NPM 076-2012

Requesting Entity: Ayungon Water District (AWD)

Issues Concern: Bids and Awards Committee (BAC) in Local Water Districts



1. How can AWD create its BAC with its required composition?

Under Section 11.2 of the IRR, the BAC may be composed of at least five (5) but not more than seven (7) members. x x x The specific qualifications of the BAC members are as follows:

(a) The Chairman, who is at least a third ranking permanent official of the procuring entity;
(b) An officer, who holds at least a third ranking permanent position, with knowledge, experience and/or expertise in procurement and who to the extent possible represents the legal or administrative area of the bureau;
(c) An officer, who holds at least a third ranking permanent position, with knowledge, experience and/or expertise in procurement who to the extent possible represents the finance area of the bureau;
(d) An officer who has technical expertise relevant to the procurement at hand, and, to the extent possible, has knowledge, experience and/or expertise in procurement; and
(e) A representative from the end user unit who has knowledge of procurement laws and procedures.

[F]or as long as five (5) of the six (6) regular employees of AWD satisfy the qualifications needed for the regular and provisional members, it can constitute its own BAC. It bears stressing, though, that the term "permanent" refers to a plantilla position within the procuring entity concerned. It does not qualify whether plantilla position is contractual, regular, or appointed, but rather the concern specifically refers to whether the position exists within the organizational structure of the procuring entity.

2. Can AWD designate members of the Board of Directors to become BAC members?

[T]he individual members comprising AWD's Board of Directors may not be designated to the BAC. Under Section 5(t) of the IRR, the HOPE for government-owned and controlled corporations such as AWD, is the governing board or its duly authorized official. As members of the collegial body constituting the approving authority of AWD, Section 11.2.5 of the IRR provides that the approving authority is disqualified from becoming a member of the BAC to avoid any conflict of interest that may arise in the approval and signing of the contract. Hence, the individual members of the Board cannot be designated as BAC members.

Working on the assumption that the Board of Directors authorizes one of the members or another official to act as the approving authority, the other members of the Board still cannot serve as BAC members. Section 8 of Presidential Decree 198 or the Provincial Water Utilities Act of 1973 provides that the Board of Directors of a district x x x shall be appointed by the appropriate appointing authority depending upon the geographic coverage and population make-up of the particular district. Thus, it appears from the composition of the Board of Directors that none of them occupies plantilla positions in the procuring entity. This runs counter to the requirement that BAC members, whether regular or provisional, must occupy a plantilla position in the procuring entity.

3. Can AWD request BAC members from other local water district (LWD) or from its local government unit (LGU) to acts as the BAC for its procurement process?

[T]he designation of members from other LWDs or LGU to the BAC is not allowed since they do not occupy plantilla positions in AWD.

x x x Section 53.6 of the IRR allows a procuring entity that does not have the proficiency or capability to undertake a particular procurement to avail the services of a Procurement Agent in order to hasten project implementation. This is an option that AWD may pursue if it fails to properly constitute its BAC.

x x x AWD should first determine among its present employees if it can validly constitute a BAC composed of five members. If this is not possible then AWD can request other government agencies, such as its LGU, to act as its procurement agent. Nonetheless, in the selection of said agency or procurement agent, its track record in, and expertise to undertake, procurement under Republic Act 9184 and its Implementing Rules and Regulations must be taken into account.