NPM No. 022-2016

Requesting Entity: Civil Aviation Authority of the Philippines (CAAP)

Issues Concern: Direct Contracting



Guidance relative to CAAP's procurement of Flight Yield Service (FYS), through Direct Contracting, that is available only from Sita Bureau Services (SBS).

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. Consequently, 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; but 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.