NPM No. 097-2015

Requesting Entity: Development Bank of the Philippines (DBP)

Issues Concern: Direct Contracting; Mixed Procurement



Whether DBP could adopt the modality of Direct Contracting under Section 50(a) of Republic Act (RA) No. 9184 and its revised Implementing Rules and Regulations (IRR) in the procurement of Anti-Money Laundering (AML) Management System Upgrading Project (Project).

A cursory reading of Section 50 of RA 9184 will reveal that Direct Contracting is a recourse available only in the procurement of goods defined under Section 5(r) of the IRR of RA 9184. On the other hand, x x x Direct Contracting is not applicable as an alternative modality for the procurement of Consulting Services as defined under Section 5(i) of RA 9184.

[T]he propriety of the resort to Direct Contracting under Section 50(a) of RA 9184 for DBP's procurement for the upgrading of its AML System depends on whether the Project is classified as Goods or Consulting Services, which is entirely dependent on how the procuring entity views the project subject to the "primary purpose of the contract" to be procured.

[T]he classification of the procurement project is incumbent upon the PE to determine. Such determination should be based on the PE's identified needs and the best way by which these needs may be addressed, managed and satisfied. It is from the identified need that the PE then classifies whether the procurement activity is treated as goods, infrastructure project or consulting services based on the definition of these terms as found in the procurement law and the IRR.