NPM 030-2012

Requesting Entity: Resource Management Group - Bureau of Internal Revenue

Issues Concern: Resort to Negotiated Procurement (Agency-to-Agency) and (Procurement Agent)



Whether the BIR may resort to Negotiated Procurement (Agency-to-Agency) in its procurement of services for its construction project and Negotiated Procurement (Procurement Agent) to tap the services of the servicing agency in the conduct of the same procurement.

x xx Agency-to-Agency procurement and procurement through a Procurement Agent refer to different instances of negotiated procurement under Section 53 of the IRR. As we have discussed in a previous opinion, the decision to resort to any of the alternative methods of procurement resides with the procuring entity upon proper evaluation of the circumstances surrounding a particular procurement and after due determination of the existence of conditions warranting its use. Although both modalities of negotiated procurement may be used to engage another government agency, the service intended to be performed will be material in determining the appropriate negotiated modality to be adopted.

[F]ollowing are the appropriate applications of Agency-to-Agency procurement, and procurement through a Procurement Agent, thus:

1) The engagement of PRA to conduct public bidding for BIR cannot be made through Agency-to-Agency since the purpose of such method is to have the servicing agency perform the actual service for the procuring entity, e.g., supply of goods, construction of infrastructure project, or performance of consulting service. The more appropriate method for such service, that is, engaging another agency to officiate and manage the bidding for another procuring entity, would be through a Procurement Agent;

2) However, if BIR engages PRA to conduct the bidding process for the design and layout, construction, or construction supervision, the latter neither can participate in such bidding activities because it is the Procurement Agent, nor can it be engaged by means of Agency-to-Agency for such services; or

3) On the other hand, if BIR engages PRA under the Agency-to-Agency scheme, to perform the design and layout, construction, and construction supervision for the project, there will be no need for bidding for such services even for a third party contractor considering that resort to Agency-to-Agency presumes that the servicing agent has the capability to perform the services. PRA may, however, be engaged as a Procurement Agent for a bidding for services other than those where it is engaged as the servicing agent.