NPM 110-2014

Requesting Entity: Metropolitan Waterworks and Sewerage System (MWSS RO)

Issues Concern: Direct Contracting



Whether the MWSS RO can resort to Direct Contracting for the procurement of the subscription to Bloomberg Professional Service (BPS)

The approval of the Government Procurement Policy Board (GPPB) before a Procuring Entity (PE) may proceed with the alternative method of procurement is only necessary for government contracts involving an amount of at least 500 Million Pesos, where the Head of the Procuring Entity (HOPE) has made a determination that such contract falls under any of the exceptions from public bidding. Thus, if the amount of the government contract to be procured through alternative method of procurement is less than 500 Million Pesos, GPPB approval is not necessary.


For the first and third conditions under Section 50 of the IRR to apply, it is incumbent upon the PE to ensure that based on the technical specifications of the goods subject of procurement, only one supplier, distributor or manufacturer can supply and deliver the goods. The PE, through the End-User, and the BAC should conduct a survey of the industry and determine the supply source to confirm the exclusivity of the source of goods to be procured. Moreover, the PE must justify the necessity for an item that may only be procured through Direct Contracting, and it must be able to prove that there is no suitable substitute in the market that can be obtained at more advantageous terms.

Mere presence of Certificate of Exclusive Distributorship by one company does not sanction resort to Direct Contracting as there may be other companies who can offer a similar product that complies with the technical specifications of the goods needed by the PE. When there are other suppliers or manufacturers which can provide the goods within the parameters established by the PE disavows resort to Direct Contracting and requires the use of Competitive Bidding as the default method of procurement.