Republic Act No.9184 Government Procurement Reform Act Republic Act No. 9184 Significance of RA 9184 in this seminar Aims of this portion Salient features of RA 9184 Effectivity Governing Principles of Procurement Coverage & Procedure Alternative Procurement Methods Sanctions Republic Act No. 9184 Simplification of pre-qualification and the strengthening of post-qualification Use of the Lowest Calculated and Responsive Bid for goods, supplies, materials and related services; and Highest Rated and Responsive Bid for consulting services Use of the Approved Budget for the Contract (ABC) as ceiling for the bid price Use of transparent, objective and non-discretionary criteria Increased transparency in the procurement process Professionalization of procurement officials Inclusion of Penal and Civil Liabilities Republic Act No. 9184 Effectivity: 26 January 2003 (RA 9184) 18 October 2003 (IRR) Amended RA 7160 (Local Government Code of 1991) accordingly Republic Act No. 9184 Governing Procurement Principles of Transparency Equal Opportunity (through standardization) Streamlined Process Accountability Public Monitoring Republic Act No. 9184 Coverage: Goods: Items Supplies Materials needed in Transaction of public business Pursuit of any government undertaking, project or activity Republic Act No. 9184 whether in the nature of equipment, furniture, stationery, materials for construction, or personal property of any kind Republic Act No. 9184 Still considered as goods: Services that are not consulting services General Support Services (e.g. Janitorial, Security, Repair and Maintenance Services) Related or Analogous Services (e.g. Lease of Office Space) Materials and supplies needed for such services Republic Act No. 9184 Consulting Services: services for Infrastructure Projects and other types of projects or activities of the Government requiring adequate external professional expertise technical and beyond the capability and/or capacity of the Government to undertake Republic Act No. 9184 Infrastructure projects/Civil Works: 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 Republic Act No. 9184 General Rule (section 10, RA 9184): Competitive Bidding! Republic Act No. 9184 What is Competitive Bidding? [Section 5 (e), RA 9184] Method of procurement Open to participation by any interested party 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, Specific requirements and mechanics of which shall be defined in the IRR to be promulgated under this Act Republic Act No. 9184 The General Processes of Competitive Bidding : Advertisement Pre-bid conference Eligibility screening of prospective bidders Receipt and opening of bids Evaluation of bids Post-qualification Award of contract Republic Act No. 9184 Bid and Awards Committee (BAC) Formation BAC Structure: Amended RA 7160 BAC formation as shall be stated later Republic Act No. 9184 BAC Composition: Head of Procuring Entity (Local Chief Executive) Now forbidden as Chairperson or member of BAC Republic Act No. 9184 BAC Composition: One (1) representative each From the regular offices under the office of the local chief executive (e.g., Office of the Provincial/City/Municipal Administrator, Budget Office, Legal Office, General Services, Engineering Service) To be appointed by the local chief executive Republic Act No. 9184 BAC Composition: Observers: Two (2) 1. At least one (1) shall come from a duly recognized private group in a sector or discipline relevant to the procurement at hand 2. The other from a non-governmental organization (NGO) COA Representative Republic Act No. 9184 BAC Composition: No. of Members: At least Five (5) but not more than Seven (7) COA Representative & Observers (non-members) Republic Act No. 9184 BAC Composition: Now more professionalized! honoraria to the BAC members in an amount not to exceed twenty-five percent (25%) of their respective basic monthly salary subject to availability of funds (Section 15) Private Legal Assistance as part of indemnification package of BAC Member (Section 72) Republic Act No. 9184 Bid Documents Preparation: Prepared by procuring entity Following the standard forms and manuals prescribed by the GPPB Republic Act No. 9184 Technical Working Group from a pool of technical, financial and/or legal experts assist in the procurement process particularly in the eligibility screening, evaluation of bids and postqualification Standardized Bidding Procedures for Goods Pre-Procurement Conf. 2-wk advertisement Pre-Bid Conference Submission of Opening of Opening of Opening of Eligibility Eligibility Env. & Tech. Env. & Req. & Bid Financial Env. Eligibility Check Prel. Exam. Bid Evaluation & Ranking Postqualification Award of Contract Republic Act No. 9184 Pre-Procurement Conference Purposes: 1. Ensure that the procurement is in accordance with the project and annual procurement plans; Republic Act No. 9184 Pre-Procurement Conference Purposes: 2. Determine the readiness of the procurement at hand, including, among other aspects, confirmation of the availability of ROW, the ownership of affected properties, availability of appropriations and programmed budget for contract, and adherence of bidding documents, technical plans, specifications, scope of work, and/or TOR, and other related matters, to relevant general procurement Republic Act No. 9184 Pre-Procurement Conference Purposes: 3. Review, modify and agree on the criteria for eligibility screening to ensure their fairness, reasonableness and that they are of the “pass/fail” type and are written in such manner; 4. Review, modify and agree on the criteria for the evaluation of bids/proposals to ensure their fairness, reasonableness and applicability to the procurement at hand; Republic Act No. 9184 Pre-Procurement Conference Purposes: 5. Clarify that the specifications and other terms in the bidding documents are minimum requirements and that the bidder may submit an offer which provides for superior specifications and/or better terms and conditions to the Government at no extra cost, without any bonus, credit or premium in the bid evaluation; and Republic Act No. 9184 Pre-Bid Conference Purposes: 6. Reiterate and emphasize the importance of confidentiality during the bid evaluation process, and the applicable sanctions and penalties, as well as agree on measures to ensure compliance with the foregoing. Republic Act No. 9184 Invitation to Bid 1. 2. 3. Publication Website Posting Republic Act No. 9184 Publication: Twice: 1. Minimum 6 days maximum 14 days in between publication 2. Newspaper of general nationwide circulation 3. Newspaper published at least 2 years prior to advertisement Republic Act No. 9184 Posting @ Website 1. Website of the procuring entity 2. Website of the service provider of the procuring entity, if available 3. Maximum period of 14 days Republic Act No. 9184 Posting at premises 1. 2. 3. Conspicuous place Reserved for the purpose Certified by the BAC Secretariat of the procuring entity Republic Act No. 9184 Pre Bid Conference: Less than P1M, discretionary for BAC to conduct. Held at least 12 days before the receipt and opening of bids. Any statement made at the pre-bid conference shall not modify the terms of the bidding documents , unless such statement is specifically identified in writing as an amendment thereto and issued as a Supplemental/Bid Bulletin. Republic Act No. 9184 Eligibility Check: BAC determines if each prospective bidder is eligible to participate By examining the completeness of each prospective bidder’s eligibility requirements or statements against a checklist of requirements Using a non-discretionary “pass/fail” criteria Republic Act No. 9184 Eligibility Documents: Class “A” Documents Class “B” Documents Republic Act No. 9184 Eligibility Documents: Class “A” Documents: May be maintained in a file with the BAC Suppliers maintain this file current and updated at least once a year, or more frequently when needed BAC certification to that files are current and updated submitted to the procuring entity concerned in lieu of the foregoing Class “A” documents Republic Act No. 9184 Eligibility Documents: Class “B” Documents: Submitted per bidding activity Republic Act No. 9184 What are these Class “A” Documents? Legal Documents: 1. DTI/SEC registration documents, as applicable 2. Mayor’s Permit/Municipal Licenses 3. “Non-blacklisting” statements 4. TIN 5. Other appropriate Licenses/Permits Republic Act No. 9184 What are these Class “A” Documents? Technical Documents: 1. Statement of the prospective bidder of all its ongoing and completed government and private contracts within the relevant period, including contracts awarded but not yet started, if any Republic Act No. 9184 What are these Class “A” Documents? Financial Documents: 1. Audited financial statements, stamped “received” by the BIR or its duly accredited and authorized institutions, for the immediately preceding calendar year, showing, among others, the prospective bidder’s total and current assets and liabilities Republic Act No. 9184 What are these Class “A” Documents? Financial Documents: 2. Bidder’s Computation of Net Financial Contracting Capacity (NFCC); or a commitment from a licensed bank to extend to it a credit line if awarded the contract to be bid, or a cash deposit certificate, in an amount not lower than that set by the procuring entity in the Bidding Documents, which shall be at least equal to ten percent (10%) of the approved budget for the contract to be bid Republic Act No. 9184 What are these Class “B” Documents? 1. Valid joint venture agreement, in case of a joint venture 2. Letter authorizing the BAC or its duly authorized representative/s to verify any or all of the documents submitted for the eligibility check Republic Act No. 9184 Eligibility Criteria: 1. Nationality/Proof of Existence 2. Prospective bidder’s largest single contract 3. NFCC or credit line/cash commitment Republic Act No. 9184 Eligibility Criteria: 1. Nationality/Proof of Existence a. Duly licensed Filipino citizens/sole proprietorships b. 60% Duly organized and existing Filipino Partnerships c. 60% Duly organized and existing Filipino Corporations d. Joint Venture with 60% Filipino interest e. Duly registered cooperatives Not Applicable for foreign procurement Republic Act No. 9184 Eligibility Criteria: 2. Prospective Bidder’s largest single contract adjusted to current prices completed within time period specified in Invitation similar to the contract to be bid at least fifty percent (50%) of the ABC Republic Act No. 9184 Eligibility Criteria: 3. NFCC or credit line/cash commitment NFCC at least equal to the approved budget for the contract to be bid Republic Act No. 9184 Eligibility Criteria: 3. NFCC or credit line/cash commitment Computation of the NFCC: NFCC = [(Current assets minus current liabilities) * (K)] minus the value of all outstanding projects under ongoing contracts, including awarded contracts yet to be started. Republic Act No. 9184 Eligibility Criteria: 3. NFCC or credit line/cash commitment Computation of the NFCC Where: K = 10 for a contract duration of one year or less, 15 for a contract duration of more than one year up to two years, and 20 for a contract duration of more than two years. Republic Act No. 9184 Receipt and Opening of Bids: Requisites for an acceptable bid: 1. 2. 3. In the prescribed Bid Form On or before the specified deadline In two (2) separate sealed bid envelopes, Technical component of the bid and the Financial component of the bid Republic Act No. 9184 Procedure: 1. Late bids shall not be accepted 2. Opening of Technical Envelopes 3. Counter-checking compliance of Technical Envelope with requirements 4. Opening of Financial Envelope 5. Counter-checking compliance of Financial Envelope with requirements Republic Act No. 9184 Procedure: 6. 7. 8. Bid Evaluation Ranking Lowest Calculated Bid Republic Act No. 9184 Note: Bids above the ABC are automatically disqualified No Floor Prices If failed Technical Envelope, cannot open the Financial Envelope Bid shall include all taxes Republic Act No. 9184 Post-Qualification Purpose: 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 Republic Act No. 9184 Post-Qualification Method: BAC shall verify, validate and ascertain all statements made and documents submitted by the bidder with the Lowest Calculated Bid/Highest Rated Bid, using a non-discretionary criteria, as stated in the Invitation to Apply for Eligibility and to Bid and the Instructions to Bidder Republic Act No. 9184 Post-Qualification Period: Within seven (7) calendar days from determination of the Lowest Calculated Bid In exceptional cases, the seven (7) calendar day period may be extended by the GPPB Republic Act No. 9184 Result: Lowest Calculated Bid becomes “Lowest Calculated and Responsive Bid” Republic Act No. 9184 Recommendation of the Award to the Head of the Procuring Entity Action of Head on Recommendation: 1. Approve 2. Disapprove Republic Act No. 9184 Action of Head on Recommendation: Disapproval based only on valid, reasonable and justifiable grounds to be expressed in writing, copy furnished the BAC. Republic Act No. 9184 Action of Head on Recommendation: If approval: Head issues the Notice of Award BAC notifies the losing bidders of the decision Republic Act No. 9184 Action of Head on Recommendation: Time period for this step: 15 Calendar Days from determination of Lowest Calculated and Responsive Bid 30 Calendar Days for GOCCs and GFIs Republic Act No. 9184 Contract Preparation and Signing Time Period: Ten (10) days from receipt of Notice of Award by Winning Bidder Republic Act No. 9184 Notice to Proceed: Given to successful bidder together with a copy or copies of the approved contract to the within seven (7) calendar days from the date of approval of the contract by the appropriate government approving authority Republic Act No. 9184 Notice to Proceed: All notices called for by the terms of the contract shall be effective only at the time of receipt thereof by the successful bidder Unless specified in the Notice to Proceed itself Republic Act No. 9184 Notes on Procedure for Infrastructure Projects: Observer: representative from National Constructor Associations duly recognized by the Construction Industry Authority of the Philippines (CIAP) Republic Act No. 9184 Notes on Procedure for Infrastructure Projects: Letter of Intent: Submit a written LOI to BAC together with its application for eligibility Must be received 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 Republic Act No. 9184 Notes on Procedure for Infrastructure Projects: Additional Class “A” Documents: 1. 2. 3. Valid Philippine Contractors Accreditation Board (PCAB) license and registration for the type and cost of the contract to be bid Prospective bidder’s statement of availability of key personnel and equipment On-going and completed government and private projects Republic Act No. 9184 Notes on Procedure for Infrastructure Projects: Eligibility Criteria: 1. 2. 3. 4. Nationality/Existence PCAB License Bidder’s largest single completed contract Satisfactory CPES rating and/or certificate of completion and owner’s acceptance of the contract 5. NFCC or credit line/cash commitment Republic Act No. 9184 Notes on Procedure for Infrastructure Projects: Eligibility Check Entire process shall not exceed fifteen (15) days Issuance of Bid Documents 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 Republic Act No. 9184 Notes on Procedure for Infrastructure Projects: Opening of Bids conducted within the following periods from the last day of the issuance of the bidding documents: Up to twenty five (25) million- 15 to 30 calendar days Above twenty five (25) million up to fifty (50) million15 to 45 calendar days Above fifty (50) million up to two hundred (200) million30 to 60 calendar days Above two hundred (200) million- 60 to 90 calendar days Republic Act No. 9184 Notes on Procedure for Consultancy Services: Observer: Project-related professional organization accredited or duly recognized by the Professional Regulation Commission (PRC) or the Supreme Court (SC) Republic Act No. 9184 Notes on Procedure for Consultancy Services: Letter of Intent: Submit a written LOI to BAC together with its application for eligibility Must be received 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 Republic Act No. 9184 Notes on Procedure for Consultancy Services: Eligibility Envelopes: Shall be opened before the dates of the pre-bid conference and bid opening to determine eligibility of prospective bidders Only then shall they be allowed to acquire or purchase the relevant bidding documents from the procuring entity Republic Act No. 9184 Notes on Procedure for Consultancy Services: Short listing: Three (3) to seven (7) consultants, with five (5) as the preferable number Number as determined in the pre-procurement conference Republic Act No. 9184 Notes on Procedure for Consultancy Services: Short listing Criteria: 1. Specified in the Invitation to Bid 2. Includes: a. Applicable experience b. Qualification of personnel who may be assigned to the job vis-à-vis extent and complexity of the undertaking c. Current workload relative to capacity Republic Act No. 9184 Notes on Procedure for Consultancy Services: The BAC recommends 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 Republic Act No. 9184 Notes on Procedure for Consultancy 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 Republic Act No. 9184 Notes on Procedure for Consultancy Services: Bid Opening: Opening of the Technical Proposal at opening dated only to determine compliance to formal requirements Republic Act No. 9184 Notes on Procedure for Consultancy Services: Bid Evaluation: Objective: Highest Rated Bid to be determined by in two steps: a) The detailed evaluation of the bids of the short listed bidders using numerical ratings based on either the quality-based evaluation/selection procedure or the quality-cost based evaluation/selection procedure Republic Act No. 9184 Notes on Procedure for Consultancy Services: Bid Evaluation: Objective: Highest Rated Bid to be determined by in two steps: b) The ranking of the bidders based on the numerical ratings from the highest to the lowest. The bid with the highest rating shall be identified as the Highest Rated Bid. Republic Act No. 9184 Notes on Procedure for Consultancy Services: 1. 2. 3. Bid Evaluation Criteria: Quality of personnel Experience and capability of the consultant Plan of approach and methodology Republic Act No. 9184 Notes on Procedure for Consultancy Services: BAC assigns numerical weights to criteria Criteria as indicated in bid documents BAC recommends to Head Head has two (2) calendar days to approve Republic Act No. 9184 Notes on Procedure for Consultancy Services: Negotiation with Highest Rated Bid 1. BAC shall within seven (7) calendar days notify and invite the consultant with the Highest Rated Bid for negotiation 2. Financial proposal of the consultant with the Highest Rated Bid shall then be opened by the BAC in the presence of the consultant Republic Act No. 9184 Notes on Procedure for Consultancy Services: Negotiation with Highest Rated Bid 3. Negotiation 4. Issues of Negotiation Contract amount Other technical issues as stated in the notification letter Republic Act No. 9184 Notes on Procedure for Consultancy Services: Negotiation with Highest Rated Bid 5. In case of Failure, Negotiation with Next Highest Rated Bid Time period: Fourteen (14) calendar days for any one consultant except for meritorious reasons Republic Act No. 9184 Failure of Bidding: 1. No Bids are received 2. No bid qualifies as the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid 3. Refusal of winning bidder to accept the award of contract Republic Act No. 9184 Failure of Bidding: Consequence: 1. Second Bidding Process 2. If this still fails, BAC may resort to negotiated procurement Republic Act No. 9184 Reservation Clause: Head of Agency may Reject any and all bids or Declare a Failure of Bidding for: 1. Prima facie evidence of collusion 2. BAC failed in following bidding procedures 3. Any justifiable and reasonable ground where the award of the contract will not redound to the benefit of the Government Republic Act No. 9184 Observations on Failure of Bidding: 1. No more reservation to waive any formalities or defects of bid(s) 2. No more failure of bid for single calculated/rated and responsive bid Republic Act No. 9184 *Philippine Star, 30 May 2004 Republic Act No. 9184 These reservation clauses are already illegal Cannot be used to justify any waiver of bid formality Republic Act No. 9184 Exceptions to Competitive Bidding: 1. Alternative Modes of Procurement 2. Outside the Coverage of RA 9184 1. 2. Acquisition of Real Property BOT Law Republic Act No. 9184 Alternative Modes of Procurement General Rule: Public Bidding Procurement program should allow sufficient lead time for public bidding Hence, procuring entity cannot intentionally delay procurement program to give ground to resort to alternative modes Resorted to only in highly exceptional cases as recommended by the BAC Republic Act No. 9184 Alternative Modes of Procurement Limited Source Bidding Direct Contracting Repeat Order Shopping Negotiated Procurement Republic Act No. 9184 Alternative Modes of Procurement Limited Source Bidding or Selective Bidding A method of procurement of 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 Republic Act No. 9184 Alternative Modes of Procurement Limited Source Bidding or Selective Bidding Procurement of highly specialized types of goods and consulting services Procurement of major plant components to maintain uniform quality and performance of the plant as a whole Republic Act No. 9184 Alternative Modes of Procurement Direct Contracting or Single Source Procurement Applies only to procurement of goods Does not require elaborate bidding documents Supplier is simply asked for a price quotation or a pro-forma invoice with the conditions of sale Offer may be accepted immediately or after some negotiations Republic Act No. 9184 Alternative Modes of Procurement Direct Contracting or Single Source Procurement 1. Proprietary items 2. Critical plant components from a specific manufacturer 3. Sold by an exclusive dealer or manufacturer with no suitable substitute Republic Act No. 9184 Alternative Modes of Procurement Repeat Order Need to replenish goods Procured under a contract previously awarded through Competitive Bidding Republic Act No. 9184 Alternative Modes of Procurement Repeat Order 1. Same contract prices 2. Not a result of splitting 3. Within six (6) months from the date of the Notice to Proceed of the original contract 4. Not to exceed twenty-five percent (25%) of the quantity of each item in the original contract Republic Act No. 9184 Alternative Modes of Procurement Shopping Submission of price quotations Readily available off-the-shelf goods or ordinary/regular equipment Procured directly from suppliers of known qualifications Republic Act No. 9184 Alternative Modes of Procurement Shopping 1. Unforeseen contingency requiring immediate purchase but not to exceed P50,000.00 2. Ordinary or regular office supplies and equipment not available in the Procurement Service not to exceed P250,000.00 Republic Act No. 9184 Alternative Modes of Procurement Shopping Not as a result of splitting Amounts subject to periodic review by the GPPB Republic Act No. 9184 Alternative Modes of Procurement Negotiated Procurement Directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant Conditions in law and IRR are exclusive Republic Act No. 9184 Alternative Modes of Procurement Negotiated Procurement 1. Second Bid Failure 2. Imminent danger to life or property during a state of calamity 3. 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 Republic Act No. 9184 Alternative Modes of Procurement Negotiated Procurement 4. Take-over of contracts 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 5. Adjacent or Contiguous contract to an on-going infrastructure project Republic Act No. 9184 Alternative Modes of Procurement Negotiated Procurement 6. Inter-agency purchase of goods 7. Individual consultants that are highly technical or primarily confidential 8. Major defense equipment for use by the AFP Republic Act No. 9184 Outside the Coverage of RA 9184 1. Acquisition of Real Property (RA 8974) 2. BOT Law (RA 6957, as amended by RA 7718) Republic Act No. 9184 Criminal/Administrative Sanctions For Bidders 1. Rigging 2. Misrepresentation Republic Act No. 9184 Criminal/Administrative Sanctions For Head/BAC/TWG 1. Premature Opening of Sealed Bid 2. Delaying screening eligibility, opening of bids, evaluation and post evaluation of bids, and awarding of contracts beyond the prescribed periods Republic Act No. 9184 Criminal/Administrative Sanctions For Head/BAC/TWG 3. Unduly influencing or exerting undue pressure 4. Splitting 5. Abuse of power to reject bids Republic Act No. 9184 Thank you!