NPM 138-2004

Requesting Entity: Municipality of Virac, Catanduanes

Issues Concern: Various queries on R.A. 9184 and its IRR-A



1. Whether or not the Municipality of Virac may participate in the auction of reconditioned heavy equipment such as a bulldozer; or otherwise stated, whether the said Municipality may procure a second hand bulldozer to be used in excavating pits and covering garbage, in implementing the Ecological Solid Waste Management Act of 2000.

It has always been emphasized that under the new procurement law which governs procurement contracts of all government agencies including local government units (LGUs), the general rule is competitive bidding; and, resort to alternative methods of procurement may only be done in highly exceptional cases.

The practice of purchasing second-hand equipment from an auction, when analyzed, partakes the nature of Direct Contracting, where the procuring agency directly contracts with one selected and preferred supplier or contractor. However, such purchase from an auction, cannot still be allowed considering that procurement through Direct Contracting may only be resorted to in the presence of the specific conditions mentioned under Sections 48 (b) and 50, of R.A. 9184 and its IRR-A, respectively; which conditions do not exist in the aforesaid situation where the need to procure a bulldozer suddenly arises.

2. Whether the requirements stated in Section 54.2 (b) of the Implementing Rules and Regulations Part A (IRR-A) of Republic Act No. 9184 (R.A. 9184) should be strictly followed, or the procuring entity has the leeway to directly negotiate a contract with a technically, legally and financially capable supplier.

We wish to inform you that the same issue on whether the requirements under Section 54.2 (b) of the IRR-A for paragraphs (a) and (b) of Section 53 on Negotiated Procurement conflict with the concept of said method of procurement has been raised to us by the Philippine Air Force (PAF), which we have resolved in Non-Policy Opinion (NPM) No. 097-2004 dated July 19, 2004.

3. Whether or not the procedures established under Commission on Audit (COA) Circular NO. 92-386 may still be practiced under R.A. 9184 and its IRR-A.

Similarly, in addressing the same issue raised by the Municipal Treasurers League of Camarines Sur (MUNTREALCAS), we had the occasion to opine on whether COA Circular No. 92-386, having been issued in pursuance to Section 383 of R.A. 7160, has been superseded by R.A. 9184. (See NPM 048-2004, April 14, 2004)