NPM No. 172-2015

Requesting Entity: Philippine Postal Corporation (PHLPost)

Issues Concern: Agency-to-Agency Agreements



Does the act of PHLPost in having its Joint Venture (JV) partner undertake the printing of the Philippine Health Insurance Corporation (PHIC) cards negate the Agency-to-Agency (A-to-A) nature of the proposed Memorandum of Agreement between PHLPost and PHIC, considering that the participation of the JV partner is not mentioned in the said MOA and considering that the JV partner is a private entity?

[U]nless PHLPost is able to lawfully provide the basis(es) to provide "printing services" as part of its legislative mandate, it may be gainfully said that "printing services" is not part of PHLPost's functions under Republic Act No. 7354; and thus, the proposed arrangement with PHIC will not fall within the purview of an A-to-A negotiated modality pursuant to the rules and the Guidelines on A-to-A Agreement. Furthermore, the "printing services", which PHIC intends to procure, will be ultimately performed by Filmetrics, notwithstanding the fact that the printing of ID cards under the Biometric Data Service Facility is not covered by PHLPost-Filmetric's JVA. To pursue an A-to-A agreement, where a private entity ultimately performs the contractual obligations of the Servicing Agency is not contemplated by the rules. The proposed setup, if implemented, may put other market operators at a disadvantage specifically so when they are capable of providing better quality "printing services" at the best price if the procurement opportunity is subjected to competitive bidding. Unless exceptional circumstances exist to warrant resort to other alternative methods of procurement, to competitively bid the procurement opportunity is still the primordial mode of procurement under the circumstances.