NPM 040-2009

Requesting Entity: LTO - Regional Office No. 8 Tacloban City

Issues Concern: Trade-in Transactions



Request for opinion with applicable provisions relative to trade-in transactions.

Trade in transactions involves two (2) connected activities of the government agencies, namely: (i) disposal of government property and (ii) procurement of goods, which transactions are covered by different rules. The rules on disposal of government property is governed by COA Circular 89-296 while that of procurement of goods is covered RA 9184 and its IRR-A.

A review of COA Circular 89-296 in correlation with the provisions of RA 9184 and its IRR-A reveals that the principles involved in public bidding for disposal of government property are also present in procurement of public contracts, such that the fusion of the rules on disposal and the rules on procurement would not undermine the rationale behind and the principles governing the former. It is necessary, however, that the winning bidder has the lowest bid for the delivery [of the item being procured] and at the same time has the highest quote for the unserviceable property, which should not be less than the book value of such unserviceable property.

[I]t is our considered opinion that the rules on procurement of goods under RA 9184 and its IRR-A may be used in the intended trade-in transaction, subject to the suppletory application of relevant provisions under COA Circular 89-296.