NPM 005-2004

Requesting Entity: Department of Public Works and Highways

Issues Concern: Clearance for the purchase of twin-engine helicopter using the alternative method of procurement, in particular, direct contracting or negotiated procurement.



Alternative methods of procurement under the Implementing Rules and Regulations (IRR-A) of Republic Act 9184 (R.A. 9184)

Under R.A. 9184 and its IRR-A, this alternative method of procurement (Direct Contracting) 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 resort to this alternative method of procurement.

Based on the given facts in your letter, the condition of exclusivity of dealer or manufacturer is lacking. In fact, there are three (3) manufacturers from which DPWH can procure the twin-engine helicopter. Although the Polish Aircraft Company has given the lowest price for the “PZL W-3A Sokol”, ex-demo unit, other helicopters from different manufacturers such as the “Eurocopter AS-365N3” and “S76C Sykorsky” have the same specifications and payload capacity. This means that DPWH can procure the twin-engine helicopter from any of these manufacturers since all these helicopters meet the technical specifications prescribed by DPWH.

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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.

However, DPWH has not shown that the procurement of a twin-engine helicopter is an exigency. In fact, presently, DPWH has a fourteen-year single engine helicopter, which is still in operation. Although, DPWH sees the need to replace this existing helicopter for fast-tracking projects located nationwide, the non-procurement of the twin-engine helicopter would neither cause damage or loss of life or property nor would it be detrimental to public service.

We believe that DPWH must conduct public bidding on its procurement of a twin-engine helicopter since the procurement of said helicopter does not fall under the requested alternative method of procurement, in particular, direct contracting and negotiated procurement.

However, aside from public bidding DPWH 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 DPWH may resort to this method of procurement since the twin-engine helicopter is considered a highly specialized type of equipment. Moreover, there are only few manufacturers known and available, considering the specifications needed by DPWH.