NPM 059-2013

Requesting Entity: Forest Management Bureau Department of Environment and Natural Resources

Issues Concern: Grant of Honoraria



May honoraria be granted on the basis of successfully completed procurement projects using Negotiated Procurement under Section 53.9 (Small Value Procurement) of the revised Implementing Rules and Regulations of Republic Act (RA) No. 9184.

Section 5.2 of the DBM Circular No. 2004-5A (Circular) provides that the payment of honoraria shall be limited to procurement that involves competitive bidding, which is present only in Competitive Bidding (Section 10), Limited Source Bidding (Section 49), and Negotiated Procurement under Two-Failed Biddings (Section 53.1). Conversely, honoraria will not be paid when procurement is through all the other alternative modes of procurement provided in RA 9184 and its IRR where competitive bidding or a semblance thereof is considered not present. Hence, honoraria should not be given when the procurement method used is Negotiated Procurement (Small Value Procurement).

Does the phrase "successfully completed procurement projects" refer only to completed open or public bidding projects?

Section 5.1 of the Circular clearly provides that honoraria may be paid for successfully completed procurement projects which have undergone competitive bidding. As discussed, Section 5.2 of the Circular specifies those modalities considered to involve competitive bidding where honoraria may be granted. x x x reading these two (2) provisions together, it is clear that honoraria is given for "successfully completed procurement projects", which not only includes Competitive Bidding, but also alternative methods of procurement where competition is present, such as in Limited Source Bidding and Negotiated Procurement under Two-Failed Biddings.

Is competitive bidding process not observed in alternative modes of procurement?

In distinguishing among the methods of procurement where honoraria may be provided, the Circular considered only those modalities where there is seeming competition. From the alternative methods of procurement under RA 9184 and its IRR, Limited Source Bidding and Negotiated Procurement under Two-Failed Biddings are considered to employ competitive processes. Thus, the Circular considered the rest of the alternative modalities of procurement as methods not involving competitive selection, and thus, entitlement to honoraria is not applicable.