Requesting Entity: Public Estates Authority

Issues Concern: Queries on Republic Act No. 9184 (R.A. 9184) and its Implementing Rules and Regulations (IRR)


Applicability of the IRR of R.A. 9184

Although R.A. 9184 has already been signed by her Excellency President Gloria Macapagal Arroyo on January 10, 2003 and became effective on January 26, 2003, the said legislative enactment cannot be applied in its totality without its IRR. Hence, even if there are self-executing provisions in R.A. 9184, the same cannot be fully implemented unless and until the Implementing Rules and Regulations (“IRR”) therefor have been finally approved by the President and published for dissemination.

It is in this connection that we inform your office that during the 3rd Meeting of the GPPB on May 26, 2003, the members unanimously agreed that, (1) Government agencies are justified in applying Executive Order No. 40, series of 2001 (“E.O. 40”) and its IRR, pending the approval of the IRR of R.A. 9184; and, (2) that a provision should be included in the Transitory Clause of the draft IRR of R.A. 9184 that in cases where the invitations for bids were issued after the effectivity of R.A 9184 but before the effectivity of its IRR, procuring entities may continue adopting the procurement procedures embodied in E.O. 40 and its IRR, or other applicable procurement laws, rules and regulations. Hence, pending approval of the proposed IRR of R.A 9184, we believe that PEA may still use the provisions of E.O. 40 and its IRR in the conduct of its procurement.

Whether or not the Public Estates Authority (PEA) should still conduct prequalification.

Conduct of Prequalification

In order to save time and make public procurement more expeditious, government procurement rules and procedures have already move away from the use of “pre-qualification” as a means to determine the eligibility and/or capacity of a prospective bidder to participate in a particular bidding even prior to the enactment of R.A. 9184. As a matter of fact, E.O. 40 and its IRR has shifted from “pre-qualification” to “simple eligibility check,” pursuant to the policy of the State expressed in Section 3, IRR of E.O. 40.

The same principle and policy were adopted by R.A. 9184 and, as such, the eligibility of bidders to participate in a specific project being bid out by a procuring entity is determined by conducting a simple eligibility check through the examination of required eligibility documents using the non-discretionary pass/fail criteria as a standard. Sections 23 and 24 exemplify the conduct of simple eligibility checking, to wit:

x x x x

Whether or not after a failed bidding, PEA may revise its original terms of reference (TOR) for the project being bid out.

Revision of the TOR and Instructions to Bidders after a Failed Bidding

After a failed bidding, the procuring entity has the option either to re-bid the project without revising the Terms of Reference/Instruction to Bidders or revises and enhances the same and conducts a re-bidding. The option lies with the procuring entity whenever it sees the necessity and propriety of revising the requirements and specifications laid down in the Terms of Reference/Instruction to Bidders.

It is therefore incumbent upon PEA to review and revise its Terms of Reference/Instruction to Bidders should there be a necessity to do the same. Often enough, procuring entities opt to revise the Terms of Reference/Instruction to Bidders when it becomes clear to them that no bidder can respond and comply with the requirements and specifications provided therein.

Whether or not bidders who were declared eligible or ineligible in the first failed bidding can participate in the re-bidding of the same project.

Participation of Eligible and Ineligible Prospective Bidders in the Re-bidding

In case of a failed bidding, the procuring entity should conduct a re-bidding with re-advertisement of the Invitation to Apply for Eligibility and to Bid. Section 35 of R.A. 9184 provides that under any of the instances enumerated therein, “[t]he contract shall be re-advertised and re-bid. The BAC shall observe the same process and set the new periods according to the same rules followed during the first bidding.”

In the ensuing bidding, the procuring entity shall allow all prospective bidders in the first failed bidding to participate, whether the prospective bidders were previously declared eligible or ineligible, as well as any other company that may wish to participate.

Whether or not PEA may conduct Negotiated Procurement as an alternative method after one (1) failed bidding.

Conduct of Negotiation After One Failed Bidding

Negotiation is a mode of procurement of goods, infrastructure projects and consulting services whereby a procuring entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant. However, it must be stressed that in cases of failure of bidding, negotiation is available only when there are two failures involving the same project being bid out. Consequently, a single failure of bidding shall not entitle a procuring entity to adopt negotiation as an alternative method of procurement.

Thus, after the first failed bidding, PEA may opt to revisit and revise its technical specifications and other requirements in the instructions to bidders and thereafter re-advertise the project and conduct a second bidding. Only when the second bidding fails can PEA adopt negotiation as an alternative method of procurement as mandated by Section 35.1.5 of the IRR of E.O. 40 and Section 53(a) of R.A. 9184.