NPM No. 070-2015

Requesting Entity: University of the Philippines

Issues Concern: Direct Contracting



Whether the procurement of Optical Parametric Generator that is available only from a foreign company with intellectual property rights on the equipment's design may be procured through Direct Contracting

Direct Contracting may be allowed when the procurement involves goods of proprietary nature, which can be obtained only from the proprietary source, that is, when patents, trade secrets, and copyrights prohibit others from manufacturing the same item. However, the procuring entity must first justify the necessity for Direct Contracting, and must be able to prove that there is no suitable substitute in the market that can be obtained at more advantageous terms to the government using specifications based on relevant characteristics and/or performance requirements. Moreover, RA 9184 and its associated IRR adopt Competitive Bidding as the primary method of procurement, and any alternative method may be employed only under highly exceptional circumstances to address economy and efficiency.