NPM 015-2004

Requesting Entity: Office of the City Legal Officer of Tacloban

Issues Concern: Posting at the G-EPS Website and the Exemption of Cooperatives from Compliance with the Eligibility Requirements



1. Whether or not there is a price limit for items that should be posted at the G-EPS:
a) Whether or not posting is required even if the item to be purchased is less than P 1,000.00.

b) If there is a limit, would the amount be per purchase request (meaning the aggregate amount of all items
listed in the PR) or per item.

It can be readily seen that Section 21.2.1 (b) does not provide for a price ceiling or floor, the same is also true with Section 21.2.4. If at all, only Section 21.2.3 provides for a limitation with respect to the ABC. Be that as it may, whether the bid is more or less than the indicated thresholds, posting at the G-EPS is still necessary. As such, whether the ABC is above or below Two Million Pesos (Php 2,000,000.00) for goods, Five Million Pesos (Php 5,000,000.00) for works and One Million Pesos (Php 1,000,000.00) for procurement of consulting services, the invitation to apply for eligibility and to bid should be posted at the G-EPS. This is also true with the procurements conducted by way of alternative method as sanctioned by Section 21.2.4.

2. Whether or not cooperatives participating in the bidding are exempt from pre -qualification/eligibility check.

Another privilege granted to cooperatives that cannot be overlooked is its exemption from pre-qualification bidding requirements mandated by no less than its enabling law. Section 63(9), R.A. 6938 provides:

(9) Cooperatives transacting business with the Government of the Philippines or any of its political subdivision or any of its agencies or instrumentalities, including government-owned and controlled corporations shall be exempt from pre-qualification bidding requirements; (Emphasis supplied).

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The concept of “pre-qualification” has been modified to a simpler procedure known as the “simple eligibility check,” which utilizes an objective and non-discretionary pass or fail criteria in the examination of the eligibility documents submitted by the bidder. Be that as it may, the import and tenor is the same. As in pre-qualification, only bidders declared eligible are allowed to submit bids, a situation side-stepped by R.A. 6938, specifically Section 63(9), to pave the way for the growth and development of cooperatives in the Philippines.

To stress the point, notwithstanding the change, the concept of pre-qualification under P.D. 1594 or the simple eligibility check under R.A. 9184 are both restrictive in the sense that only those prospective bidders who are able to comply with the rigid requirements of the pre-qualification/eligibility check will be allowed to participate. The restrictive nature of both the pre-qualification requirement and the simple eligibility check was certainly inconsistent with the thrust of promoting the cooperative’s participation in the bidding process.

In the present state of things, the legislative intent of granting cooperatives the privilege of being exempt from the rigid requirements of pre-qualification or simple eligibility check to our mind, still stands. The spirit of Section 63(9), R.A. 6938 that giveth life to cooperatives should still be countenanced and the change in procedural nomenclature from prequalification to simple eligibility check, which seemingly killeth, should be reconciled with the noble intention of enabling cooperatives to develop into a viable and responsive economic enterprise, thereby bringing about a strong cooperative movement that is free from any condition that might infringe upon its autonomy and organizational integrity.

3. Whether or not the local government unit may resort to negotiated procurement under Section 53 (e) of R.A. 9184.

By reason of the above-cited provision, the City of Tacloban may specifically seek the help of another government agency to procure for and in its behalf, subject only to such requirements as may be provided by law. It must be borne in mind, however, that procurement outsourcing should not veer away from the concept of competitive bidding, in that, the agency procuring for the City of Tacloban, should consider procurement of the requested goods, services, infrastructure project or consulting services, as the case may be, by way of competitive bidding. Option as to the use of any alternative method should always be considered as a last recourse in order not to defeat the purpose of competitive bidding.

Emphasis must be made at this juncture that the concept of outsourcing simply involves a situation where a procuring entity, having no knowledge, proficiency or experience in the procedures relating to public procurement, seeks the help of another government agency to handle its procurement. In this eventuality, the requesting entity may always require the agency with which the procurement is being outsourced to procure by way of competitive bidding.