NPM 011-2003

Requesting Entity: University of the Philippines – Open University (UPOU)

Issues Concern: Request for Comments/ Suggestions on the Comparison of the Different Modes of Procurement Under R.A. 9184 and their Existing or Internal University of the Philippines – Open University (UPOU) Guidelines and Procedures:



A. Competitive Bidding:

Contrary to the practice of UPOU, where it conducts public bidding only if the project cost is more than Five Hundred Thousand Pesos (PHP.500,000.00), R.A. 9184 did not qualify or restrict the use of competitive bidding in government procurement. As it is, the general rule is to procure by way of competitive bidding regardless of the project cost, and it is only in particular circumstances that government agencies are allowed to procure utilizing the alternative methods of procurement.

B. Pre-qualification

In Sections 23 and 24 of R.A. 9184, the Bids and Awards Committee (BAC) is mandated to determine the eligibility of bidders to be able to participate in the bidding proper. It should be noted that the concept of pre-qualification was totally abandoned in R.A. 9184.

Even under E.O. 40 and its IRR, pre-qualification has been substituted by the simple eligibility checking or screening process, where the BAC employs a non-discretionary pass/ fail criteria during the eligibility screening of the bidder’s technical, legal and financial documents.

In view of the foregoing, we believe that UPOU should now use the simple eligibility checking or screening in place of the pre-qualification process.

C. Procurement of Supplies of Foreign Origin from Exclusive Philippine Agents or Distributors

In R.A. 9184 and even in E.O. 40 and its IRR, procurement by government agencies from exclusive Philippine agencies and distributors through competitive bidding is allowed, subject to eligibility requirements with respect to ownership and equity considerations. However, we wish to point out that in the adoption of Direct Contracting/Single Source Procurement, an alternative method being employed by UPOU, procurement from Philippine agents or distributors is likewise allowed subject to certain limitations and requirements.

It appears that the rules of UPOU in the procurement of supplies of foreign origin are similar to the rules on Direct contracting under R.A. 9184, with particular reference to Section 50(c) thereof. Thus, we believe that UPOU may procure from exclusive dealers or manufacturers provided they do not have sub-dealers selling at lower prices, and no suitable substitute can be obtained at more advantageous terms to the Government.

D. Repeat Order

R.A. 9184 allows the use of Repeat Order as an alternative method of procurement. However, in order to avail of this mode, each procuring entity would have to comply with the conditions provided for under Section 51 of R.A. 9184.

It must be stressed, however, that the Repeat Order shall not exceed twenty-five percent (25%) of the quantity of each item in the original contract. Thus, under R.A. 9184, UPOU would no longer be able to conduct Repeat Order more than 25% of the quantity of the original contract as previously practiced.

E. Sealed Bidding

Sealed bidding as an alternative mode of procurement is not allowed under R.A. 9184. Section 48 of R.A. 9184, the provision governing the various alternative methods of procurement, makes no mention of “sealed bidding.”

F. Open-Canvass

Open-canvass as an alternative method of procurement is still sanctioned by R.A. 9184 in the form of Shopping. In Shopping, the Procuring Entity simply requests for the submission of price quotations for readily available off-the-shelf goods or ordinary/regular equipment to be procured directly from suppliers of known qualification. (Section 48 [d], R.A. 9184)

G. Over-the-Counter Purchase

Over-the-Counter Purchase which we would consider as falling under the term "Shopping," may only be undertaken under the circumstances enumerated in Section 52 of R.A. 9184. With respect to item (b) of the same section, it should be noted that if the office supply is available in the Procurement Service (PS) of the Department of Budget and Management (DBM), the same may only be obtained therefrom, because PS-DBM is tasked with centralized procurement of commonly used Goods for the government. (See Section 53 [e], R.A. 9184)