NPM 016-2012

Requesting Entity: Development Bank of the Philippines

Issues Concern: Agency-to-Agency Agreements



Whether an Agency-to-Agency arrangement under Section 53.5 of the revised Implementing Rules and Regulations (IRR) of Republic Act (RA) 9184 is plausible for the Cashless Purchase Card project that will be implemented by the Department of Budget and Management (DBM) and the Department of National Defense - Armed Forces of the Philippines (DND-AFP).

We wish to stress, however, that procuring entities are mandated to procure by way of open, competitive and public bidding, and the use of any alternative procurement modality may be resorted to only in highly exceptional cases provided under the rules. Moreover, decision to resort to any of the alternative methods of procurement such as Negotiated Procurement (Agency-to-Agency) resides with the Procuring Entity upon proper evaluation of the circumstances surrounding a particular procurement, and due determination of the existence of conditions warranting use of an alternative method of procurement.

From the foregoing, it is upon DBM's sole discretion whether the procurement for the Cashless Purchase Card project should be conducted through public bidding or through Negotiated Procurement (Agency-to-Agency). If DBM decides to resort to public bidding, no further justification is necessary considering that such is the default rule. However, if the decision is to resort to Negotiated Procurement (Agency-to-Agency), DBM has to satisfactorily show that the conditions for its use have been complied with.