NPM 045-2004

Requesting Entity: Municipality of Pantukan, Compostela Valley

Issues Concern: Use of Shopping as an Alternative Method of Procurement and Splitting of Contracts



Whether or not Shopping as an alternative method of procurement may be utilized by [municipalities] without violating the specific requirements of R.A. 9184 and its IRR-A on the alternative me thods of procurement.

Use of Shopping as an Alternative Method of Procurement
Applying the above-mentioned provision (Section 52, IRR-A) to the factual antecedents of your case, it appears that the BAC of the Municipality of Pantukan erred when it resolved “to adopt Section 52.b. of the IRR-A of R.A. 9184 as the mode of procurement for other goods and small infrastructure projects” considering that based on your representations,
it appears that the justification for such alternative method is due only to time pressure brought about by the impending prohibition on award of Government contracts during the election period, which certainly does not fall under the specified ground provided by Section 52.b of the IRR-A of R.A. 9184. It must be noted also that Shopping as an alternative method is applicable only to procurement of goods and not to infrastructure projects. It can be observed that under the IRR-A of R.A. 9184, the only alternative method of procurement that may be availed of for infrastructure projects is Negotiated Procurement as provided by Section 53 thereof.

Furthermore, the fact that the Procurement Service (PS) depot within your locality is still undergoing construction is not a valid reason for your Municipality to resort to Shopping in the procurement of common-use goods. It must not be forgotten that all government agencies nationwide, regardless of location, are required to procure common use supplies
from the PS as mandated by Letter of Instruction No. 755 and Executive Order Nos. 285 and 359, which was amplified by the pertinent provisions of the R.A. 9184 and its IRR-A. Thus, even in the absence of a PS regional depot in your area, common-use goods must still be obtained from the main warehouse of the PS. However, if there is an unforeseen contingency requiring immediate purchase of readily available off-the-shelf goods or ordinary/regular equipment, your
Municipality may resort to Shopping for the procurement of such goods not exceeding Fifty Thousand Pesos (P50,000.00), pursuant to Sectio n 52.a. of the IRR-A of R.A. 9184.

The Annual Procurement Plan (“APP”) vis-à-vis Shopping as an Alternative Method of Procurement

If the original mode of procurement recommended in the APP was Competitive Bidding, the BAC shall recommend the change in the mode of procurement from Competitive Bidding to Shopping through a Resolution to be approved by the Head of the Procuring Entity. Furthermore, if the items to be procured are not included in the APP, updating of the
individual PPMPs and the consolidated APP must be undertaken to comply with Sections 7.1 - 7.5 of the IRR-A of R.A. 9184.

In other words, Shopping as an alternative method under the specific grounds stated in Section 52 of R.A. 9184 may be availed of by an agency even if such mode is not mentioned in the original APP as the means of obtaining the items to be procured stated therein, as long as such is approved by the Head of the Procuring Entity upon recommendation of the

Splitting of Government Contracts

There is Splitting of Gove rnment Contracts if a particular contract to be awarded by an agency is divided into separate parts for the purpose of subverting the law. Thus, the indicia of contract splitting under the IRR-A depends upon the
purpose for which the contract is divided. If the purpose for the division of the contract into artificial phases or subcontracts is to circumvent or evade the mandatory requirements of R.A. 9184 and its IRR-A, then the public officers responsible for such is guilty of contract splitting. Accordingly, if the goods to be procured by your Municipality through Shopping under Section 52.b, assuming that valid grounds for such exist, is covered by separate contracts when it may be lumped into a single contract and the very reason why such contract is divided is to make it appear that it is
within the P250,000.00 maximum limit, which has the effect of circumventing the provisions of R.A. 9184 and its IRRA, then there is Splitting of Government Contracts.