NPM 161-2004

Requesting Entity: Department of Trade and Industry

Issues Concern: Lease of Office Space



Procurement Method for the Lease of Office Space

The appropriate procurement method for the lease of office space is Competitive Bidding. Competitive bidding implies an open participation by any and all qualified suppliers, consultants or contractors in a selection process to determine the party that can offer to the government the most advantageous deal. x x x

However, the peculiarity involved in the lease of office space deserves more consideration specifically in the preparation of the technical specifications. The lease of office space depends entirely on the needs and requirements of the agency such as, but not limited to, location, the width and dimension of the area, floor shape and size, accessibility, amount of lease, structural aptness, architectural design, interior set-up, floor to ceiling clearance, communication readiness, electricity load, access to light, view and air, and the like.

The restrictive and customized technical specifications involved in the lease of office space calls for elaborate specifications which may indicate more detailed and need-specific requirements. As such, although competitive bidding is the primary recourse, the peculiarity of the object to be bid limits the number of bidders qualified to deliver an agency’s requirements.

In sum, except where the canvassing and actual physical inspection undertaken by DTI are merely considered as preliminary to the determination of technical specifications to be required in view of the contemplated procurement, the previous action was not in accordance with the dictates of R.A. 9184.

So as to avoid the recurring issue on the re-negotiation or renewal of lease contracts, it is best that DTI lease office space on a multi-year basis pursuant to Budget Circular (BC) No. 2004-12. The multi-year project may be pursued either with appropriations available in full during the first year of implementation or with multi-year appropriations after the agency has first secured a Multi-Year Obligational Authority from the Department of Budget and Management.