NPM 037-2008

Requesting Entity: Province of Bukidnon

Issues Concern: Cooperative Undertakings among Local Governments



1. Request for exemption from the 25% threshold for projects undertaken through Agency-to-Agency Agreement.

It is the general poilcy of government to purchase its requirements from the private sector. However, the GPPB acknowledges that, in some exceptional cases, procurement from or contracting with another agency of the government is more efficient and economical for the government. Thus, it is only in these highly exceptional cases, and when justified by the conditions prescribed under the Guidelines, may the procuring entity procure from or contract with another government agency under the 1st paragraph of Section 53 (e) of the IRR-A of R.A. 9184.

Bearing this in mind, the GPPB opted to place a 25% cap in the respective budgets for each procurement category of government agencies under Item 5 (a) (ii) of the Guidelines. Said condition is intended to discourage government agencies from adopting Agencyt-to-Agency agreements as the general rule in procurement transactions.

2. Whether or not cooperative arrangements formed among LGUs under Section 33of R.A. 7160 are subject to the threshold for Agency-to-Agency Agreements.

We believe that cooperative arrangements formed among LGUs under Section 33 of R.A. 7160 are akin to joint venture agreements. x x x

[If the Memorandum of Agreements entered into between LGUs] falls under the definition of a joint venture agreement, the LGU does not have to comply with the threshold prescribed under Item 5 (a) (ii), which properly applies to an agreement where a government agency procures from or contracts with another government agency.