Alternative Methods of Procurement

In accordance with Section 10 of the 2016 Revised IRR of RA 9184, UP Manila as the procuring entity, shall adopt competitive or public bidding as the general or default method of procurement. However, subject to the prior approval of the Chancellor, and whenever justified by the conditions provided in Rule XVI of the same IRR, the procuring entity may, in order to promote economy and efficiency resort to any of the alternative methods of procurement. The method of procurement to be used shall be indicated in the approved APP/ SPPMP.

Annex H of the 2016 Revised IRR provided the Consolidated Guidelines for the Alternative Methods of Procurement which includes specific guidelines for the following alternative modes of procurement.

D.1   Limited Source Bidding otherwise known as selective bidding is a method of procurement that involves direct invitation to bid by the Procuring Entity from a set of pre-selected suppliers or consultants with known experience and proven capability relative to the requirements of a particular contract. This method may be resorted to in any of the following conditions. (Sec. 49 of the 2016 Revised IRR of RA9184)3.

D.1.1   Procurement of highly specialized types of Goods and Consulting Services which are known to be obtainable only from a limited number of sources; or

D.1.2   Procurement of major plant components where it is deemed advantageous to limit the bidding to known eligible bidders in order to maintain an optimum uniform level of quality and performance of the plant as a whole.

D.2   Direct Contracting or Single Source Procurement is a method of procurement of Goods that does not require elaborate Bidding Documents because the supplier is simply asked to submit a price quotation or a pro-forma invoice together with the conditions of sale, which offer may be accepted immediately or after some negotiations. This may be resorted to under any of the following conditions: (Sec 50 of the 2016 Revised IRR of RA9184)4

D.2.1   Procurement of Goods of proprietary nature, which can be obtained only from the proprietary source, i.e. when patents, trade secrets, and copyrights prohibit others from manufacturing the same item;

D.2.2   When the procurement of critical components from a specific manufucturer, supplier or distributor is a condition precedent to hold a contractor to guarantee its project performance, in accordance with the provisions of its contract; or

D.2.3   Those sold by an exclusive dealer or manufacturer which does not have subdealers selling at lower prices and for which no suitable substitute can be obtained at more advantageous terms to the government.

D.3   Repeat Order, when provided for in the Annual Procurement Plan, 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. Repeat orders shall likewise be subject to the following conditions: (Sec. 51 of the 2016 Revised IRR of RA9184)5

D.3.1   Unit prices of the repeat order must be the same as or lower than those in original contract, provided that such prices are still the most advantageous to the Government of the Philippines after price verification;

D.3.2   The repeat order will not result in splitting of contracts, requisitions, or Basic Administrative Policies and Procedures 43 purchase orders, as provided for in Section 54.1 of the 2016 Revised IRR of RA91846;

D.3.3   Except in cases duly approved by the Government Procurement Policy Board (GPPB), the repeat orders shall be availed of only within six (6) months from the date of the Notice to Proceed arising from the original contract: Provided , that there has been a partial delivery, inspection and acceptance of the goods within the same 6-month period; and

D.3.4   Repeat orders shall not exceed twenty-five percent (25%) of the quantity of each item in the original contract. In order not to exceed the 25% threshold, the goods under the original contract must be:

D.3.4.1 Quantifiable;

D.3.4.2 Divisible; and

D.3.4.3 Consisting of at least four (4) units per item.

D.4   Shopping is a 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. This method of procurement shall be employed in any of the following cases: (Sec. 52 of the 2016 Revised IRR of RA9184)7

D.4.1   When there is an unforeseen contingency requiring immediate purchase: Provided, however, That the amount shall not exceed Two Hundred Thousand Pesos (P200,000.00). (Annex “H” of the 2016 Revised IRR of RA 9184).

D.4.2   Procurement of ordinary or regular office supplies and equipment not available in the Department of Budget and Management-Procurement Service in the amount not exceeding One Million Pesos (P1,000,000.00). (Annex “H” of the 2016 Revised IRR of RA9184)8.

D.5   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 in any of the following cases: (Sec. 53 of the 2016 Revised IRR of RA9184)9

D.5.1   Two Failed Biddings - where there has been a failure of Competitive Bidding or Limited Source Bidding for the second time as provided in Section 35 of the Act and 2016 Revised IRR of RA9184.10

D.5.2   Emergency Cases - in case of imminent danger to life or property during a state of calamity, or when time is of the essence arising from natural or man-made calamities or other causes where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities. In the case of infrastructure projects, the Procuring Entity has the option to undertake the project through negotiated procurement or by administration or, in high security risk areas, through the AFP

D.5.3   Take-Over of Contracts –Take-over of contracts, which have been rescinded or terminated for causes provided for in the contract and existing laws, where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities.

D.5.4   Adjacent or Contiguous – Where the subject contract is adjacent or contiguous to an on-going Infrastructure Project or Consulting Service where the consultants have unique experience and expertise to deliver the required service: Provided, however, that:

D.5.4.1   The original contract is the result of a Competitive Bidding;

D.5.4.2   The subject contract to be negotiated has similar or related scopes of work;

D.5.4.3   It is within the contracting capacity of the contractor/consultant; the contractor/consultant uses the same prices or lower unit prices as in the original contract less mobilization cost;

D.5.4.4   The amount of the contiguous or adjacent work involved does not exceed the amount of the ongoing project; and

D.5.4.5   The contractor/consultant has no negative slippage/delay: Provided, further, That the negotiations for the procurement of the contiguous or adjacent work are commenced before the expiry of the original contract.

D.5.5   Agency-to-Agency - Procurement of Goods, Infrastructure Projects and Consulting Services from another agency of the Government of the Philippines, such as the Department of Budget and Management-Procurement Service which is tasked with the centralized procurement of Common-Use Supplies for the Government of the Philippines in accordance with Letter of Instruction No. 755 and E.O. No. 359, series of 1989.

D.5.6   Scientific, Scholarly or Artistic Work, Exclusive Technology and Media Services. Where Goods, Infrastructure Projects and Consulting Services can be contracted to a particular supplier, contractor or consultant and as determined by the Head of the Procuring Entity, for any of the following reasons:

D.5.6.1  If the requirement is for:

  • Work of art; commissioned work or services of an artist for a specific artist skills (e.g. , Singer, poet, writer, painter, sculptor, etc.); Scientific, academic, scholarly work or research, or legal services;
  • Highly-specialized life-saving medical equipment, as certified by the Department of Health;
  • Scientific, technical, economic, business, trade or legal journal, magazine, paper, subscription, or other exclusive statistical publications and references; or
  • Media documentation, advertisement, or announcement through television, radio, newspaper, internet, and other communication media. Due to the nature of the information to be disseminated, alongside principles of transparency, efficiency and economy, award to more than one (1) supplier may be made by the Procuring Entity.

D.5.6.2  The construction or installation of an infrastructure facility where the material, equipment, or technology under a proprietary right can only be obtained from the same contractor.

D.5.7   Highly Technical Consultants - In the case of individual consultants hired to do work that is:

  • Highly technical or proprietary; or
  • Primarily confidential or policy determining, where trust and confidence are the primary consideration for the hiring of the consultant: Provided, however, That the term of the individual consultants shall, at the most, be on a 6 (six) month basis, renewable at the option of the appointing Head of the Procuring Entity, but in no case shall exceed the term of the latter.

D.5.8   Small Value Procurement - Procurement of Goods, Infrastructure Projects, Consulting Services, where the amount involved does not exceed the amount of One Million Pesos (P1,000,000.00). (Annex “H” of the 2016 Revised IRR RA9184).8

D.5.8.1  The End-User shall submit a request for Small Value Procurement to the BAC, which indicate the technical specifications, scope of work, terms of reference, approved budget for the contract and terms and conditions.

D.5.8.2  The BAC shall prepare and send the Request for Quotations/Request for Proposals to at least three (3) suppliers, contractors or consultants of known qualifications. This, not withstanding, those who responded thru any of the required postings shall be allowed to participate. Receipt of at least one (1) quotation is sufficient to proceed with the evaluation thereof.

D.5.8.3  Except for those with Approved Budget for the Contracts equal to Fifty thousand Pesos and below, request for quotations shall be posted for a period of three (3) calendar days in the PhilGEPS website, website of the Procuring Entity, if available, and at any conspicuous place reserved for this purpose in the premises of the Procuring Entity.

D.5.8.4  Pre-bid conference may be conducted at the discretion of the BAC, in order to clarify and/or explain any of the requirements, terms, conditions and specifications stipulated in the Request for Quotation/Request for Proposal.

D.5.8.5  After the deadline for submission of quotations/proposals, an Abstract of Quotations shall be prepared setting forth the names of those who responded to the Request for Quotation/Request for Proposal.

D.5.8.6  The BAC shall recommend to the Head of Procuring Entity the award of contract in favor of the supplier or the contractor with the Single or Lowest Calculated and Responsive Quotation (for goods or infrastructure projects), or consultant with the single highest rated and responsive proposal (for consulting services). In case of approval, the Head of the Procuring Entity shall immediately enter into contract with the said supplier, contractor or consultant.