NPM 004-2007

Requesting Entity: Department of Social Welfare and Development

Issues Concern: Swiss Challenge



Whether procuring entities may adopt the Swiss Challenge system in its procurement transactions.

[T]he Swiss Challenge system is more appropriately applied outside the framework of a competitive public bidding. It is initiated by an unsolicited proposal or when the original proponent makes an offer to the government without any formal or informal request from the former. To ensure that the original proponent's scheme is superior, third parties are allowed to challenge said scheme during a designated period. The original party then gets the right to counter-match any superior offers given by the third party.

R.A. 9184 and its IRR-A do not legally sanction the adoption and use of the Swiss Challenge system. We believe that R.A. 9184 does not prescribe this system since the conduct of public bidding already ensures that the lowest complying and responsive bid or the highest rated and responsive bid, as the case may be, is the most favorable bid to the government. Adoption of the Swiss Challenge system after conduct of public bidding may thus be considered redundant.