NPM 124-2014

Requesting Entity: Fertilizer And Pesticide Authority (FPA)

Issues Concern: Negotiated Procurement under Section 53.1 (Two-Failed Biddings)



Whether an Observer needs to be invited for Negotiated Procurement (Two-Failed Biddings)

For Negotiated Procurement (Two Failed Biddings), we refer, to Section 53.1.6 of the IRR of RA 9184, which states that "[i]n all stages of the negotiations, Observers shall be invited." The use of the word "shall" makes the invitation of Observers mandatory. The word "shall" means ought to, must, obligation used to express a command or exhortation used in laws, regulations or directives to express what is mandatory.

Following the requirements under Section 13.3 of the revised IRR of RA 9184, Observers shall be invited at least three (3) calendar days before the date of the negotiation and the absence of Observers will not nullify the BAC proceedings, provided that they have been duly invited in writing. If any of the invited Observers fail to attend the negotiation stage on the indicated schedule, the procurement process should continue since the absence of any of the Observers is not a ground to delay the proceedings.

Whether the minimum requirements for a contractor to be eligible to participate in the negotiation process are the same with the eligibility requirements in the conduct of public bidding.

[T]he revised IRR of RA 9184 is silent as to whether or not the same eligibility documents required in public bidding must likewise be submitted when resorting to any of the Alternative Methods of Procurement, except those where competitive bidding or semblance thereof is present, i.e. Limited Source Bidding and Negotiated Procurement (Two Failed Biddings).

[T]he procuring entity has the discretion as to what legal, technical and financial eligibility documents to require, with a caveat that it shall "[d]irectly negotiate a contract with a technically, legally and financially capable supplier, contractor or consultant." On the other hand, it must be emphasized that the use of alternative methods of procurement is couched upon the principles of efficiency and economy, such that requiring too many eligibility documents may, in the process, defeat the very purpose for which the relevant alternative procurement modalities were introduced and institutionalized.