dated October 7, 2005) issued by the DBM (Annex 5)
provides the guidelines on the grant of honoraria to government personnel involved in
government procurement. Under these guidelines, chairs and members of the AFP BAC
and the TWG may be paid honoraria only for completed procurement projects. A
procurement project shall be considered successfully completed once the contract has
been awarded to the successful bidder. In line with government policy to promote public
bidding, the payment of honoraria is limited to procurement that involves competitive
bidding activities. Conversely, honoraria will not be paid when procurement is thru the
alternative methods which do not entail public bidding procedures.

2007
September
Professionalization of the AFPPS, BAC, Secretariat, TWG

Legal Reference
IRR-A Section 16 provides the legal reference for the professionalization of procurement
units, BAC and the TWG.
The GPPB, through its Technical Support Office has established in cooperation with
qualified organizations and institutions, a sustained training program to develop the
capability of the BACs, BAC Secretariats, TWGs and the Procurement Units/Offices of the
Procuring Entities, and professionalize the same. The professionalization program of the
GPPB will address the continuing education needed to enhance the capacity and career
path of procurement officers in government, including the development of plantilla
positions for procurement officers.
It is the responsibility of the CSAFP as Head of the Procuring Entity to ensure that all
officials and employees involved in the procurement process will avail of the procurement
training conducted by the GPPB and other GPPB accredited bodies offering the different
modules on procurement-related training. (See www.gppb.gov.ph for details) The AFP
(procuring entities) must also develop and implement its own in-house training programs
in accordance with the guidelines and standards prescribed by the GPPB-TSO. For this
purpose, they ought to include provisions for such training in their annual budget
proposals submitted to the DBM and Congress.
Moreover, the CSAFP as Head of the Procuring Entity must regularly monitor the work
quality of the AFPPS/PCs/COs, through a review of the procurement monitoring reports
regularly submitted by the BAC as mentioned previously in this Manual. Management
meetings may likewise be conducted for this purpose.
In line with the standardization of the procurement procedures and the thrust towards
strengthening the procurement function to increase operational efficiency and
effectiveness, the CSAFP must aim to consolidate or unify all procurement activities of the
organization, whether locally funded or foreign assisted, and whether pertaining to goods,
infrastructure projects or consulting services, subject to the provision of Sec 11.1 of the
IRR-A, which allows for the creation of several BACs.

2007
September
SECTION 3
Procurement Planning
Page 41 of 224
PROCUREMENT PLANNING - Procurement Planning and Budget

Linkage
Legal Reference
IRR-A Section 7 provides the legal reference for procurement planning and budget linkage.
Planning is the act or process of making or carrying out plans; specifically: the establishment
of goals, policies, and procedures for a social or economic unit.
(Merriam-Websters
Collegiate Dictionary, 2001) Plans could be short-term, medium-term, or long-term periods.
They could be small-scale or large-scale. But in all cases, a plan involves resource allocation
and scheduling.
This is particularly true for procurement planning, which is a critical
component of a Procuring Entitys budget.
Every year, upon issuance of the Budget Call by the Department of Budget and Management
(DM), the Procuring Entity prepares the Agency Budget Proposal for the succeeding calendar
year, taking into consideration the budget framework for that year. At this stage, the Project
Management Office (PMO), end-user units or the different operating units of the Procuring
Entity prepare their respective Work and Financial Plans (WFP) for their different programs,
projects and activities (PPA), using forms provided by the DBM as annexes to the Budget Call.
Presently, the WFP for the AFP and its operating units is reflected in its Operating Program
and Budget (OPB) and BP Form 201 that is provided for in the Budget Call by the DBM.
The AFPs Budget Proposal embodies the agency thrusts and the resources needed to produce
the key services it delivers to the public. Procurement planning should be done within this
budgetary context, reflecting the Procuring Entitys priorities and objectives for the budget
period. Procurement Planning therefore involves two levels: the Agencys over-all strategic
plan and the project and/or operational plans that contain the details of the manner in which
the strategic plan will be carried out.
In the context of budget preparation, the project and/or operational plans are reflected in the
WFP for each PPA which is also based on the preliminary program and budget guidance issued
to the AFP Unit. The WFP contains the initial list of projects / requirements of each PMO/enduser unit and corresponding estimated budgetary requirement. The WFP is submitted by the
PMOs or end-user units to the Resource Management Office (RMO) of the AFP on or about
May of each year, to coincide with the submission of their respective budget proposals. These
WFPs will be evaluated and, if warranted, included in the Procuring Entitys Budget Proposal.
These WFPs will support the Budget Proposal submitted to DBM, and becomes basis for the
proposed Project Procurement Management Plan (PPMP) to be prepared by the PMOs and
various end-user units of the AFP. The RMO shall furnish a copy of the WFPs as evaluated
and included in the AFPs Budget Proposal, to the BAC Secretariat for the consolidation of the
initial list of items / projects for procurement into the proposed Annual Procurement Plan
(APP). All documents shall be approved by the Head of the Procuring Entity prior to any
submission to other approving bodies.
As soon as the General Appropriations Act (GAA) becomes final, which is usually around
November December, the PMOs and end-user units must refine the proposed PPMP in
accordance with the guidelines discussed below. Within fifteen (15) days from the date of
issuance of the Agency Budget Matrix (ABM) during the first quarter of the fiscal year, the
PMOs and end-user units shall finalize the PPMPs to reflect the budgetary allocation for their
respective PPAs, as provided in the ABM. The final PPMPs shall be submitted to the BAC
Secretariat for the finalization of the proposed Procuring Entitys APP which will then be
submitted to the Head of the Procuring Entity for confirmation or approval.
Insofar as National Government Agencies (NGAs) are concerned, the Approved Budget for the
Contract (ABC) referred to in RA 9184 and its IRR-A basically refers to the proposed budget
for the project contained in the Agency Budget as reflected in the GAA or to be proposed in
succeeding GAAs and approved by the Head of the Procuring Entity. Thus, NGAs may post
and/or advertise procurement opportunities for projects proposed in the succeeding GAA even
prior to its enactment but cannot award contracts until after the Certificate of Availability of
September 2007
Funds has been issued. (GPPB Resolution 011-2005 dated 26 May 2005) However, this
procedure is recommended to be adopted only for high priority projects, as contained in the
proposed APP, which are necessary to be implemented immediately upon the opening of the
succeeding year.
September 2007
Page 43 of 224
PROCUREMENT PLANNING Preparation of the Project

Procurement Management Plan (PPMP)
Legal Reference
IRR-A Section 7 provides the legal reference for the preparation of the PPMP.
1. The PPMP
A Project Procurement Management Plan or PPMP, which is a component of the Project
Management Plan, deals primarily with:
a.
planning for the procurement of project requirements,
b.
bidding or procurement strategy,
c.
source selection,
d.
delivery and payment schedules,
e.
contract administration,
f.
contract termination and
g.
other major milestones,
in an effort to obtain goods, infrastructure and services from suppliers, contractors and
consultants.
The PPMP serves as a guide document in the procurement and contract implementation
process, as well as a vital reference in procurement monitoring. Moreover, it serves as
an important tool in resource and financial management, allowing the Procuring Entity
the flexibility to optimize the utilization of scarce resources. Well-planned procurement
will significantly minimize the practice of doing short-cuts to ensure that the Procuring
Entity is able to purchase its requirements for the delivery of public services.
2. Developing the Project Requirements

The development of the project requirements should be done during the preparation of
the proposed PPMP. At this stage of the procurement planning process, the PMO or
end-user unit must:
a.
Identify the need of the PMO or end-user unit

What is the purpose of the procurement? What are the problem/s or needs that
the project or procurement aims to address?
b.
Identify the alternative solutions / products / services
What alternative solutions to the problem/s or need/s are available in the market?
What are the sources of these products and services? What is the profile of the
supply market? Are they easily obtainable? How much is the cost of each
alternative?
The PMO or end-user unit should conduct the market research at this point, and
gather as much information about the Goods, Services or expertise required. At the
end of this activity, it should know the market or the industry well enough to make
an informed choice.
September 2007
c.
Compare the alternatives (consider qualitative and quantitative factors)

How would the PMO or end-user unit rate the various alternatives in terms of:
i.
value for money
The concept of value for money is not restricted to price alone. In addition
to costs, other considerations are non-cost factors like suitability or fitness to
the purpose, quality, among others. In comparing costs, all relevant costs
should be considered, e.g., acquisition costs, life-cycle costs (including
maintenance and operating costs for goods and infrastructure, spare parts of
goods, etc.).
ii.
risk assessment and management
Some risks that may be identified are the obsolescence of equipment, the
availability of support services, the capacity of contractors to implement the
project, among others. It is recommended, especially for high-technology,
complex, or high value procurement, that the PMO or end-user unit identify
the risks involved and come up with its own risk management plan. Or the
bidders could be required to submit, as part of their technical document, a
risk assessment and risk management plan.
iii. government policies that have an impact on the project or procurement
Are there any restrictions on the procurement contemplated? What relevant
government policies should be considered in determining the goods or
services that will be purchased?
iv. other relevant factors that may be identified by the PMO or end-user unit.
d.
Choose from among the alternatives the one that is most beneficial to the
Procuring Entity, and make the necessary recommendation to the approving
authority.
In developing the project requirements and Technical Specifications (TS)/Scope of

Work (SOW)/Terms of Reference (TOR), the Procuring Entity shall engage the
services of technical experts, whether in-house or consultants, to ensure that the
requirements and the TS/ SOW / TOR are adequate to achieve the objectives of the
particular procurement.
3. Writing the Technical Specifications, Scope of Work and Terms of

Reference
The Technical Specifications (for Procurement of Goods), Scope of Work (for Services
and Infrastructure Projects) or Terms of Reference (for Consulting Services) is the
document that provides the detailed description of the deliverables of the Supplier,
Contractor or Consultant.
The Technical Specifications, Scope of Work and Terms of Reference are discussed in
detail in Volumes 2, 3 and 4, respectively. The following guidelines are, however,
considered helpful in writing the TS/SOW/TOR:
a. Quality Assurance actually starts at this stage of the procurement cycle,
considering that the deliverables are decided at this time.
It is therefore
important that all stakeholders are consulted, and the actual requirements of the
PMO or end-user unit are determined and put in writing.
b.
If the procurement is complex, highly technical, or high value, and the Procuring
Entity does not have sufficient technical proficiency, it would be prudent to
engage the services of technical experts who will serve as consultants in the
preparation of the TS/SOW/TOR. In engaging these consultants, the Procuring
Entity shall follow the procedures for procurement of consulting services as laid
September 2007
Page 45 of 224
down in Volume 4 of these Manuals. Moreover, care should be taken that possible
conflict of interest is avoided; that is, the consultant/s engaged should not be
connected with the prospective bidders/contractors, and are barred from being
engaged by the latter for any purpose related to the procurement at hand.
c.
The description should be generic and flexible, not product-specific or seemingly

tailored for a particular brand, product, contractor or consultant, unless the
procurement involves products or services that have intellectual property rights
attached to it, or are exclusively offered by a single source, and there are no
suitable substitute products or services.
d.
The description should be clear and unambiguous, to avoid confusion and to

facilitate the evaluation process. It is noted that the TS/SOW/TOR is also the
basis of the evaluation or, when applicable, the testing parameters.
e.Technical specifications shall be developed and established in such a manner that

compliance with these standards are objectively/scientifically verifiable through
inspection, measurement or testing, in order to ensure fairness and prevent
arbitrariness in the procurement process.
f. Considering that planning is done sometime before actual procurement and even
farther from the date of actual delivery or project implementation, changes in
technology or changes in the concerned industry or field of expertise should
already be taken into account in writing the TS/SOW/TOR. This will allow the
Procuring Entity to procure the latest products and/or services available in the
market.
4. Determining the Approved Budget for the Contract

The ABC refers to the budget for the contract duly approved by the Head of the
Procuring Entity, as provided for in the GAA and/or continuing appropriations, in the
case of NGAs; the corporate budget for the contract approved by the governing board,
pursuant to E.O. No. 518 series of 1979 in the case of GOCCs and GFIs, and R.A. No.
8292 in the case of SUCs; and the budget approved by the Sanggunian in the case of
LGUs. (Section 5, IRR-A)
The ABC insofar as the AFP is concerned, refers to the budget for the contract duly
approved by the CSAFP/SND which is contained in the AFP Budget as reflected in the
General Appropriations Act (GAA) or to be proposed in succeeding GAAs, or as provided
for in other appropriations or fund sources such as Republic Acts 7898 and 7227. Thus
the ABC basically refers to the proposed budget for the project approved by the CSAFP/
SND based on the APP as consolidated from various PPMPs.
In determining the ABC, the PMO or end-user unit has to consider several factors,
namely: the appropriation for the project or procurement (whether taken from the
current years appropriations or continuing appropriations), the market price of the
goods and/or services being procured, inflation and cost of money which are directly
related to the procurement time table. In all cases the sources of price/cost data, the
factors considered, and the assumptions made in the cost estimates shall be stipulated
in the ABC, to facilitate their review.
The determination of the ABC for each type of procurement (Goods, Infrastructure
Projects and Consulting Services) is discussed in Volumes 2, 3 and 4.
5. Procurement Milestones
The PPMP, like any plan, is not complete without including therein the schedule of
significant activities. The procurement milestones referred to are the following: preprocurement conference (if required or necessary), publication and/or posting of the
IAEB, pre-bid conference, submission of eligibility requirements and LOI (for
procurement of infrastructure projects and consulting services), submission of bids (for
procurement of goods, submission of eligibility requirements and bids are done
September 2007
simultaneously), bid evaluation, determination of LCRB or HRRB, issuance of notice of

award, contract execution and approval, issuance of notice to proceed, delivery dates or
commencement of project implementation. For details on the specific activities for each
type of procurement, please refer to Volumes 2 (for Goods), 3 (for Infrastructure
Projects) and 4 (for Consulting Services). Each of these significant activities should be
scheduled so as to provide the PMO or end-user unit with a guide in each procurement
undertaken by the Procuring Entity. This will ensure that logistical support and other
requirements of the Procuring Entity are promptly addressed, hence contributing to
more efficient and effective delivery of public service.
The Procurement Milestones may be laid down in a GANNT chart similar to that shown
in Section 4 (General Procurement Activities and Timelines).
6. Method of Procurement
As a general rule, all procurement should be through public bidding. This is the policy
of the State as laid down in RA9184. However, the law recognizes that certain unique
circumstances require the use of other methods of procurement. The selection of the
method of procurement is dependent on the presence or absence of specific conditions
that justify the use of a particular method (e.g., if a product is patented, direct
contracting is the preferred mode instead of public bidding).
These are discussed in
Section 5 in this Volume, and in Volumes 2, 3 and 4, when applicable to the type of
procurement.
7. Format of the PPMP (prepared by the PMO/end-user unit)

The PPMP shall contain the following information:
a. The type of contract to be employed (e.g. lump sum, unit price, day-work, costplus/force account, etc.)
b. The name and general description of the project/procurement
c. The extent/size of contract scopes/packages
This refers to the general description of the lot to be included in a particular
contract, i.e., the goods, infrastructure project or services, or a combination of
any two or three of these types of procurement, including quantities where
applicable.
d.
The procurement methods to be adopted, and indicating if the procurement tasks

are to be outsourced as provided in Section 53(e) of the IRR-A
e.
The time schedule for each procurement activity
f.
The Approved Budget for the Contract
Only goods/services, infrastructure projects and consultancy services which are to be

actually procured through the AFP BAC or the AFPPS/PCs/COs, shall be included in the
PPMP/APP. Other objects of expenditure, such as traveling, utilities (light, water,
telephone), communications, vehicle registration and the like, which may be lawfully
incurred by the KBU, but will not be subject to actual acquisition or procurement within
the proposed budget year thru procedures prescribed by RA 9184, should not be
included in the PPMP/APP.
The prescribed format for the PPMP is shown in the Guidelines on the Preparation of
PPMP/APP issued by the DCS for Logistics, J4, dated November 10, 2005, attached as
Annex 6.
September 2007
PROCUREMENT PLANNING Preparation of the Annual

Procurement Plan (APP)
1. The Annual Procurement Plan

The Annual Procurement Plan (APP) is the document that consolidates the various
Project Procurement Management Plans or PPMPs submitted by the various PMOs and
end-user units within the AFP. It reflects the entirety of the procurement activities that
will be undertaken by the AFP within the calendar year. Section 7 of the IRR-A provides
that the consolidation of the PPMPs into an APP shall be lodged with the BAC
Secretariat. For practical purposes however, each end-user unit in the hierarchy of the
AFP organization shall consolidate the PPMPs of the subordinate units under it into an
APP for the superior unit.
The APP for the entire AFP is prepared by the BAC through the BAC Secretariat upon
submission of the consolidated PPMPs/APPs of the PMOs and KBUs, by the DCS for
Logistics, J4. The APP shall be approved by the CSAFP, who shall furnish copies of the
approved APP, SPP and any amendments thereto, to the Undersecretary for Operations
to ensure compliance with the provisions of RA 9184 and its IRR. The APP shall be
finalized after the ABM has been approved by the DBM, once the Appropriations Act is
signed into law.
In preparing the APP, the following factors shall be taken into consideration:
a.
The APP should include all procurement activities planned for the year. The
approved APP shall be the basis for the Procuring Entitys procurement. No
procurement shall be undertaken by the AFP unless it is in accordance with the
APP duly approved by the CSAFP. The Undersecretary for Operations shall be
furnished copies of the APP, SPP and any amendments thereto, for monitoring
purposes, to ensure compliance with the provisions of RA 9184 and its IRR.
b.
The APP shall include only those procurements that are considered crucial to the
efficient discharge of governmental functions.
The IRR-A considers the
procurement crucial to the efficient discharge of governmental functions if:
i.
It is required for the day-to-day operations of the Procuring Entity; or
ii.
It is in pursuit of the principal mandate of the procuring entity concerned.
c.
The APP shall include provisions for foreseeable emergencies based on historical
records. The BAC, through the BAC Secretariat, upon recommendation of Major
Services Logistics staff and the Deputy Chief of Staff for Logistics, shall include
therein a lump sum to cover for these emergencies or contingencies, which
amount shall be a percentage of the AFPs total appropriations for Maintenance,
Operating and Other Expenses (MOOE).
d.
Scheduling of procurement activities should be done in such a manner that the

BAC and the other offices/units in the Procuring Entity that are involved in the
procurement process are able to efficiently manage the conduct of procurement
transactions. Moreover, it is paramount that project implementation timelines are
met.
A review and updating of the individual PPMPs and the APP shall be done regularly, at
least once every six months or as often as necessary. The review and updating of the
PPMPs will be done by the PMOs and the end-user units. These units may avail of the
services of technical experts to review the individual PPMPs.. The updated PPMPs will
then be submitted to the BAC Secretariat for subsequent inclusion in the updated APP.
September 2007
Page 48 of 224
2. Procurement Strategy
The procurement strategy refers to the approach that will be adopted by the AFP BAC in
the procurement of the goods, infrastructure projects and consulting services included
in the APP.
In the review and consolidation of the PPMPs, the BAC will be able to determine the
extent of diversity, quantities, quality, cost, the supply market, and other characteristics
of the procuring entitys requirements for the year. The profile of the procurement is a
major determinant in the choice of procurement strategy to be employed, as well as in
the scheduling of procurement activities.
There may be common requirements for the various PPMPs. For example, three
projects may require the purchase of five (5) units of laptop computers for each project
office, or a total of fifteen (15) laptop computers. Obviously, it will be more cost
effective and efficient if the BAC will procure the 15 laptop computers in one bidding
exercise and as one bid lot.
The individual PPMPs sometimes reflect a mix of procurement types, for example, an
information technology (IT) project might involve the procurement of goods (e.g.,
workstations, network equipment and peripherals), procurement of civil works (e.g., the
installation of cables might involve the repair of some offices and other related civil
works) and procurement of consulting services (e.g., design and development of
information systems). In similar cases, the BAC will have to exercise judgment in
determining the bid lots and contract package. There are two approaches to this case
the project could be bid out as one package, or it could be divided into several bid lots
(i.e., supply of hardware, supply and installation of cables, design and development of
information systems, and repair of facilities). There are advantages and disadvantages
to either approach, and the BAC, through the help of the TWG and the Secretariat, shall
determine which is the best option for the Procuring Entity.
In determining the nature of a project with goods, civil works and consulting
components, or any combination of the three, the purpose of the procurement shall
govern. In the example given, it seems that the purpose is actually to computerize the
internal operations of the Procuring Entity, hence the single most important component
of the project is the design and development of information systems. This being the
case, the project could be bid out as a consulting service.
3. Format of the APP

The AFP BAC shall prepare three APPs, one each for Goods, Infrastructure Projects, and
Consulting Services.
The APP shall contain the following information:
a.
Name of the project/procurement
b.
PMO or end-user unit
c.
General description of the project/procurement

requirements and quantities, where applicable)
d.
The procurement methods to be adopted, and indicating if the procurement tasks

are to be outsourced as provided in Section 53(e) of the IRR-A
e.
The time schedule for each procurement activity
f.
The Approved Budget for the Contract
(general
description
of
September 2007
Page 49 of 224
Only goods/services, infrastructure projects and consultancy services which are to be

actually procured through the AFP BAC or the AFPPS/PCs/COs, shall be included in the
PPMP/APP. Other objects of expenditure, such as traveling, and vehicle registration,
which may be lawfully incurred by the KBU, but will not be subject to actual acquisition
or procurement within the proposed budget year thru procedures prescribed by RA
9184, should not be included in the PPMP/APP.
The format for the APP is shown in the Guidelines on the Preparation of PPMP/APP
issued by the DCS for Logistics, J4, dated November 10, 2005, attached as Annex 6.
September 2007
Page 50 of 224
Specific Procedures for Procurement Planning
Planning for the procurement goods, works and consulting services shall be done strictly in
accordance with the procedures and standards set forth in the preceding Sections and
following the process as described herein:
1.
The Key Budgetary Units(KBUs)/Units Logistics Offices shall determine their

requirements based on the logistics data provided by the Inventory Control Points
(ICPs) to the RMO. The Logistics data/inventory provided by the ICP shall serve as the
basis for the KBUs/Unit Logistics Offices to formulate the Project Procurement
Management Plan/Annual Procurement Plan. The PPMP/APP shall be prepared in
conjunction with the budget preparation, and it shall be based on the preliminary
program and budget guidance issued to the AFP Unit. The preparation of the Units
PPMP/ APP shall take into consideration historical demand data, such as annual
appropriations, and reinforced by the output of the units requirement determination
process and indicating therein the respective budget estimates.
a.
Goods and services procured should comply with applicable standards of the Bureau
of Product Standards or the International Organization for Standardization (ISO)
which establishes technical standards for products, materials or processes, including
standards for generic management systems. For products where there are no
specified Philippine or ISO standards, the standards of the country of origin or other
international bodies shall be considered.
b.
For highly technical/non-common/specially manufactured goods (BDA for example),

in-house experts who may be part of the TWG or the PMO, or hired consultants may
assist in developing the technical specifications.
c.
The purchase of medicines by all AFP units, hospitals and clinics shall strictly
comply with the formulary embodied in the National Drug Policy of the Department
of Health. (No.3- Special Provisions, DND, GAA)
d.
For civil works, applicable design/detailed engineering standards in the National

Building Code, the DPWH Design Guidelines, Criteria and Standards Volumes I-IV
and those adopted by any of the attached agencies of the DPWH involved in the
design, construction and implementation of other types of infrastructure projects,
shall be followed. Where none apply, standards of other recognized local or
international bodies shall be followed.
e.
The latest edition of the DPWH Standard Specifications Vol. II-Highways, Bridges
and Airports, 2004 Edition and Vol. III-Buildings, Ports and Harbors, Flood Control
and Drainage Structures, and Water Supply Systems shall likewise be adopted for
infrastructure projects implemented by the AFP Corps of Engineers (AFPCOE).
Specifications for other project types adopted by government infrastructure
agencies attached to the DPWH may also be used for similar projects when
implemented by the AFP COE.
2.
Supplemental APP shall also be prepared for procurement activities funded from other
sources (eg: Trust Receipts, Special Releases, etc.) for review/ evaluation by J4,
validation by AFP BAC and final approval by CSAFP. The Undersecretary for Operations,
DND shall be furnished a copy of the approved Supplemental APP to ensure compliance
with the provisions of RA 9184 and its IRR.
3.
The APPs (Regular and Supplemental) shall include procurement of goods, consulting
services, and infrastructure projects programmed for the year.
4.
The Logistics Offices of the KBUs and other Units shall prepare their respective
PPMP/APP using the prescribed forms (Annex 6), and the Head of the Unit concerned
September 2007
Page 51 of 224
shall submit the same for review, collation/consolidation and approval by higher
authorities following the prescribed preparation/ submission schedule. Refer to
Annexes 4, 7, 8, and 9, forms and flowcharts. (Note: For the instruction on the
preparation of PPMP/APP, refer to PPMP/APP primer Incl 1).
The PPMPs prepared by the lower subordinate end-user units shall be reviewed and
consolidated by the Logistics Office/Unit of the superior unit who exercises supervision
and control over it. The consolidated PPMPs of all lower units under it shall then be
included in the APP of the superior unit.
5.
The APPs of all Units shall be reviewed and evaluated by the OJ4, before they are
submitted to the BAC/BAC Secretariat for validation and final consolidation into the APP
for the whole AFP. The final APP shall then be submitted for approval of the CSAFP, the
Undersecretary for Operations and the Undersecretary for Finance, DND in accordance
with DO 53.
6.
The review and consolidation of the PPMP/APP prepared by subordinate units, shall be
performed by the Logistics Offices of their superior units, the OJ4 and finally the
AFPBAC/BAC Secretariat to achieve the following:
a.To see to it that all the Units procurement are within the approved budget and that
priorities and objectives for the budget period are embodied in the APP.
b.To ascertain that only procurement crucial or indispensable to the efficient discharge
of government functions is included in the APP.
c. To see to it that a realistic procurement strategy is formulated for the unit and the
AFP as whole taking into consideration:
d.the appropriate mix of procurement methods as allowed by law that will be adopted
to efficiently and effectively fulfill the procurement requirements of the Unit/AFP
e.the entities who should undertake/implement each mode of procurement, i.e. the
AFP BAC, AFPPS/PS/CO and the DND BAC
f. common items/requirements of various PPMPs that may be procured together in one
package for greater procurement efficiency and effectiveness
g.the appropriate size of bid lots or contract packages considering the project
objectives, the nature of items to be procured and the capability of legitimate
suppliers in the market to provide them (the principle of promoting
competitiveness through the proper matching of the size of the contract packages
with the capability of most bona fide suppliers should be considered)
h.To see to it that the PPMP/APP is prepared in accordance with the procedure
prescribed in this manual, in both substance and form.
i. To see to it that the APP is in accordance or in line with the Logistics Strategy of
the AFP
7.
The APPs of all Units shall be reviewed and evaluated by the OJ4, before they are
submitted to the BAC/BAC Secretariat for validation and final consolidation into the APP
for the whole AFP.
8.
The APP shall include provisions for foreseeable emergencies based on historical
records.
The BAC, through the BAC Secretariat, upon recommendation of Major
Services Logistics staff and the Deputy Chief of Staff for Logistics, shall include therein a
lump sum to cover for these emergencies or contingencies, which amount shall be a
percentage of the AFPs total appropriations for Maintenance, Operating and Other
Expenses (MOOE).
September 2007
9.
The final APP shall then be submitted for approval of the CSAFP. The Undersecretary for
Operations, DND shall be furnished a copy of the approved APP in accordance with DO
12.
10. Once the General Appropriations Act is passed by Congress and approved by the
President, any discrepancy between the Budget Estimates in the APP and the Annual
Appropriation shall be settled on a priority basis as determined by the concerned
Program Directors of the AFP.
The PROGRAM DIRECTOR is the KBU functional staff officer responsible for the
preparation of the Preliminary Program and Budget Guidance document. He monitors
and conducts program review and analysis. He prepares the functional objective, policy
guidance and monitors the implementation of the control programs peculiar to his staff
responsibility.
11. No government procurement shall be undertaken unless it is in accordance with the
approved APPs (Regular and Supplemental). All emergency procurement, however,
shall be subsequently supported by corresponding amendment/ updating in the APP,
subject to the review/ evaluation by J4, validation by AFP BAC and subsequent approval
by CSAFP. The Undersecretary for Operations, DND shall be furnished copies of the APP,
SPP and any amendments thereto, for monitoring purposes, to ensure compliance with
the provisions of RA 9184, in accordance with DO 12.
12. Amendment/Updating of APP shall be undertaken every six (6) months or as often as
necessary.
September 2007
SECTION 4
General Procurement Activities

and Timelines
Page 55 of 224
GPPB RESOLUTION NO. 014-2006

ENDORSING FOR THE APPROVAL OF THE PRESIDENT OF THE REPUBLIC OF THE
PHILIPPINES, HER EXCELLENCY PRESIDENT GLORIA MACAPAGAL-ARROYO
PROPOSED AMENDMENTS TO THE IRR-A OF REPUBLIC ACT 9184 ON THE
SHORTENING OF PROCUREMENT TIMELINES
WHEREAS, Republic Act No. 9184 (R.A. 9184) and its Implementing Rules and
Regulations Part A (IRR-A) took effect on January 26, 2003 and October 8, 2003 respectively;
WHEREAS, the Government Procurement Policy Board (GPPB) under Section 63 of the
IRR-A of R.A. 9184 is mandated to formulate and amend public procurement policies, rules
and regulations, and amend whenever necessary, the IRR-A of R.A.9184;
WHEREAS, Section 3 of R.A 9184 provides as one of its governing principles the
streamlining of all procurement processes which should be simple and adaptable to advances
in modern technology, for a more effective and efficient procurement system;
WHEREAS, the prescribed periods for procurement activities, as provided under the IRRA of R.A. 9184, may still be shortened in order to expedite the acquisition of goods,
infrastructure projects and consulting services of the Government without sacrificing
transparency nor competition;
WHEREAS, the Inter-Agency Technical Working Group (IATWG) of the GPPB, in a special
IATWG meeting held last July 14, 2006, reviewed, discussed and resolved to recommend to
the GPPB for its consideration and approval, the shortening of the periods of action for each
procurement activity as set forth under the pertinent provisions of the IRR-A and its Annex
C;
WHEREAS,
the GPPB, in its special meeting held on July 20, 2006, duly
considered and resolved to adopt the following as the total estimated maximum periods and
the earliest possible time for the completion of the entire process for the procurement of
goods, infrastructure projects and consulting services, respectively:
Type
of
Procurement
Goods
Total Maximum Period
Infrastructure
Projects
70
calendar
days
infrastructure projects with
ABC of 50M and below; and
100
calendar
days
infrastructure projects with
ABC of above 50M
139 calendar days and
Consultancy
Services
Earliest
Possible
Time
28 calendar days
80 calendar days
for
an
43 calendar days
for
an
48 calendar days
WHEREAS, during the same meeting, the GPPB identified important measures/courses
of action that government agencies shall pursue to ensure the completion of the procurement
process at the earliest possible time, namely: (i) the creation of an organic or permanent Bids
and Awards Committee (BAC) Secretariat that will provide administrative support to the BAC,
and if necessary, the creation of permanent Technical Working Groups (TWGs) to give
technical assistance in the procurement process; (ii) the establishment of a Registry of
Suppliers, Contractors, or Consultants that will greatly facilitate the process of eligibility
check; and (iii) mandating members of the BAC, BAC Secretariat and TWG to undergo the
training programs of the GPPB for the development of their capability and expertise in the
field of procurement;
WHEREAS, for infrastructure projects, procuring entities must ensure that appropriate
timing and/or phasing of related activities are undertaken, such as feasibility studies and/or
September 2007
Page 56 of 224
engineering designs, way in advance of the commencement of procurement activities and

project start to ensure smooth and timely implementation of infrastructure projects.
NOW, THEREFORE, for and in consideration of the foregoing, WE, the Members of the
GOVERNMENT PROCUREMENT POLICY BOARD, by virtue of the powers vested in US by law, hereby
RESOLVE :
To endorse for approval of the President of the Republic of the Philippines, Her
Excellency President Gloria Macapagal-Arroyo, the proposed amendments to the IRRA of R.A. 9184 and its Annex C relative to the Revised Procurement Timelines for
the Procurement of Goods, Infrastructure Projects and Consulting Services, attached
hereto as Annex A and made an integral part hereof.
This resolution shall take effect immediately.
APPROVED this 20th day of July, 2006 at Pasig City, Philippines
September 2007
Page 57 of 224
AMENDMENTS TO THE IMPLEMENTING RULES AND REGULATIONS PART A (IRR-A)

OF REPUBLIC ACT NO. 9184 (R.A. 9184)
IRR-A
IRR-A Provision
Proposed Amendments
Reference
September 2007
Page 58 of 224
Section
21.2.1.
Except as otherwise provided in Sections

21.2.3 and 21.2.4 of this IRR-A and for
the procurement of common-use goods
and supplies, the Invitation to Apply for
Eligibility and to Bid shall be:
a) Advertised at least twice within a
maximum period of fourteen (14)
calendar days, with a minimum period
of six (6) calendar days in between
publications, in a newspaper of
general nationwide circulation which
has been regularly published for at
least two (2) years before the date of
issue of the advertisement;
b) Posted continuously in the website of
the procuring entity concerned, if
available, the website of the procuring
entitys service provider, if any, as
provided in Section 8 of this IRR-A,
and the G-EPS during the maximum
period of fourteen (14) calendar days
stated above; and
c)
Posted at any conspicuous place

reserved for this purpose in the
premises of the procuring entity
concerned, as certified by the head of
the BAC Secretariat of the procuring
entity concerned.
Except
as
otherwise
provided in Sections 21.2.3
and 21.2.4 of this IRR-A
and for the procurement of
common-use goods and
supplies, the Invitation to
Apply for Eligibility and to
Bid shall be:
a) Advertised at least
once in
one (1)
newspaper of general
nationwide circulation
which
has
been
regularly published for
at least two (2) years
before the date of
issue
of
the
advertisement;
b) Posted continuously in
the website of the
procuring
entity
concerned,
if
available, the website
of
the
procuring
entitys
service
provider, if any, as
provided in Section 8
of this IRR-A, and the
G-EPS for seven (7)
calendar
days
starting on date of
advertisement,
if
applicable; and
c)
Posted
at
any
conspicuous
place
reserved
for
this
purpose
in
the
premises
of
the
procuring
entity
concerned for seven
calendar days, if
applicable,
as
certified by the head
of the BAC Secretariat
of the procuring entity
concerned.
To ensure the widest

dissemination
of
the
Invitation to Apply for
Eligibility and to Bid,
suppliers,
manufacturers,
distributors, contractors
and/or
consultants
must register with the
G-EPS
in
accordance
with the provisions of
Section 8.5.1 of the Act
and this IRR-A. Such
September 2007
Page 59 of 224
registration shall ensure

that prospective bidders
will
receive
an
automatic notification of
all bidding opportunities
in
government
agencies.
2
Section
21.2.2
The following periods from the last day of

the period for advertising and/or posting of
the Invitation to Apply for Eligibility and to
Bid up to the opening of bids shall be
observed:
(i) For goods, a maximum period of thirty
(30) calendar days from the last day of the
period of advertising and/or posting of the
Invitation to Apply for Eligibility and to Bid
up to opening of bids.
(ii)
For infrastructure projects, the
bidding documents shall be issued within
thirty (30) calendar days from the last day
of the period of advertising and/or posting
of the Invitation to Apply for Eligibility and
to Bid, and the opening of bids shall be
conducted within the following periods
from the last day of the issuance of the
bidding documents:
Estimated Contract Period
Cost
(in pesos)
Up to twenty five 15 to 30
(25) million
calendar
days
Above twenty five 15 to 45
(25) million up to fifty calendar
(50) million
days
Above
fifty
(50) 30 to 60
million up to two calendar
hundred (200) million days
Above two hundred 60 to 90
(200) million
calendar
days
In case of simple or repetitive or
standardized works where time is of the
essence, the head of the procuring entity
may reduce the above term of issuance to
not less than fifty percent (50%) of the
periods
indicated
above:
Provided,
however, That the periods for conducting
eligibility check, pre-bid conference and
the issuance of bidding documents shall be
followed.
(iii)
For
consulting
services,
a
maximum period of ninety (90) calendar
days from the last day of the period of
advertising and/or posting of the Invitation
to Apply for Eligibility and to Bid up to the
opening of bids.

2007
The following periods from

date of advertisement
and/or
1st
day
of
posting of the Invitation
to Apply for Eligibility and
to Bid up to opening shall
be observed:
(i) For goods, a maximum
period
of
thirty
(30)
calendar days from date
of
advertisement
and/or
1st
day
of
to Bid up to opening of
bids.
(ii)
For
infrastructure
projects, the following
maximum periods from
date of advertisement
and/or
1st
day
of
to Apply for Eligibility
and to Bid up to bid
opening
shall
be
observed:
Approved
Budget for
the
Contract
(in pesos)
Fifty
(50)
million and
below
Period
36
calend
ar
days
Above fifty 50
(50) million calend
ar
days
(iii)
For
consulting
services,
a
maximum
period of
sixty (60)
calendar days from date
of
advertisement
and/or
1st
day
of
to Bid up to opening of
bids.
For
infrastructure
projects and consulting
September
Page 60 of 224
With respect to priority programs and

infrastructure projects funded out of the
annual GAA which are intended for
implementation within the province, the
procuring entity may, in addition to the
requirements specified in this Section,
publish the Invitation to Apply for
Eligibility and to Bid in a local newspaper
of general circulation within the respective
periods stated in this Section.
Section
21.3.1
For the procurement of infrastructure

projects and consulting services, the
interested party shall submit a written LOI
together with its application for eligibility,
which must be received by the BAC not
later than seven (7) calendar days after
the last day of the period for advertising
and/or posting of the Invitation to Apply
for Eligibility and to Bid provided in Section
21.2 of this IRR-A.
Section
23.3
The
BAC
shall
inform
an
eligible
prospective bidder that it has been found
eligible to participate in the bidding. On
the other hand, the BAC shall inform an
ineligible prospective bidder that it has
been found ineligible to participate in the
bidding,
and
the
grounds
for
its
ineligibility. Those found ineligible have
seven (7) calendar days upon written
notice or, if present at the time of opening
of eligibility requirements, upon verbal
notification, within which to file a request
for a reconsideration with the BAC: x
x
services, the eligibility

documents
shall
be
issued
and
made
available at the time the
Eligibility and to Bid is
advertised or posted.
The bidding documents
must be issued after the
conduct
of
eligibility
check
and/or
short
listing, and the same
must be available for at
least seven (7) calendar
days from the date the
bidding documents were
first issued.
With respect to priority
programs
and
infrastructure
projects
funded out of the annual
GAA which are intended
for implementation within
the
province,
the
procuring entity may, in
addition
to
the
requirements specified in
this Section, publish the
Eligibility and to Bid in a
local newspaper of general
circulation
within
the
respective periods stated
in this Section.
For the procurement of
infrastructure projects and
consulting services, the
interested
party
shall
submit
a
written
LOI
together
with
its
application for eligibility,
which must be received by
the BAC not later than
seven (7) calendar days
from last date of posting
of the Invitation to Apply
for Eligibility and to Bid
provided in Section 21.2 of
this IRR-A.
The BAC shall inform
prospective bidders if they
have been found eligible or
ineligible to participate in
the
bidding.
If
found
ineligible, the BAC shall
also state the grounds for
its ineligibility.
Those
found ineligible have three
(3) calendar days upon
written notice or, if present
at the time of opening of
eligibility
requirements,
September 2007
Page 61 of 224
upon verbal notification,

within which to file a
request
for
a
reconsideration with the
BAC: x x
x
The entire process of

eligibility check for the
procurement
of
infrastructure
projects
shall not exceed three (3)
calendar days.
The BAC shall recommend
the short list of consultants
to
the
head
of
the
procuring
entity
for
consideration
and
approval.
The entire
process of eligibility check
and short listing shall not
exceed
twenty
(20)
calendar days.
A bidder determined as
failed has three (3)
calendar
days
upon
written notice or, if present
at the time of bid opening,
upon verbal notification,
within which to file a
request
for
a
reconsideration with the
BAC: x x x
Members of the BAC,
including its staff and
personnel, as well as its
Secretariat and TWG, are
prohibited from making or
accepting any kind of
communication with any
bidder
regarding
the
evaluation of their bids
until the issuance of the
Notice of Award, unless
otherwise allowed in this
IRR-A.
The
entire
evaluation process shall be
completed in not more
than seven (7) calendar
days for the procurement
of goods and infrastructure
projects from the deadline
for receipt of proposals.
However,
for
infrastructure projects
costing fifty (50) million
and below, the entire
Section
23.10
The entire process of eligibility check for

the procurement of infrastructure projects
shall not exceed fifteen (15) calendar
days.
Section
24.15.4
The BAC shall recommend the short list of

consultants to the head of the procuring
entity for consideration and approval. The
entire process of eligibility check and short
listing shall not exceed thirty (30) calendar
days.
Section
30.3.
A bidder determined as failed has seven

(7) calendar days upon written notice or, if
present at the time of bid opening, upon
verbal notification, within which to file a
request for a reconsideration with the
BAC: x x x
Section
32.3
Members of the BAC, including its staff

and personnel, as well as its Secretariat
and TWG, are prohibited from making or
accepting any kind of communication with
any bidder regarding the evaluation of
their bids until the issuance of the Notice
of Award, unless otherwise allowed in this
IRR-A. The entire evaluation process shall
be completed in not more than fifteen (15)
days for the procurement of goods and
infrastructure projects from the deadline
for receipt of proposals.

2007
September
Page 62 of 224
evaluation process shall

be completed in not
more
than
five
(5)
calendar days from the
deadline for receipt of
proposals.
9
Section
33.4.2
After approval by the head of the

procuring entity, of the Highest Rated Bid,
the BAC shall within seven (7) calendar
days notify and invite the consultant with
the Highest Rated Bid for negotiation. x
x
x
10
Section
33.4.4
Except
for
meritorious
reasons,
negotiations with any one consultant shall
be completed within
fourteen (14)
calendar days.
11
Section
33.5
Quality-Cost Based Evaluation Procedure

x
x
x The BAC shall rank the
consultants in descending order based on
the combined numerical ratings of their
technical and financial proposals and
identify the Highest Rated Bid: Provided,
however, That subsequent negotiations in
accordance with Section 33.4.3 of this
IRR-A shall still be undertaken with the
first in rank consultant, except for item (e)
thereof. Except for meritorious reasons,
negotiations with any one consultant shall
be completed within
fourteen (14)
calendar days. Total calculated bid prices,
as evaluated and corrected for minor
arithmetical
corrections,
such
as
computational errors, which exceed the
approved budget for the contract shall not
be considered.
12
Section
34.1
Within seven (7) calendar days from the

determination of Lowest Calculated Bid or
After approval by the head

of the procuring entity, of
the Highest Rated Bid, the
BAC shall within three (3)
calendar days notify and
invite the consultant with
the Highest Rated Bid for
negotiation. x
x
x
Except
for
meritorious
reasons, negotiations with
any one consultant shall be
completed within ten (10)
calendar days.
Quality-Cost
Based
Evaluation
Procedure
x
x
x The BAC shall
rank the consultants in
descending order based on
the combined numerical
ratings of their technical
and financial proposals and
identify the Highest Rated
Bid. After approval by
the
head
of
the
procuring entity of the
HRB, the BAC shall
within
three
(3)
calendar days notify and
invite the consultant
with
the
HRB
for
negotiation:
Provided,
however, That subsequent
negotiations in accordance
with Section 33.4.3 of this
IRR-A
shall
still
be
undertaken with the first in
rank consultant, except for
item (e) thereof. Except
for meritorious reasons,
negotiations with any one
consultant
shall
be
completed within ten (10)
calendar
days.
Total
calculated bid prices, as
evaluated and corrected
for
minor
arithmetical
corrections,
such
as
computational
errors,
which exceed the approved
budget for the contract
shall not be considered.
Within seven (7) calendar
days
from
the
September 2007
Page 63 of 224
the Highest Rated Bid, as the case may

be, the BAC shall conduct and accomplish
a post-qualification of the bidder with the
Lowest Calculated Bid/Highest Rated Bid,
to
determine
whether
the
bidder
concerned complies with and is responsive
to all the requirements and conditions for
eligibility, the bidding of the contract, as
specified in the bidding documents, in
which case the said bidders bid shall be
considered and declared as the Lowest
Calculated Responsive Bid for the
procurement of goods and infrastructure
projects,
or
the
Highest
Rated
Responsive Bid for the procurement of
consulting services. In exceptional cases,
the seven (7) calendar day period may be
extended by the GPPB.
determination of Lowest
Calculated Bid or the
Highest Rated Bid, as the
case may be, the BAC shall
conduct and accomplish a
post-qualification of the
bidder with the Lowest
Calculated
Bid/Highest
Rated Bid, to determine
whether
the
bidder
concerned complies with
and is responsive to all the
requirements
and
conditions for eligibility,
the bidding of the contract,
as specified in the bidding
documents, in which case
the said bidders bid shall
be considered and declared
as
the
Lowest
Calculated
Responsive
Bid for the procurement
of goods and infrastructure
projects, or the Highest
Rated Responsive Bid
for the procurement of
consulting services.
In exceptional cases, the
post qualification period
may be extended by the
head of the procuring
entity, but in no case
shall
the
aggregate
period
exceed
thirty
(30) calendar days.
13
Section
34.4
If, however, the BAC determines that the

bidder
with
the
Lowest
Calculated
Bid/Highest Rated Bid fails the criteria for
post-qualification, it shall immediately
notify the said bidder in writing of its postdisqualification and the grounds for it. The
post-disqualified bidder shall have seven
(7) calendar days from receipt of the said
notification to request from the BAC, if it
so wishes, a reconsideration of this
decision.
The BAC shall evaluate the
request for reconsideration, if any, using
the same non-discretionary criteria, and
shall issue its final determination of the
said request within seven (7) calendar
days from receipt thereof.

2007
If, however, the BAC

determines that the bidder
with the Lowest Calculated
Bid/Highest Rated Bid fails
the
criteria
for
postqualification,
it
shall
immediately notify the said
bidder in writing of its
post-disqualification
and
the grounds for it.
The
post-disqualified
bidder
shall have three (3)
calendar
days
from
receipt
of
the
said
notification to request from
the BAC, if it so wishes, a
reconsideration
of
this
decision.
The BAC shall
evaluate the request for
reconsideration, if any,
using
the
same
nondiscretionary criteria, and
shall
issue
its
final
determination of the said
request within seven (7)
calendar days from receipt
September
Page 64 of 224
thereof.
14
Section
37.2.1
Within a period not exceeding fifteen (15)

calendar days from the determination and
declaration by the BAC of the Lowest
Calculated Responsive Bid or Highest
Rated
Responsive
Bid,
and
the
recommendation of the award, the head of
the procuring entity or his duly authorized
representative shall approve or disapprove
the said recommendation. In case of
approval, the head of the procuring entity
or his duly authorized representative shall
immediately issue the Notice of Award to
the bidder with the Lowest Calculated
Responsive
Bid
or
Highest
Rated
Responsive Bid. In the case of GOCCs and
GFIs, the period provided herein shall be
thirty (30) calendar days.
Within the
same period provided herein, the BAC
shall notify all losing bidders of its
decision.
Within
a
period
not
exceeding
seven
(7)
calendar days from the
determination
and
declaration by the BAC of
the
Lowest
Calculated
Responsive Bid or Highest
Rated Responsive Bid, and
the recommendation of the
award, the head of the
procuring entity or his duly
authorized representative
shall
approve
or
disapprove
the
said
recommendation.
However,
for
with an ABC of fifty (50)
million and below, the
entity
or
his
duly
shall
approve
or
disapprove
the
said
recommendation
within
four (4) calendar days.
In case of approval, the
entity
or
his
duly
shall immediately issue the
Notice of Award to the
bidder with the Lowest
Calculated Responsive Bid
or
Highest
Rated
Responsive Bid.
In the
case of GOCCs and GFIs,
the period provided herein
shall be fifteen (15)
calendar days.
Within
the same period provided
herein, the BAC shall notify
all losing bidders of its
decision.
15
Section
37.4
Approval of Contract
Approval of Contract
When further approval of higher authority

is required, the approving authority for the
contract,
or
his
duly
authorized
representative, shall be given a maximum
of twenty (20) calendar days from receipt
thereof, together with all documentary
requirements to perfect the said contract,
to approve or disapprove it. In the case of
GOCCs, the concerned board, or its duly
authorized representative, shall act on the
approval of the contract within thirty (30)
calendar days from receipt thereof
together
with
all
documentary
requirements to perfect the said contract.
When further approval of

higher
authority
is
required, the approving
authority for the contract,
or his duly authorized
representative, shall be
given
a
maximum
of
fifteen (15) calendar
days from receipt thereof,
together
with
all
documentary requirements
to
perfect
the
said
contract, to approve or
disapprove it. However,
September 2007
Page 65 of 224
for
infrastructure
projects with an ABC of
fifty (50) million and
below, the maximum
period
is
five
(5)
calendar days. In the
case
of
GOCCs,
the
concerned board, or its
duly
authorized
representative, shall act on
the
approval
of
the
contract within twentyfive (25) calendar days
from
receipt
thereof
together
with
all
documentary requirements
to
perfect
the
said
contract.
16
17
Section
37.5
Notice to Proceed
Notice to Proceed
The concerned procuring entity shall then

issue the Notice to Proceed together with a
copy or copies of the approved contract to
the successful bidder within seven (7)
calendar days from the date of approval of
the
contract
by
the
appropriate
government approving authority.
All
notices called for by the terms of the
contract shall be effective only at the time
of receipt thereof by the successful bidder.
If an effectivity date is provided in the
Notice to Proceed by the procuring entity
concerned, all notices called for by the
terms of the approved contract shall be
effective only from such effectivity date.
The concerned procuring

entity shall then issue the
Notice to Proceed together
with a copy or copies of
the approved contract to
the
successful
bidder
within three (3) calendar
days from the date of
approval of the contract by
the
appropriate
government
approving
authority. However, for
with an ABC of fifty (50)
million and below, the
notice to proceed must
be issued within two (2)
calendar days. All notices
called for by the terms of
the
contract
shall
be
effective only at the time
of receipt thereof by the
successful bidder.
If an
effectivity date is provided
in the Notice to proceed by
the
procuring
entity
concerned,
such
date
shall not be later than
seven (7) calendar days
from issuance thereof.
Section
38.1
The procurement process from the

opening of bids up to the award of
contract shall not exceed three (3)
months, or a shorter period to be
determined by the procuring entity
concerned.
The estimated periods for
action on specific procurement activities
are provided for in Annex C of this IRRA. In case the deadline for each activity
falls on a non-working day (i.e. Saturday
and Sunday), legal holiday, or special non-
The procurement process

from the opening of bids
up to the award of contract
shall not exceed three (3)
months,
or a shorter
period to be determined by
the
procuring
entity
concerned. All members
of the BAC shall be on a
jury duty type of
assignment until the

2007
September
Page 66 of 224
working holiday, the deadline shall be the

next working day.
Notice
of
Award
is
issued by the head of
procuring entity in order
to complete the entire
procurement process at
the
earliest
possible
time.
For purposes of this
section, the term jury
duty
shall
be
understood to mean a
state
by
which
the
members give utmost
priority
to
BAC
assignments over all
other
duties
and
responsibilities until the
requirements for the
said
assignments
at
hand are completed.
The maximum periods
and earliest possible
time
for
action
on
specific
procurement
activities are provided
for in Annex C of this
IRR-A.
In case the
deadline for each activity
falls on a non-working day
(i.e.
Saturday
and
Sunday), legal holiday, or
special
non-working
holiday, the deadline shall
be the next working day.
September 2007
Page 67 of 224
PERIOD OF ACTION ON PROCUREMENT ACTIVITIES
Stage
Activities
Advertisement/posting of IAEB
Letter of Intent
Eligibility Check for civil works and

consulting
services/Short-listing
for
consulting services
Issuance and availability of bidding
documents
4
5
Pre bid conference

(Note: for goods, the pre-bid conference
is conducted prior to eligibility check.)
Request for clarification
Supplemental/Bid bulletin
Submission and Opening of Bids
Bid Evaluation
Notification for Negotiation
Deadline
MAXIMUM PERIODS
Civil Works
Goods
For ABC
costing 50M
and below
7 cd
For ABC
costing above
50M
7 cd
7 cd
n/a
7 cd
7 cd
7 cd
refer to stage 6
3 cd
3 cd
20 cd
7 cd
Within 7 cd from the last
day of posting
30
available for at least for 7
cd from the date of the
issuance
12 before the deadline of
submission of bids
Consulting
Services
5
0
3
6
cd
cd
cd
1 cd
1 cd
6
0
1 cd
cd
1 cd
10 days before deadline

of submission
7
days
before
the
deadline of submission of
bids

2007
1cd (includes
eligibility check)
7 cd
1 cd
1 cd
1 cd
5 cd
7 cd
21 cd + 2 cd
for approval of
ranking
3 cd
n/a
September
Page 68 of 224
Negotiation
10
Post Qualification
7 cd
7 cd
7cd
7cd
11
Approval of Resolution/Issuance of Notice

of Award
7 cd
4 cd
7 cd
7 cd
12
Contract Preparation and Signing
10 cd
10 cd
10 cd
10 cd
13
Approval of Contract by Higher Authority
15 cd
5 cd
15 cd
15 cd
14
Issuance of Notice to Proceed
3 cd
2 cd
3 cd
3 cd
80 cd
70 cd
100 cd
139 cd
Total Maximum Periods
10 cd
Note: The periods indicated in the boxes are the maximum periods to be observed from the day of advertisement and/or 1st day of posting of the Invitation of Apply for
Eligibility and to Bid up to opening of bids.
September 2007
Page 69 of 224
Stage
Activities
1
2
Advertisement/posting of IAEB
Letter of Intent
Eligibility Check for civil works

and consulting services/shortlisting for consulting services
Issuance and availability of
bidding documents
Pre bid conference

(Note: for goods, the pre-bid
conference is conducted prior to
eligibility check.)
Request for clarification
Supplemental/Bid bulletin
6
7
Submission and Opening of Bids

Bid Evaluation
8
9
Notification for negotiation

Negotiation
10
11
Post Qualification
Approval of Resolution/Issuance
of Notice of Award
12
Contract Preparation and Signing
Deadline
Within 7 cd from the
last day of posting
available for at least

for 7 cd from the date
of the issuance
12 before the deadline
of submission of bids
Goods
EARLIEST POSSIBLE TIME

Civil Works
Consulting Services
7 cd
n/a
7 cd
7 cd
7 cd
7 cd
refer to stage 6
1 cd
7 cd
3 cd (1 cd for eligibility, 1
cd for shortlisting and 1
cd for notification)
7 cd
1 cd (12 days before

the submission of bids)
1 cd (12 days before the

submission of bids)
1 cd (12 days before the

submission of bids)
1 cd
1 cd
1 cd
1cd
1 cd
1 cd + 1 cd for approval
of ranking
1 cd
1 cd
1 cd
2 cd (1 cd for BAC
Resolution and 1 cd for
issuance of NOA)
2 cd (1 cd for contract
preparation and 1 cd for
contract signing
1 cd
2 cd (1 cd for BAC
issuance of NOA)
preparation and 1 cd for
contract signing
refer to stage 1
10
days
before
deadline of submission
7 days before the
deadline of submission
of bids
n/a
1 cd
2 cd (1 cd for BAC
issuance of NOA)
preparation and 1 cd
for contract signing
September 2007
Page 70 of 224
13
14
Total
Time
Approval of Contract by Higher

Authority
Issuance of Notice to Proceed
Estimated Earliest Possible
1 cd
1 cd
1 cd
1 cd
28 cd
1 cd
43 cd
1 cd
48 cd
Note: The procurement process from the opening of bids up to the award of contract shall not exceed three (3) months, or a shorter period to be
determined by the procuring entity concerned. All members of the BAC shall be on a jury duty type of assignment until the Notice of Award is issued
by the head of procuring entity in order to complete the entire procurement process at the earliest possible time.
September 2007
SECTION 5
Various Methods of Procurement
Page 74 of 224
Competitive Bidding
Legal Reference
IRR-A Section 10 provides the legal reference for competitive bidding.
All procurement shall be through competitive or public bidding, except as provided in Rule XVI
of the IRR-A, which provides for the conditions for use of the alternative methods of
procurement. This is so specified in Section 10, Article IV of RA 9184 and Section 10, Rule IV
of its IRR-A. In keeping with this policy, Procuring Entities are enjoined to provide for
sufficient lead time in its procurement program for the conduct of public bidding.
Competitive Bidding or Public Bidding is defined in RA9184 and its IRR-A as follows:
Refers to the method of procurement which is open to participation by any
interested party and which consists of the following processes: advertisement, prebid conference, eligibility screening of prospective bidders, receipt and opening of
bids, evaluation of bids, post-qualification, and award of contract, the specific
requirements and mechanics of which shall be defined in the IRR to be promulgated
under this Act.
Competitive bidding opens up the procurement opportunity to a greater number of suppliers
or contractors who compete among themselves in providing the best goods or services to the
Government for the best value. This enables the Government to obtain goods and services,
infrastructure projects, and consulting services at lower prices and better terms, thus
optimizing the use of scarce resources. In addition, it allows for greater transparency of the
procurement process.
Competitive bidding is discussed in detail in Volumes 2, 3 and 4 of these Manuals.
It is conceded, however, that there are instances when resorting to any of the alternative
methods of procurement is necessary.

2007
September
Page 75 of 224
Alternative Methods of Procurement

Legal Reference
IRR-A Sections 48 to 54 provide the legal reference for the alternative methods of
procurement.
1. Conditions for Use of Alternative Methods of Procurement

In highly exceptional cases provided for in Article XVI of RA 9184 and Rule XVI of its
IRR-A, the Procuring Entity is allowed to resort to the alternative methods of
procurement in order to promote economy and efficiency, subject to the following
conditions:
a.
The BAC shall recommend to the Head of the Procuring Entity the use of
alternative methods of procurement in cases where public bidding is not feasible,
to be indicated in the Annual Procurement Plan (APP);
In cases where the original method of procurement specified in the APP is public
bidding and conditions arise justifying the use of an alternative method of
procurement after the APP is finalized, the APP may be amended. This can be
done after a BAC Resolution recommending the use of the alternative method is
approved by the Head of the Procuring Entity. The procedures are discussed in
Volumes 2, 3, and 4.
Procuring
purchases
within the
Manual, in
entities may charge small value purchases or over-the-counter

(OCP) against petty cash funds provided that the procurement is
allowable contingency. This is further discussed in Volume 2 of this
Section 2 (Part 2).
b. The Head of the Procuring Entity or his duly authorized representative has given
prior approval of the use of any of the alternative methods of procurement;
c.
The conditions surrounding the procurement at hand justify the use of any of the
alternative methods of procurement, as provided for in Sec.48-54, Art. XVI of the
RA9184 and Sections 48-54, Rule XVI of its IRR-A.
d.
The AFP BAC shall issue a resolution

recommending for the CSAFPs approval, the use the following alternative modes
if public bidding is the original method specified in the APP: Limited Source
Bidding, Direct Contracting, Repeat Order and Negotiated Procurement. This is to
protect the CSAFP from any legal implications that might arise from
signing/approving the APPs since RA 9184 and its IRR-A provides that the use of
alternative mode of procurement would require not only CSAFPs approval but also
the justification of the conditions set forth therein.
2. The Different Alternative Methods

a.
Limited Source Bidding, otherwise known as selective bidding, is a method of

procurement of goods and consulting services that involves direct invitation to
bid by the concerned entity of all pre-selected suppliers or consultants with known
experience or proven capability on the requirements of the particular contract.
The pre-selected suppliers or consultants shall be all those appearing in the list
maintained by the relevant Government authority (e.g. BFAD for medicines, NTC
September 2007
Page 76 of 224
for telecommunication equipment, etc.) that has expertise and experience in the
type of procurement concerned, which list should have been submitted to,
maintained and updated with, the GPPB. For highly specialized goods and
consulting services, where no such list is being maintained by a relevant
Government authority, competitive bidding shall be conducted. It is noted that
the purpose of the list is to regulate the quality of goods being offered and the
qualifications of consultants in the particular field of expertise.
The particular conditions under which this alternative method of procurement may
be used are outlined in Section 2, Part 2, Vol. 2 (for procurement of goods, and
Section 3, Part 2, Vol. 4 (for procurement of consulting services), of this Manual.
b.
Direct Contracting or single source procurement is a method of

procurement of goods that does not require elaborate bidding documents. The
supplier is simply asked to submit a price quotation or a pro-forma invoice
together with the conditions of sale. The offer may be accepted immediately or
after some negotiations.
be used are outlined in Section 2, Part 2, Vol. 2 of this Manual.
c.
Repeat Order is a method of procurement of goods from the previous winning

bidder, whenever there is a need to replenish goods procured under a contract
previously awarded through Competitive Bidding.
d.
Shopping is a method of procurement of goods whereby the procuring entity

simply requests for the submission of price quotations for readily available offthe-shelf goods or ordinary/regular equipment to be procured directly from
suppliers of known qualifications.
e.
Negotiated procurement is a method of procurement of goods,

infrastructure projects and consulting services, whereby the procuring entity
directly negotiates a contract with a technically, legally and financially capable
supplier, contractor or consultant only in the cases provided for in Sec. 53 of
RA9184 and Sec. 53, Rule XVI of its IRR.
be used are outlined in Section 2, Part 2, Vol. 2, Section 3, Part 2, Vol. 3 and
Section 3, Part 2, Vol. 4 of this Manual.

2007
September
Page 77 of 224
Ordering Agreement
Legal Reference
GPPB Resolution No. 06 2005 dated April 1, 2005, Approving and Adopting the Guidelines
on the Use of an Ordering Agreement under the Government Procurement Reform Act
(Annex H), serves as the legal reference for ordering agreements.
Definition of Ordering Agreement

An Ordering Agreement refers to a written instrument negotiated between the procuring
entity and the Lowest Calculated and Responsive Bidder and used to expedite the
procurement process when anticipated needs for specific items are not known. It grants the
procuring entity the option to either place an order or not buy at all, within a given period of
time. The Ordering Agreement shall contain:
1.
terms and clauses applying to future contracts (orders) between the parties during its
term,
2.
a description , as specific as practicable, of supplies to be delivered including lead time

for the receipt thereof, and
3.
methods for issuing and delivering future orders under the ordering agreement.
Justifications for the Use of an Ordering Agreement

The use of ordering agreements is limited to situations where a government agency intends to
procure non-inventory parts necessary to maintain the operational effectiveness of existing
major equipment, the requirement thereof, although identified, becomes necessary only upon
the happening of a fortuitous event. In which case, the quantity and the exact time of need
for the said parts cannot be actually pre-determined.
Therefore, for reasons of economy, keeping in stock of said parts for possible future use or by
procuring them for inventory shall be disadvantageous to the government. This excludes
parts required for routine maintenance, the volume and delivery time being determinable at
an earlier period.
GPPB Resolution No. 06 2005 is shown as Annex H for ready reference. A more detailed
description of the guidelines and procedures on the use of an ordering agreement is presented
in Vol. 2 of this Manual.
September 2007
Page 78 of 224
Implementation of A.F.P. Infrastructure Projects By

Administration
Legal Reference
The following serve as legal reference for the implementation of infrastructure projects by
administration:
1.
Section 23.5 of the IRR-A of RA 99184, which authorizes the AFP Corps of Engineers to
undertake infrastructure projects by administration.
2.
Section 53.b of the IRR-A of RA 9184, which authorizes procuring entities to undertake
emergency infrastructure projects urgently needed due to calamities or other causes,
through negotiated procurement or by administration or, in high security risk areas,
through the AFP.
3.
GPPB Resolution No. 09-2005, dated April 28, 2005, which approves the guidelines on
implementation of projects undertaken by the AFP Corps of Engineers.
4.
GPPB Resolution No. 013-2005, dated August 5, 2005, which approves and adopts the
guidelines for the implementation of infrastructure projects through negotiated
procurement under Section 54.2(d) of the IRR-A of RA 9184 and by administration.
Definition of the Term By Administration

Although the implementation of infrastructure projects by administration is technically a
concept beyond procurement, its implications overreach into the domain of government
acquisition and affects policies thereon.
GPPB Resolution No. 013-2005 defines By Administration as - The procedure by which the
implementation of an infrastructure project is carried out under the administration and
supervision of the concerned agency thru its own personnel. The term by administration is
considered synonymous to force account which is defined as;
1.
(Websters Third New International Dictionary, Unabridged) 1: the part of the

expense account of a public body (as a municipality) resulting from the employment of
a labor force (as for garbage collection and the maintenance of streets) usually
distinguished from the part resulting from contracting similar services with commercial
agencies. 2: labor force maintained under force account.
2.
(Procurement Guidelines, World Bank) Force account, that is, construction by the use
of the Borrowers (the Governments) own personnel and equipment, may be the only
practical method for constructing some kinds of works. The use of force account may be
justified where:
a.
Quantities of work involved cannot be defined in advance;
b.Works are small and scattered or in remote locations for which qualified
construction firms are unlikely to bid at reasonable prices;
c. Work is required to be carried out without disrupting ongoing operations;
d.Risks of unavoidable work interruption are better borne by the Borrower than by a
Contractor; and
e.There are emergencies needing prompt attention.

2007
September
Page 79 of 224
A government-owned construction unit that is not managerially (administratively) and

financially autonomous shall be considered a force account unit. Force account is
otherwise known as direct labor, departmental forces, or direct work.
3.
The Guidelines approved by GPPB Resolution No. 013-2005 defines force account as
the implementation of an infrastructure project by administration and is applicable
when, due to the happening of unforeseen events, there is need to immediately
complete infrastructure works, or when work outside the original contract is necessary
for the completion of the works but the costs involved cannot be determined at the
outset.
By administration or force account, therefore, is a mode of implementing infrastructure

projects through the employment of the Agencys own resources. Although this originally
meant only labor or manpower resources (the word force refers to the Owners labor
force), this has now come to include the provision by the implementing Agency of the
materials, supplies, equipment and construction/technical supervision required by the
infrastructure project. Instead of contracting for the complete construction of the whole
works, the Owner/Agency opts to undertake the construction using its own resources.
Possible
Arrangements
and
Options
Infrastructure Projects By Administration
In
the
Implementation
of
The Owner or the Agency has several options in prosecuting construction of the project by
administration or force account as shown:
1.
The Owner Agency can resort to a combination of any of the options outlined in the
following matrix:
PROJECT COMPONENTS
LABOR
CONSTRUCTION MATLS and
EQUIPMENT FOR INSTALLATION
CONSTRUCTION EQUIPMENT
CONSTRUCTION SUPERVISION
SOURCE OR METHOD OF PROCUREMENT

In-House Personnel/ Job Order, Pakyaw/Piece work
contracting
Public Bidding, Limited Source Bidding, Negotiated
Procurement, Direct Contracting, Shopping
Owned/ Rental ( Public Bidding, Limited Source Bidding,
Negotiated Procurement, Direct Contracting, Shopping)
In-House/ Consultant ( Public Bidding, Limited Source
Bidding, Negotiated Procurement)
2.
The Owner may also opt to avail of trade or specialty sub contractors for each work item
of the project (civil works, electrical, plumbing/sanitary, architectural finishes,
mechanical, etc.). The sub contractors may provide labor, materials, supplies and
construction equipment, with construction supervision and coordination either provided
in-house by the Owner agencys organic engineering/technical personnel or by
consultants, hired for the purpose.
3.
A cost-plus or a reimbursable cost plus fees contract can also be resorted to with
labor, construction materials, and equipment to be procured by the Owner with the
Contractor being guaranteed a fixed percentage over the cost. This entails some
additional administrative effort and cost on the part of the Owner since he must procure
all of the inputs and implement controls over their utilization such as warehousing,
inventory and timekeeping activities. In addition, the Owner, thru his construction
supervisor, must directly concern himself with the overall quality, time and cost
standards of the project.
This mode of implementation is usually adopted for projects were it is difficult to exactly
determine the extent or scope of the work at the onset, such as in repair/restoration
work where sizable portions of the project are initially embedded or covered up, the
restoration of historical/artistic works, and in case of emergencies were time is of the
essence such that normal detailed engineering procedures are not practicable.
September 2007
Page 80 of 224
This mode is also resorted to in infrastructure contracts when the cost of certain
anticipated additional work cannot be accurately measured, estimated or standardized
beforehand (e.g. the repair and restoration of completed and partially accepted portions
of the work that may be damaged by force majeure within the effectivity of the original
contract) such that the Contractor cannot quote a realistic or reasonable price at the
time of bidding. Sometimes a form or a schedule of manpower and construction
equipment rates is provided for in the bid documents to be filled up by the proponents.
This eventually becomes part of the contract executed with the successful bidder, and
the rates reflected therein are applied to determine the amount due the contractor
when such work becomes necessary. This is often called a Schedule of Day Work
Rates.
The Advantages and Disadvantages of Procuring Works By Administration

When the nature of the work involved (refer to the definition of force account under
Guidelines of the World Bank above) is not the main reason or justification for choosing to
prosecute work by administration, the following advantages are most often invoked:
1.
It is possible for the Owner agency to have savings since there is no contractors profit
or taxes to be included in the project cost.
2.
Savings can also be incurred by availing of

technical/engineering personnel that are under utilized.
3.
The capability, experience and proficiency of the agencys personnel in construction and
engineering work is enhanced and maintained. (This is the primary justification for
allowing the AFPCOE to implement projects by administration under Section.23.5 of the
IRR-A of Ra 9184.)
the
services
of
in-house
On the other hand there are certain disadvantages or risks that have to be considered:
1.
There is increased administrative effort and cost on the part of the Owner compared to
contracts awarded through competitive bidding, specially, in cost-plus a fee contracts.
2.
It is contrary to present government policy declaring competitive bidding as the

preferred mode of procurement of infrastructure projects. As far as the Government is
concerned, it is generally thru competitive bidding that economical, timely and quality
construction of public infrastructure can be ensured. (Assuming that its construction
supervisors/managers are efficient, effective and incorruptible.) Furthermore, it is a
basic tenet in a free market economy that competition brings out greater cost
efficiencies in businesses or firms.
3.
Implementing infrastructure projects by administration is also contrary to declared

Government policy not to compete with the business sector.
4.
There is a risk that quality control for the project may be less stringent unless an
autonomous quality control unit exists within the agency. There is a tendency for inhouse construction supervisors/managers to be less scrupulous about construction
quality standards since there is a low incentive for them to check on their own work.
There is no check and balance as in a straight contract, where a contractor is engaged
to provide the labor, materials and equipment for the construction of the whole project.
5.
Unless effectively monitored and reviewed, there is the risk that prosecuting projects
by administration could be used as a way of circumventing the requirements of
competitive bidding, specially, when the nature of the work involved easily lends itself
to implementation by contracting. The implementing unit could actually end up entirely
contracting out by administration projects, or large portions of it, without the
knowledge and approval of higher officials (and thereby commit a violation of the
condition stipulated in Sec. 4.2 of GPPB Resolution 013-2005). This practice is
always closely linked to the phenomenon of the implementing unit resorting to
unjustified alternative methods of procurement and the splitting of procurement
contracts for construction materials, labor and equipment charged to project funds.

2007
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These procurement contracts can usually be padded and become the means to provide
the cash to pay the by administration contractor. Agency project cost estimates and
construction implementation arrangements would have to likewise be stringently
reviewed to ensure that greater efficiency and economy would be achieved by
undertaking projects by administration rather than thru competitive bidding.
The implementation of infrastructure projects by administration should therefore be resorted
to only in highly exceptional cases and only with adequate management controls in place.
Cost estimates and the procurement of construction inputs (labor, construction materials and
equipment) used for such projects should be closely reviewed and monitored to ensure
compliance with the provisions of RA 9184 and its IRR-A.
The implementation of projects by administration or force account in the AFP are discussed
in more detail in Vol. 3 of this Manual.
September 2007
SECTION 6
Procurement by Electronic
Means and the G-EPS
Page 84 of 224
Procurement by Electronic Means and the G-EPS

Legal Reference
IRR-A Section 8 provides the legal reference for the procurement by electronic means and the
G-EPS.
1. The G-EPS
Consistent with the policies of transparency and streamlining of the procurement
process, and to achieve efficiency, Information and Communications Technology (ICT)
shall be utilized in the conduct of government procurement. A two-pronged approach
has been adopted to achieve this:
a.
institutionalization of the Government Electronic Procurement System (G-EPS),

which will be used for procurement of common-use items and as repository of all
Government procurement information; and
b.
use or engagement of electronic procurement service providers by the individual

Procuring Entities for procurement of non-common use items.
The DBM-Procurement Service (DBM-PS) manages the G-EPS under the supervision of
the GPPB. The G-EPS serves as the single portal and primary source of information on
all government procurement.
All Procuring Entities shall utilize the G-EPS, through its Electronic Catalogue facility, for
the procurement of common-use supplies. Moreover, all Invitations to Apply for
Eligibility and to Bid (IAEB), notices of award, and all other procurement-related notices
shall be posted in the G-EPS, regardless of the method of procurement used by the
Procuring Entity.
The GPPB shall issue the necessary procedural guidelines covering procurement through
the G-EPS.
2.
Features of the G-EPS

A. Electronic Bulletin Board
The G-EPS shall have a centralized electronic bulletin board.
Procuring Entities are required to post the following in the G-EPS electronic bulletin
board:
a) Invitations to Apply for Eligibility and to Bid (IAEB) for competitive bidding or
notices of other procurement opportunities using the alternative methods of
procurement;
b) Supplemental / bid bulletins;
c)
Contract awards and the corresponding Notice of award, including the reason for
award of contract;
d) Other procurement opportunities using the alternative methods of procurement;

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e) Other notices, announcements, information for interested parties

f)
Procurement monitoring report
Failure to post a procurement opportunity will render the resulting contract null and
void.
Failure to post a Notice of Award shall render the erring government official/s
administratively liable in accordance with RA 6713 and other pertinent laws, rules and
regulations, and appropriate sanctions shall be imposed.
Posting of notices and other transactions with the G-EPS shall be done through duly
authorized personnel of the Procuring Entity. In accordance with Section 8.2.3 of the
IRR-A, the Procuring Entity shall be required to designate its personnel who will be
authorized to transact with the G-EPS. The internal procedures of G-EPS require that a
Procuring Entity shall have at least one (1) but not more than two (2) such authorized
personnel. For purposes of consistency with the prescribed procurement procedures,
the Procuring Entity shall designate such personnel who is a member of the BAC
Secretariat or assigned to the Procurement Unit / Office. (Please refer also to Section 3,
Volume 2 of this Manual for the procedures for transacting with the PS-DBM.)
Posting of the IAEB shall follow the guidelines in Section 21 of the IRR-A, Section 2, Part
1, Vol.2, Section 3, Part 1, Vol.3, and Section 3, Part 1, Vol. 4 of this Manual.
B. Registry of Manufacturers, Suppliers, Distributors, Contractors and

Consultants
The G-EPS shall have a centralized electronic database of all manufacturers, suppliers,
distributors, contractors and consultants registered under the system.
Registration shall entail the submission of the requirements specified by the PS-DBM.
Details of the requirements may be obtained from the PS-DBM website
(procurementservice.org), or the G-EPS website (procurementservice.net). Submission
of these requirements may be done on-line at the G-EPS website or physically at the GEPS office. Registration shall be effective for one year and may be renewed, provided
that the manufacturer, supplier, distributor, contractor or consultant concerned
maintains its registration current and updated at least once a year, or more frequently
when needed.
Manufacturers, suppliers, distributors, contractors and consultants applying for
registration must also indicate their account number with a bank duly licensed by the
Bangko Sentral ng Pilipinas (BSP) to facilitate payment as well as the posting of bid and
performance security, when applicable.
The G-EPS shall deny registration to or exclude from the registry any party that is found
to have willfully misrepresented any of the information provided in the application for
registration or who is in the blacklist of the Government or any of its procuring entities
from participating in any of its procurement opportunities.
A manufacturer, supplier, distributor, contractor or consultant applying for registration
shall be required to provide an e-mail address to which all communications from the
BAC and the procuring entity shall be sent. The e-mail address provided shall be
considered as such applicants information system for purposes of reckoning the date of
sending or receipt of electronic messages or documents.
Once the G-EPS allows electronic bid submission and other on-line transactions
requiring digital signatures, registered manufacturers, suppliers, distributors,
contractors and consultants shall secure a digital certificate from the appropriate
certification authority to be able to participate in the procurement activities of the GEPS.
September 2007
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Registration with the G-EPS is not tantamount to a finding of eligibility, nor is it a

guaranty that a manufacturer, supplier, distributor, contractor or consultant may
participate in a public bidding without first being determined to be eligible for that
particular public bidding.
C. Electronic Catalogue
The G-EPS shall have a centralized electronic catalogue of common and non-common
use goods, supplies, materials and equipment.
Procuring Entities are required to procure common-use goods, supplies, materials and
equipment from the Electronic Catalogue in the G-EPS, once it is in operation. The
procedures for transacting with the G-EPS shall be provided for in detail in the websites
of the G-EPS (procurementservice.net) and the PS-DBM (procurementservice.org).
Procuring entities without internet access may avail of the G-EPS Public Access
Terminals which shall be installed at DBM-designated locations in the provinces and in
Metro Manila.
In addition to the e-catalogue, the G-EPS shall also feature a Virtual Store, Electronic
Payment, Electronic Bid Submission, and such other features that may be developed in
the future. Procedures for the use of these features will be published once these
become operational.

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Use of Procurement Service Providers

Legal Reference
IRR-A Section 8 provides the legal reference for the use of procurement service providers.
Procuring Entities may hire service providers who will provide electronic procurement systems
and/or services for the procurement of non-common use supplies, infrastructure projects and
consulting services. The Procuring Entity shall conduct a public bidding for this service.
Minimum Requirements for Service Providers

Electronic procurement service providers must meet the following minimum requirements
to qualify as a service provider to a Procuring Entity:
a) the system must comply with the provisions of RA 9184, its IRR-A, RA 8792
(Electronic Commerce Act) and its IRR-A;
b) the system must be linked to the G-EPS, particularly with regard to the
posting of all bid opportunities and awards;
c)
the system must allow parallel manual submission of bids to the procuring
entity;
d) the system must ensure that the BAC shall have complete control of the
bidding process, and that the BACs sole authority to open bids is strictly
observed;
e) the system must be virus-resilient and the infrastructure must provide
sufficient security which is at least equivalent to that employed by the G-EPS,
such as, but not limited to, firewall and encryption devices;
f)
must provide for use of electronic signatures and other current electronic
authentication devices;
g) the service provider must have sufficient redundant back-up facilities;

h) the system must have provisions for linkage to the Procuring Entitys Financial
Management Information System (FMIS), Logistics Management System, and
other internal information systems that may interact with the procurement
process; and
i)
Electronic payment facilities, if used, shall comply with all laws, rules and
regulations issued by the Government.
The GPPB shall determine and certify compliance with the above requirements.
However, it may delegate this task to technically capable agencies/offices of the
Government. For this purpose, it shall issue the necessary Guidelines.
September 2007
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SECTION 7
Other Specialized Types of

Procurement

2007
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Procurement Sourcing
Legal Reference
IRR-A Sections 43 to 45 provide the legal basis for procurement sourcing.
1. Procurement of Foreign and Domestic Goods

a) Goods may be obtained from domestic or foreign sources.. It is required,
however, that a bidder, whether offering domestic or foreign goods, must be
eligible in conformity with the requirements of RA 9184, its IRR-A, Republic Act
5183, and the guidelines in Vol. 2, 3 and 4 of this Manual. A Procuring Entity
shall exercise domestic preference, and this shall be expressly mentioned in the
Bidding Documents.
b) In exercising the preference as mentioned in the immediately preceding
paragraph, the Procuring Entity shall apply the provisions of Commonwealth Act
138, to wit:
1) When the Lowest Calculated Bid (LCB) including taxes and customs
duties, is a foreign bid as defined in CA 138 (see definition below), the
award shall be made to the bidder who submitted the lowest domestic
bid, provided:
i)
the domestic bid is not more than fifteen per centum

(15%) in excess of the LCB. (Section 3 [e] CA 138);
ii)
the bidder who submitted the lowest domestic bid must

pass the post-qualification.
An illustrative case is as follows: Foreign Bidder A submitted a bid of P15M which

was declared as the LCB.
Domestic preference was specified in the bidding
documents. The lowest Domestic Bidder B submitted a bid of P16.5M, which is 10%
in excess of the LCB. If Bidder B is post-qualified, and the items offered pass the
necessary quality assurance tests, it shall be awarded the contract. However, if it is
post-disqualified, or if the goods it offered do not meet the standard of quality
specified in the Bidding Documents, the award shall be made to Bidder A.
2) An award shall nevertheless be made to the bidder who submitted the
foreign bid which was determined to be the LCB if:
i)
The lowest domestic bid is more than 15% in excess of the LCB;
or
ii)
the bidder who submitted the lowest domestic bid fails to postqualify.
An illustrative case is as follows: Foreign Bidder A submitted a bid of P15M which

was declared as the LCB.
Domestic preference was specified in the bidding
documents. The lowest Domestic Bidder B submitted a bid of P17.4M, which is 16%
in excess of the LCB. If Bidder A is post-qualified, and the items offered pass the
necessary quality assurance tests, it shall be awarded the contract, despite the
domestic preference.
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A foreign bid means any offer of articles, materials or supplies not manufactured
or to be manufactured in the Philippines, substantially from articles, materials or
supplies of the growth, production, or manufacture, as the case may be, of the
Philippines. (Section 2[d], CA 138) Conversely, a domestic bid means any offer
of unmanufactured articles, materials, or supplies of the growth or production of the
Philippines, or manufactured articles, materials or supplies manufactured or to be
manufactured in the Philippines, substantially from articles, materials or supplies of
the growth, production or manufacture, as the case may be, of the Philippines.
(Section 2[c] CA 138) In US jurisprudence, the term substantially was construed
to mean more than 75%. Thus, even if a product is manufactured in the
Philippines, it may not be considered within the ambit of the preference if its raw
materials are wholly imported.
c)
When a non-discriminatory rule in accordance with the Governments obligations

under international treaties or agreements is contained as a provision, preference
for domestically-produced goods that meet the specified or desired quality may be
allowed in the interest of:
1) Availability, that is, the domestically-produced goods are more readily
available in the market, like off-the-shelf items;
2) Efficiency; and
3) Timely delivery of goods.
2. Bidding of provincial projects

a) Provincial Projects
The rules on public bidding and procurement processes prescribed in RA 9184, its
IRR-A and this Manual, shall apply to priority programs and infrastructure projects
funded out of the GAA for implementation within the province. These projects are
referred to as provincial projects. Provincial projects are Engineering District
infrastructure projects and priority programs fully funded by the Government and
identified in consultation with the concerned members of Congress.
b) Matching of Bids by Provincial Bidders
1) A provincial bidder is a contractor whose principal office is within the
province where a provincial priority program or infrastructure project,
defined in the immediately preceding paragraph, is being implemented.
2) In the bidding of such provincial projects, a provincial bidder is given the
privilege to match the lowest calculated bid (LCB) of a bidder who is not a
provincial bidder.
In implementing this rule, the following shall be
observed:
i)
The subject bidding is done within five (5) years from the effectivity of
RA9184, or not later than January 26, 2007.
ii)
The provincial bidder who is given the privilege to match the LCB
submits the lowest bid among the provincial bidders, although it is
higher than the LCB.
iii)
The said provincial bidder shall exercise the privilege to match the
LCB within forty-eight (48) hours from receipt of the notice from the
BAC to match the LCB.
September 2007
iv) Matching shall be made in writing, through appropriate adjustments in

the unit bid prices without changing the Scope of Work and work
items prescribed by the Procuring Entity in the bidding documents.
v) If the provincial bidder is able to match the LCB within the prescribed
period and he passes the post-qualification, the contract will be
awarded to him. However, if he fails to match the LCB or to pass the
post-qualification, the contract will be awarded to the bidder who
originally obtained the LCB.
3) This privilege granted to provincial contractors shall not apply to:
i)
contracts the coverage of which includes more than one (1) province;
ii)
procurement of consulting services;
iii) projects for implementation within Metro Manila.
c)
Publication and Posting of Provincial Projects

1)
In addition to the DBM publication of the release of funds for

provincial projects, the procuring entity shall likewise publish the IAEB or
notice of procurement opportunity for provincial projects in compliance
with the following requirements:
i)
It shall comply with the publication requirement in the IRR-A and

Volumes 2,3 and 4 of this Manual;
ii)
It shall be published in a local newspaper with the widest region-wide

circulation for a minimum of 8 calendar days and a maximum of 14
calendar days;
iii) It shall be posted at any conspicuous place reserved for the purpose
in the premises of the Procuring Entity for 14 calendar days; and
Conspicuous place shall mean any place in the premises of the Procuring Entity
that is accessible to the general public and reserved for the purpose of posting /
publishing announcements and/or notices for dissemination to the public.
iv) It shall be posted in the website of the DBM and the G-EPS for 14
calendar days.
d) Lease of Computers, Communications, Information and Other Equipment
Contracts for lease of construction and office equipment, including computers,
communication and information technology equipment, are subject to the same
public bidding and procurement procedures as prescribed in RA 9184, its IRR-A
and Volume 2 of this Manual. (Please refer also to Joint Memorandum Circular
No. 2002-01 issued by the National Computer Center and the DBM, which
provides the policies, rules and regulations on lease of IT equipment. Also,
reference may be made to Department Order No. 188 (dated September 28,1999)
and Department Order No. 219 (dated August 14, 2003), issued by the
Department of Public Works and Highways, governing the lease of construction
equipment.)
Page 93 of 224
September 2007
SECTION 8
Case Studies
September 2007
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September 2007
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Case Study: Procurement of Infrastructure Projects

A concrete road project with an approved budget for the contract (ABC) of P10.0 million was
advertised for bidding.
Twenty (20) contractors expressed interest in the project by
submitting a letter of intent on or before the deadline specified in the Invitation to Apply for
Eligibility and to Bid (IAEB). On the day of the Eligibility Check / Screening, only ten (10)
were found to be eligible.
On or before the day of Bid Opening, all of the ten (10) eligible contractors submitted a bid.
All their technical envelopes were rated passed during the preliminary examination of bids.
Further, their financial envelopes were likewise complying. After reading all the financial bids,
Contractor A, which submitted a bid of P8.5 million, was declared the bidder with the lowest
calculated bid (LCB). The second lowest bid was P9.1 million, submitted by Contractor B.
During the Bid Evaluation, the bid of Contractor A was corrected for arithmetical errors. The
recalculated bid of Contractor A went up to P9.0 million.
During the Post-Qualification, Contractor B wrote the BAC Chairman and informed him that
Contractor A has an on-going project with outstanding works of about P40.0 million. This
project was apparently not taken into consideration in Contractor As submitted calculation of
its Net Financial Contracting Capacity (NFCC), a requirement for eligibility.
The BAC called the attention of Contractor A on the matter of the deficient NFCC. In reply,
Contractor A posted a credit line in an amount which is more than enough to cover for the
difference between its real NFCC and the ABC. The bid of Contractor A seemed to be
responsive, especially since it has all the required personnel and equipment needed for the
project, and has done all its previous projects satisfactorily with no negative slippage at all.
Further, there is political pressure on the BAC to award the contract to Contractor A as it is
being endorsed by the Congressman in the locality of the project.
In comparison, the bidder with the second lowest bid, Contractor B, has completed all its
previous projects satisfactorily, suffering only a negative slippage of 12%. Further, its
legal, technical and financial requirements would have passed the Post-Qualification. The BAC
is wary of it though as its owner is the first cousin of the BAC Chairman.
The BAC will meet to deliberate on the award of the project.
Analysis:
The BAC should award the project not to Contractor A, but to Contractor B, primarily because
a) Contractor A is not eligible in the first place, and b) Contractor B submitted the lowest bid
among all the others who have been found eligible.
Contractor A is not eligible. While the eligibility requirements it has submitted passed the
Eligibility Check, information that the BAC has gathered during Post-Qualification shows that
Contractor A misrepresented itself by not reporting on its on-going project, whose outstanding
works would have a negative impact on its NFCC.
IRR-A Section 23.4 says: Notwithstanding the eligibility of a prospective bidder, the
procuring entity concerned reserves the right to review its qualification at any stage
of the procurement process if it has reasonable grounds to believe that a
misrepresentation has been made by the said prospective bidder, or that there has
been a change in the prospective bidders capability to undertake the project from the
time it submitted its eligibility requirements. Should such review uncover any
misrepresentation made in the eligibility requirements, statements or documents, or
any changes in the situation of the prospective bidder which will affect the capability
of the bidder to undertake the project so that it fails the preset eligibility criteria, the
procuring entity shall consider the said prospective bidder as ineligible and shall
disqualify it from submitting a bid or from obtaining an award or contract.
September
2007
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Further, even if Contractor A posted a credit line enough to compensate for the difference in
its NFCC and the projects ABC, the BAC, in the first place, should not have accepted the
credit line as this is tantamount to an improvement in the qualification / bid of Contractor A,
and in the second place, the eligibility requirement from a bidder as proof of its capacity to
absorb additional obligations in connection with the contract and to finance its implementation
and completion is a choice among the NFCC, or a credit line or a cash deposit, and not a
combination of the three.
Lastly, Contractor A should even be penalized in accordance with IRR-A Section 65.3 for
submitting false information. This
Submitting eligibility requirements of whatever kind and nature that contain false information
or falsified documents calculated to influence the outcome of the eligibility screening process
or conceal such information in the eligibility requirements when the information will lead to a
declaration of ineligibility from participating in public bidding.
If proven to be guilty of the above, the bidder may be penalized with imprisonment of not less
than six (6) years and one (1) day, but not more than fifteen (15) years.
At this point, the BAC should have disqualified Contractor A despite a) its apparent capability
to undertake the contract as is shown by its other submitted requirements such as lists of
personnel and equipment and its good track record; b) its bid being the lowest; and c) its
closeness to the Congressman, which does not have a bearing on the bidding process.
While the three points above may be difficult to ignore, we add the following arguments. On
the first point, it must be clear in the minds of the BAC that the reason for having an Eligibility
Check / Screening prior to the submission of Bids is to allow the BAC to sift among the many
interested bidders and deal only with those that are eligible, based on some pre-set criteria,
in the first place. Thus, if a bidder is not eligible, the BAC should not think twice about
disqualifying it even if it appears to be capable based on its technical and / or financial
envelopes. The advantage of having this kind of a step-by-step procedure is that it minimizes
discretion of the BAC and thus saves/protects it from having to face dilemmas of this sort.
On the second point, since Contractor A submitted the lowest bid at P8.5 million and while
this bid is recalculated to be P 9.0 million, if the contract is awarded to it, then the
government would have to shell out only P8.5 million (IRR-A Section 37.1). Since the second
lowest bid is P9.1 million, it would understandably be difficult for the BAC to simply forget
about the potential P600,000 savings. However, again, it has to be emphasized that its bid
shall have to be disqualified simply because it is not eligible to participate.
On the third point, if Contractor A was being endorsed by the Congressman because it is a
provincial bidder, and the Congressman invokes the preferential treatment granted to
provincial bidders in IRR-A Section 45, still the BAC should not award the contract to
Contractor A, because it is not eligible to participate in the bidding.
Thus, the BAC has to award the contract to the bidder which submitted the second lowest bid
among all the others who have been found eligible, Contractor B.
While Contractor B has had a negative slippage of 12% in his other projects, the eligibility
requirement on track record only requires that the negative slippage, if any, not be more than
15%. Further, while the owner of Contractor B is a first cousin of the BAC Chairman, it is
still not in violation of IRR-A Section 47 that prohibits participation of bidders related to the
BAC within the third civil degree. Being a cousin means that he is a fourth degree relative.
September 2007
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Case Study: Procurement of Consulting Services

A government agency wanted to engage the services of a consultant for the detailed
engineering of its IT building. During the pre-procurement conference, it was agreed upon by
the Bids and Awards Committee (BAC) and other participants that the use of the qualitybased evaluation procedure shall be recommended in the selection of consultants. The head of
agency approved the use of said evaluation procedure.
The project which has an approved budget of P6,500,000 was advertised on 01 and 07
November 2003 in a newspaper of nationwide general circulation, in the agencys website, in
the Government Electronic Procurement System, and in conspicuous places in the agency
premises. Fifteen (15) firms responded by submitting their Letters of Intent (LOI) and
eligibility documents on or before the deadline specified in the Invitation to Apply for Eligibility
and to Bid (IAEB).
During the eligibility check conducted by the BAC on 24 November 2003, the BAC declared
eight (8) firms as ineligible for failing to pass all the eligibility requirements. The 8 ineligible
firms received their notice of ineligibility before the meeting adjourned. The seven (7) other
firms were declared by the BAC as eligible for shortlisting. One of the 8 ineligible firms,
Company X, filed a request for reconsideration with the BAC on 02 December 2003. After an
assessment of the justification provided by the said ineligible bidder, the BAC decided on 05
December 2003 to grant its request for reconsideration and declared Company X as eligible.
After evaluating the eligibility documents submitted by the 8 eligible bidders based on the
criteria specified in the IAEB, the BAC determined the ratings of the 8 bidders as follows:
1)
2)
3)
4)
5)
6)
7)
8)
Company
Company
Company
Company
Company
Company
Company
Company
A
B
C
D
E
F
G
X
90.5 points
85.5 points
75.5 points
69.5 points
69.0 points
68.5 points
51.5 points
49.5 points
The BAC deliberated on the number of firms to include in the shortlist and agreed to have a
shortlist of six (6) firms. All 6 firms were informed of their inclusion in the shortlist through a
letter dated 22 December 2003 and signed by the BAC Chairman. A request for proposal
(RFP) was forwarded to the 6 firms on 23 December 2003 stating, among others, the place
and deadline for the submission of the technical and financial proposals.
A pre-bid conference was scheduled on 13 January 2004 while the deadline for submission of
technical and financial proposals was on 23 January 2004, 10:00 a.m. at the Conference
Room at the 3rd floor of the agencys building.
The BAC made attendance of the 6 firms in the pre-bid conference to be mandatory, failure to
attend being a ground for disqualification of the firm. All 6 firms attended the pre-bid
conference and the minutes of the pre-bid conference were issued to the 6 bidders on 16
January 2004.
Five of the six firms submitted their technical and financial proposals on or before 23 January
2004, 10:00 a.m. deadline at the 3rd floor Conference Room. The sixth firm (Company F)
arrived at the 3rd floor Conference Room at 10:03 a.m. and insisted that its technical and
financial proposals be accepted as they were in the building at 9:57 a.m. as recorded in the
security guards logbook. The BAC decided to accept the technical and financial proposals of
Company F.
The BAC started opening the technical envelopes of the six firms at the time indicated in the
RFP to determine the presence of the required technical documents. All the firms, except
Company F, submitted all the required technical documents. Company F was declared
September 2007
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disqualified by the BAC for failure to pass all the technical requirements. After agreeing with
the declaration of the BAC on its disqualification, Company F accepted its financial proposal
that was returned unopened by the BAC.
Prior to the detailed evaluation of the technical documents submitted by the five technically
complying firms, the BAC deliberated on the sub-criteria and the corresponding weights. The
general criteria were further subdivided to more appropriately consider the requirements of
the project. Based on the approved criteria, the BAC rated the five firms, resulting in the
following rankings:
1)
2)
3)
4)
5)
Company
Company
Company
Company
Company
A
B
C
D
E
88.5 points
81.5 points
71.5 points
68.0 points
65.5 points
The BAC sent a letter to Company A dated 16 February 2004 informing the firm that it
submitted the highest rated bid and inviting it for contract and financial negotiations on 19
February 2004 at 9:00 a.m. The authorized representative of Company A met with the BAC
and discussed, among others, its financial proposal. Upon opening of the financial proposal of
Company A, the submitted bid price was read as P6,800,000, exceeding the ABC by
P300,000. The BAC checked the calculation of company A and it determined the correct bid
price to be P6,550,000, still exceeding the ABC by P50,000. Company A offered a discount of
P50,000 so that the cost of its financial proposal shall not exceed the ABC. The BAC satisfied
with the high technical score obtained by Company A, accepted the discount offered.
Negotiations were successfully completed on 20 February 2004. Company A was considered
to have submitted the highest rated and responsive bid after its successful post-qualification
on 27 February 2004.
The BAC will deliberate on the award of contract. What steps, if any, are not consistent with
the provisions of the IRR-A relating to the procurement of consulting services?
Analysis:
While the IAEB was advertised twice in a newspaper of general nationwide circulation, Section
21.2.1.a of the IRR-A provides that there should be a minimum period of six (6) days in
between publications. The BAC had a shorter period of five (5) days for disseminating the
procurement opportunity for consulting services.
The request for reconsideration by Company X, which was declared by the BAC to be
ineligible, should not have been favorably considered by the BAC as it was filed eight (8) days
after it received the notice of ineligibility. Section 24.13 provides that prospective bidders
found ineligible have seven (7) calendar days upon written notice within which to file a
request for reconsideration with the BAC.
During the pre-procurement conference, the BAC should have already determined the number
of shortlist of consultants as provided in Section 24.15.2. Said Section further provides that
(s)hould less than the required number apply for eligibility and shortlisting, pass the
eligibility check, and/or pass the minimum score required in the shortlisting, the BAC shall
consider the same. Determining the number of shortlist and the minimum score during
actual shortlisting gives the BAC the opportunity to have a lesser or larger number of
shortlist, from three (3) to seven (7), to favor a preferred firm if it wishes to.
The BAC is a recommendatory body. It should have obtained the approval of the head of the
procuring entity for its recommended shortlist before inviting all the firms in the shortlist to
submit proposals, as provided in Section 24.15.4.
Section 22.2 provides that attendance to the pre-bid conference should not be mandatory/
and should be conducted at least twelve (12) days before the deadline for the submission and
receipt of bids. Conducting it ten (10) days before the deadline may not give the shortlisted
bidders enough time to revise their proposals if these were affected by agreements reached
September 2007
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during the pre-bid conference. To be binding on both parties, any agreements reached during
the pre-bid conference should be stated in writing and issued as a Supplemental/Bid Bulletin.
The technical and financial proposals of Company F should not have been accepted by the
BAC as these were submitted at the designated place, which is the 3 rd floor Conference Room
of the agencys building and not just any place, beyond the deadline. Section 25.2 provides
that (b)ids submitted after the deadline should not be accepted by the BAC.
The evaluation criteria for the technical proposals should also have been agreed upon by the
BAC during the pre-procurement conference. Although the BAC has not yet started evaluating
the technical proposals when it finalized the evaluation criteria and could claim that they did
not skew the criteria to favor a particular bidder, a losing bidder can exploit the situation and
complain otherwise.
When the BAC calculated the cost of the financial proposal of Company A and determined that
it exceeded the ABC, it should have disqualified Company A at this point as Section 31
provides that the ABC shall be the upper limit or ceiling for acceptable bid prices. The discount
offered by Company A should not have been accepted as this is tantamount to an
improvement of bid. Since Company A should have been disqualified, Company B should be
invited by the BAC for negotiations as it has the second highest technical score. If
negotiations and post-qualification were successful, Company B would be determined to have
submitted the Highest Rated and Responsive Bid, and recommended for award of contract.
September 2007
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ANNEX A
Acronyms
September 2007
Page 104 of 224
Acronyms
ABC Approved Budget for the Contract
ABM Agency Budget Matrix
ACCTG - ACCOUNTING
AFP Armed Forces of the Philippines
AFPCC AFP COMMAND CENTER
AFPCES AFP COMMISSARY AND EXCHANGE SERVICE
AFPCGSC AFP COMMANDING GENERAL STAFF COLLEGE
AFPCIG AFP COUNTER INTELLIGENCE GROUP
AFPDSC AFP DENTAL SERVICE COMMAND
AFPFC AFP FINANCE CENTER
AFPJSOG AFP JOINT SPECIAL OPERATIONS GROUP
AFPMC
AFP MEDICAL CENTER
AFPMPMO AFP MODERNIZATION PROJECT MANAGEMENT OFFICE

AFPPS AFP PROCUREMENT SERVICE
AFPREO AFP REAL ESTATE OFFICE
AFPRESCOM AFP RESERVE COMMAND
AFPSM AFP SERGEANT MAJOR
AFPWSSU AFP-WIDE SUPPORT and SEPARATE UNITS
AFS Audited Financial Statement
ALOBS Allotment Obligation Slip
APP Annual Procurement Plan
BAC Bids and Awards Committee
BDS Bid Data Sheet
BRS Bureau of Research and Standards
BSP Bangko Sentral ng Pilipinas
CAF Certificate of Availability of Funds
CDA Cooperatives Development Authority
CEIS COMMUNICATION ELECTRONICS AND INFORMATION SYSTEM
CEISSAFP COMMUNICATION ELECTRONICS AND INFORMATION SYSTEM, AFP
CENTCOM CENTRAL COMMAND (UC)
CIAP Construction Industry Authority of the Philippines
COFILCO Confederation of Filipino Consulting Organizations
CPES Contractors Performance Evaluation System
CPESIU Contractors Performance Evaluation System Implementing Unit
CRSAFP CIVIL RELATIONS SERVICE, AFP
CSAFP CHIEF of STAFF, AFP
CSC Civil Service Commission
DBCC Development Budget Coordination Committee
DBM Department of Budget and Management
September
2007
Page 105 of 224
DBM-PS Department of Budget and Management-Procurement Service

DCS DEPUTY CHIEF OF STAFF
DILG Department of Interior and Local Government
DND Department of National Defense
DOST Department of Science and Technology
DTI Department of Trade and Industry
EO Executive Order
ESAO Engineering Supervision and Administration Overhead
FMIS Financial Management Information System
GAA General Appropriations Act
GCC General Conditions of Contract
G-EPS The Government Electronic Procurement System
GFI Government Financial Institution
GHQ & HSC GENERAL HEADQUARTERS and HEADQUARTERS SERVICE COMMAND
GOCC Government-Owned or Controlled Corporation
GOP Government of the Philippines
GPPB Government Procurement Policy Board
GPRA Government Procurement Reform Act
HRB Highest Rated Bid
HRRB Highest Rated and Responsive Bid
IAEB Invitation to Apply for Eligibility and to Bid
ICB International Competitive Bidding
IFI International Funding Institution
IPR Intellectual Property Rights
ISAFP INTELLIGENCE SERVICE-AFP
ITB Instruction to Bidders
ITR Income Tax Return
JVA Joint Venture Agreement
KBU Key Budgetary Unit
LC Letter of Credit
LCB Lowest Calculated Bid
LCRB Lowest Calculated and Responsive Bid
LGU Local Government Unit
LOI Letter of Intent
MFO MANAGEMENT AND FISCAL OFFICE
MOOE Maintenance and Other Operating Expenses
NACAP National Constructors Association of the Philippines
NCRCOM NATIONAL CAPITAL REGION COMMAND (UC)
NFCC Net Financial Contracting Capacity
NGA National Government Agency
NOLCOM NORTHERN LUZON COMMAND (UC)
NSO National Statistics Office
September 2007
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OESPA OFFICE OF ETHICAL STANDARD AND PUBLIC ACCOUNTABILITY

OLA OFFICE OF LEGISLATIVE AFFAIRS
OSPS OFFICE OF THE SPECIAL SERVICE
OSSS OFFICE OF STRATEGIC STUDIES
OTIA OFFICE OF THE INTERNAL AUDIT
PAGASA Philippine Atmospheric, Geophysical and Astronomical Services Administration
PCA Philippine Constructors Association, Incorporated
PCAB Philippine Contractors Accreditation Board
PCAB Philippine Contractors Accreditation Board
PCCI Philippine Chamber of Commerce and Industry
PERT/CPM Project Evaluation Review Technique / Critical Path Method
PICE Philippine Institute of Civil Engineers
PICPA Philippine Institute of Certified Public Accountants
PIO PUBLIC INFORMATION OFFICE
PMA PHILIPPINE MILITARY ACADEMY
PMO Project Management Office
PNP Philippine National Police
PPMP Project Procurement Management Plan
PRC Professional Regulation Commission
PSG PRESIDENTIAL SECURITY GROUP
PWI Procurement Watch Incorporated
RFP Request for Proposal
RFQ Request for Quotation
RIS Requisition and Issuance Slip
RMO RESOURCE MANAGEMENT OFFICE
ROW Right-of-Way
RRA Retirees and Reservist Affairs
SARO Special Allotment Release Order
SBD Standard Bidding Documents
SCC Special Conditions of Contract
SEC Securities and Exchange Commission
SJS SECRETARY OF JOINT STAFF
SME Small and Medium Enterprises
SOLCOM SOUTHERN LUZON COMMAND (UC)
SOUTHCOM SOUTHERN COMMAND (UC)
SOW Scope of Work
SUC State Universities and Colleges
SWA Statement of Work Accomplished
TAG THE ADJUTANT GENERAL
TCCHS THE CHIEF CHAPLAIN SERVICE
TCDS THE CHIEF DENTAL SERVICE
TCE THE CHIEF ENGINEERS
September 2007
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TCN THE CHIEF NURSE

TCOCS THE CHIEF ORDNANCE CHEMICAL SERVICES
TDCS THE DEPUTY CHIEF OF STAFF
TIG THE INSPECTOR GENERAL
TJAG THE JUDGE ADVOCATE GENERAL
TOR Terms of Reference
TPMG THE PROVOST MARSHALL GENERAL
TQMG THE QUARTERMASTER GENERAL
TSG THE SURGEON GENERAL
TSO Technical Support Office
TWG Technical Working Group
UC UNIFIED COMMAND
VAT Value-Added Tax
VCSAFP VICE CHIEF of STAFF, AFP
WESCOM WESTERN COMMAN
September 2007
ANNEX B
Glossary
Page 110 of 224
Glossary
Abstract of Bids The corresponding document prepared by the BAC after all bids have
been received, opened, examined, evaluated and ranked.
Abstract of Bidding Documents A summary containing general information on the
procurement at hand that is posted in the G-EPS.
Advance payment Refers to any payment made prior to the delivery and acceptance of
Goods, Works, or Consulting Services.
Amendment to Order refers to any change within the general scope of the contract, in
any of the following aspects: drawings, design or specifications of the Goods; the method of
shipment or packing; the place of delivery; scope of work or services to be rendered; the
place of performance of the services; additional items needed and necessary for the
protection of the Goods procured, which were not included in the original contract; or any
other change affecting the specifications or scope of work of the Goods and/or services to be
procured.
Approved Budget for the Contract The budget for the contract duly approved by the
head of the procuring entity, as provided for in the General Appropriations Act (GAA) and/or
continuing appropriations, in the case of national government agencies (NGAs); the corporate
budget for the contract approved by the governing board, pursuant to Executive Order No.
518, series of 1979 (E.O. 518), in the case of GOCCs and GFIs, and Republic Act No. 8292
in the case of SUCs; and the budget approved by the Sanggunian in the case of LGUs.
BAC The Bids and Awards Committee, established in accordance with Rule V of the IRR-A of
R.A. 9184.
Bid A signed offer or proposal to undertake a contract submitted by a bidder in response to
and in consonance with the requirements of the bidding documents. Also referred to as
Proposal and Tender, particularly when referring to the procurement of consulting services.
Bid Evaluation The process of determining the Bidder with the Lowest Calculated Bid (LCB)
or the Highest Rated Bid (HRB).
Bid Opening Date The date specified in the IAEB for the opening of bids.
Bid Security Cash, check, bank draft, letter of credit, bank guarantee, surety bond or a
foreign government guarantee that serves as a guarantee that the successful bidder shall not
default on his offer, and shall enter into contract with the Procuring Entity and furnish the
performance security.
Bid Validity A reasonable period determined by the head of the Procuring Entity concerned,
but in no case shall exceed one hundred twenty (120) calendar days from the date of the
opening of bids, wherein a Bid Security is considered valid.
Bidder An individual or entity that submits a bid. The term includes anyone acting on behalf
of the individual or other entity that submits a bid, such as agents, employees, and
representatives. More specifically, a contractor, manufacturer, supplier, distributor and/or
consultant competing for the award of a contract in any government procurement. See
Eligible bidder, Prospective bidder.
Bidding Documents. The documents issued by the procuring entity as the bases for bids,
furnishing all information necessary for a prospective bidder to prepare a bid for the
infrastructure projects, goods and/or consulting services required by the procuring entity.
Blacklisting To place on, or as if on, a list of persons or organizations that have incurred
disapproval or suspicion or are to be boycotted or otherwise penalized.
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Brand Name A trade name or product name, which identifies a product as having been
made by a particular manufacturer.
Calculated bid price The price of a bid, after taking into account minor arithmetical
corrections to consider computational errors, omissions and discounts, if allowed.
Civil Works See Infrastructure Projects.
Collusion An agreement between two or more persons, to commit acts to accomplish a
fraudulent or deceitful purpose.
Common-Use Supplies Goods, materials and equipment that are repetitively used in the
day-to-day operations of procuring entities in the performance of their functions, which are
included in the Price List of the Procurement Service (PS) of the Department of Budget and
Management (DBM).
Competitiveness A principle in Government procurement that allows broad participation by
eligible and qualified suppliers, contractors, consultants to put forward offers for a project.
Competitive Bidding A method of procurement which is open to participation by any
interested party and which consists of the following processes: advertisement, pre-bid
conference, eligibility screening of prospective bidders, receipt and opening of bids, evaluation
of bids, post-qualification, and award of contract. Also referred to as Public Bidding.
Communication costs mail and fax costs, plus cost of advertising, meetings, internet/web
posting, and other costs incurred for the dissemination of information about the bidding.
Conference Notice A formal written communication sent to the participants of the
conference (such as the Pre-procurement, Pre-bid and Post-Award Conference) informing
them when and where the conference will be held.
Conflict of Interest Refers to a clash between public interest and the private pecuniary
interest of the individual concerned (Blacks law Dictionary, 5th ed.)
Consulting Services Refer to services for Infrastructure Projects and other types of
projects or activities of the Government requiring adequate external technical and
professional expertise that are beyond the capability and/or capacity of the Government to
undertake such as, but not limited to: (i) advisory and review services; (ii) pre-investment or
feasibility studies; (iii) design; (iv) construction supervision; (v) management and related
services; and (vi) other technical services or special studies. (IRR-A Sec. 5 i of RA 9184)
Consolidated Blacklisting Report A report issued by the GPPB that contains a list of
people and/or organizations that are barred from participating in any Government
procurement project.
Consulting Services Services for Infrastructure Projects and other types of projects or
activities of the Government requiring adequate external technical and professional expertise
that are beyond the capability and/or capacity of the Government to undertake such as, but
not limited to: (i) advisory and review services; (ii) pre-investment or feasibility studies; (iii)
design; (iv) construction supervision; (v) management and related services; and (vi) other
technical services or special studies.
Contract Completion Project sign-off or acceptance of the project/goods by the end-user.
Contract Implementation The execution of a contract, covering the following milestones:
effectivity of the contract; contractors performance of his contractual obligations; procuring
entitys performance of its contractual obligations, as specified in the Contract; final
acceptance or project sign-off; all other related activities; and payment by the Procuring
Entity.
Contractor One who undertakes to perform a work or service, or supply goods for a public
or private entity.
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Contract Termination Ending of a contract prior to its completion.

Corrupt practice the offering, giving, receiving, or soliciting of any thing of value to
influence the action of a public official in the procurement process or in contract execution.
Compare fraudulent practice.
Cost Recovery Component Direct and indirect costs accounted for in determining the
price of Bidding Documents to be sold to interested suppliers/contractors.
Demand Regulation Component a positive (+) or negative (-) unit amount allocated to
the bidding activity for the purpose of regulating the participation of bidders
Development Cost Costs incurred in developing the original content of the documents,
designs, plans and specifications. The design cost may be excluded if the same is to be
included in the capitalized cost of the project which is to be recovered from the usage of the
completed project facility.
Direct Contracting An alternative method of procurement of goods that does not require
elaborate bidding documents. The supplier is simply asked to submit a price quotation or a
pro-forma invoice together with the conditions of sale. The offer may be accepted
immediately or after some negotiations. Also referred to as Single Source Procurement.
Direct Costs - Costs directly incurred such as development, reproduction, and
communication costs allocated to the bidding activity. See Communication Cost, Development
Cost, Reproduction Cost. Compare Indirect Costs.
Disclosure The act of disclosing, uncovering, or revealing
Disqualification The act of barring a bidder from further participation in the procurement
at hand, even if, in some instances, it has initially been declared eligible or post-qualified.
Domestic Bid Any offer of unmanufactured articles, materials, or supplies of the growth or
production of the Philippines, or manufactured articles, materials or supplies manufactured or
to be manufactured in the Philippines, substantially from articles, materials or supplies of the
growth, production or manufacture, as the case may be, of the Philippines.
Eligible Bidder A contractor, manufacturer, supplier, distributor or consultant who meets
all the eligibility requirements issued by the procuring entity.
Eligibility Refers to the status of a Bidder in relation to its legal, technical and financial
competence to comply with the requirements of the contract to be bid, as shown by eligibility
documents submitted to and checked by the BAC.
Eligibility Check The process of determining the compliance of Prospective Bidders with
the eligibility requirements prescribed, using a non-discretionary, pass/fail criteria.
Eligibility Screening see Eligibility Check.
Financial Bid One of two components comprising a bid, the other being the Technical Bid.
Force Majeure see Fortuitous events.
Foreign Bid Any offer of articles, materials or supplies not manufactured or to be
manufactured in the Philippines, substantially from articles, materials or supplies of the
growth, production, or manufacture, as the case may be, of the Philippines.
Foreign Supplier A supplier who is not a local supplier.
Fortuitous events An event which could not be foreseen, or which though foreseen, was
inevitable. (Art. 1174, Civil Code)
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Fraudulent practice Misrepresentation of facts in order to influence a procurement process

or the execution of a contract to the detriment of the Procuring Entity. Compare corrupt
practice.
Goods Refer to all items, supplies, materials and general support services, except
consulting services and infrastructure projects, which may be needed in the transaction of
public businesses or in the pursuit of any government undertaking, project or activity,
whether in the nature of equipment, furniture, stationery, materials for construction, or
personal property of any kind, including non-personal or contractual services such as the
repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial,
security, and related or analogous services, as well as procurement of materials and supplies
provided by the procuring entity for such services. The term related or analogous services
shall include, but not be limited to, lease or purchase of office space, media advertisements,
health maintenance services, and other services essential to the operation of the procuring
entity. (IRR-A Sec. 5 k of RA 9184)
Head of the Procuring Entity (i) the head of the agency or body, or his duly authorized
official, for NGAs and the constitutional commissions or offices, and branches of government;
(ii) the governing board or its duly authorized official, for GOCCs, GFIs and SUCs; or (iii) the
local chief executive, for LGUs: Provided, however, that in an agency, department, or office
where the procurement is decentralized, the Head of each decentralized unit shall be
considered as the head of the procuring entity subject to the limitations and authority
delegated by the head of the agency, department, or office. The Chief of Staff of the AFP
(CSAFP) shall be deemed the Head of the Procuring Entity subject to the limitations and
authority delegated by the SND.
IAEB Invitation to Apply for Eligibility and to Bid. This serves as the notice to the public and
all interested parties of the procurement opportunity.
Incidental Services services ancillary to the supply of the Goods, such as transportation
and insurance; installation, commissioning, provision of technical assistance, training, and
other such obligations of the Supplier covered under the contract, RFP, TOR, and/or bidding
documents.
Indirect Costs - Costs indirectly incurred such as overhead, supervision, and administrative
costs allocated to the bidding activity. Compare Direct Costs.
Ineligible Bidder A contractor, manufacturer, supplier, distributor or consultant who fails
to meet any or all of the eligibility requirements issued by the procuring entity.
Infrastructure Projects Include the construction, improvement, rehabilitation, demolition,
repair, restoration or maintenance of roads and bridges, railways, airports, seaports,
communication facilities, civil works components of information technology projects,
irrigation, flood control and drainage, water supply, sanitation, sewerage and solid waste
management systems, shore protection, energy/power and electrification facilities, national
buildings, school buildings, hospital buildings, and other related construction projects of the
government. (IRR-A Sec. 5 n) Also referred to as civil works.
Inspection Examination and/or testing of merchandise to determine whether it has been
received in the proper quantity and condition, and to verify that it conforms to the applicable
specifications.
Latent Defect A defect that is not apparent to the buyer by reasonable observation. A
latent defect is hidden or one that is not immediately determinable.
Limited Source Bidding An alternative method of procurement for Goods and Consulting
Services that involves direct invitation to bid by the concerned procuring entity from a set of
pre-selected suppliers or consultants with known experience and proven capability on the
requirements of the particular contract.
Liquidated Damages Damages agreed upon by the parties to a contract, to be paid in
case of breach thereof.
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Motion for Reconsideration In procurement, it is an application made to the BAC for the
purpose of obtaining a rule or order setting aside a previous decision.
Negotiated Procurement An alternative method of procurement of goods, infrastructure
projects and consulting services, whereby the procuring entity directly negotiates a contract
with a technically, legally and financially capable supplier, contractor or consultant.
Notice of Award The document issued by the Head of the Procuring Entity to the bidder to
whom the contract is awarded.
Notice of Eligibility The document issued by the BAC to the eligible bidder/s formally
informing the same that he/she/they met the eligibility requirements issued by the procuring
entity.
Notice of Ineligibility The document issued by the BAC to the bidder/s who failed to meet
any or all of the eligibility requirements issued by the procuring entity.
Notice of Post-qualification The document issued by the BAC to the bidder with LCB
whose bid is found responsive.
Notice of Post-disqualification The document issued by the BAC to the bidder with LCB
whose bid is found non-responsive.
Notice to Proceed The document issued by the Head of the Procuring Entity to the winning
bidder to proceed with the implementation of the contract.
Observer One who is invited to attend and observe all stages of the procurement,
especially: the pre-bid conference; opening of bids; bid evaluation; post-qualification;
contract award; and special meetings of the BAC.
Patent Defect A defect that is apparent to the buyer on normal observation. An apparent
or obvious defect.
Performance Security A security posted by the winning bidder to guarantee the faithful
performance by the same of its obligations under the contract prepared in accordance with
the bidding documents.
Portal A website that integrates a wide variety of contents for the purpose of attracting and
aggregating multiple users together in a central virtual space.
Post-qualification The process of validating and verifying the documents, information and
statements made in the Eligibility Documents by the Bidder who submitted the Lowest
Calculated Bid, as well as ascertaining the said Bidders compliance with the legal, financial
and technical requirements of the bid.
Post-qualification Report The report prepared by the TWG containing the findings/results
of the post-qualification conducted on the bidder with the LCB or HRB, as the case may be.
Pre-bid Conference is the forum where the Procuring Entitys representatives and the
Prospective Bidders discuss the different aspects of the procurement at hand.
Pre-procurement Conference is the forum called by the BAC for procurements
undertaken through public bidding, where all officials involved in the procurement meet and
discuss all aspects of the transaction, including the technical specifications, the Approved
Budget for the Contract (ABC), the applicability and appropriateness of the recommended
method of procurement and the related milestones, the bidding documents, availability of the
pertinent budget release for the project / contract, among others.
Procurement The acquisition of Goods, Consulting Services, and the contracting for
Infrastructure Projects by the Procuring Entity. Procurement shall also include the lease of
goods and real estate. With respect to real property, its procurement shall be governed by
the provisions of R.A. 8974 and other applicable laws, rules and regulations.
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Procurement Observation Report The report submitted by the Observer to the Head of
the Procuring Entity, based on the procurement checklist.
Procurement Unit Refers to the organic office of the Procuring Entity that carries out the
procurement function.
Procuring Entity Any branch, constitutional commission or office, agency, department,
bureau, office, or instrumentality of the Government, including GOCC, GFI, SUC and LGU
procuring Goods, Consulting Services and Infrastructure Projects.
Project Management Office The unit/office/department of the procuring entity that is
primarily responsible for implementing and managing a project.
Proposal See Bid.
Protest A formal declaration made by a person interested or concerned in some act to be
done, or already performed, whereby he expresses his dissent or disapproval, or affirms the
act against his will. The object of such declaration is usually to save some right which would
be lost to him if his implied anent could be made nil, or to exonerate himself from some
responsibility which would attach to him unless he expressly negatived his assent. (Blacks
Law Dictionary, 5th Ed.)
Provincial bidder A contractor who participates in the bidding of provincial priority
programs and infrastructure projects as defined in Section 44 of the IRR-A of RA 9184, and
whose principal office is within the same province.
Public Bidding See Competitive Bidding.
Public Monitoring A principle in Government procurement
Repeat Order An alternative method of procurement of goods from the previous winning
bidder, whenever there is a need to replenish goods procured under a contract previously
awarded through Competitive Bidding.
Reproduction cost labor, supplies and equipment rental costs incurred in the reproduction
of the documents.
Request for Clarification A written request submitted by the bidder to the BAC, asking
the latter to clarify a particular provision of the Bidding Documents.
Request for Proposal A written request for proposals concerning goods or services the
government intends to acquire by means of Competitive Bidding. The solicitation document
used in Competitive Bidding. The procedure allows changes to be made after other proposals
are opened and contemplates that the nature of the proposals and/or prices offered will be
negotiated prior to award.
Shopping An alternative method of procurement of goods whereby the procuring entity
simply requests for the submission of price quotations for readily available off-the-shelf goods
or ordinary/regular equipment to be procured directly from suppliers of known qualifications.
Single source procurement See Direct Contracting.
Spare parts Refer to extra components, equipment, tools, instruments or parts of
machinery or apparatus that replace the ones that are damaged or worn out.
Specification A description of what the purchaser requires and what a bidder must offer.
Splitting of Contracts The act of dividing or breaking up government contracts into
smaller quantities and amounts. It also is the act of dividing contract implementation into
artificial phases or sub-contracts.
Both actions are for the purpose of evading or
circumventing the requirements of law and this IRR-A, especially the necessity of public
bidding and the requirements for the alternative methods of procurement. (IRR-A Section
54.1)
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Standard The established and fixed measure used in assessing quality or performance.
Subcontractor One who takes a specific part of the work undertaken by the principal
contractor. (Blacks Law Dictionary, 5th Ed.)
Submitted bid price The bid price as indicated in the financial proposal submitted by the
bidder.
Supplemental/Bid bulletin A notice issued by the Procuring Entity to Prospective Bidders
with respect to any clarifications or modifications in the Bidding Documents, including those
affecting the technical specifications, eligibility requirements, procurement schedule, and
other similar matters.
Technical Bid One of two components comprising a bid, the other being Financial Bid.
Tender See Bid.
Two-Stage Competitive Bidding Bidding process divided into two stages. In the first
stage, bidders submit only the technical bids. In the second stage, when the technical
specifications have already been well defined, the regular procedure for public bidding is
followed. This may be employed for the procurement of Goods where, due to the nature of
the requirements of the project, the required technical specifications/requirements of the
contract cannot be precisely defined in advance of bidding, or where the problem of
technically unequal bids is likely to occur.
Warranty An undertaking by the supplier, manufacturer or distributor to guarantee that it
will correct any manufacturing defects of the goods procured by the government.
September 2007
ANNEX C
Supply Process thru the

AFPBAC, AFPPS and ICP
Page 120 of 224
Supply Process thru the AFPBAC, AFPPS and ICP

Procurement Flow
1)
Requisitioning Procedures:
a)
End-users Supply Officer prepares the Requisition and Issue Slip (RIS) and
forwards it to the concerned inventory control point (ICP). If items requested
are available, the Respective 4s shall issue an issuance directive. Otherwise,
the ICP thru SAO shall certify the non-availability of stocks.
b)
End-user Requesting Units Supply Officer prepares the Procurement Request

(PR) indicating therein the mode of procurement. If the items to be procured
are not included in the approved APP, the End-User initiates the amendment
of the APP.
c)
Management and Fiscal Office (MFO) or its equivalent office of the End-user
issues Certificate of Funding Chargeability (CFC) for the procurement activity
of P1M and below while GHQ MFO and its counterpart in the Major Services
shall issue CFC for procurement activity above P1M.
d)
The End-user forwards the PR to PC or CO with complete documents as

follows:
(1)
APP/SPP/Amendatory APP
(2)
CFC
(3)
Technical Specs, if necessary Terms of Reference (TOR), Circular of
Requirements (COR), and Scope of Work.
e)
2)
After evaluation of PR with supporting attachments, the PC or CO sends

Bidding Request to concerned AFP BACs thru BAC Secretariat, which shall
convene the concerned AFP BAC and TWG. However, if the procurement is
through alternative mode, the PC or CO transmits the request for resolution to
GHQ BAC1 for the issuance of corresponding resolution to be approved by the
CSAFP. After which, the implementation of procurement will be done by the
concerned PC or CO.
Procurement:
a)
Concerned AFP BAC conducts bidding.

After determining the successful
bidder, Notice of Award (NOA) is sent for approval to the appropriate
authority. Consequently, the PC or CO, serves the NOA to the winning bidder.
However, if the procurement is thru shopping mode, the procurement shall be
implemented by PC or CO.
b)
The TWG together with the PC or CO prepares the contract/PO/WO with inputs
from winning bidder for approval/signing by the authorized official.
c)
After the contract is finalized, contracting parties will sign the contract. Then,
Commander of Procurement Center or Contracting Office signs Box A of the
Obligation Slip (OS) and forwards to MFO. (OS Form Annex C)
d)
The MFO or its equivalent fiscalizes and signs Box B of the OS and forwards
contract to the approving authority.
e)
The contract/Purchase Order (PO)/Work Order (WO) shall be reviewed by

TJAG or its Major Service counterparts prior to the approval/signature by the
approving authority.
September 2007
3)
f)
Upon approval of the contract, PC or CO furnishes copy of the contract to the

supplier, together with the issuance of Notice to Proceed (NTP).
g)
The supplier delivers the items to the AFPPS (PC or CO) or ICP in accordance
with the contract.
h)
The SAO/RSO of AFPPS receives items for safekeeping and notifies Technical
Inspection and Acceptance Committee (TIAC) and MFO for inspection of
delivery.
i)
The TIAC ensures that the items delivered are in accordance with the
specifications stipulated in the procurement documents. The TIAC accepts the
items and forwards the acceptance report to Procurement Center or
Contracting office.
j)
At the same time, the MFO inspects the items delivered and prepares a
corresponding report to be submitted to Procurement Center or Contracting
Office. Inspection and Acceptance may be done simultaneously by TIAC and
MFO.
k)
The SAO of the requesting unit accepts the items.
l)
Unit Supply Office/End-user receives item thru Invoice Receipt of Property

(IRP), Property Acknowledge Receipt (PAR), Requisition and Issue Slip (RIS)
or using appropriate documents.
m)
Accounting receives liquidating documents.
Payment
a)
Upon receipt of SAO Acceptance Report and Inspection Report from MFO and
TIAC, the Procurement Centers or Contracting Offices prepare the
Disbursement Voucher (DV), attach the obligation slip (OS) and other
pertinent documents and
forward to Accounting Center or its equivalent
office for availability of cash.
b)
The Accounting Center/Office journalizes record and certify as to availability of

cash/signs Box A of DV. MFO pre-audits the DV.
Then forwards DV to
Finance Service Unit (FSU). (DV form Annex D)
c)
Finance Center prepares and signs check and advise of check issued and
cancelled (ACIC) then forwards DV to PC or CO for approval, which in turn,
approves and signs Box B of the DV/countersigns check.
d)
The Finance Center/Office releases the check to the supplier and in return the
supplier issues an Official Receipt.
e)
The Finance Center submits report of payment to PC or CO and MFO (enduser).
Page 122 of 224
ANNEX C-1 & C-2
Preparation/Approval of
APP/PPMP
September 2007
Page 124 of 224
Preparation/Approval of APP/PPMP
1)
End-user Units Logistics Office prepares its respective PPMP/APP in accordance with
the prescribed format as shown in Annex A. Units under Program 4 submit their
PPMP/APP in three (3) copies to J4 with e-copy for consolidation and review prior to
submission to GHQ BAC1 following the timelines for the preparation/submission of the
APP, hereto attached as Annex B. For Units Logistics Office under the Major
Services, submit PPMP/APP to Major Svc 4s, which in turn, forwards to GHQ BAC 1 in
three (3) copies with e-copy.
2)
GHQ BAC 1 consolidates and evaluates the APPs, prepares/signs

the resolution for all procurement activities falling under shopping mode then
recommends thru J4 the approval/signature of CSAFP on the APP, and the attached
resolution.
3)
J4 validates the PPMP/APP or SPP and retains the e-copy then

forwards same including the resolution for approval.
4)
CSAFP approves/signs the APP or SPP, including the resolution for

the shopping mode of procurement.
5)
J4 transmits the approved APPs and resolution to the End-user

Units for implementation, copy furnished GHQ BAC 1. Likewise, the Undersecretary
for Operations, DND shall be furnished with copies of the APPs and SPPs for
monitoring purposes to ensure compliance with the provisions of RA#9184 and its
IRR-A.
6)
End-user units, in time, initiate implementing action.
September 28, 2007
Page 126 of 224
ANNEX C-3
Amendment of APP
September 28, 2007
Amendment of APP
1)
2)
3)
End-user forwards the request and other supporting documents for the amendment of
its APP for review/evaluation of GHQ BAC 1 and approval by CSAFP.
J4 endorses the recommendation of GHQ BAC 1 to CSAFP for
approval/signature.
Upon approval, J4 updates its records then transmits the amended
APP to the End-user, copy furnished the GHQ BAC 1 and Under Secretary for
Operations, DND.
ANNEX C-4
Procurement Centers/
Contracting Offices
Page 132 of 224
Procurement Centers/Contracting Offices
For PROCUREMENT CENTERS (PCs): The PCs are deployed in major camps, bases,
and stations of the AFP, as follows:
PA Procurement Center
- Fort Bonifacio, Makati City
PAF Procurement Center
- Villamor Air Base, Pasay City
PN Procurement Center
- Bonifacio Naval Station, Makati City
GHQ Procurement Center
- Camp Aguinaldo, Quezon City
For CONTRACTING OFFICES (COs): The COs are deployed in 31 camps nationwide in
close proximity to the AFP field units, as follows:
Philippine Army
Location
Nr
Unit
101st (1ID)
Camp Sang-An, Upper Pulacan Labangan, Zamboanga del Sur
102nd (2ID)
103 (3ID)
Camp Capinpin, Tanay, Rizal

Camp Peralta, Jamindan, Capiz
104th (4ID)
Camp Evangelista, Cagayan de Oro
105th (5ID)
Camp Melchor Dela Cruz, F. Upi Gamu, Isabela
106th (6ID)
Camp Siongco, Awang DOS, Maguindanao
107th (7ID)
Fort Magsaysay, Palayan City, Nueva Ecija
108th (8ID)
Camp Lukban, Catbalogan, Samar
109th (9ID)
Camp Angeles, Pili, Camarines Sur
10
110th (53rd Ebde)
Camp Lapu-Lapu, Cebu City
11
111th (55th Ebde)
Cabatangan, Zamboanga City
12
112th (LABde)
Camp ODonell, Capas, Tarlac
rd

1
201st
Clark Air Base, Pampanga
202nd
Benito Ebuen Air Base, Mactan, Cebu
203rd
MDAAB, Sangley, Cavite City
204th
Edwin Andrews Air Base, Zamboanga City
September 2007
Philippine Navy
1
301st
Poro Point, San Fernando, La Union
302nd
Naval Base, Sangley Point Cavite
303rd
Naval Station, Rawis, Legaspi City
304th
Naval Station, Zambales
305th
Naval Operating Base, Mactan
306th
Naval Station, Panacan, Davao City
307th
Naval Station, Zamboanga City
General Headquarters
1
401st
Camp Aquino, Tarlac City
402nd
Camp Nakar, Lucena City
403rd
Camp Lapu-Lapu, Cebu City
404th
Camp Navarro, Zamboanga City
405th
Camp Ricarte, Palawan,
406th
AFPMC, V. Luna Rd., Quezon City
407th
PMA, Fort Del Pilar, Baguio City
408th
PSG
Infrastructure Contracting Office
PA Contracting Office
1
110th
Camp Lapu-lapu, Cebu
111th
Cabatangan, Zamboanga City
112th
Camp Atienza, Libis, Quezon City
PAF Contracting Office

Basa Air Base, Pampanga
1
PN Contracting Office
1
PN Engineering Headquarters
Page 134 of 224
ANNEX C-5 AND C-6
Reporting and Monitoring of

Procurement
September 2007
Page 136 of 224
Reporting and Monitoring of Procurement

1)
At the end of each quarter, the Procurement Centers or Contracting Offices prepare
and submit the Quarterly Report of all procurement activities to GHQ BAC 1 thru
AFPPS and recommend amendment to the APP as the need arises.
2)
The GHQ BAC 1 validates the Quarterly Report of Procurement and submits the report
to J4 NLT 15th day of the month following the end of the quarter covered by the
report.
3)
J4 reviews and transmits the Quarterly Report of AFPPS to CSAFP for his notation
prior to submission to GPPB.
4)
The implementation of this procurement system shall be subject to audit by the OTIA,
AFP.
September 2007
ANNEX D
Procurement thru Shopping

Mode
Page 140 of 224
Procurement thru Shopping Mode
1)
The end-user unit submits PR with complete documents to the PC or CO, indicating
therein the urgency of the requirement. In case an immediate purchase is needed,
brought about by an unforeseen contingency, the same may be undertaken directly
with a supplier and charged against cash advances.
2) The Procurement Center or Contracting Office posts invitation to submit canvass

bid/quotation in sealed envelope at their website or at its premises for a maximum of
14 CD. PC or CO issues requests for quotation to at least three (3) suppliers in good
standing. This may not apply in the case of unforeseen contingencies requiring
immediate purchase.
3) Canvass Committee of the Procurement Center or Contracting Office obtains canvass
bids/quotations in sealed envelope from at least three (3) suppliers and opens the
sealed envelopes, then evaluates the canvass bids/quotations and determines the
lowest complying price quotation.
4) Canvass Committee of the Procurement Center or Contracting Office signs Abstract of
Canvass and prepares resolution/Notice of Award (NOA) for approval of Commanding
Officer, PC/Chief, CO then serves to the winning supplier.
5) Procurement Center or Contracting Office prepares the Purchase Order (PO) and submits
to their respective Commander for approval/ signature.
6) Upon approval, MFO fiscalizes and signs Box B of the OS.
7) Supplier receives the PO and NTP, then delivers the items to the AFPPS (PC or CO) or ICP
in accordance with the PO.
8) For purposes of monitoring contingency purchases, the end-user shall submit to the
designated canvass committee within seven (7) calendar days from date of purchase,
the details of the procurement made for purposes of posting. (refer to DND Cir Nr 012006)
Performance Security is not advisable for purchases P50K and below.
September 2007
Page 142 of 224
ANNEX D-1
Procurement thru Public Bidding

below P50M
September 28, 2007
Page 144 of 224
Procurement thru Public Bidding below P50M
Procurement thru Public Bidding with an amount below P50M. The same requisitioning
procedures are to be followed under Annex C herein.
1)
PC or CO issues Bidding Request (BR) to concerned AFP BAC together with the
complete documents for the particular procurement required for the conduct of the
Public Bidding thru the BAC Secretariat.
2)
Concerned TWG of AFP BAC validates the technical specifications and present to the
AFP BAC for the preparation of the requirements in the conduct of Public Bidding.
3)
Concerned AFP BAC conducts the Public Bidding, as follows:

a)
Calls for Pre-Procurement Conference with the concerned TWG and End-User
in attendance to discuss, among others, the following: preparation of bid
documents, Terms of Reference (TOR), approved APP, certification of
availability of funds, technical specifications, eligibility requirements and
schedule of Pre-Bid Conference, Submission and Opening of Bids.
b)
Pre-procurement conference may not be required for procurement of goods

costing P2M and below, for infrastructure P5M and below, and consulting
services P1M and below.
c)
Posts Invitation to Apply for Eligibility and to Bid (ITAEB/ITB) in a newspaper

of general nationwide circulation. However, contracts to be bid with an ABC of
P2M and below for goods, P5M and below for infrastructure, and P1M and
below for consulting services, the posting shall be done only in the website of
the procuring entity; conspicuous place reserved for this purpose.
d)
Calls for Pre-Bid Conference with the prospective bidders in attendance to

discuss the technical and financial components of the contract to be bid.
However, for contracts to be bid costing less than P1M, pre-bid conference
may be conducted at the discretion of the AFP BACs.
e)
Receives and opens the bids.
f)
Evaluates and determines the lowest calculated bid (LCB)/highest rated bid
(HRB).
g)
Post-qualifies to determine the lowest

(LCRB)/highest rated responsive bid (HRRB).
h)
Declares the bidder with the LCRB/HRRB as the winning bidder and
recommends to approving authority based on DO#12 thru J4 or Maj Svc 4s
the award of contract to the winning bidder.
calculated
responsive
bid
4)
J4 or Maj Svc 4s endorses the recommendation of concerned AFP BAC together with
the Notice of Award (NOA) for approval/signature of the approving authority based on
DO#12.
5)
Approving Authority approves the recommendation and signs the NOA then sends
back to J4 or Maj Svc 4s.
6)
J4 or Maj Svc 4s forwards NOA to the PC or CO (where PR is submitted) for the

contract preparation and the subsequent issuance of Notice to Proceed (NTP).
September 2007
7)
The TWG and PC or CO prepare the contract

approval/signing by the Commander based on DO#12.
(with
suppliers
input)
for
8)
Commander of Procurement Center or Contracting Office signs Box A of the obligation

slip (OS). MFO fiscalizes and signs Box B of the OS. Accounting Center certifies the
availability of funds & signs contract as witness. Then, TJAG reviews contract prior to
the approval by appropriate authority based on DO#12. The Supplier receives copy of
the contract, as well as the corresponding NTP, then delivers the items to AFPPS or
Inventory Control Point as prescribed in the contract.
9)
The Procurement Centers or Contracting Offices prepare the Disbursement Voucher

(DV), attach the obligation slip (OS) and other pertinent documents and forward to
Accounting Center or its equivalent office for availability of cash.
10)
The Accounting Center/Office journalizes record and certify as to availability of

cash/signs Box A of DV. MFO pre-audits the DV. Then forwards DV to Finance
Service Unit (FSU).
Page 146 of 224
ANNEX D-2
Procurement thru Limited

Source Bidding below P50M
September
2007
Page 148 of 224
Procurement thru Limited Source with an amount below P50M

The same requisitioning procedures under Annex A herein are to be followed, except
that in the PR, the mode of Limited Source Bidding is being requested.
1)
GHQ BAC 1 receives procurement request for the use of Limited Source Bidding with
supporting documents.
2)
GHQ BAC 1 evaluates the request then prepares/signs the resolution for the use of
alternative mode of procurement, and recommends same to the CSAFP (thru: J4) for
approval/signature.
3)
J4 seeks legal opinion from TJAG, if necessary, and endorses the resolution to CSAFP
for approval/signature.
4)
CSAFP approves the recommendation and signs the resolution, then sends back to J4
for implementation.
5)
J4 forwards approved resolution to concerned AFP BAC, copy furnish Procurement

Center or Contracting Office, together with the supporting documents required for the
conduct of Limited Source Bidding.
6)
Concerned AFP BAC will conduct the Limited Source Bidding using the same
procedures of Public Bidding, except that only the pre-selected bidders are given the
ITAEB/ITB.
7)
Bid and performance securities are required.
September 2007
ANNEX D-3
Procurement thru Direct

Contracting below P50M
Procurement thru Direct Contracting below P50M
Procurement thru Direct Contracting below P50M

Procurement thru Direct Contracting with an amount below P50M
that the requested mode of procurement is Direct Contracting. (Note: If the ABC is P1M and
above but not to exceed P50M the Direct Contracting shall be conducted by the concerned
AFPBAC)
1)
J4 receives approved resolution for Direct Contracting and forwards same to the
Procurement Center or Contracting Office (thru channel) for implementation, copy
furnished GHQ BAC 1.
2)
PC or CO identifies the supplier from whom the goods will be procured.

procurement conference is required, hold such a conference.
3)
PC or CO thru BAC Secretariat, posts for information purposes the request for
quotation for a maximum period of 14 CD prior to sending the request for quotation in
the GEPS, the website of the procuring entity, and any conspicuous place in the
premises of the procuring entity.
4)
Canvass/Contracting Committee of the Procurement Center or Contracting Office

(where PR is issued) gets the suppliers quotation or pro-forma invoice together with
the conditions of sale, then prepares the contract for approval/signing by the
appropriate authority.
5)
Supplier gives inputs on the preparation of contract and signs. PC or CO signs

contract and Box A of the Obligation Slip (OS). MFO signs Box B of the OS. TJAG or
its Major Service counterparts reviews contract prior to its approval by appropriate
authority. Procurement Center or Contracting Office gives copy of the contract to the
supplier together with the NTP, then the latter delivers the items to the AFPPS (PC or
CO) or ICP in accordance with the contract.
6)
Performance Security is required.
If a pre-
Page 153 of 224
September 2007
ANNEX D-4
Procurement thru Repeat Order

below P50M
Page 155 of 224
September 2007
Page 156 of 224
Procurement thru Repeat Order with an amount below P50M

that the requested mode of procurement is Repeat Order. (Note: If the ABC is P1M and
above but not to exceed P50M the Repeat Order shall be conducted by the concerned
AFPBAC).
1)
J4 receives approved resolution for Repeat Order (RO) and forwards same to the
Procuring Unit or Contracting Office (thru channel) for implementation, copy furnish
GHQ BAC 1.
2)
PC or CO confirms the RO with the previous supplier, and proceeds within the
preparation of the supplemental contract and PO, using the tech specs in the bidding
documents used in the previous bidding.
3)
Procurement Center or Contracting Office prepares the PO observing the provisions

under Sec 51, Art XVI of RA 9184 and its IRR. MFO fiscalizes and signs Box B of the
OS. J4 forwards PO to TJAG for review, if necessary.
4)
The PC or CO shall forward the PO to appropriate authority for approval/signature.
5)
PC or CO thru BAC Secretariat, posts for information purposes the award.
6)
Procurement Center or Contracting Office serves the PO to the Supplier for

implementation.
7)
Supplier delivers the items to AFPPS (PC or CO) or ICP in accordance with the
contract.
8)
Performance Security is not advisable for RO P50K and below.
September2007
Page 157 of 224
September 28, 2007
ANNEX D-5
Negotiated Procurement below

P50M
Page 159 of 224
September 28, 2007
Page 160 of 224
Negotiated Procurement below P50M
Negotiated Procurement with an amount below P50M

The same requisitioning procedures under Annex A are to be followed, except that the
requested mode of procurement is Negotiated Procurement.
(NOTE: If the negotiated
procurement is under Section 53 (a) and (g) and the ABC is more than P1M but not to exceed
P50M the negotiated procurement will be conducted by concerned AFP BAC.) However, the
Contracting Office for engineering projects can negotiate with ABC up to P5M.
1)
J4 receives approved resolution for Negotiated Procurement and forwards same to the
Procurement Center or Contracting Office (thru channel) for implementation, copy
furnish GHQ BAC 1.
2)
PC or CO holds pre-procurement conference thru the concerned AFPBAC, if deemed

necessary. Likewise, posts for information purposes the procurement opportunity
thru BAC Secretariat, for a maximum period of 14 CD.
3)
If the procurement is being negotiated because of two previous failures of bidding

concerned AFPBAC shall draw up a list of at least three (3) suppliers, contractors, or
consultants in good standing which will be invited to submit bids and negotiate with
the bidder who submitted the lowest calculated bid or highest rated bid, whichever is
applicable. If the offer of the bidder who submitted the lowest calculated bid or
highest rated bid, whichever is applicable, is not responsive to the original
specifications and ABC, negotiation shall be made in ascending order starting from the
lowest offer.
The bidder whose bid is found to be responsive to the original
specifications and ABC shall be considered for award. In all cases, the award of
contract shall be posted at the G-EPS website, website of the AFP, if any, and in
conspicuous place within the premises of the AFP BAC or PC/CO.
4)
In case of imminent danger to life or property, concerned AFPBAC or PC/CO

respectively shall negotiate with a previous supplier, contractor or consultant of good
standing of the AFP concerned, or a supplier, contractor or consultant of good
standing situated within the vicinity where the calamity or emergency occurred. The
award of contract shall be posted at the G-EPS website, website of the AFP, if any,
and in conspicuous place within the premises of the AFP.
5)
Canvass/Contracting Committee of the Procurement Center or Contracting Office

(where PR is issued) negotiates with at least three (3) or more suppliers, determines
the most advantageous offer to the AFP, and recommends the award of contract to
the winning supplier for approval of appropriate authority.
6)
Upon approval of the Notice of Award (NOA), Contracting Committee of the

Procurement Center or Contracting Office serves the NOA to the Supplier and
prepares the contract together with the TWG.
7)
Supplier gives inputs on the preparation of contract and signs.
8)
The contract will be reviewed by TJAG or its Major Service counterparts prior to its
approval/signature by the approving authority.
9)
Upon approval of the contract, the Canvass/Contracting Committee of the

Procurement Center or Contracting Office furnishes a copy of the approved contract to
the Supplier, then prepares and issues NTP.
10)
Supplier delivers the items to the AFPPS (PC or CO) or ICP in accordance with the
contract.
11)
Bid and Performance Securities are required.
September
2007
Page 161 of 224
Supplemental Negotiated Procurement Procedures for Inter Agency Transferred Fund

(IATF) Projects undertaken by the AFP Corps of Engineers authorized to be undertaken by the
CO-IP.
1.
The Project Administrator (PRAD) submits Procurement Request (PR) to the

Contracting Office tasked to undertake procurement for the PRAD.
2.
The Contracting Office receives the PR, and the following documentary requirements:
2.1.a
2.1.b
2.1.c
2.1.d
2.1.e
Materials and Quantities Forms

Specifications
Material Schedule
Approved Budget of the Contract
Approved SPP authorizing the adoption of Negotiated Procurement
The Contracting Office organizes the Canvass Contracting Committee (C3)

while the PRAD creates the Technical Working Group.
2.2
The composition of the Canvass Contracting Committee is as follows:
Chairman Ex-O of the Contracting Office - Engineering (CO-E)

Financial Member MFO of the PRAD
Legal Member SJA or equivalent of PRAD
Technical Member - Brigade G4 of the PRAD or Bn Ex-O of the
Implementing Unit
Secretary Officer from CO-E (at least O2)
2.3 The composition of the Technical Working Group is as follows:
Chairman: Selected officer from PRAD (at least O-4)
Members: One (1) Logistics Officer
One (1) Financial Analyst
One (1) Officer (at least O-3) as technical member
One (1) Procurement NCO
The Contracting Office calls for a pre procurement conference.
3.1
3.2
3.3
CO-IP
consolidates
procurement
documents
for
negotiated
procurement.
CO-IP selects a previous supplier/contractor/consultant of the AFP of
good standing or supplier/contractor/consultant of good standing
within the locality in coordination with the PRAD.
C3
prepares
Letter
of
Invitation
to
the
selected
supplier/contractor/consultant.
C3 conducts pre-bid conference with the selected supplier/contractor/consultant of

good standing in the AFP or supplier/contractor/consultant of good standing within the
locality.
4.1
C3 issues Letter of Invitation with attached Canvass/Bid Proposal to
selected supplier/contractor/consultant inviting him to submit a price quotation or a pro-forma
invoice together with the condition of sale based on items of 2.1a d;
4.2
The letter of invitation also sets the schedule of submission and
opening
of
the
price
quotation
or
pro-forma
invoice.
The
selected
supplier/contractor/consultant shall submit his updated eligibility requirements at least three
(3) days before the submission of the price quotation.
On a pre-determined date, the C3 opens the price quotation of the selected
supplier/contractor/consultant.
September 2007
Page 162 of 224
C3 prepares the Notice of Award and submits it to the authorized approving

authority.
Approving authority signs the Notice of Award.
C3 and TWG prepare the contract.
After signing by the parties of the contract, it shall be forwarded to the appropriate
authority for approval.
Chief, CO-IP issues the Notice to Proceed and publishes the Award of Contract in the
G-EPS website, at the website of the AFP, and conspicuous place within the premises of the
concerned CO-IP.
September
2007
ANNEX D-6
Procurement with an amount of

P50M and Above
Page 165 of 224
September 28, 2007
Page 166 of 224
Procurement with an amount of P50M and Above
1)
Requesting Units submit PR to J4 (thru channel) together with the technical

specifications of the items requested and other pertinent documents.
2)
J4 forwards PR to CSAFP for approval and signature on the Letter to SND for the DND
BAC to conduct Public Bidding or issue a resolution for the use of alternative mode of
procurement.
3)
The DND BAC undertakes the Public Bidding, gives authority to the AFP for the use of
alternative mode of procurement or undertakes the alternative mode of procurement,
as the case may be.
4)
Upon issuance of the Notice of Award by SND or CSAFP (if delegated by SND) the
AFP, through the concerned Procurement Center together with TWG and supplier,
prepares the contract for approval/signature of SND, and issues the NTP upon
approval of the contract.
5)
Supplier, upon receipt of the approved contract and NTP, delivers the items to the
AFPPS (PC or CO) or ICP in accordance wit the contract.
September 2007
ANNEX D-7
Procurement thru PS DBM
Page 170 of 224
Procurement thru PS DBM

1)
Upon receipt of certification from concerned SAO at their level on the non-availabilityin-stocks of requested items, requesting Unit fills-up the Agency Procurement Request
(APR) Form prescribed by PS DBM and forwards to the approving authority based on
DO#12 thru Logistics Staff Office (LSO) for signature and in turn, submits APR to
PSDBM.
2)
Once the APR has been approved, LSO forwards approved APR together with the
approved APP, PR, CFC and SAO certificate of non-availability of stocks to PC or CO
for the preparation of disbursement Voucher (DV) to facilitate the fund transfer to PS
DBM.
3)
If approving authority is the Maj Service Commander, IABAC/PS, DBM receives

directly the APR with complete documents required for the conduct of public bidding.
a)
If approving authority is CSAFP, APR is forwarded to J4. Likewise, if the

procurement is under the approving authority of VCSAFP for units catered to
by GHQ PC and its Contracting Offices, APR shall be forwarded to J4. Then J4
transmits the APR to VCSAFP or CSAFP.
b)
VCSAFP or CSAFP approves the APR and sends back to J4.
c)
J4 forwards the duly approved APR to PC or CO who will serve APR to PS DBM.
d)
IABAC-PSDBM receives APR and conducts bidding.
4)
Concerned TWG will monitor and provide the requirements of IABAC-PSDBM

pertaining to such procurement.
5)
PS DBM together with the supplier facilitates the delivery of items to the AFPPS or
end-users ICP in accordance with the contract, which in turn, receives the items for
safe keeping.
6)
SAO/RSO of concerned PC or CO notifies TIAC and MFO for inspection of delivery.
7)
Concerned TIAC together with PS DBM and MFO representative/s inspects/accepts the
items and furnishes acceptance report to PC or CO for reference and documentation.
8)
AFPPS or ICP accepts the items thru SAO
9)
Units Supply Office receives the items using appropriate documents.
September, 2007
ANNEX E
EO 235 & DO 165
Page 173 of 224
September 28, 2007
Page 174 of 224
Executive Order No. 235
STREAMLINING THE RULES AND PROCEDURES OF DEFENSE CONTRACTS

WHEREAS, in line with the government's program of good governance, there is a need to
streamline procedures for defense contracts for the expeditious implementation of defense projects
and the speedy response to security threats while promoting transparency, impartiality, and
accountability in government transactions;
WHEREAS, to achieve the foregoing, the Task Force created by the undersigned to study the
procurement process and fund disbursement system of the AFP has recommended the issuance of
an Executive Order to streamline the rules and procedures on defense contracts;
NOW, THEREFORE, I GLORIA MACAPAGAL-ARROYO, President of the Philippines, by virtue of the
powers vested in me by law, do hereby order:
Section 1. Signing and Approving Authority. Except for contracts required by law to be acted upon
and/or approved by the President, the Secretary of National Defense shall have the authority to
sign and/or approve Government contracts of the Department of National Defense and any of its
bureaus, offices or agencies, before the Government contract shall be considered approved in
accordance with law and binding on the Government; Provided, however, that the Secretary of
National Defense may delegate in writing to appropriate officials, subject to appropriate ceilings,
this authority to sign and/or approve a Government contract below Fifty Million Pesos (P50 Million),
as he sees fit under the circumstances: Provided, further, that for Government contracts of the
Armed Forces of the Philippines involving an amount below Fifty Million Pesos (50 Million), the
Chief of Staff of the Armed Forces of the Philippines shall have full authority to sign the same.-,
Section 2. Creation of a Single GHQ BAC; Composition. In accordance with and subject to the
provisions of law, for the purposes of the immediately preceding Section, the Armed Forces of the
Philippines shall be considered as a procuring entity with respect to Government contracts
pertaining to it, and it shall establish in its General Headquarters (GHQ) a single Bids and Awards
Committee (BAC) to undertake all public biddings therein. The GHQ BAC shall be composed of the
following
members:
Regular Members:
1.
Chairman, who is at least a third ranking permanent officer of the Armed Forces of the
Philippines;
2.
An officer, who is at least a fifth ranking permanent officer of the Armed Forces of the
Philippines, with knowledge, experience, and/or expertise in procurement and, to the
extent possible, represents the legal or administrative area of the Armed Forces of the
Philippines;
3.
An officer, who is at least a fifth ranking permanent officer of the Armed Forces of the
Philippines, and, to the extent possible, represents the finance area of the Armed Forces of
the Philippines;
Provisional members:
4.
An officer of the subordinate unit of the Armed Forces of the Philippines to which the
procurement pertains, who has technical expertise relevant to the procurement at hand,
and, to the extent possible, has knowledge, experience, and/or expertise in procurement;
and
5.
A representative from the end user unit who has knowledge of procurement laws and
procedures.
September 2007
Page 175 of 224
The members of the BAC, including the Chairman and the Vice-Chairman, shall be designated by
the Chief of Staff of the Armed Forces of the Philippines. Moreover, the Vice-Chairman shall be
selected from among the regular members of the BAC.
Section 3. BAC Secretariat; Technical Working Group. The Chief of Staff of the Armed Forces of the
Philippines shall create a Secretariat which shall serve as the main support unit of the BAC. He
may designate an existing organic office within the GHQ to serve as Secretariat. However, he may
reorganize any relevant unit within the GHQ by designating it as a BAC Secretariat and redeploying
appropriate existing personnel to it to perform this function, as well as procurement related tasks.
The Head of the BAC Secretariat shall be at least a fifth ranking permanent employee.
The BAC shall be supported by a Technical Working Group. For this purpose each subordinate unit
of the Armed Forces of the Philippines shall maintain a pool of technical, financial and legal
experts, which pool may be called upon by the. BAC, depending on the type of procurement
involved, to assist in the procurement process, particularly in the review of bidding documents, in
the eligibility screening, evaluation of bids and post-qualification.
Section 4. This Executive Order takes effect immediately.
11 September 2003
By the President:
(Sgd.) GLORIA M. ARROYO
(Sgd.) ALBERTO G. ROMULO

Executive Secretary
September 2007
Page 176 of 224
Department Order No. 165
September 2007
Page 177 of 224
September 2007
Page 178 of 224
September 2007
ANNEX F
Page 181 of 224
September 2007
Page 182 of 224
September 2007
Page 183 of 224
September 2007
Page 184 of 224
September 2007
Page 185 of 224
September 2007
Page 186 of 224
September 2007
Page 187 of 224
September 2007
Annex G
GPPB Resolution No. 18-2006
Page 191 of 224
APPROVING AND ADOPTING THE REVISED GUIDELINES FOR THE IMPLEMENTATION OF

INFRASTRUCTURE PROJECTS BY ADMINISTRATION
WHEREAS, Republic Act No. 9184 (R.A. 9184), otherwise known as Government
Procurement Reform Act and its Implementing Rules and Regulations Part A (IRR-A) took effect
on January 26, 2003 and October 8, 2003, respectively;
WHEREAS, under Section 53 (b) of the IRR-A, in exceptional cases expressed therein, the
procuring entity has the option to undertake infrastructure projects through negotiated
procurement, by administration or, in high security risk areas, through the Armed Forces of the
Philippines (AFP);
WHEREAS, pursuant thereto, the Government Procurement Policy Board (GPPB), through
Resolution No. 13-2005 issued the Guidelines for the Implementation of Infrastructure Projects
through Negotiated Procurement under Section 54.2 (d) of IRR-A of RA 9184 and By
Administration which took effect last 26 September 2005;
WHEREAS, there is a need to revise the above-mentioned guidelines in view of recent
amendments to the provisions on negotiated procurement under Section 54.2 (b) and (d) of the
IRR-A of R.A. 9184 under Memorandum Order No. 213 dated May 8, 2006, and to harmonize the
provisions of the guidelines with the special provisions for the Department of Public Works and
Highways (DPWH) under the General Appropriation Act (GAA) governing implementation of
projects by Administration or Force Account;
WHEREAS, the GPPB in its 5th meeting on 06 December 2006 discussed and unanimously
agreed to adopt the revised guidelines on the implementation of projects by administration;
NOW, THEREFORE, premises considered, WE, the Members of the GOVERNMENT PROCUREMENT
POLICY BOARD, by virtue of the powers vested on US by law, hereby RESOLVE to approve and
adopt, as WE hereby approve and adopt the Revised Guidelines for the Implementation of
Infrastructure Projects By Administration, attached hereto as Annex A and made an integral
part hereof.
APPROVED this 6th day of December 2006 at Pasig City, Philippines
_____________________________________
ROLANDO G. ANDAYA JR.
Secretary
Department of Budget and Management
_____________________________________
ROMULO L.NERI
Director General
National Economic and Development Authority
_____________________________________
NATIONAL ECONOMIC AND DEVELOPMENT
AUTHORITY
_____________________________________
DEPARTMENT OF NATIONAL DEFENSE
_____________________________________
DEPARTMENT OF EDUCATION
_____________________________________
DEPARTMENT OF HEALTH
_____________________________________
_____________________________________
September 2007
Page 192 of 224
DEPARTMENT OF THE INTERIOR AND LOCAL

GOVERNMENT
DEPARTMENT OF ENERGY
_____________________________________
DEPARTMENT OF PUBLIC WORKS AND
HIGHWAYS
_____________________________________
DEPARTMENT OF FINANCE
_____________________________________
DEPARTMENT OF TRADE AND INDUSTRY
_____________________________________
DEPARTMENT OF SCIENCE AND
TECHNOLOGY
_____________________________________
DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS
_____________________________________
PRIVATE SECTOR REPRESENTATIVE
Attested by:
____________________________________
RUBY U. ALVAREZ
Board Secretary, GPPB
Executive Director, GPPB-TSO
September 2007
Page 193 of 224
GUIDELINES FOR THE IMPLEMENTATION OF INFRASTRUCTURE PROJECTS BY

ADMINISTRATION
1.0
Purpose and Coverage

These guidelines shall provide rules for the implementation of projects by
administration by all Departments, Bureaus, Offices and Agencies of the National
Government (NGA), Government-Owned and/or Controlled Corporations (GOCCs),
Government Financing Institutions (GFIs), State Universities and Colleges (SUCs), and
Local Government Units (LGUs).
Projects undertaken by administration by the Armed Forces of the Philippines Corps
of Engineers (AFPCOE) shall be governed by the guidelines issued by the GPPB
through Resolution 09-2005 dated 28 April 2005.
2.0
Definition of Terms
For purposes of these guidelines, the following terms shall be defined as follows:
2.1
By Administration refers to the procedure by which the implementation of

an infrastructure project is carried out under the administration and
supervision of the concerned agency through its own personnel.
2.2
Implementing Agency refers to any government unit undertaking the

construction of an infrastructure project.
2.3
Job-Contractor refers to a person or entity who carries out, under his own
responsibility, supervision and control, the performance or completion of a
specific job, service or work which has been farmed out by another for the
latters benefit.
2.4
Job-order refers to employment of individuals to undertake piece or lump

sum works, or intermittent jobs of short duration not exceeding six months on
a daily basis.
2.5
Labor-only Contractor refers to a person or entity that engages in the

supply of workers/laborers to an employer but does not have substantial
capital or investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and placed perform
activities directly related to the principal business of the employer.
2.6
Pakyaw refers to a system of hiring a labor group for the performance of a

specific work and/or service incidental to the implementation of an
infrastructure project by administration whereby tools and materials are
furnished by the implementing agency. For the specific work/service output, a
lump-sum payment is made either through the group leader or divided among
the pakyaw workers and disbursed using a payroll system.
2.7
Semi-skilled Work/Job refers to a work/job which needs some skills but

does not require doing the more complex work duties. Semi-skilled jobs may
require alertness and close attention to watching machine processes; or
inspecting, testing or otherwise looking for irregularities; or tending or
guarding equipment, property, materials, or persons against loss, damage or
injury; or other types of activities which are similarly less complex than skilled
work, but more complex than unskilled work. A job may be classified as semiskilled where coordination and dexterity are necessary, as when hands or feet
must be moved quickly to do repetitive tasks.
2.8
Skilled Work/Job refers to work that requires qualifications in which a

person uses judgment to determine the machine and manual operations in
order to obtain the proper form, quality, or quantity of material to be
produced. Skilled work may require laying out work estimating quality,

2007
September
Page 194 of 224
determining the suitability and needed quantities of materials, making precise

measurements, reading blueprints or other specifications, or making
necessary computations or mechanical adjustments to control or regulate the
work.
2.9
3.0
Unskilled Work/Job refers to work which needs little or no judgment that

can be learned on the job in a short period of time. The job may or may not
require considerable strength.
Conditions and Requirements for the use of By Administration

3.1
Projects undertaken by Administration shall be included in the approved

Annual Procurement Plan (APP) of the procuring entity concerned. If the
original mode of procurement recommended in the APP was Public Bidding but
cannot be ultimately pursued, or the project to be undertaken by
administration has not been previously included, the BAC, through a
resolution shall justify and recommend the change in the mode of
procurement or the updating of the APP to be approved by the Head of the
Procuring Entity.
3.2
To undertake projects by administration, the implementing agency must:

a.
have a track record of having completed, or supervised a project, by

administration or by contract, similar to and with a cost of at least fifty
percent (50%) of the project at hand, and
b.
own the tools and construction equipment to be used or have access to

such tools and equipment owned by other government agencies.
The criteria for evaluating the track record and capability of implementing
agencies shall be in accordance with the guidelines to be issued by the
Department of Public Works and Highways in consultation with the leagues
enumerated under the Local Government Code.
3.3
Any project costing Five Million (P 5,000,000) or less may be undertaken by

administration or force account by the implementing agency concerned. A
project costing over Five Million (P 5,000,000) may be undertaken by the
agency concerned only in the following cases:
a.
b.
c.
d.
e.
emergency arising from natural calamities or where immediate action is

necessary to prevent imminent loss of life or property;
to comply with government commitments, as certified by the concerned
government authority;
failure to award a contract after competitive bidding for a valid cause;
termination or rescission of contract;
areas with critical peace and order problems as certified by the Local
Peace and Order Council;
PROVIDED, that prior authority shall be obtained from the Secretary of

Public Works and Highways, if the project cost is Five Million (P5,000,000) up
to Twenty Million (P20,000,000), or from the President of the Philippines,
upon the favorable recommendation of the Secretary of Public Works and
Highways, if the project cost is more than Twenty Million (P 20,000,000).
3.4
No contractor shall be used by the procuring entity, directly or indirectly for

works undertaken by administration.
3.5
Procurement of tools and construction equipment shall be subject to the rules

on public bidding.

2007
September
Page 195 of 224
4.0
3.6
For projects funded by the National Government and implemented by a Local

Government Unit, the latter shall be required to post the necessary warranty
security in accordance with Section 62 of RA 9184 and its IRR-A.
3.7
The manual labor component of projects undertaken by administration may be

undertaken in-house by the implementing agency concerned, by job-order or
through the pakyaw contracting system. In-house labor is undertaken if the
workers are employees or personnel occupying regular plantilla positions in
the implementing agency. Job-order contracts shall be governed by relevant
Commission on Audit (COA) and/or Civil Service Commission (CSC) rules.
Pakyaw Contracting System

4.1
Pakyaw labor shall be drawn from the vicinity of the project, or Pakyaw labor
groups belong to various Barangay Associations contiguous to the project site.
Unskilled labor should be drawn from the Barangay where the project is
located; semi-skilled labor shall be recruited within the municipality,
preferably within the Barangay; skilled labor shall be recruited within the
province but preferably within the Barangay/Municipality.
4.2
The formation of Pakyaw Groups should actively involve the Barangay leaders
and the community. A Project Facilitator (PF) shall be appointed by the
implementing agency to assist in the organization of the Pakyaw Groups and
in the preparation of the Pakyaw Contracts. The PF shall, for purposes of
informing the community of the project and of organizing pakyaw groups,
shall convene community meetings, with the assistance of the Barangay
Chairperson/s. The PF shall cause the registration of all unemployed or
underemployed members of the community who are interested to join Pakyaw
groups being formed for the project.
4.3
The Pakyaw workers should be formed into groups of workers based on the
lump sum works. In case of competitive selection, pakyaw groups which were
not selected for a particular lump sum work may choose to compete for other
works requiring pakyaw groups.
4.4
Where there is competition for the award of Pakyaw works, the pakyaw labor
contract shall be awarded through competitive selection with at least three (3)
Pakyaw Groups participating. There is deemed to be a competition for the
award of pakyaw contracts when the number of laborers who registered
during the community meeting is more than what is reasonably needed for
the lump sum work required under the project. The competitive selection shall
be done on a per-output basis. And the winner(s) shall be determined based
on what group(s) undertake(s) to deliver the desired output at the lowest
rate, either per item of output or per lump sum work, within the required
period.
4.5
For purposes of Item 4.4 hereof, the number of members per group shall be
determined by the Project Facilitator to ensure that at least three Pakyaw
Groups are organized for the competitive selection. The determination by the
Project Facilitator of the number of members per Pakyaw Group shall be
exercised with regard to the objective of providing work to as many laborers
as possible.
4.6
A Group Leader shall be elected from among the members of the group who
shall be the signatory to the Pakyaw Contract and any other documents
pertaining to the work on behalf of the Pakyaw Group. He may be replaced at
any time by the group through an election for that purpose, after due notice
to the Project Facilitator and the Barangay Chairperson. Any such replacement
shall not invalidate any previous Pakyaw Contract.
4.7
In no case may Pakyaw Groups be regular or licensed contractors or

organized by and/or under the management of a regular or licensed

2007
September
Page 196 of 224
contractor. Laborers supplied by job-contractors/labor-only contractors are

likewise disqualified to become members of the Pakyaw groups when the jobcontracting/labor-only contracting is specifically carried out for the purpose.
4.8
6.0
The amount of a pakyaw labor contract per project shall not exceed Five
Hundred Thousand Pesos (P500,000.00) per pakyaw group.
Repealing Clause
This set of guidelines repeals GPPB Resolution 13-2005 approving and adopting the
Guidelines for the Implementation of Infrastructure Projects through Negotiated
Procurement under Sec. 54.2 (d) of IRR-A of RA 9184 and by Administration.
7.0
Effectivity
These Guidelines or any amendments hereto shall take effect fifteen (15) days after
publication in the Official Gazette or in a newspaper of general nationwide circulation
and upon filing with the University of the Philippines Law Center of three (3) certified
copies of these guidelines.

2007
September
NNEX H
Page 198 of 224

2007
September
Page 199 of 224

2007
September
Page 200 of 224

2007
September
Page 201 of 224

2007
September
Page 202 of 224

2007
September
ANNEX I
Page 204 of 224
Page 205 of 224
AMENDING GPPB RESOLUTION NO. 06-2003 WHICH ENUMERATES THE RELEVANT

PROVISIONS OF REPUBLIC ACT NO. 7898 THAT WERE AMENDED BY REPUBLIC ACT
NO. 9184
WHEREAS, Republic Act No. 7898 (R.A. 7898), entitled An Act Providing for the
Modernization of the Armed Forces of the Philippines and for other Purposes, contains
provisions on procurement procedures and practices that are peculiar to the Modernization
Program of the Armed Forces of the Philippines;
WHEREAS, Republic Act No. 9184 (R.A. 9184), entitled An Act Providing for the
Modernization, Standardization and Regulation of the Procurement Activities of the
Government for other Purposes, and its Implementing Rules and Regulations Part A (IRR-A)
took effect on 26 January 2003 and 8 October 2003, respectively;
WHEREAS, Section 76 of R.A. 9184 and Section 75 of its IRR-A provide that the relevant
provisions of R.A. 7898 are repealed, and that any other law, presidential decree or
issuances, executive order, letter of instruction, administrative order, proclamation, charter,
rule or regulation and/or parts thereof contrary to or inconsistent with provisions of R.A. 9184
are repealed, modified or amended accordingly;
WHEREAS, the Government Procurement Policy Board (GPPB), issued GPPB Resolution
No. 06-2003 dated 1 December 2003, confirming that R.A. 9184 amended Sections 4(b),
10(b) and 14 of R.A. 7898 pursuant to Section 76 of R.A. 9184 and Section 75 of its IRR-A;
WHEREAS, under GPPB Resolution No. 06-2003, it was recognized that Section 4 (b) of
R.A. 7898 was amended by restricting the application of the third and fourth restrictions on
purchase of major equipment, including that of limiting suppliers to those who are themselves
manufacturers, to cases where procurement are from foreign sources;
WHEREAS, GPPB Resolution No. 02-2004, dated 19 March 2004 and GPPB Resolution
18-2005, dated 12 September 2005 providing guidelines in the determination of eligibility of
foreign suppliers, contractors, and consultants, expressly specify that foreign bidders may
either be manufacturers, suppliers and/or distributors, thereby impliedly repealing the
limitation that only foreign suppliers who are themselves manufacturers are eligible to bid;
WHEREAS, there is a need to provide a categorical declaration that GPPB Resolution
Nos. 02-2004 and 18-2005 amended GPPB Resolution No. 06-2003 in order to reflect the
uniform policy on competition provided under R.A. 9184 and its IRR-A;
GOVERNMENT PROCUREMENT POLICY BOARD, by virtue of the powers vested on US by law, hereby
CONFIRMS that, to conform with the provisions of R.A. 9184, the fourth proviso in Section 4(b)
of R.A. 7898, which states Provided, furthermore, That only offers from suppliers who are
themselves the manufacturers shall be entertained was impliedly repealed by R.A. 9184 and
its IRR-A. Thus, Section 4(b) of R.A. 7898 now reads:
Section 4 (b) Capability, material, and technology development. The AFP
modernization program entails the development and employment of certain
capabilities that can address the assessed threats:
Provided that, the
acquisition of air force, navy and army equipment and material of such types
and quantities shall be made in accordance with the need to develop APF
capabilities pursuant to its modernization objectives: Provided, further, That
the acquisition of new equipment and weapons system shall be synchronized
with the phase-out of uneconomical and obsolete major equipment and weapons
system in the AFP inventory: Provided, even further, That in the case of
procurement from foreign sources, no major equipment and weapons system

2007
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Page 206 of 224
shall be purchased if the same are not being used by the armed forces in the
country of origin or used by the armed forces of at least two countries:
Provided, finally, That no supply contract shall be entered into unless such
contract provides for, in clear and unambiguous terms, and after-sales services
and the availability of spare parts.
APPROVED this 6th day of December, 2006 at Pasig City, Philippines.
_____________________________________
ROLANDO G. ANDAYA, JR.
Secretary
_____________________________________
ROMULO L. NERI
Director General
_____________________________________
AUTHORITY
_____________________________________
_____________________________________
_____________________________________
_____________________________________
DEPARTMENT OF INTERIOR AND LOCAL
GOVERNMENT
_____________________________________
_____________________________________
HIGHWAYS
_____________________________________
_____________________________________
_____________________________________
TECHNOLOGY
_____________________________________
COMMUNICATIONS
_____________________________________
Attested by:
____________________________________
RUBY U. ALVAREZ

ANNEX J
Page 209 of 224

APPROVING THE GUIDELINES FOR LEGAL ASSISTANCE AND INDEMNIFICATON OF
BIDS AND AWARDS COMMITTEE (BAC) MEMBERS AND BAC SUPPORT STAFF1
WHEREAS, Republic Act No. 9184 (R.A. 9184), otherwise known as Government
Procurement Reform Act and its Implementing Rules and Regulations Part A (IRR-A) took
effect on 26 January 2003 and 08 October 2003 respectively;
WHEREAS, the Government Procurement Policy Board (GPPB) under Section 63 of the
IRR-A of RA 9184 is mandated to formulate and amend public procurement policies, rules and
regulations, whenever necessary;
WHEREAS, Section 72 Republic Act No. 9184 provides that all the members of the BAC
are hereby authorized to engage the services of a private lawyers or external counsel
immediately upon receipt of Court Notice that a civil or criminal action, suit or proceeding is
filed against the BACthem or against any of themits members;
WHEREAS, Section 73 of R.A. 9184 provides that the GPPB shall establish an equitable
indemnification package for public officials providing services in the BAC, which may be in the
form of free
legal assistance, liability insurance, and other forms of protection and
indemnification for all costs and expenses reasonably incurred by such persons in connection
with any civil or criminal action, suit or proceeding to which they may be, or have been made,
a party by reason of the performance of their functions or duties, unless they are finally
adjudged in such action or proceeding to be liable for gross negligence or misconduct or grave
abuse of discretion;
WHEREAS, there is a need to prescribe the rules and procedures in granting legal
assistance and indemnification to the Bids and Awards Committee (BAC) members and BAC
Support Staff and establish the legal parameters for its effective implementation;
WHEREAS, during the 8th 9th GPPB meeting held on 12 07 OctoberSeptember 2005 at
Unit 2506 Raffles Corporate Center, F. Ortigas Jr. Road, Ortigas Center, Pasig City, the
members of the Board discussed and unanimously approved the Guidelines for Legal
Assistance and Indemnification of Bids and Awards Committee (BAC) Members, a copy of
which is attached hereto as Annex A, and forms an integral part hereof;
GOVERNMENT PROCUREMENT POLICY BOARD, by virtue of the powers vested on US by law, hereby
RESOLVE to confirm, adopt and approve, as WE hereby confirm, adopt and approve, the
Guidelines for Legal Assistance and Indemnification of Bids and Awards Committee (BAC)
Members and BAC Support Staff attached hereto as Annex A.
APPROVED this 127th
Philippines
th
day of
OctoberSeptember, 2005 at Pasig City,
GPPB RESOLUTION NO. 21-2005, 7 October 2005
September 2007
Page 210 of 224
_____________________________________
ROMULO L. NERI
Secretary
_____________________________________
AUGUSTO B. SANTOS
Director General
_____________________________________
AUTHORITY
_____________________________________
_____________________________________
_____________________________________
_____________________________________
GOVERNMENT
_____________________________________
_____________________________________
HIGHWAYS
_____________________________________
_____________________________________
_____________________________________
TECHNOLOGY
_____________________________________
COMMUNICATIONS
_____________________________________
Attested by:
____________________________________
JOSE MARTIN C. SYQUIA

2007
September
ANNEX K
Page 212 of 224

September 2007
Page 213 of 224
APPROVING AND ADOPTING THE GUIDELINES ON THE USE OF AN ORDERING

AGREEMENT UNDER THE GOVERNMENT PROCUREMENT REFORM ACT
WHEREAS, Republic Act No. 9184 (R.A. 9184), entitled An Act Providing for
Modernization, Standardization and Regulation of the Procurement Activities of the
Government for other Purposes, was signed into law on January 10, 2003, and took effect on
January 26, 2003. On the other hand, its Implementing Rules and Regulations Part A (IRRA) took effect on October 8, 2003;
WHEREAS, Section 63.1 of the IRR-A of R.A. 9184 provides that the Government
Procurement Policy Board (GPPB), as established in Section 63 of R.A. 9184 shall have the
power to formulate and amend public procurement policies, rules and regulations, and
amend, whenever necessary the IRR-A;
WHEREAS, there is a need to prescribe the procurement rules and procedures to govern
situations wherein the procurement by national government, its departments, bureaus, offices
and agencies, including state universities and colleges, government-owned and/or controlled
corporations, government financial institutions and local government units intend to procure
non-inventory parts necessary to maintain the operational effectiveness of existing major
equipment which necessitates entering into ordering agreements;
WHEREAS, the items to be covered by the ordering agreements are limited only to
those although identified, becomes necessary only upon the happening of a fortuitous event
where the exact time of the need of such parts cannot be accurately pre-determined; and it is
inadvisable for procuring entities to carry it on stock or commit to purchase a certain quantity
within a given period;
WHEREAS, the members of the Technical Working Group of the GPPB have reviewed the
draft Guidelines on the Use of an Ordering Agreement under the Government Procurement
Reform Act during its meeting held on March 17, 2005;
WHEREAS, during the 3rd GPPB meeting held on April 1, 2005
Corporate Center, Ortigas Center, Pasig City, the Members of the Board
and unanimously agreed to approve and adopt the Guidelines on
Agreement Under the Government Procurement Reform Act, a copy
hereto as Annex A to form an integral part hereof;
at Unit 2506 Raffles

discussed, considered
the Use of Ordering
of which is attached
NOW, THEREFORE, for and in consideration of the foregoing, WE, the Members of the GOVERNMENT
PROCUREMENT POLICY BOARD, by virtue of the powers vested in US by law, hereby RESOLVE to
approve and adopt the GUIDELINES ON THE USE OF ORDERING AGREEMENT UNDER THE
GOVERNMENT PROCUREMENT REFORM ACT, attached hereto as Annex A.
APPROVED this 1st day of April, 2005 at Pasig City, Philippines

September 2007
Page 214 of 224
_____________________________________
EMILIA T. BONCODIN
Secretary
_____________________________________
ROMULO L. NERI
Director General
_____________________________________
AUTHORITY
_____________________________________
_____________________________________
_____________________________________
_____________________________________
GOVERNMENT
_____________________________________
_____________________________________
HIGHWAYS
_____________________________________
_____________________________________
_____________________________________
TECHNOLOGY
_____________________________________
COMMUNICATIONS
_____________________________________
Attested by:
____________________________________
JOSE MARTIN C. SYQUIA

September 2007
Page 215 of 224
GUIDELINES ON THE USE OF AN ORDERING

AGREEMENT UNDER THE GOVERNMENT PROCUREMENT REFORM ACT
1.
SCOPE AND APPLICATION

These guidelines shall govern the use of ordering agreements; limited to situations
where the national government, its departments, bureaus, offices and agencies,
including state universities and colleges, government-owned and/or controlled
corporations, government financial institutions and local government units intend to
procure non-inventory parts necessary to maintain the operational effectiveness of
existing major equipment; the requirement thereof, although identified, becomes
necessary only upon the happening of a fortuitous event. In which case, the quantity
and the exact time of need for said parts cannot be accurately pre-determined.
Therefore, for reasons of economy, keeping in stock of said parts for possible future
use or by procuring them for inventory shall be disadvantageous to the government.
This excludes parts required for routine maintenance, the volume and delivery time
being determinable at an earlier period.
2.
PURPOSE
These guidelines are formulated to meet the following objective:
To prescribe the procurement rules and procedures to govern situations wherein the
procurement by the national government, its departments, bureaus, offices and
agencies, including state universities and colleges, government-owned and/or
controlled corporations, government financial institutions and local government units
necessitate entering into ordering agreements for parts of unknown quantity; and it is
inadvisable for said procuring entity to carry it on stock or commit to purchase a
certain quantity within a given period.
3.
DEFINITION OF TERMS
a.
Non-inventory items. Refer to non-routinary or non-recurring requirements

not ordinarily kept in stock by the procuring entity but which may become
necessary upon the happening of a fortuitous event.
b.
Unknown Quantity. Refers to a situation where, in the procurement of

certain items, it can not be determined in advance that a definite/certain
quantity will be required within a given period.
c.
Delivery Order Contract. Refers to a contract that authorizes and obligates

a supplier to deliver a certain quantity of items within an agreed period
pursuant to the Ordering Agreement entered into between the procuring
entity and said supplier. For purposes of these guidelines, the Delivery Order
Contract shall signify exercise by the procuring entity of the option to
purchase in the amount and quantity not exceeding those indicated in the
Ordering Agreement List and shall constitute the actual purchase by the
procuring entity.
d.
Ordering Agreement. Refers to a written instrument of understanding,

negotiated between the procuring entity and the Lowest Calculated and
Responsive Bidder and used to expedite the procurement process when
anticipated needs for specific items are not known. It grants the procuring
entity the option to either place an order or not buy at all, within a given
period of time. The Ordering Agreement shall contain (1) terms and clauses
applying to future contracts (orders) between the parties during its term, (2)
a description, as specific as practicable, of supplies to be delivered including
lead time for the receipt thereof, and (3) methods for issuing and delivering
future orders under the ordering agreement.

September 2007
Page 216 of 224
e.
4.
Order Agreement List. List of parts and their corresponding quantities that
by its nature have been identified to be of the type where procurement
utilizing an Order Agreement is the most practical, economical, and
advantageous for a procuring entity.
PROCUREMENT PLANNING
4.1.
No procurement shall be undertaken under these guidelines unless the

same is in accordance with the Annual Procurement Plan (APP) and the
Project Procurement Management Plan (PPMP) prepared by the procuring
entity. The procuring entity, in preparing its APP, shall include, for purposes of
entering into an Ordering Agreements, an Order Agreement List which shall
remain unchanged, neither to be increased or decreased after advertisement
and during its life span of one (1) year.
4.2.
The APP shall indicate the types of items considered for inclusion in
the Order Agreement List.
4.3.
The Order Agreement List shall indicate the following information:

i.
ii.
iii.
iv.
v.
vi.
5.
The type and nature of the item to be procured;

The technical specifications of the item;
The estimated quantity in the event that the need for
the product arises;
The estimated unit contract price;
The total ABC including budgetary allotments per
type of product; and
Other appropriate information as may be required.
4.4.
The estimated agency unit contract price per item shall be determined
after careful consideration of variables that may affect future market prices.
4.5.
The estimated quantity of items to be procured should not exceed the

expected number to be required by the agency should the need arise; in
which case, such estimated quantity of items shall not be deemed as the
minimum purchase. It shall be used only for the purpose of approximating a
quantity of items which will be needed by the procuring entity and which the
supplier is bound to deliver upon the happening of a fortuitous event.
4.6.
The total ABC shall be the ceiling amount for any item or a
combination of items to be purchased under the Delivery Order Contract/s.
COMPETITIVE BIDDING
5.1.
The procuring entity shall package the contract for Ordering

Agreements in the most practicable manner and conduct the bidding using the
single stage, three-envelope procedure as prescribed in Sections 23 and 25 of
R.A. 9184 and its IRR-A, whereby bidders are to bid on a per item basis as
presented in the Ordering Agreement List. For this purpose, the procuring
entity, through its BAC, shall prepare separate Technical Specifications and/or
Terms of Reference for every line item to be bid out and indicate, among
others; (1) an estimate of the budgetary allocation for each item, (2) the
estimated quantity it may procure when needed, and (3) the requested
delivery lead time from execution of Delivery Order Contract or from any date
determined by the procuring entity.
5.2.
The eligibility requirements shall include, among others, the capacity

of the bidder to deliver the estimated quantity as prescribed in the Ordering
Agreement List.

September 2007
Page 217 of 224
6.
7.
5.3.
The Lowest Calculated and Responsive Bidders, determined in

accordance with the provisions of the Implementing Rules and Regulations
Part A of R.A. 9184, shall be declared and recommended to the Head of the
procuring entity for the issuance of the Notice of Award.
5.4.
Within a period of fifteen (15) calendar days, in case of NGAs, and

thirty
(30)
calendar
days,
in
case
of
GOCCs,
from
the
determination/declaration of the winning bidders, the head of the procuring
entity or his duly authorized representative shall approve or disapprove the
recommendation for award. In case of approval, a Notice of Award shall be
issued in favor of the winning bidder.
ORDERING AGREEMENT
6.1.
Within ten (10) calendar days from receipt by the winning bidder of
the Notice of Award, the winning bidder or its duly authorized representative
shall formally enter into an Ordering Agreement with the procuring entity
concerned for an option amount of one peso to be paid by the procuring entity
as a consideration for the privilege granted to the procuring entity to buy the
items only upon its determination that it is necessary.
6.2.
The Ordering Agreement shall not state or imply any agreement by

the procuring entity to place future contracts or release orders with the
contractor. It shall (1) include a fixed contract price per item; (2) include
delivery terms and conditions; (3) include terms of payment; (4) specify that
the execution and issuance of Delivery Order Contracts shall reckon the
perfection of the actual procurement contract; and (5) that upon the
execution and issuance thereon, all laws, rules and guidelines governing
implementation of procurement contracts under R.A. 9184 and its IRR-A shall
be applicable.
6.3.
No modification of Order Agreements during its lifetime shall be

allowed.
6.4.
The Ordering Agreement shall be valid only for a period as stated in

the Bidding Documents but which, in any case, shall not exceed one (1) year
from the time the Ordering Agreement was formally entered into by the
parties.
DELIVERY ORDER CONTRACTS

7.1.
When the procuring entity has determined the necessity for one or
more of the items covered in the Ordering Agreement, it shall require the
delivery of the line item identified in the Order Agreement List in the quantity
stated therein and at the price for which it was awarded.
The procuring entity shall execute or issue a Delivery Order Contract in favor
of the supplier to obligate the latter to make deliveries according to the terms
and conditions stated in the Ordering Agreement.
7.2.
The procuring entity may issue or execute as many Delivery Order

Contracts for the same line item as may be needed; provided that the
succeeding Delivery Order Contracts shall be with the same unit price as
originally stated in the Ordering Agreement. And, except on conditions
warranting the termination of the Ordering Agreement as provided in Section
8 hereof, there is no limit on the number of Delivery Order Contracts that may
be executed or issued. No other costs are authorized unless otherwise
specified in the Ordering Agreement.
7.3.
Should the price indicated in the Ordering Agreement, for any reason,
become higher than the prevailing market rate at the time of demand for

September 2007
Page 218 of 224
delivery, and the procuring entity fails to favorably negotiate for a price equal
to, or lower than, the prevailing rate, the procuring entity shall not execute or
issue a Delivery Order Contract in favor of the supplier but shall conduct
another public bidding to determine the most suitable offer.
7.4.
8.
IMPLEMENTATION AND TERMINATION OF ORDERING AGREEMENTS

8.1.
8.2.
9.
The procuring entity may execute or issue Delivery Order Contracts

requiring delivery to multiple destinations or performance at multiple
locations.
Without prejudice to the provisions of applicable laws, rules, and

guidelines, the Ordering Agreement shall automatically terminate under the
following conditions:
i.
When the total ABC for the project has been exhausted
regardless of the actual number of items procured or of the unit
quantity per item; and
ii.
When the one-year period duration of the contract have

expired.
All other rules governing contract implementation and termination

under R.A. 9184, its IRR-A, and relevant Guidelines or Resolutions shall be
applicable.
EFFECTIVITY
These Guidelines or any amendments hereto shall take effect fifteen (15) days after
publication in the Official Gazette or in a newspaper of general nationwide circulation
and upon filing with the University of the Philippines Law Center of three (3) certified
copies of these guidelines.

September 2007
Page 219 of 224

September 2007
ANNEX L
AFP Organization
Page 222 of 224
Basic Procurement Supply Chain Organizational Structure

Bids and Awards Committee
Head of Unit
Goods
Works
Consulting
Materials Control
Fig. 1
Table I. Staffing of the Basic Procurement Supply Chain Organizational Structure
Directorate
Overall Supervision
Director III
Supervision
units
PMO
IV
(number
dependent
procurement
size
and
degree
specialization)
Staffing
of
sub-
Division
Section
PMO IV
on
of
PMO
III
(number
dependent
procurement
size
and
degree
specialization)
PMO III
on
of
PMO III
PMO II
PMO II
PMO II
PMO I
PMO I
PMO I
Administrative Assistant
Aide
Aide
September 2007
Page 223 of 224
Aide
Table II. Correlation of Proposed Position Titles, Qualification Standards and Certification Program Modules
Position Title
Director III
SG
Key Tasks
Qualification Standards
(27)
Manages operations of Directorate

through Division Heads
Addresses broader strategic issues
in procurement for the agency or
department
Bachelors degree
5 years of relevant experience
Career Service Executive Eligibility
Certified Procurement Manager
(equivalent to 560 training
hours)
Completed these modules:

Module 10: Procurement strategies
Module 11:The legal and administrative
environment
Module 12: Stock management, warehousing
and logistics
Bachelors degree
Career Service (Professional)
Certified Procurement
Professional
(additional 320 training hours)
Bachelors degree
Practitioner in any two of areas
of specialization
(additional 160 training hours
depending on module )
Bachelors degree
1 year of relevant experience
Practitioner in any one:
Planning & Financial
Management
Bids and Awards
Contract Management &
Distribution
(equivalent to 160
training
Completed all 7 modules from Modules 3 to 9

and passed certification examinations
Procurement
Management
Officer (PMO)
IV
(Division
Head)
(24)
Supervises
all
supply
management
functions
division
chain
of
a
PMO
III
(Section Head)
(22)
Handles
broader
aspects
of
procurement; May be assigned to
supervise all the supply chain
management functions for goods,
services, or works depending on
procurement size
Handles
several
procurement functions:
related
Financial
PMO II
(Specialist
Position)
(18)
PMO II (Planning
Reporting)
&
PMO II (Bids and Awards)

PMO II (Contract Management &
Distribution)
2007
Program Modules
Same as above but modules taken are

dependent on area of specialization
For Planning & Fin Mgt

Module 3: Procurement Planning, Budgeting
& Reporting
Module 4: Financial Mgt & Acctg for
Procurement
For Bids and Awards
Module 5: Drafting bidding documents,
proposals & contracts
Module 6: The evaluation of bids & proposals
September
Page 224 of 224
hours depending on module )
PMO I
(Specialist
Position)
(15)
May be assigned to handle any

one of these key tasks:
Procurement Planning
Writing specifications for
goods, civil works, or services
Drafting contracts
Financial reporting
Bachelors degree
1 year of relevant experience
Completed the Foundation
Certificate of the Professional
Public Procurement Certification
Program (equivalent to 80
training hours)
For Contract Mgt & Distribution

Module 7: Contract Adm & Mgt
Module 8: Multi- and Bilateral Agencies
Module 9: Warehousing & Distribution
Module 1: Principles of Procurement Best
Practice
Module 2: RA 9184 and IRR
September 2007

AFP Procurement System

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AFP Procurement System

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VOLUME 1

AFP Procurement System and

AFP PROCUREMENT SYSTEM AND ORGANIZATION ..................................................1

Guidelines on Establishing Procurement Systems and Organizations

Procurement and the Logistics Function in the AFP

Fulfill the countrys international commitments.

Support national development.

Functional Areas of Logistics

The supply process consists of:

Inventory Inventory is a stock of items kept by an organization to meet internal or

Maintenance is a logistics function of sustaining a material, equipment or a facility in operational

The following principles govern the logistics function in the AFP:

Simplicity The efficiency of a logistics system is enhanced if the complexity of

Flexibility This is the adaptability of logistics structures and procedures to changing

Enhance logistics support to the AFP through sound management.

Improve information technology (IT) applications.

Optimize fund utilization.

Increase local sourcing of military hardware.

Develop and harness the full potential of logistics personnel.

Create and maintain an ethical environment.

(SOURCE: AFP Basic Logistics Doctrine, AFPM 4-0, April 2002)

Streamlining and the use of technology in procurement

Multi-Year Defense Planning System;

Legal Basis for the A.F.P. Procurement Manual

R.A. 9184, Government Procurement Reform Act, and its IRR-A.

R.A. 7898, AFP Modernization Act.

Executive Order 235, dated 08 September 2003

DND Department Order 165

DND Department Order 53

DND Department Order No. 12, dated April 5, 2006

Coverage, Scope, and Application

GPPB Resolution No. 13-2005 Guidelines for the Implementation of Projects

GPPB Resolution No. 06-2005 Guidelines on the Use of an Ordering Agreement

GPPB Resolution No. 09-2005 Guidelines on Implementation of Projects Undertaken

A logistics directive covering the procurement/acquisition thru the US Security Assistance

Goods and Services;

Infrastructure Projects; and

Principles of Government Procurement

Streamlining and use of technology in procurement

The Procurement Organization in

The Organizational Structure

1. The Procuring Entity The AFP

Guidelines on Establishing Procurement Systems and Organizations

The AFP Bids and Awards Committees

the items to be procured are complex or specialized; or

The separate BACs may be organized according to:

geographical location of the Project Management Office (PMO) or end-user units of

Guidelines on Establishing Procurement Systems and Organization

The regular members are:

An officer, who is at least a third-ranking permanent official of the

An officer, who holds at least a fifth ranking permanent plantilla

An officer, who holds at least a fifth ranking permanent plantilla

The provisional members are:

The Chairman and Vice-Chairman must be regular members of the BAC.

Guidelines on Establishing Procurement Systems and Organizations

In accordance with the thrust to professionalize the procurement organization,

In case of resignation, retirement, separation, transfer, re-assignment, or

Representatives designated by BAC members to attend meetings in their

The CSAFP/Head of the Procuring Entity;

The official who approves procurement transactions;

The Chief Accountant / Head of the Accounting Department and his/her

b. Multiple or Lower Level BACS

- not exceeding P25,000,000.00