Reviewer.docx

Introduction - 1.1 - 1.1.1 The herein Implementing Rules and Regulations (IRR) are prescribed to standardize and provide uniformity to the existing rules and regulations governing the procurement of goods using government funds. - 1.1.2 The aims and purposes...

Introduction - 1.1 - 1.1.1 The herein Implementing Rules and Regulations (IRR) are prescribed to standardize and provide uniformity to the existing rules and regulations governing the procurement of goods using government funds. - 1.1.2 The aims and purposes of the government\'s procurement process are as follows: - to purchase goods of acceptable quality at fair and reasonable prices from qualified and capable suppliers/manufacturers/distributors, with on time delivery and satisfactory compliance of all contract terms and conditions; - to assure fair and equitable treatment of suppliers/ manufacturers/distributors including arrangements for prompt payments; - to adopt procurement procedures that utilize information technology; and - to maintain records and collect data for refinement of procurement policies and procedures based on experiences gained. - 1.2 Coverage and Applicability - 1.2.1 The IRR applies to all supply contracts of National Government agencies, including Government-Owned or Controlled Corporations (GOCCs), for procurement of goods, supplies, and materials for project-related or regular operations and maintenance activities. It covers procurement of services like janitorial or security services, repair and maintenance services, and materials provided by the agency. Supplies include everything, except real estate. General Procedures - 3.1 Certificate of Availability of Funds - 3.1.1 Contracts for the procurement of goods shall not be approved unless a Certificate of Availability of Funds (CAF) has been issued by the proper accounting official of the concerned agency certifying that funds are available and have been duly appropriated for the purpose to cover the expenditures for the current fiscal year. - 3\. 2 Procurement Planning - Procurement of goods shall be undertaken according to a procurement plan that the agency concerned shall formulate to ensure that the goods/supplies/materials to be procured are available when needed. The basic content of the procurement plan including pertinent guidelines and policies thereon are prescribed in Annex \"B\". - 3.3 Method of Procurement - 3.3.1 As a general rule, awards of contracts shall be done after open competitive bidding unless a more appropriate method has been duly approved for adoption. Other than the open competitive bidding methods, Annex \"C\" outlines the various alternative methods of procurement. - Annex C - The alternative methods include: 1. Limited Source Bidding 2. Direct Contracting or Single-Source Procurement 3. Repeat Order 4. Shopping 5. Negotiated Procurement - 3.4 Who May Be Eligible to Bid - 3.4.1 For Procurement Financed by the Government the following manufacturers/suppliers/distributors, whether 100% local - or at most 40% foreign owned, may participate in the bidding for the supply of goods to be bid out by the Government: - Duly licensed Individuals/Sole proprietorship; - Partnerships or corporations; - Manufacturers/suppliers/distributors forming themselves into a joint venture, - Cooperatives duly registered with the Cooperatives Development Authority (CDA). - 3.4.2 For projects financed wholly or partly with funds from International Financing Institutions (IFIs) as well as bilateral and other sources, eligible bidders shall meet the following requirements: - a\. the manufacturers/suppliers/distributor is an entity from an IFI/member country and eligible in accordance with the procurement rules of the IFI concerned as may be required; and - b\. the goods must be manufactured in or supplied, as well as bid by, an eligible member country bidder as may required under the procurement rules of the IFI concerned. - 3.4.3 Only eligible bidders as hereinafter determined may participate in the bidding and may be awarded contracts. An exceptional case is the acquisition called for under the Armed Forces of the Philippines (AFP) Modernization Program wherein only offers from suppliers who are manufacturers themselves shall be entertained pursuant to the pertinent provisions of RA 7898. Bidding Process - 4.1 Preparation of Bid/Tender Documents - 4.1.1 To ensure fairest competition, the Bid/Tender Documents shall describe clearly and precisely the nature of the goods. Annex \"D\" discusses and elaborates on the basic content of the Bid/Tender Documents. - 4.2 Invitation to Apply for Eligibility and to Bid - 4.2.1 The Invitation to Apply for Eligibility and to Bid for local competitive bidding must be publicly advertised at least 14 days before the deadline, in two consecutive issues of two newspapers, posted on the Department of Budget and Management\'s website, and at a conspicuous place. For contracts costing two million pesos or less, the advertisement may only be posted on the website or at a designated location. - 4.2.2 For international competitive bidding, advertisement shall be done along the same lines prescribed above. Advertisements of invitations for contracts financed partly or wholly from ODA funds provided by IFIs shall be in accordance with the procedures established by and agreed upon with the concerned IFI. - 4.2.3 For procurement methods other than the open competitive procedure, public advertisement of the Invitation to Apply for Eligibility and to Bid may be dispensed with. - 4.3 Issuance of Application for Eligibility Forms and Bid/Tender Documents - 4.3.1 Prospective bidders shall be given ample time to examine the forms for application for eligibility and the bid/tender documents and to prepare their respective bids. To provide ample time, the concerned BAC shall make available upon payment, if applicable, said documents from the time the Invitation to Apply for Eligibility and to Bid is first advertised. - 4.3.2 Supplemental bulletins may be issued by the government or interested parties who secured bid/tender documents to clarify provisions. Amendments should be identified as amendments. These bulletins must be sent by mail, hand, or electronic to interested parties within a reasonable time. Requests for clarification must be in writing and submitted to the BAC within 14 days before the deadline for eligibility and bid envelopes. All clarifications must be made in writing and furnished to interested parties. - 4.4 Determination of Eligibility of Prospective Bidders - 4.4.1 The capabilities and resources of prospective bidders shall be initially assessed, subject to post-qualification, to determine if they meet the requirements for eligibility. The determination of eligibility of prospective bidders shall be based on the submission of the following documents as specified hereunder: - Legal Documents - Technical Documents - Financial Documents - 4.4.2 The eligibility of prospective bidders shall be determined using simple \"pass/fail\" criteria and shall be determined as either \"eligible\" or \"ineligible\". - 4.4.3 If only one bidder is found to be eligible, or that only one bidder responded to the Invitation to Apply for Eligibility and to Bid, the agency concerned shall recognize a lone eligible bidder as valid. - 4.4.4 Notwithstanding the eligibility of a bidder, the government reserves the right to review the qualifications of a bidder before the bidding of the contract is made. Should such review uncover any misrepresentation made in the eligibility statements, or any changes in the situation of the bidder to materially downgrade the substance of such statements, the agency concerned shall disqualify the bidder from submitting a bid. - 4.5 Pre-bid Conferences - 4.5.1 The government conducts pre-bid conferences for contracts over P1,000,000 to clarify requirements, terms, conditions, and specifications. For contracts under P1,000,000, pre-bid conferences may be conducted at the discretion of the concerned office/agency/corporation. The conference should be held 14 days after bid documents are made available, and bidders bear all costs. - 4.5.2 Among others, the pre-bid conference shall discuss the following: - a\. Technical specifications - b\. Legal requirements - c\. Financial requirements - d\. Production capability requirements - e\. Delivery schedule - f\. After-sales service requirements - 4.5.3 Any statement at the pre-bid conference shall not modify the terms of the bid documents unless such statement is specifically identified in writing as an amendment thereto and sent by mail, by hand or electronically to all parties who have secured the bid/tender documents. The minutes of the conference(s) shall be recorded and made available to all participants. - 4.6 Submission, Receipt and Opening of Eligibility and Bid Envelopes - 4.6.1 Prospective bidders must submit eligibility and bid documents simultaneously, sealed and containing required documents. For single-stage bidding, two envelopes should be submitted, while bidding documents should be submitted first. Ineligible bidders must return unopened bid envelopes. - 4.6.2 Bidders may be required to submit bids either through the single-stage bidding procedure, its variation or two-stage bidding procedures depending on the requirements of the procurement process as duly approved for use. - 4.6.3 Each bid shall be accompanied by a bid security that is payable to the concerned agency as a guarantee that the successful bidder shall, within fifteen (15) calendar days after receipt of the Notice of Award, enter into contract with the Government and furnish the required performance security for the faithful performance of all works called for. Failure to enclose the required bid security as to form and amount prescribed herein shall automatically disqualify the bid concerned. - 4.6.4 The amount of the bid security shall be fixed at an amount equal to two-and-one-half percent (2-1/2%) of the approved budget for the contract to be bid. - 4.6.5 Bids and bid securities shall be valid for such reasonable period determined by the head of the agency concerned. This period shall be so indicated in the Instructions to Bidders. In no case shall this period exceed one hundred twenty (120) days from the date of opening of bids - 4.6.6 Withdrawal of bids after the applicable deadline shall be subject to appropriate sanctions as prescribed herein. Bid modifications received after the applicable deadline as well as bids submitted after the deadline for the submission of bids shall not be considered and shall be returned unopened. Subject to this restriction, a prospective bidder may withdraw his bid, including the bid security, or modify it. Where a bidder wishes to modify his bid, he shall not be allowed to retrieve his original bid, but shall only be allowed to send another bid equally sealed, properly identified and linked to his original bid and marked as \"modification\" - 4.6.7 No bid securities submitted in the form of sureties of all complying bidders shall be returned after the opening of bids. Bid securities submitted in form other than sureties, such as cash, cashier\'s check, manager\'s check, letter of credit and bank draft/guarantee, may be returned upon request of the bidder, provided that he is not among the three lowest evaluated complying bidders and such withdrawal shall be construed as a waiver by the bidder for the award of contract. Bid securities in the form of sureties shall be returned only after the successful bidder has signed the contract and furnished the performance security but not later than the expiration of the bid security validity period indicated in the Instructions to Bidders. - 4.6.8 If only one (1) bid is received in response to an invitation for bids, an award may be made to the single bidder provided that his bid price is not higher than the approved budget for the contract to be bid, his bid passes post qualification, and there is no evidence of collusion with non-participating suppliers and/or other parties and that other prospective bidders were given equal opportunity to respond. - 4.7 Determination of the Lowest Calculated Responsive Bid - 4.7.1 The \"lowest calculated responsive bid\" is defined as the bid (a) with the lowest calculated price as determined in section 4.8.3, and (b) which complies with or is responsive to all the requirements hereof. The bid satisfying (a) shall be referred to as the lowest calculated bid. - 4.7.2 The BAC shall determine the lowest calculated responsive bid in the following manner: - Determine whether each eligible bid complies with the submission requirements - Establish the calculated prices - Post qualification of the bidder with the lowest calculated price - 4.8 Examination and Evaluation of Bids - 4.8.1 Bids must be evaluated using \"pass/fail\" criteria. Bids must be submitted in sealed envelopes for single, double, or multi-stage bidding, with bids containing all requirements rated \"passed\" for evaluation and comparison. - 4.8.2 The bid evaluation aims to determine the lowest calculated bid. The bid evaluation shall be based on a detailed analysis of the following: - Completeness of the bid unless the instructions to bidders specifically allow partial bids, bids not offering all of the required items shall be considered non-responsive and, thus, automatically disqualified. - The bid security must conform to the requirements of the Instructions to Bidders, as to type, amount, form and wording, and validity period. - The recurring costs if any and maintenance costs. - The bid price subject to a price equalization analysis calculating arithmetical errors and other minor deviations. - Identification of minor/major deviations and terms and conditions as described in the Instructions to Bidders Bids. - Corrections for errors, discounts, and other modifications - 4.8.3 The concerned agency may employ any of the specific evaluation procedures described in Annex \"H\". The use of any such procedure shall be approved by the head of the concerned office/agency/corporation and indicated in the Instructions to Bidders - Annex H 1. Lowest Calculated and Responsive Bid (LCRB) 2. Quality-Cost Based Evaluation (QCBE) 3. Quality-Based Evaluation (QBE) 4. Cost-Only Evaluation (COE) - 4.8.4 Evaluation of bids shall be completed not later than thirty (30) calendar days from the date of the opening of bids. - 4.8.5 The Government reserves the right to reject any or all bids or to declare the bidding a failure if there is evidence of collusion among bidders thus resulting in the absence of competition - 4.8.6 No information shall be disclosed to persons outside the BAC.. After the award of contract, all unsuccessful bidders shall be informed individually in writing. - 4.9 Failure of Bidding - 4.9.1 The government shall declare a bidding failure and conduct a rebidding with readvertisement if no bids are received, or without re-advertisement if all bids fail to meet eligibility or qualification requirements. - 4.9.2 Should there occur another bidding failure after the conduct of the project\'s rebidding, the agency concerned may enter into a negotiated procurement. - 4.10 Post qualification of the Lowest Calculated Bid - 4.10.1 The BAC must conduct a post qualification within 30 days of determining the lowest calculated responsive bid. These criteria shall consider, but shall not be limited to, the following measures: - A. Legality of documents - B. Evaluation of technical capacity - C. Evaluation of financial capability - If the bidder passes in all criteria, he shall be considered post qualified. If, on the other hand, the bidder fails in any of the criteria, he shall be considered post disqualified. Contract Award and Implementation - 5.1 Award of Contract - 5.1.1 Award of contract shall be made using the submitted, not the calculated, price for the contract under bidding. - 5.1.2 The decision whether or not to award the contract shall be made within thirty (30) calendar days after the completion of bid evaluation. - 5.1.3 For foreign-assisted projects, the duly approved decision to award shall be transmitted to the concerned IFI, for concurrence as may be required, within seven (7) calendar days from the date of approval of the decision. Likewise, the Notice to Award shall be issued by the concerned agency within seven (7) calendar days from the date of concurrence of the concerned IFI. - 5.1.4 The BAC determines the lowest calculated responsive bidder and awarded at the submitted bid price. If the calculated lowest bidder fails the criteria, they have seven days to reconsider. If the second lowest bidder passes, the contract is awarded at the submitted price. - 5.1.5 Contract award must be made within bid validity, and if extension is needed, agency must request it in writing, but bidders can refuse without forfeiting bid security. - 5.1.6 The successful bidder must execute the contract with the agency within 15 calendar days after receiving the award, and unsuccessful bidders will be notified through official notices and communications. - 5.2 Performance Security - 5.2.1 The contract awardee shall post a performance security within the time specified by the concerned agency after contract signing. The performance security may be released after the issuance of the \"Certificate of Acceptance\" of the goods provided that there are no claims filed against the awardee or the surety company. - 5.2.2 The supplier/manufacturer/distributor shall post an additional performance security proportionate to cover any cumulative increase of more than ten percent (10%) over the original value of the contract, including validity extension for cost adjustments and/or Amendments to Order. Similarly, the agency concerned may allow a proportional reduction in the original amount of performance security in case of a reduction in contract value. - 5.3 Warranties - 5.3.1 A warranty shall be required of the successful bidder, the obligations for which shall be covered by either retention moneys in the amount equal to ten percent (10%) of every progress payment, or a special bank guarantee equivalent to ten percent (10%) of the total contract price. Such amounts shall only be released after the warranty period provided that the goods supplied are free from defects and all the conditions imposed under the contract are fully met. - 5.3.2 For supply contracts which include installation and commissioning services in addition to the supply of goods/equipment, the period and the required obligation of the warranty shall cover the same. - 5.4 Refusal to Enter into Contract - 5.4.1 Should the lowest calculated responsive bidder refuse, fail or be unable to enter into contract, he shall be meted with the appropriate sanctions provided under Annex \"M\" of these IRR and the office/agency/corporation concerned may consider for award the second lowest calculated responsive bidder provided it does not exceed the approved budget. In case of another refusal or failure, appropriate sanctions shall likewise be imposed. - 5.5 Approval of Contracts - 5.5.1 Supply contracts should be approved or disapproved by the Head of Agency concerned or his duly authorized representative within fifteen (15) calendar days from the date the successful bidder has executed the contract and submitted all documentary requirements to perfect the contract. - 5.6 Issuance of Notice to Proceed - 5.6.1 The concerned agency shall issue the Notice to Proceed (NTP) not later than fifteen (15) calendar days from the date of contract approval. - 5.7 Amendment of Order - 5.7.1 Amendments to order may be issued at any time by the concerned agency. If any such order increases or decreases the cost or the time required, an equitable adjustment shall be mutually agreed upon and the contract accordingly modified in writing. - 5.8 Suspension of Work - 5.8.1 The Government may suspend the work wholly or partly due to force majeure or any fortuitous events as defined in the contract. The supplier shall take all reasonable steps to minimize the costs. - 5.8.2 Before the suspension order expires, the agency concerned shall either lift or terminate the work. If the suspension order is lifted, or if the period of the order expires, the supplier shall have the right to resume work. Appropriate adjustments shall be made and the contract shall be modified accordingly. - 5.9 Contract Termination - 5.9.1 The Government may terminate the contract for reasons of default and/or convenience. - 5.9.2 Notwithstanding contract termination and subject to any directives from the concerned agency, the supplier shall take timely, reasonable and necessary actions to protect and preserve property(s) in his possession upon which the Government has an interest. - 5.10 Liquidated Damages - 5.10.1 When the supplier fails to satisfactorily deliver goods within the specified delivery schedule, inclusive of duly granted time extensions, if any, the supplier shall be liable for damages and shall pay the Government for liquidated damages an amount equal to onetenth(1/10) of one percent (1%) of the cost of the delayed goods per day until accepted. - 5.10.2 The Government need not prove that it has incurred actual damages to be entitled to liquidated damages. Such amount shall be deducted from any money due or collect the same from any supplier securities. In no case shall the total sum of liquidated damages exceed fifteen percent (15%) of the total contract price, in which event the concerned agency shall automatically terminate the contract and impose appropriate sanctions over and above the liquidated damages to be paid. - 5.11 Administrative Sanctions - 5.11.1 For offenses/violations committed under the pertinent provisions of these IRR, appropriate administrative sanctions shall be imposed on erring suppliers as prescribed under Annex \"M\". Procurement by Electronic Means - 6.1. Within two (2) years from the issuance of these IRR, government offices/agencies/corporations must adopt electronic communications and digital information processing technology systems for procurement procedures. Procedures must be guided by transparency, accountability, equity, effectiveness, efficiency, and economy, and eligibility determinations must follow these regulations. - 6.2 Government offices/agencies can gradually implement electronic procurement, starting with basic commodities. Until Supreme Court rules are issued, BAC requires hard copies of documents. Inconsistencies between electronic and hard copies can lead to disqualification. Offices must keep hard copies to prevent loopholes. Effectivity - 7.1 These Implementing Rules and Regulations (IRR) as well as their amendments shall take effect fifteen (15) days after the date of publication of the same in the official gazette or in a newspaper of general circulation. The IRR and their amendments shall have prospective application.