NPM 014-2013

Requesting Entity: Department of the Interior and Local Government (DILG)

Issues Concern: Concerns on the Procurement of Sixty Eight (68) Units Fire Trucks by the Bureau of Fire Protection (BFP)



1. Whether the BFP Chief may be considered the HOPE for the subject procurement despite DILG Circular No. 2010-13 which limits its authority to approve BAC Resolutions for procurements involving amounts not exceeding Seven Million Pesos (PhP7,000,000.00).

[C]onsidering the limitation on the authority of the BFP Chief, imposed by virtue of DILG Circular 2010-13, and taking into account that the ABC for the subject procurement is over and above the authority bestowed, it is our opinion that while the BFP Chief is, and remains the HOPE for BFP, he does not have the authority to approve the subject procurement; more so issue a Notice of Award (NOA), as his authority to approve is confined only within the identified threshold of PhP 7 Million, such that those projects with ABCs beyond this threshold should be endorsed to the SILG for approval.

2. Whether an official designated as OIC, and not as Chief or Acting Chief of BFP, can exercise the duties, powers and functions of the HOPE.

[D]esignation results in the bestowal and imposition of functions, duties and responsibilities in addition to what is currently being exercised by the designee by reason of his present position. Also, the designation to perform the duties and responsibilities of a particular office entails the exercise and execution of actual, related and incidental power and authority inherent in the office, unless the designation contains specific reservations, limitations, or qualifications on the functions, duties, and responsibilities to be performed, such as the limitation on the approval authority of the BFP Chief promulgated by the SILG through DILG Circular No. 2010-13.

Accordingly, x x x the OIC-BFP Chief is authorized to make decisions on procurement activities of the BFP, subject to the limits stated in DILG Circular No. 2010-13.

3. Whether only those recommendations that are "for approval" (and not for disapproval) are required to be elevated to the higher approving authority under Section 37.3 of the IRR.

In exercising the power to approve, the approving authority is likewise deemed to have the mandate to disapprove any recommendation on the matter. This principle was adopted in the case of Alinsugay v. Court of Appeals where the Supreme Court pronounced that "by force of logic, the power and authority conferred by law on a body to approve appointments, carries with it the corresponding power to disapprove."

In this regard, regardless of the recommendation of the BFP-BAC or the BFP Chief, whether for approval or for disapproval, all decisions relative to contracts with an ABC exceeding Seven Million Pesos (PhP7,000,000.00) must be elevated to the SILG for approval or disapproval.

4. Whether there is conflict of interest where the OIC of the Procuring Entity (PE) approves the BAC Resolution and issues the Notice of Award for a procurement activity where the OIC was then a member of the BAC that issued the same Resolution.

Section 11.2.5 of the IRR of RA 9184 is clear and categorical in providing that in no case shall the HOPE and/or the approving authority be the Chairman or a member of the BAC. It bears stressing that the prohibition is intended to avoid any conflict of interest between the person who undertakes procurement and recommends the award of the contract and the one who approves said transaction.

Under the peculiar circumstance attending the procurement, prudence dictates that the OIC-BFP Chief, who was then the Chairman of the BFP-BAC that made the earlier recommendation to award the contract to the JV, should divorce himself from any action or decision relating to such recommendation in order to maintain the neutrality and impartiality of the transaction and avoid would be negative perceptions.

5. Whether findings of "substantial compliance" with the technical specifications provides sufficient basis for a recommendation for award of contract.

Section 37.1.1 of the IRR of RA 9184 provides that the BAC shall recommend to the HOPE the award of the contract to the bidder with the LCRB after the post qualification process has been completed. This means that there has been a determination of full compliance with the technical specifications and requirements stated in the bidding documents; otherwise, the bidder should be declared post-disqualified.

6. Whether the decisions to grant the motion for reconsideration and issue a BAC Resolution declaring the bidder to be the LCRB and recommending award of contract are proper despite the bidder's non-compliance with the 120-day delivery schedule.

In COA v. Link Worth , the High Tribunal held that the technical specifications, once laid down, does not give occasion for the PE to arbitrarily exercise its discretion and brush aside the very requirements it specified as vital components of the goods it bids out.

In this regard, the non-compliance with the 120-day delivery schedule required in the bidding documents, if this is indeed the requirement in the bidding documents as originally crafted, and that no revision or change of the 120-day delivery requirement was made through a validly issued supplemental/bid bulletin, is a valid ground for the disqualification of the bidder and the rejection of the request for reconsideration, respectively.