NPM 007-2009

Requesting Entity: Philippine National Police

Issues Concern: Petroleum, Oil and Lubricants Procurement



1. What can be used as the Approved Budget for the Contract (ABC) of POL products?

The determination of the different cost components that would comprise the ABC for the subject item for bidding is the responsibility of the procuring entity. In no case, however, shall the ABC exceed the appropriation for the procurement at hand.

2. Will suppliers bid for each POL product type and how will the POL products be grouped?

The packaging of the subject item for bidding as expressly provided for in the bidding documents, lies within the prerogative and sound discretion of the procuring entity conducting the bidding. Hence, the procuring entity may opt to resort to procurement by lot or just one package for all types of POL products. Necessarily, therefore, the supplier will have to bid either for each product type of POL Products or for the whole package, depending on what is clearly stated in the procuring entity's bidding documents.

3. Will it be necessary to determine the total contract price for each POL product type?

The contract price of POL products will be computed based on the following formula:

a) POL Products using WPP index: WPP - discounts (if any) + delivery cost + Cost for E-VAT

b) POL Products using MOPS and ICIS-LOR index: MOPS or ICIS-LOR + Premium + delivery cost + Cost of E-VAT

4. How will the actual price payable to the supplier be computed?

For staggered deliveries, the procuring entity shall make, after every delivery, an accounting of the amount actually payable based on the date of the delivery receipt to determine the allowable unit/volume that may still be ordered from the remaining amount allotted for each POL product. The procuring entity shall be allowed to make adjustments in the units/volume to be delivered per type of product to conform to the remaining amount in the total contract price.

For contracts stipulating consignment whereby a supplier makes a delivery of POL products to a procuring entity's holding area and payment is based on volume consumed, the actual price payable shall be determined based on the weighted average if the applicable index from the date the order is placed up until the cut-off date for payments agreed upon by the parties. The same rule shall apply for contracts where a major supplier delivers the POL products to the procuring entity through its authorized stations and/or distribution centers.