NPM 027-2004

Requesting Entity: Philippine Tourism Authority

Issues Concern: Request for Authority to procure a Twin-Engine Helicopter and Airplane using the Alternative Method of Procurement, Direct Contracting and Negotiated Procurement



Request to procure a twin-engine helicopter and airplane using Direct Contracting.

This alternative method of procurement may be resorted to by the procuring entity only when there is an exclusivity of dealer or manufacturer and such dealer or manufacturer sells at lower prices and provided further that, no suitable substitute can be obtained by the procuring entity at more advantageous terms. These conditions must be present before the procuring entity be permitted to resort to this alternative method of procurement.

Based on the facts given in your letter, the condition of exclusivity of dealer or manufacturer that offers the lowest price is lacking. Although Polish Aircraft Company PZL Swidnik has an exclusive dealer in the Philippines, the Philippine Polish Industries, Inc., there are other dealers or manufacturers from where Philippine Tourism Authority (PTA) can procure the aircrafts. In addition, reference to brand names is not allowed under R.A. 9184 and its IRR-A, Section 18.

The specifications for the procurement of aircrafts shall be based on their relevant characteristics and/or performance requirements.

In our opinion, TSO NPM 05-2004, DPWH wants to procure a twin engine helicopter from Polish Aircraft Company since it offers the lowest price as compared to other dealers or manufacturers, the GPPB is of the opinion that DPWH must still conduct public bidding even if the Polish Aircraft Company offers the lowest price since the twin engine helicopter is also available from other dealers and manufacturers.

Request to procure a twin-engine helicopter and airplane using Negotiated Procurement.

The procuring entity is only permitted to resort to negotiated procurement when it is necessary to prevent damage to or loss of life or property, or to restore vital public service. This means that in order for the procuring entity to resort to this kind of method of procurement, there must be some sort of exigency in the procurement, requiring immediate action.

In your letter, PTA has not shown that the procurement of helicopter and airplane is an exigency. In fact, PTA has an existing twin engine helicopter. Although the immediate acquisition of the aircrafts will provide the necessary assurance to tourists and divers and better position the country as preferred tourists/divers destinations in the world, the nonprocurement of the aircrafts would neither cause damage or loss to life or property nor would it be detrimental to public service.

Based on the discussion above, we believe that PTA must conduct public bidding on its procurement of a twin-engine helicopter and airplane since the procurement of said aircrafts do not fall under the requested alternative method of procurement, in particular, direct contacting and negotiated procurement.

However, aside from public bidding PTA has the option to rent the helicopter on a need basis or to resort to Limited Source Bidding as provided under Section 49 of IRR-A of R.A. 9184.

We are of the opinion that PTA may resort to this method of procurement since the twin-engine helicopter and airplane are considered a highly specialized type of equipment. Moreover, there are only few manufacturers known and available, considering the specifications needed by PTA. However, under this alternative method of procurement, the procuring entity shall send to all pre-selected suppliers or manufacturer having the expertise in the type of procurement concerned, the invitation to bid indicating therein the relevant information required to enable the latter to prepare their bids as prescribed under the pertinent provisions of IRR-A of R.A. 9184.