NPM 026-2011

Requesting Entity: Department of National Defense

Issues Concern: Agency-to-Agency Agreements



Whether the Department of National Defense (DND) and Armed Forces of the Philippines (AFP) may directly enter into contract with the Bangko Sentral ng Pilipinas (BSP) to manufacture its medals and decoration requirements.

[P]ursuant to Section 10 of Republic Act (R.A.) No. 9184 and its Implementing Rules and Regulations (IRR), all procurement, as a general rule, shall be done through competitive bidding. Alternative methods of procurement, however, are allowed in highly exceptional cases in order to promote economy and efficiency subject to the prior approval of the Head of the Procuring Entity upon favorable recommendation of the Bids and Awards Committee.

Please note that, in cases where procurement from another agency of the government is more efficient and economical, Negotiated Procurement (Agency-to-Agency) may be used. This rule allows a government entity to procure from another government entity without need of public bidding, subject to compliance with the prescribed conditions and procedures under existing rules and the Guidelines on Agency-to-Agency Agreement.


Based on the foregoing, it is our considered view that DND and AFP may directly purchase its medals and decoration requirements from BSP through Agency-to-Agency under Section 53.5 of the IRR of R.A. 9184, upon compliance with the condition and procedures provided in the Guidelines.