NPM No. 148-2017


Issues Concern: Clearance/Authorization for the Procurement of Heavy Equipment



Whether there is a requirement for the City Government to secure clearance/authorization from any relevant government agency prior to its procurement of several heavy equipment for its infrastructure projects and solid waste management programs with a budget amounting to One Hundred Million Pesos (100M).

Item 4.0 of Department of Budget and Management (DBM) Budget Circular No. 2010-2, as amended by Budget Circular No. 2017-1, provides that Governors, City and Municipal Mayors, and Punong Barangays are authorized to purchase the types of motor vehicles enumerated in Sub-Item 3.1 thereof for their respective provinces, cities, municipalities and barangays out of their unencumbered local funds covered by appropriations ordinances specifically authorizing/earmarking funds for the purpose. However, the said item of the Budget Circular also states that the approval of the DBM for the acquisition of motor vehicles enumerated under Sub-Item 3.1, or of the Office of the President (OP) for motor vehicles enumerated under Sub-Item 3.2 thereof, shall be required in cases where the purchases are sourced from national government funds under the General Appropriations Act.

We wish to note that a perusal of the Budget Circular would show that the rules do not make a qualification based on the amount of the motor vehicles to be procured as to which purchases require the approval of the DBM or the OP. Instead, the rules make a classification of motor vehicles based on their descriptions and specifications laid down in the same DBM Budget Circular.