NPM 043-2014

Requesting Entity: Criminal Investigation & Detection Group (CIDG) – Philippine National Police (PNP)

Issues Concern: Procurement by Lot; Basis of the ABC and Contract Award



1.Whether the procurement of medicine by lot is allowed under Republic Act No. (RA) 9184 and its Revised Implementing Rules and Regulations (IRR)

Procurement of projects by lot is a recognized mechanism under existing government procurement rules. The Philippine Bidding Documents for the Procurement of Goods, particularly Clause 1.2 of the Instructions to Bidders and the corresponding Bid Data Sheet provision, requires Procuring Entities (PE) to provide the name, identification, and number of lots specific to the bidding.

2.Whether the Approved Budget for the Contract (ABC) should be based per item, the aggregate total, or both

The PE may opt to group several items into one package consisting of several lots, and award the contract per lot; in which case, the ABC shall be based on the budget for each lot that will be awarded separately. Alternatively, the PE may decide to group several items into one lot and award it as one contract. In such case, the sum of the respective budgets of the items aggregated into one lot becomes the ABC for such lot.

3.Whether there is violation if the contract entered into is by lot and the price of the items are higher than the ABC per item

When bids are evaluated by lot, any price offer that exceeds the ABC for a particular lot shall be disqualified for that respective lot. On the other hand, when several items are grouped into one lot and awarded as one contract, bids that exceed the ABC for the lot shall be disqualified per Section 31 of RA 9184 and its IRR.

4.Whether overpricing in some of the items may be off-set by underpricing in other items.

Only bids that are within the ABC, regardless if the price offered for other items in the lot exceeds their respective ABC per item, may be considered for award if proven to be the lowest calculated and responsive bid among all other bids, in the case where several items are grouped into one lot and awarded as one contract.