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Republic of the Philippines

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HOUSE OF REPRESENTATIVES \ ah RY

Quezon City, Metro Manila :

NINETEENTH CONGRESS
First Regular Session

HOUSE BILL NO. 18

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Introduced by Representatives FERDINAND MARTIN G. ROMUALDEZ,
YEDDA MARIE K. ROMUALDEZ, FERDINAND ALEXANDER A. MARCOS
and JUDE A. ACIDRE

EXPLANATORY NOTE,

Republic Act No. 9184, otherwise known as “Government Procurement Reform Act”, was passed
into law to modernize, standardize and streamline the procurement process actoss government
agencies with the intention to curb graft and corruption in government. R.A. No. 9184 is seen as
4 tool to promote transparency and competition and lessen delays in the procurement process. Its
Implementing Rules and Regulations have been revised four times since its passage in 2003, The
latest revision was in 2021.

This bill secks to further improve the government procurement system by providing additional
measures that will shorten the present bureaucratic intricacies of the system and expedite the
procurement process through mandatory inclusion of the procurement plan and purchase priority
in the annual development plan, the inclusion of the list of requirements in the posting and
publication of the invitation to bid, upgrading Philippine Government Electronic Procurement
System (PhilGEPS) and establishment of the electronic bidding process

The latest impetus to further reform the government procurement process has been the need to
find an alternative to the lowest-bid method. The bill introduces the Best Value Procurement
(BVP), which refers to the procurement process where all key factors such as but not limited to
price, life cycle cost, benefits, and predicted risks are considered in the selection process to
maximize the performance and value for money of every government procurement activity. Apart
from this, the bill proposes several reforms such as the adoption of Global Open Data Contracting
Standards, which enhances the electronic government procurement system by facilitating
publication and analysis of data related to all stages of the contracting process; promoting
Sustainable Public Procurement, which supports the creation of an Inter-Agency Task Force to
determine the standards for products and services needed to fulfill the government's
environmental objectives; Support to Inclusive Public Procurement, which incentivizes the


participation of MSMEs in government procurement; Institutionalization of a Procurement
Academy, among others.

These innovations will help make the procurement process more transparent, faster, and more
efficient. Ultimately, the improved procurement process will be advantageous to the government
in the long run.

In the 18" Congress, various bills on amendments to the Government Procurement Reform Act
were filed by Reps. Pablo John Garcia, Joey Sarte Salceda, Francis Gerald Aguinaldo Abaya,
Luis Raymund “LRay”F. Villafuerte, Jr, Evelina G. Escudero, Vilma Santos-Recto, Aurelio
“Dong” Gonzales, Bayani F. Fernando, Joy Myra S. Tambunting, John Marvin “Yul Servo” C.
Nieto, Manuel DG. Cabochan II] and Florida “Rida” P. Robes.

In view of the foregoing, the approval of this bill is urgently sought.

RDINAND MA\ FATEIE K. ROMUALDEZ
Representative Representative
First District, Leyte Part}List, Tingog Sinirangan

FERDINANDMALEXANDER A. MARCOS

Representative
First District, Ilocos Norte Party-List, Tingog Sinirangan



Republic of the Philippines

House of Representatives

Quezon City, Metro Manila
Nineteenth Congress
First Regular Session

House BLL NG! _18

Introduced by Representatives Ferdinand Martin G. Romualdez, Yedda Marie K. Romualdez,
Ferdinand Alexander A. Marcos and Jude A. Acidre

AN ACT AMENDING REPUBLIC ACT NO. 9184, OTHERWISE KNOWN AS THE
“GOVERNMENT PROCUREMENT REFORM ACT” AND FOR OTHER
PURPOSES

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

ARTICLE

GENERAL PROVISIONS ,

Section 1. Short Title. - This Act shall be known as the "Revised Government
Procurement Reform Act".

SEC. 2. Declaration of Policy. — It is the declared policy of the State to promote the
ideals of good governance in all its branches, departments, agencies, subdivisions, and
instrumentalities, including government-owned and/or -controlled corporations, and local

government units.

Bill Drafting Service


SEC. 3. Governing Principles on Government Procurement. ~ All procurement of
the national government, its departments, bureaus, offices and agencies, including state
universities and colleges, government-owned and/or -controlled corporations, government
financial institutions and local government units, shall, in all cases, be governed by these

principles:

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(a) Transparency in the procurement process and in the implementation of procurement
contracts consistent with global open contracting data standards.

(b) Competitiveness by extending equal opportunity to enable private contracting
parties who are eligible and qualified to participate in public bidding.

(©) Streamlined procurement process that will uniformly apply to all government
procurement. The procurement process shall be simple and made adaptable to advances in
modern technology in order to ensure an effective and efficient method.

(d) System of accountability where both the public officials directly or indirectly
involved in the procurement process as well as in the implementation of procurement contracts
and the private parties that deal with government are, when warranted by circumstances,
investigated and held liable for their actions relative thereto.

(©) Public monitoring of the procurement process and the implementation of awarded
contracts with the end in view of guaranteeing that these contracts are awarded pursuant to the
provisions of this Act and its implementing rules and regulations, and that all these contracts
are performed strictly according to specifications.

(f) Sustainable public procurement as driver for innovation and sustainable
development.

(g) Inclusive public procurement and entrepreneurship through the encouragement and

incentivization of priority enterprises involvement.


SEC. 4. Scope and Application. — This Act shall apply to the procurement of
infrastructure projects, goods, and consulting services, vehicles, regardless of source of funds,
whether local or foreign, by all branches and instrumentalities of government, its departments,
bureaus, offices and agencies, including government-owned and/or -controlled corporations,
government financial institutions, state universities and colleges, military and police units, and
local government units, subject to the provisions of Commonwealth Act No. 138. entered into
by the Philippine government before the passage of this Act shall likewise be governed by the
provisions of this Act: Provided, That the Government Procurement Policy Board (GPPB) shall
promulgate special rules consistent with the governing principles of this Act for the following

classes of procurement:

a Those for the use of Philippine Government offices overseas;

b. Those involving official development assistance or international development
assistance through multilateral or bilateral agreements, and those covered by
international agreements, international funding, international organization agreements
between countries for joint implementation of projects, or any procurement funded by
international grant, loan, or other assistance;

© Those covered by the national security interests including defense articles,
services, and infrastructure projects determined by the Secretary of National Defense
as vital to national security and other strategic considerations; and

d. Those involving scientific research and development initiatives.

However, for the procurement of science, engineering, technology and research
equipment, and specialized supplies and materials, this Act shall not apply in case the amount
of the goods and equipment to be procured are not more than One hundred thousand pesos
(P 100,000.00).

SEC. 5. Definition of Terms. — For purposes of this Act:


(a) Approved Budget for the Contract (ABC) refers to the budget for the contract duly
approved by the Head of the Procuring Entity, as provided for in the General Appropriations
Act and/or continuing appropriations, in the case of National Government Agencies; the
Corporate Budget for the contract approved by the governing Boards, pursuant to Executive
Order No. 518, Series of 1979, in the case of government-owned and/or -controlled
corporations, government financial institutions and state universities and colleges; and the
budget for the contract approved by the respective sanggunian, in the case of local government
units. For multi-year contracts, for which a Multi-Year Contractual [Obligational] Authority
(MYCA) [(MYOA)] or an equivalent document is required, the ABC shall be incorporated in
the project cost reflected in the MYCA [MYOA] or equivalent document.

(b) BAC refers to the Bids and Awards Committee established in accordance with Article
TV of this Act.

(©) Best value procurement refers to the procurement process where all key factors such
as, but not limited to, price, life cycle cost, benefits and predicted risks are considered in the
selection process to maximize the performance and value for money of every government
procurement project or program.

(d) Bidding Document refers to documents issued by the procuring entity as the basis
for bids, furnishing all information necessary for a prospective bidder to prepare a bid for the

goods, infrastructure projects, and consulting services to be provided, or to the electronic

document published by the procuring entity to a portal or PhilGEPS for purposes of inviting
potential bidders.

(©) Bid refers to a signed offer or proposal submitted physically or through PhilGEPS by
a supplier, manufacturer, distributor, contractor or consultant in response to the Bidding

Documents.


(f) Blacklisting refers to an administrative penalty disqualifying a person or an entity
from participating in any government procurement for a given period.

(g) Competitive bidding refers to a method of procurement which is open to participation
by any interested party and which consists of the following processes: advertisement, pre-bid
conference, eligibility screening of prospective bidders, receipt and opening of bids, evaluation
of bids, post-qualification, and award of contract, the specific requirements and mechanics of
which shall be defined in the IRR to be promulgated under this Act.

(h) Consulting service refers to services for infrastructure projects and other types of
projects or activities of the government requiring adequate external technical and professional
expertise that are beyond the capability and/or capacity of the government to undertake such
as, but not limited to: (i) advisory and review services; (ii) pre-investment or feasibility studies;
(iii) design; (iv) construction supervision; (v) management and related services; and (vi) other
technical services or special studies.

(i) Cooperative refers to any association duly registered with the Cooperative
Development Authority and defined as such by Republic Act No. 6938, otherwise known as
the Philippine Cooperative Code of 2008, as amended.

(j) Disabled persons refers to any person described as such by Republic Act No. 7277,
otherwise known as the Magna Carta For Disabled Persons, as amended.

(k) Goods refer to all items, supplies, materials and general support services, except
consulting services and infrastructure projects, which may be needed in the transaction of
public businesses or in the pursuit of any government undertaking, project or activity, whether
in the nature of equipment, furniture, stationery, materials for construction, or personal
property of any kind, including non-personal or contractual services such as the repair and

maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security, and


related or analogous services, as well as procurement of materials and supplies provided by
the procuring entity for such services.

()) GPPB refers to the Government Procurement Policy Board established in
accordance with Article XX1 of this Act.

(m) Head of the procuring entity refers to: (i) the head of the agency or the duly
authorized official, for national government agencies; (ii) the governing board or its duly
authorized official, for government-owned and/or -controlled corporations; or (iii) the local
chief executive, for local government units: Provided, That in a department, office or agency
where the procurement is decentralized, the head of each decentralized unit shall be considered
as the head of the procuring entity subject to the limitations and authority delegated by the
head of the department, office or agency.

(n) Key performance indicators (KPI) refers to measurable value that demonstrates
how effective a procurement is being implemented.

(0) Infrastructure project includes the construction, improvement, rehabilitation,
demolition, repair, restoration or maintenance of roads and bridges, railways, airports,
seaports, communication facilities, civil works components of information technology
projects, irrigation, flood control and drainage, water supply, sanitation, sewerage and solid
waste management systems, shore protection, energy/power and electrification facilities,
national buildings, school buildings, hospital buildings and other related construction projects
of the government.

(p) IRR refers to the implementing rules and regulations to be promulgated in
accordance with Section 124 of this Act.

(q) Life-cycle cost refers to the total cost of ownership of a good from its acquisition,

operation, maintenance, and disposal.


(t) Micro, Small and Medium Enterprise (MSME) refers to any business or enterprise
defined and found eligible as such by Republic Act No. 6977, otherwise known as the Magna
Carta for Small Enterprises, as amended.

(s) Multi-Year Project refers to the program or project that takes more than one (1)
year to complete;

(t) Multi-Year Contractual Authority (MYCA) refers to the authorization awarded to
multi-year projects or programs that will take more than one year for completion and will
require multi-year appropriations.

(u) Procuring entity refers to any branch, department, office, agency, or
instrumentality of the government, including state universities and colleges, government-
owned and/or -controlled corporations, government financial institutions, and local
government units procuring goods, consulting services and infrastructure projects.

(v) Performance-based specification refers to a requirement describing the desired
outcomes or results in terms of functional or performance requirements rather than in terms of
technical details used in cases when the procuring entity is uncertain of the best process or
method to deliver the requirements, when high-level technology is required, when suppliers
are known to have the capability to design fit for purpose solutions, or when past performance
or other non-financial considerations may be beneficial in the government.

(w) PhilGEPS refers to the Philippine Government Electronic Procurement System as
provided in Section 10 of this Act.

(x) Priority enterprise refers to sheltered workshop, cooperative, and micro, small and
medium enterprise.

(y) Sheltered workshop refers to any business, enterprise, or workplace the main

purpose of which is the social and professional integration of disabled persons: Provided, That


at least thirty percent (30%) of workers, employees, or personnel in the sheltered workshop, at
the time of bid evaluation and throughout the execution of the contract, are disabled persons.

SEC. 6. Standardization of Procurement Process and Forms. — To systematize the
procurement process, avoid confusion and ensure transparency, the procurement process,
including the forms to be used, shall be standardized insofar as practicable. For this purpose,
the GPPB shall pursue the development of generic procurement manuals and standard bidding
forms, the use of which once issued shall be mandatory upon all procuring entities.

SEC. 7. Procurement Planning and Budgeting Linkage. — All procurement should
be within the approved budget of the procuring entity and should be meticulously and
judiciously planned by the procuring entity concemed. Consistent with government fiscal
discipline measures, only those considered crucial to the efficient discharge of governmental
functions shall be included in the Annual Procurement Plan to be specified in the IRR.

‘No government procurement shall be undertaken unless it is in accordance with the
approved Annual Procurement Plan of the procuring entity. The Annual Procurement Plan
shall be approved by the head of the procuring entity and must be consistent with its duly
approved yearly budget. The Annual Procurement Plan shall be formulated and revised only
in accordance with the guidelines set forth in the IRR. In the case of infrastructure projects,
the plan shall include engineering design and acquisition of right-of-way.

‘The annual procurement plan of the national government agencies shall conform with
the National Development Plan and, in the case of the local government unit, with the local
development plan.

The procuring entities shall make a list of their purchase priority which shall be
included in their annual procurement plan and budget.

ARTICLE I

COMPETITIVE BIDDING


SEC. 8. Lowest Bid Procurement. — Lowest bid method of Competitive Bidding shall
be the default mode of procurement, except as provided for in Section 10 and Article XV of
this Act.

SEC. 9. Best Value Procurement, ~ Procurement of non-common use Goods,
Infrastructure Projects, Consultancy Services, and other classes as determined by the GPPB,
may be done through the Best Value Procurement (BVP) method.

In the use of BVP method, the following factors or a combination thereof may be
considered as relevant technical and financial components of each submission, including:

a) Quality of the goods, materials, and services;

b) Alignment with desired outcomes;

©) Key performance indicators;

4) Risks involved;

©) Timeliness;

f) Life cycle costs;

2) Potential bidder's relevant experience and performance history; and

h) Environmental sustainability of the proposed goods and infrastructures.

ARTICLE II

PROCUREMENT BY ELECTRONIC MEANS

SEC. 10. Transparency and Efficiency in Electronic Procurement. - To promote
transparency and efficiency, information and communications technology shall be fully
utilized in the conduct of procurement procedures. Accordingly, there shall be a single portal
that shall serve as the primary source of information on all government procurement from the
planning stage up to its implementation to be known as the Philippine Government Electronic

Procurement System (PhilGEPS). The PhilGEPS shall serve as the primary and definitive


source of information on government procurement and shall provide equal access to all
potential bidders. Further, the Government Procurement Policy Board (GPPB), the governing
body created under Article XXI of this Act, is authorized to approve changes in the
procurement process to adapt to improvements in technology, provided that such modifications

are consistent with the provisions of Section 3 of this Act.

To take advantage of the significant built-in-efficiencies of the PhilGEPS and the
volume discounts inherent in bulk purchasing, all Procuring Entities shall utilize the PhilGEPS

for the procurement of common supplies in accordance with the rules and procedures to be

established by the GPPB. With regard to the procurement of non-common use items,
infrastructure projects and consulting services, agencies may hire service providers to
undertake their electronic procurement provided these service providers meet the minimum

requirements set by the GPPB.

SEC. 11. Security, Integrity and Confidentiality. — The PhilGEPS shall ensure the
security, integrity, and confidentiality of documents submitted through the system. It shall
include features that provide for an audit trail for electronic transactions and allow the

Commission on Audit to verify the security and integrity of the systems at any time.

SEC. 12, Adoption of State-of-the-Art Technologies. — PhilGEPS shall continuously
adopt state-of-the-art technologies which shall have the minimum features of real-time
updates, traceability of all transactions, and accessibility to a large pool of users at any given

time.

SEC. 13. Prompt Payment. — PhilGEPS shall incorporate an electronic payment
system that shall ensure prompt payments to suppliers. In all cases, obligations of the
government must be settled within thirty (30) calendar days after the delivery and favorable

inspection of the goods or services.


ARTICLE IV
BIDS AND AWARDS COMMITTEE (BAC)

SEC. 14. BAC and its Composition. — Each procuring entity shall establish a single
BAC for its procurement. The BAC shall have at least five (5) members, but not more than
seven (7) members. It shall be chaired by at least a third ranking permanent official of the
procuring entity other than its head, and its composition shall be specified in the IRR.
Alternatively, as may be deemed fit by the head of the procuring entity, there may be separate
BACs where the number and complexity of the items to be procured shall so warrant. Similar
BACs for decentralized and lower level offices may be formed when deemed necessary by the
head of the procuring entity. The members of the BAC shall be designated by the head of
procuring entity. However, in no case shall the approving authority be a member of the BAC.
Unless sooner removed for a cause, the members of the BAC shall have a fixed term of one
(1) year reckoned from the date of appointment, renewable at the discretion of the head of the
procuring entity. In case of resignation, retirement, separation, transfer, reassignment, removal,
the replacement shall serve only for the unexpired term: Provided, That in case of leave or
suspension, the replacement shall serve only for the duration of the leave or suspension. For
justifiable causes, a member shall be suspended or removed by the head of the procuring entity.

SEC. 15. Functions of the BAC. — The BAC shall have the following functions:
advertise and/or post the invitation to bid, conduct pre-procurement and pre-bid conferences,
determine the eligibility of prospective bidders, receive bids, conduct the evaluation of bids,
undertake post-qualification proceedings, recommend award of contracts to the head of the
procuring entity or the duly authorized representative: Provided, That in the event the head of
the procuring entity shall disapprove such recommendation, such disapproval shall be based
only on valid, reasonable and justifiable grounds to be expressed in writing, copy furnished

the BAC; recommend the imposition of sanctions in accordance with Article XIV, and perform


such other related functions as may be necessary, including the creation of a technical working
group from a pool of technical, financial and/or legal experts to assist in the procurement
process. In proper cases, the BAC shall also recommend to the head of the procuring entity the
use of alternative methods of procurement as provided for in Article XV hereof. The BAC
shall be responsible for ensuring that the procuring entity abides by the standards set forth by
this Act and the IRR, and it shall prepare a procurement monitoring report that shall be
approved and submitted by the head of the procuring entity to the GPPB on a semestral basis.
The contents and coverage of this report shall be provided in the IRR.

SEC. 16. Observers. — To enhance the transparency of the process, the BAC shall, in
all stages of the procurement process, invite, in addition to the representative of the
Commission on Audit, at least two (2) observers to sit in its proceedings, one (1) from a duly
recognized private group in a sector or discipline relevant to the procurement at hand, and the
other from a non-government organization: Provided, however, That they do not have any
direct or indirect interest in the contract to be bid out. The observers should be duly registered
with the Securities and Exchange Commission, members in good standing of the sector,
discipline or non-government organization they represent as duly certified by the head of the
sector, discipline or organization to which they belong, and should meet the criteria for
observers as set forth in the IRR.

Each observer shall make a separate report on the conduct of the public bidding, its
procedures, conditions and problems, if any, which shall be submitted to the procuring entity,
the GPPB and the Commission on Audit.

In case of unavailability of the observers from the non-government organization or
private sector, the GPPB shall provide qualified observers to the BAC. For this purpose, the
GPPB shall maintain a registry of procurement professionals qualified to be the observers to

the BAC.


The absence of any of the observers and corresponding reports shall nullify the bidding
process.

SEC. 17. BAC Secretariat. — To assist the BAC in the conduct of its functions,
procurement units shall be established in all government agencies and instrumentalities that
will serve as the main support unit of the BAC. The GPPB shall promulgate guidelines as to
the duties of its personnel, number of plantilla items, compensation, and other matters
necessary for the success of these units.

SEC. 18. Honoraria of BAC Members. — The procuring entity may grant payment of
honoraria to the BAC members in an amount not to exceed twenty-five percent (25%) of their
respective basic monthly salary subject to availability of funds. For this purpose, the

Department of Budget and Management shall promulgate the necessary guidelines.

SEC. 19. Procurement Academy. — The GPPB shall establish a sustained training
program for developing the capacity of the BACs, BAC secretariats, and technical working

groups of procuring entities, and professionalize the same.

For this purpose, the GPPB shall establish a procurement academy under its technical
service office that shall be responsive to the needs and apt for the responsibilities of

government procurement personnel and other interested individuals.

The procurement academy may establish partnerships with state universities and
colleges (SUCs) or other educational institutions in providing these trainings. The GPPB shall
establish standards for accreditation of these institutions. Certifications shall be awarded to

individuals who will finish the courses.

‘The members of the BAC secretariat shall undergo an annual training based on their
responsibilities as conducted. The head of the procuring entities, members of the BAC, and

the technical working groups shall undergo an executive course on procurement.


‘The GPPB shall also establish a system professional licensure examinations of

procurement practitioners.

SEC. 20. Maintenance, Update, and Back Up. — PhilGEPS must undergo a periodic
maintenance to ensure that its systems are running smoothly. It shall have a disaster backup
feature to maintain the system’s integrity and ensure uninterrupted operations.

SEC. 21. Data Collection and Analysis. — the GPPB technical service office and the

Department of Budget and Management procurement service shall collect data and create

usable and presentable statistics on procurement activities to understand the status of public
procurement and formulate and implement effective procurement policies.
ARTICLE V
INTEGRATED PROCUREMENT PROCESS
SEC. 22. Integrated Procurement Process. - The life cycle of procurement activities
has three integrated stages:
a) Planning Stage that includes:
(1) Procurement Planning;
(2) Requirement Specification and Market Feasibility Analysis;
(3) Preparation of bidding documents.
b) Soureing Stage
(1) Invitation to Bid;
(2) Receipt and Opening of Bids;
(3) Bid Evaluation;
(4) Post-Qualification; and
(c) Management Stage
(1) Implementation of Contract

(2) Monitoring and Evaluation


(3) Disposal.
ARTICLE VI
PREPARATION OF BIDDING DOCUMENTS
SEC. 23. Form and Contents of Bidding Documents. — The bidding documents shall
be prepared by the procuring entity following the standard forms and manuals prescribed by
the GPPB. The bidding documents shall include the following:

(a) Approved Budget for the Contract;

(b) Instructions to Bidders, including criteria for eligibility, bid evaluation and post-
qualification, as well as the date, time and place of the pre-bid Conference (where applicable),
submission of bids and opening of bids;

(©) Terms of Reference;

(@ Eligibility Requirements;

(e) Plans and Technical Specifications;

(f) Form of Bid, Price Form, and List of Goods or Bill of Quantities:

(g) Delivery Time or Completion Schedule;

(h) Form and Amount of Bid Security;

(i) Form and Amount of Performance Security and Warranty; and,

() Form of Contract, and General and Special Conditions of Contract.

The procuring entity may require additional document requirements or specifications
necessary to complete the information required for the bidders to prepare and submit their
respective bids.

ARTICLE VII
PLANNING STAGE
A. PROCUREMENT PLANNING


SEC. 24. Procurement Capability Index. — The procuring entity shall submit a self-
assessed procurement capability index (PCI) to the Department of Budget Management every
year. The PCI shall gauge the capacity of the procuring entity to undertake procurement
activities.

In the preparing the PCI, the procuring entity shall engage with stakeholders and also
review previous or existing contracts.

SEC. 25, Multi-Year Contracting. — National government agencies, local government
units, constitutional offices, and state universities and colleges may request the Department of
Budget and Management for the issuance of a Multi-Year Contracting Authority (MYCA)
prior to entering into contracts to cover the total project costs of multi-year projects, whether
locally-funded or foreign-assisted. In the case of government-owned and/or -controlled
corporations, they shall secure prior authority from their respective governing boards before
entering into multi-year projects and proceeding with their procurement.

SEC. 26. Estimate of the Total Monetary Value of a Procurement. — The end-user
must consider the total value over the whole life of the contract required for the full delivery
of the goods, infrastructure projects, or consulting services in estimating the total monetary
value of procurement through methodologies such as life cycle costing. The GPPB may
prescribe special methods of valuation in certain types of procurement.

SEC. 27. Procurement Short of Award. — To facilitate the immediate procurement of
goods, infrastructure projects, or consulting services, even pending approval of the General
Appropriations Act, corporate budget, or appropriations ordinance, as the case may be, the
procuring entity may undertake procurement activities short of award. National government
agencies, state universities and colleges, constitutional commissions or offices may start their
procurement activities immediately after the National Expenditure Program has been

submitted by the President to Congress: Provided, That the head of the procuring entity has


approved the corresponding in«

the awarding of procurement contracts after the enactment of the GAA, enabling the timely
implementation and completion of programs and projects.

The procuring entities shall proceed with the awarding of contract only upon approval
or enactment of their respective appropriations or budget authorization documents, as the case
may be, and on the basis of the amount authorized therein.

Should the approved budget for a program, activity, or project be lesser than the amount
indicated in the National Expenditure Program, the concerned procurement entity shall make
the necessary adjustments accordingly.

B. REQUIREMENT SPECIFICATION AND INDUSTRY ANALYSIS
SEC. 28. Requirement Specification. — Upon the issuance of the National Expenditure

Program, the procuring entity shall instruct its end-users to further specify the requirements of

their proposed procurement activities.

SEC. 29. Industry Analysis. — After the end-users have specified their requirements,
an industry analysis shall be conducted wherein the landscape of suppliers for the desired
goods and services is examined. The end-users shall also determine the risks involved in the
procurement and potential mitigation approaches.

SEC. 30. Price References. — The DBM procurement service, in cooperation with the
Department of Trade and Industry, shall maintain verified price references for common use
items and other items that shall be seasonably updated. Procuring entities may use these
verified price references in lieu of market feasibility studies.

Loy PREPARATION OF BIDDING DOCUMENTS

SEC. 31. Reference to Brand Names. ~ Specifications for the procurement of goods
and goods components of infrastructure projects shall be based on relevant characteristics and

performance requirements. Reference to brand names shall be allowed in specific instances,


as determined by the GPPB: Provided, That in cases where the reference to the brand name of
a particular supplier is necessary, the phrase “or equivalent” shall be added after such

reference,

SEC. 32. Access to Information. — In all stages of the preparation of the bidding
documents, the procuring entity shall ensure equal access to information by posting the said
documents in the PhilGEPS website and making them available in the concerned offices. Prior
to their official release, no aspect of the bidding documents shall be divulged or released on

any prospective bidder or having direct or indirect interest in the project to be procured.

ARTICLE VII
SOURCING STAGE

A INVITATION TO BID

SEC. 33. Pre-Advertising Conference. — Prior to the issuance of the invitation to bid,
the BAC is mandated to hold a pre-advertising conference on each and every procurement,
except those contracts below a certain level or amount specified in the IRR, in which case, the
holding of the same is optional. The pre-advertising conference shall assess the readiness of
the procurement in terms of confirming the certification of availability of funds, as well as
reviewing all relevant documents in relation to their adherence to law. This shall be attended
by the BAC, the unit or officials who prepared the bidding documents and the draft invitation
to bid, as well as consultants hired by the agency concemed and the representative of the end-

user.

SEC 34. Advertising and Contents of the Invitation to Bid. — In line with the principle
of transparency and competitiveness, all invitations to bid contracts under Lowest Cost
Procurement and Best Value Procurement shall be be posted on the entity’s website and openly

advertised by the procuring entity in such manner and for such length of time as may be


necessary under the circumstances, in order to ensure the widest possible dissemination
thereof, the invitation to bid, including the list of requirements, conditions, contact details and
required tax clearances and licenses, shall be posted in the procuring entity's premises, the
PhilGEPS and the website of the procuring entity at least sixty (60) days before deadline for
submission of bids. The details and mechanics of implementation shall be provided in the IRR
to be promulgated under this Act.

‘The invitation to bid shall contain, among others:

(a) A brief description of the subject matter of the procurement;

(b) A general statement on the criteria, certifications, and performance measures to be
used by the procuring entity for the eligibility check, the shortlisting of prospective bidders, in
the case of the procurement of consulting services the examination and evaluation of bids, and
post-qualification;

(c) The date, time and place of the deadline for the submission and receipt of the
eligibility requirements, the pre-bid conference if any, the submission and receipt of bids, and
the opening of bids;

(d) The approved budget for the contract to be bid;

(©) The source of funds;

(f) The period of availability of the bidding documents, and the place where these may
be secured;

(g) The estimated timeframe for deli

ing the goods, infrastructure projects, and
consulting services, or the estimated contract duration and any options relating to the length of
contract;

(h) Any limitations on the number of bidders that may be shortlisted;

(i) The mode of procurement; and

(j) Such other necessary information deemed relevant by the procuring entity.


Any prospective bidder may send queries about the invitation to bid to the procuring
entity electronically. The procuring entity must promptly respond to all questions and
reasonable requests for information within two (2) working days: Provided, That information
that might give undue advantage over other prospective bidders or disclose confidential or
commercially sensitive information must not be given. Provided, further, That when a
procuring entity responds to a supplier’s question, it must not discuss or disclose another
supplier's confidential or commercially sensitive information.

The procuring entity may make changes in its requirements or process or provide
additional information to all participating bidders after an invitation to bid is published:
Provided, That should a shortlisting be conducted, the information must be made available to
all shortlisted bidders at the same time. Changes in the bid thereafter shall be allowed until
the deadline for responses.

SEC. 35. Closed Invitation to Bid. — Invitations to bid shall be sent to either a direct
source or a limited number of known suppliers, as the case may be, for the alternative methods
of procurement as defined in Article XV of this Act as well as to the following transactions:

(a) Purchase of a prototype for research, experiment, study, or original

development;

(b) Purchase on exceptionally advantageous conditions that only arise on the very

short term;

(©) Where the contract is awarded to the winner of a design contest; and

(@ Where an agency receives a unique unsolicited proposal.

SEC. 36. Pre-bid Conference. — At least one physical or web-based pre-bid conference
shall be conducted for each procurement, unless otherwise provided in the IRR. Subject to the
approval of the BAC, a pre-bid conference may also be conducted upon the written request of

any prospective bidder.


The pre-bid conference shall be held within thirty (30) days after the last day of posting
of the invitation to bid and within a reasonable period before the deadline for receipt of bids to

allow prospective bidders to adequately prepare their bids, which shall be specified in the IRR.

ARTICLE IX
VIDEO RECORDS OF ALL BIDDING CONFERENCES
SEC. 37. Video Recording of All Procurement-Related Conferences. — To enhance
the transparency of the procurement process, the procuring entity shall keep a video recording
of all procurement-related conferences including but not limited to pre-procurement
conference, pre-bid conference, bid opening, and all meetings of the bids and BAC, for all

procurement projects equal or exceeding the amount of One million pesos (P1,000,000. 00).

All procurement related conferences may not commence without a video recording

initiated by the chair of the BAC.

Violations of this Section shall be meted out penalties as prescribed under Articles
XXII (Penal Clause), XXIII (Civil Liability), and XXIV (Administrative Sanctions) of this
Act. In addition to the aforementioned sanctions, the contract in favor of the errant party

shall be nullified if the bid has been awarded.

SEC. 38. Specifications of the Video Recording. ~The video recording shall be clear
and shall provide a close-up view of those present in the conference. During recording, the
members of the BAC, the prospective or qualified bidders, the representative of the
Commission on Audit and the two (2) observers invited in accordance with Article IV of

this Act, shall be introduced one by one.

SEC. 39. Copies of the Video Recording. — There shall be made three (3) copies of the

video recording for the perusal and/or record of the BAC, the GPPB, and the Commission


on Audit (COA). The video copies shall be made available to the public upon written request

and payment of a specified fee.

SEC. 40. Written and Video Records as Evidence in Court. — In case of any pertinent
legal action, the video records may be subject to subpoena duces tecum, and may be used as
evidence in court as it finds appropriate.

The BAC, GPPB, and COA shall store the video records for not less than twenty (20)

years and may dispose of them thereafter.

The BAC and the GPBB shall ensure that the copies of the recording are regularly
checked to ascertain that they are in good condition and not deteriorating, subject to the

recommended conservation practices for the storage of the same.

SEC. 41. Logistics of Video Recording. — The BAC of each procuring entity shall be in
charge of the logistics of video recording and other related technical matters, such as but not
limited to audio, archiving, and such other matters necessary to carry out the provisions of

this Act.

SEC. 42. Procurement of Video Recording Equipment. —- The GPPB shall be in charge
of the procurement of the video recording equipment and related supplies to be allocated to

the procuring entities.

SEC. 43. Exclusion of bidders. — The procuring entity may exclude a bidder from
participating due to the following reasons:
a. Blacklisting of the supplier;
b. Bankruptcy, receivership, or liquidation;
c. Making a false declaration in its submissions;

d. Serious performance issue in a previous contract;


e. Conviction for a serious crime;

f. Professional misconduct;

8 Failing to pay taxes, duties, or other levies;

h. Human rights violations by the supplier or in the supplier’s supply chain; and

i. Any analogous matter.

Evidence supporting the reason for exclusion must exist before exclusion. The
excluded bidder must be notified of its exclusion together with the reasons for such and be
afforded the right to refute within a reasonable time.

SEC. 44. Eligibility Requirements for the Procurement of Goods and Infrastructure
Projects. — The BAC or, under special circumstances specified in the IRR, its duly designated
organic office shall determine the eligibility of prospective bidders for the procurement of
goods and infrastructure projects, based on the bidders’ compliance with the eligibility
requirements within the period set forth in the invitation to bid. The eligibility requirements
shall provide for fair and equal access to all prospective bidders. The documents submitted in
satisfaction of the eligibility requirements shall be made under oath by the prospective bidder
or by the duly authorized representative certifying to the correctness of the statements made

and the completeness and authenticity of the documents submitted.

A prospective bidder may be allowed to submit the eligibility requirements
electronically. However, said bidder shall later on certify under oath as to correctness of the
statements made and the completeness and authenticity of the documents submitted: Provided,
That for the procurement of infrastructure projects, the participation of prospective bidders
shall be determined based on the approved budget for the contract (ABC) as follows:

1. ABC of One hundred million pesos (P100,000,000.00) and below. The location of
the main office of the bidder must be within the province where the project shall be

implemented;


2. ABC of above One hundred million pesos (P100,000,000.00) and below Two
hundred million pesos (P200,000,000.00). The location of the main office of the bidder must
be within the region where the project shall be implemented; and

3. ABC of above Two hundred million pesos (P200,000,000.00). The location of the
main office of the bidder may be anywhere in the Philippines.

B. RECEIPT AND OPENING OF BIDS

SEC. 45, Eligibility Requirements and Shortlisting. — The eligibility of prospective
bidders for the procurement of goods, infrastructure services, and consulting services shall be
determined by their compliance with the eligibility requirements prescribed for the competitive
bidding concerned, within the period stated in the invitation to bid. The eligibility
requirements shall provide for fair and equal access to all prospective bidders. The prospective
bidder shall certify under oath as to the correctness of the statements made, and the
completeness and authenticity of the documents submitted. A prospective bidder may be
allowed to submit the eligibility requirements electronically. However, said bidder shall later
on certify under oath as to correctness of the statements made and the completeness and
authenticity of the documents submitted. The eligible prospective bidders shall then be
evaluated using numerical ratings on the basis of the shortlisting requirements prescribed for
the competitive bidding concerned, within the period stated in the invitation to bid to determine
the short list of bidders who shall be allowed to submit their respective bids.

SEC. 46. Submission and Receipt of Bids. — A bid shall have two (2) components,
namely the technical and financial components which should be in separate electronic folders
or sealed envelopes, and which shall be submitted simultaneously. The bids shall be received
by the BAC on or before such date, time and place specified in the invitation to bid. The

deadline for the receipt of bids shall be fixed by the BAC, giving the prospective bidders


sufficient time to study and prepare their bids. The deadline shall also consider the urgency of
the procurement involved.

Bids submitted after the deadline shall not be accepted.

Notwithstanding the provisions of this Section and Section 47 of this Act, the GPPB
may prescribe innovative procedure for the submission, receipt and opening of bids through
the PhilGEPS. The GPPB shall upgrade the electronic bidding system in the G-EPS that
facilitates the submission of bids, quotation, documents and payment to the BAC through an
electronic device. The GPPB may prescribe other innovative procedures that expedite the
procurement process.

SEC. 47. Modification and Withdrawal of Bids. — A bidder may modify the bid,
provided that this is done before the deadline for the receipt of bids. The modification shall be
submitted in an electronic folder or sealed envelope duly identified as a modification of the
original bid and stamped received by the BAC.

A bidder may, through an electronic mail, withdraw the bid or express the intention not
to participate in the bidding before the deadline for the receipt of bids. In such a case, bidder
shall no longer be allowed to submit another bid or the same contract either directly or
indirectly.

SEC. 48. Bid Security. — All bids shall be accompanied by a bid security, which shall
serve as a guarantee that, after receipt of the notice of award, the winning bidder shall enter
into contract with the procuring entity within the stipulated time and furnish the required
performance security. the specific amounts and allowable forms of the bid security shall be
prescribed in the IRR.

SEC. 49. Bid Validity. - Bids and bid securities shall be valid for such reasonable period
of time indicated in the bidding documents. the duration for each undertaking shall take into

account the time involved in the process of bid evaluation and award of contract.


SEC. 50. Bid Opening. - The BAC shall publicly open all bids at the time, date, and
place specified in the bidding documents, which in no case shall be more than five (5) working
days after the deadline of the submission of bids. The minutes of the bid opening shall be
made available to the public through the PhilGEPS.

C. BID EVALUATION
‘SEC. 51. Oral Presentations and Demonstrations. — To provide top-ranked bidders an
opportunity to highlight the strengths of their proposal and provide answers regarding their
bids, a procuring entity may have the option to schedule an oral presentation of their respective
proposals that shall be conducted in a fair manner not later than five (5) calendar days after the
‘opening of bids in best value procurements. Provided, That the bidders shall not be allowed to
submit new information or modify their bids.

SEC. 52. Final Offer. — After the oral presentation and demonstration, the procuring
entity may give bidders up to two (2) opportunities to improve their bids in order to receive a
more favorable evaluation. The bidders shall be requested to submit their final offers not later
than ten (10) working days after the oral presentation or demonstration. Procuring entities may
evaluate the final offers as an addition to the scores already received by the bidders on their
original bid or may develop a new evaluation process based entirely on the final offers.

Bidders may opt not to submit a final offer and respond in writing to the procuring entity
that their response remains as originally submitted. During the final offer process, the lowest
price during the original responses may be disclosed but not the identity of the bidder as well
as the current rank of the bidders.

SEC. 53. Preliminary Examination of Bids. — Prior to bid evaluation, the BAC shall
examine first the technical components of the bids using "pass or fail" criteria to determine

whether all required documents are present. Only bids that are determined to contain all the


bid requirements of the technical component shall be considered for opening and evaluation
of their financial component.

SEC. 54. Ceiling for Bid Prices. - The ABC shall be the upper limit or ceiling for the
bid prices. Bid prices that exceed this ceiling shall be disqualified outright from further
Participating in the bidding. There shall be no lower limit to the amount of the award.

SEC. 55. Bid Evaluation for the Procurement of Goods and Infrastructure Projects.
— For the procurement of goods and infrastructure projects, the BAC shall evaluate the
financial component of the bids. The bids that passed the preliminary examination shall be
ranked from lowest to highest in terms of their corresponding calculated price in lowest bid
procurement or overall performance rating based on evaluation criteria shall be referred to as
the “Most Advantageous Bid.”

The most advantageous bid under best value procurement shall be understood as the one
that offers the best public value over the whole life of the goods and infrastructure projects as
proposed by the bidder that fully understands and has the capability to deliver the requirements
and meet the contract conditions.

SEC. 56. Bid Evaluation of Shortlisted Bidders for Consulting Services. — For the
procurement of consulting services, the bids of the shortlisted bidders shall be evaluated and
ranked using numerical ratings in accordance with the evaluation criteria stated in the bidding
documents, which shall include factors such as, but not limited to, experience, performance,
quality of personnel, price and methodology. The bids shall be ranked from highest to lowest
in terms of their corresponding calculated ratings. The bid with the highest calculated rating
shall be the “Most Advantageous Bid.” After approval by the head of the procuring entity of
the Most Advantageous Bid, the BAC shall invite the bidder concemed for negotiation or
clarification on the following items: financial proposal submitted by the bidder, terms of

reference, scope of services, methodology and work program, personnel to be assigned to the


job, services, or facilities, or data to be provided by the procuring entity concerned, and
provisions of the contract. When negotiations with the first-in-rank bidder fails, the financial
proposal of the second rank bidder shall be opened for negotiations: Provided, That the amount
indicated in the financial envelope shall be made as the basis for negotiations and the total
contract amount shall not exceed the amount indicated in the envelope and the ABC.
Whenever necessary, the same process shall be repeated until the bid is awarded to the winning
bidder.
D. POST-QUALIFICATION

SEC. 57. Objective and Process of Post-qualification. — Post-qualification is the stage
where the bidder with the most advantageous bid (MAB) undergoes verification and validation
whether the bidder has passed all the requirements and conditions as specified in the bidding
documents.

If the bidder with the MAB passes all the criteria for post-qualification, the bid shall
be considered the most advantageous and responsive bid (MARB). However, if a bidder fails
to meet any of the requirements or conditions, the bidder shall be "post-disqualified” and the
BAC shall conduct the post-qualification on the bidder with the second MARB. If the bidder
with the second MARB is post-disqualified, the same procedure shall be repeated until the

MARB is finally determined.

In all cases, the contract shall be awarded only to the bidder with the MARB.

In Best Value Procurements, the procuring entity is not required to automatically select
a bidder based upon the lowest cost or the highest qualifications unless these were the primary

criteria for selection.

SEC. 58. Debriefing of Unsuccessful Bidders. — Upon the request of any unsuccessful

bidder, the procuring entity shall conduct a debriefing in order to give them an opportunity to


improve their future proposals. Requests may be made within twenty (20) days after giving
the notice of award. The procuring entity shall state the reasons their proposal was not selected,
their relative strengths and weaknesses, and address other concerns. In no case shall the

procuring entity disclose another bidder’s confidential or commercially sensitive information.
SEC. 59. Failure of Bidding. — There shall be a failure of bidding if:
(a) Nobids are received;
(b) _Nobid qualifies as the MARB;

(©) Whenever the bidder with the MARB refuses, without justifiable cause to

accept the award of contract, as the case may be;

(@) Non-compliance with the requirements for the award of contract; or

(e) Failure to enter into contract and post-performance security.

Under any of the above instances, the 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. After the second failed bidding, however, the BAC may

resort to negotiated procurement as provided for in Section 89 of this Act.

‘The BAC of the procuring entity shall inform in writing the GPPB of the failure of
bidding and the reason thereof. The BAC of the procuring entity shall secure the approval of

GPPB for re-bidding or negotiated procurement.

SEC. 60. Single Advantageous Responsive Bid Submission. — A single advantageous

responsive bid shall be considered for award if it falls under of the following circumstances:


(a) If after advertisement, only one prospective bidder submits a letter of intent or applies
for eligibility check, and meets the eligibility requirements or criteria, after which it submits a

bid, which is found to be responsive to the bidding requirements;

(b) If after the advertisement, more than one prospective bidder applies for eligibility

check, but only one bidder meets the ibility requirements or criteria, after which it submits

a bid which is found to be responsive to the bidding requirements; or

(©) If after the eligibility check, more than one bidder meets the eligibility requirements,
but only one bidder submits a bid, and its bid is found to be responsive to the bidding
requirements. In all instances, the procuring entity shall ensure that the ABC reflects the most

advantageous prevailing price for the government.

ARTICLE X
IMPLEMENTATION STAGE
A. AWARD, IMPLEMENTATION AND TERMINATION OF THE CONTRACT
SEC. 61. Notice and Execution of Award, — Within a period not exceeding seven (7)
calendar days from the determination and declaration by the BAC of the most advantageous
and responsive bid and the recommendation of the award, the head of the procuring entity or
the duly authorized representative shall approve or disapprove the said recommendation. In
case of approval, the head of the procuring entity or the duly authorized representative shall
immediately issue the notice of award to the bidder with the most advantageous and responsive
bid. In case of disapproval, the head of the procuring entity shall state the reasons thereof and
return the documents to the BAC on the same day, which shall take action thereon within five
(5) working days.
In case the head of the procuring entity disapproves the recommendation of the BAC

to award the contract to the bidder with the lowest calculated responsive bid or the highest


rated responsive bid, the head of the procuring entity shall state the specific reasons for the
disapproval and return the same to the BAC immediately on the day of the disapproval.

Within five (5) calendar days from receipt of the notice of award, the winning bidder shall
formally enter into contract with the procuring entity. Otherwise, the contract shall be deemed
approved by the head of the procuring entity or the authorized representative.

In case the head of the procuring entity disapproves the contract, the reason or reasons for
the disapproval shall be stated in clear and unmistakable terms and the disapproved contract
shall be returned immediately on the day the contract is disapproved to the implementing unit
of the project which shall take action thereon within two (2) days from its receipt of the

disapproved contract.

The head of the procuring entity or the authorized representative shall issue the notice
to proceed to the winning bidder on the day immediately following the approval of the contract
and shall cause the service of the notice to proceed through the fastest means of communication
recognized as valid mode of service of implementing unit of the project notice under existing
law.

In the case of government-owned and/or -controlled corporations, the concerned board
shall take action on the said recommendation within thirty (30) calendar days from receipt
thereof.

The procuring entity shall issue the notice to proceed to the winning bidder not later than
five (5) working days from the date of approval of the contract by the appropriate authority.
All notices called for by the terms of the contract shall be effective only at the time of receipt
thereof by the contractor. The other bidders shall likewise be promptly notified by the decision
of the BAC. The notice of award and the notice to proceed shall be published in PhilGEPS.

SEC. 62. Period of Action on Procurement Activities. - The procurement process

from the opening of bids up to the award of contract shall not exceed three (3) months, or a


shorter period to be determined by the procuring entity concerned. Without prejudice to the
provisions of the preceding Section, the different procurement activities shall be completed
within reasonable periods to be specified in the IRR.

If no action on the contract is taken by the head of the procuring entity or by the duly
authorized representative, or by the concerned board, in the case of government-owned and/or
-controlled corporations, within the periods specified in the preceding paragraph, the contract
concemed shall be deemed approved, without prejudice to the appropriate administrative
sanctions that may be imposed against responsible officials.

The procurement process, starting from the date of the publication of the invitation to
bid, which shall be published only once in a newspaper of national circulation for projects
costing Fifteen million pesos and above up the issuance of the notice to proceed shall not
exceed three (3) months or a shorter period as may be warranted for justifiable cause to be
determined by the head of the procuring entity.

For contracts wherein there is only one bidder, the procurement process starting from
the date of submission and opening of bids up to issuance of the notice to commence or
proceed shall not exceed fifteen (15) days.

No project shall be included for funding in the General Appropriations Act unless the
detailed plans and specifications therefor have been duly completed and approved by the head
of the procuring entity and the right-of-way or site for the project have been acquired by the

procuring entity either through negotiated sale or by expropriation.

The chairperson of the BAC, its members and the members of the secretariat or
technical working group shall give first priority to the discharge of their duties and functions
as BAC members and members of the secretariat or technical working group, to ensure that
the timelines for procurement activities are attained.

SEC. 63. Performance Security. - Prior to the signing of the contract, the winning bidder


shall, as a measure of guarantee for the faithful performance of and compliance with the
obligations under the contract prepared in accordance with the bidding documents, be required
to post a performance security in such form and amount as specified in the bidding documents.

SEC. 64. Failure to Enter into Contract and Post Performance Security. ~ If, for
justifiable causes, the bidder with the most advantageous and responsive bid fails, refuses, or
is otherwise unable to enter into contract with the procuring entity, or ifthe bidder fails to post
the required performance security within the period stipulated in the bidding documents, the
BAC shall disqualify the said bidder and shall undertake post-qualification for the next-ranked
most advantageous and responsive bid. This procedure shall be repeated until an award is
made. However, if no award is possible, the contract shall be subjected to a new bidding or be
cancelled.

In the case of a failure to post the required performance security, the bid security shall
be forfeited without prejudice to the imposition of sanctions prescribed under Article XXIV.

SEC. 65. Reservation Clause. ~ The head of the agency reserves the right to reject any
and all bids, declare a failure of bidding, or not award the contract in the following situations:
(a) If there is prima facie evidence of collusion between appropriate public officers or
employees of the procuring entity, or between the BAC and any of the bidders, or if the
collusion is between or among the bidders themselves, or between a bidder and a third party,
including any act which restricts, suppresses or nullifies or tends to restrict, suppress or nullify
competition; (b) If the BAC is found to have failed in following the prescribed bidding
procedures; or (c) For any justifiable and reasonable ground where the award of the contract
will not redound to the benefit of the government as defined in the IRR.
SEC. 66. Contract Implementation and Termination. — The rules and guidelines for

the implementation and termination of contracts awarded pursuant to the provisions of this Act


shall be prescribed in the IRR. The rules and guidelines shall include standard general and
special conditions for contracts.
B. MONITORING AND EVALUATION

SEC. 67. Managing Relationship With Winning Bidder. — The procuring entity through
the end-user shall actively manage the contractual relationship with the winning bidder to
ensure that key performance indicators are met through regular communication.

SEC. 68. Periodic Updates. - The end-user shall make periodic updates on the
compliance of the winning bidder not longer than three (3) months apart.

SEC. 69. Satisfaction Metric. — The procuring entity shall rate the performance of the
winning bidder before a contract is terminated using a metric to be formulated by the GPPB
accompanied by detailed observations that shall be reflected in the profile of the bidder in
PhiIGEPS.

‘The winning bidder shall also be given the opportunity to rate the procuring entity after
the termination of the contract.

‘The GPPB shall collate these ratings and any recommendations for improvement of
bidders and the procurement process itself.

SEC. 70, Blacklisting. — Blacklisting of non-compliant suppliers, contractors, and
consultants as well as whitelisting or recognizing compliant and exemplary suppliers,
contractors, and consultants shall be allowed upon release of guidelines or ratings system by
the GPPB. These shall be easily viewable in the PhilGEPS website. Blacklisted persons and
entities shall be automatically barred from participating in any PhilGEPS activity.

‘An information technology infrastructure that can accommodate the uploading of
proceedings and transactions in PhilGEPS shall be provided. This shall be accessible to
everyone, especially for government watchdogs.

C. DISPOSAL


SEC. 71. Disposal Procedure. ~ The procuring entities shall follow the established
government disposal procedures.
ARTICLE XI
DOMESTIC AND FOREIGN PROCUREMENT
SEC. 72. Procurement of Domestic and Foreign Goods. — Consistent with the country’s

obligations under international treaties or agreements, goods may be obtained from domestic
or foreign sources and the procurement thereof shall be open to all eligible suppliers,
manufacturers and distributors. However, the purchase of domestically-produced and
manufactured goods, supplies and materials that meet the specified or desired quality in
accordance with the provisions of existing laws and treaties or international agreements must
be prioritized or given preference. Foreign bidders may only be eligible to participate under
any of the following circumstances:

A. When the goods sought to be procured are not available from local suppliers;

or

B. When the foreign supplier, manufacturer or distributor is a citizen, corporation

or association of a country the laws or regulations of which grant reciprocal rights or

privileges to citizens, corporations or associations of the Philippines, irrespective of the

availability of goods from local suppliers; or

C. When provided for under any treaty or international or executive agreement.

SEC. 73. Local Added Value. — All government-sponsored or government-issued

supplies to beneficiaries shall have at least seventy percent (70%) local added value.

For purposes of this Act, supplies refer to materials and equipment necessary in the

transaction of the official business of the procuring entity and used in its day to day operations.


SEC. 74. Certification Requirement. — In order to be qualified to participate in the
bidding process, suppliers are required to show proof of compliance to the requirement

mentioned in Section 73 of this Act.

‘The Department of Trade and Industry shall issue the certification to qualified suppliers
or vendors who want to participate in the procurement process.

SEC. 75. Availability of Local Materials. - The materials needed to produce the
government-sponsored or government-issued supplies shall be locally sourced. In case of non-
availability of materials locally, it is required that a certification from the Department of Trade
and Industry stating that locally made and sourced materials are not available, before a supplier
can participate in any government procurement bidding.

SEC. 76. Domestic and Foreign Bids. — Whenever several domestic and foreign
bidders shall participate in the bidding to supply articles, materials and equipment, the award
shall be given to the domestic bidder offering the lowest bid, provided the amount of the bid
is not more than twenty-five percent (25%) in excess of the lowest bid offered by a foreign
bidder.

SEC. 77. Procurement of Imported Goods. — The procurement of imported goods may
be allowed if local products, materials and supplies are not manufactured domestically in
sufficient quantity or comparable quality and at reasonable prices.

SEC. 78. Prioritization of Domestically Manufactured Vehicles in Public
Procurement. — In all public procurement involving the purchase of motor vehicles, the
government shall be required to procure only those manufactured domestically and, also, in
public procurement involving lease or rental of vehicles the government shall be required to
procure from service providers at least 50 percent (50%) of whose fleets are composed of

domestically-manufactured vehicles acquired in the five (5) years preceding the date of


procurement, unless no such vehicles meeting the required specifications or possessing the
required capabilities are manufactured or produced within the Philippines.
ARTICLE XII
BIDDING OF PROVINCIAL PROJECTS

SEC. 79. Bidding of Provincial Projects. — Priority programs and infrastructure
projects funded out of the annual General Appropriations Act which are intended for
implementation within the province shall be subject to the same public bidding and to the
procurement processes prescribed under this Act. For purposes of this Article, engineering
district civil works projects, subject to consultation with the concerned Members of Congress,
are included and subsumed in the term “provincial projects” and shall be governed by this
Section and Section 82 hereof.

SEC. 80. Provincial Bidders. — Within five (5) years from the effectivity of this Act,
a contractor who participates in the bidding of provincial priority programs and infrastructure
projects, whose principal office is within the same province, and who submits the lowest bid
among the provincial bidders which is higher than the lowest bid made by a contractor with
principal office outside the said province shall be granted the privilege to match the bid made
by the latter: Provided, however, That the release of funds for said projects shall be published
ina local newspaper with the widest circulation and the website of the Department of Budget
and Management, the mechanisms of which shall be spelled-out in the IRR.

ARTICLE XIII
LEASE OF COMPUTERS, COMMUNICATIONS, INFORMATION
AND OTHER EQUIPMENT

SEC. 81. Lease Contracts. — Lease of construction and office equipment, including

computers, communication and information technology equipment are subject to the same

public bidding and to the processes prescribed under this Act.


ARTICLE XIV
DISCLOSURE OF RELATIONS

SEC. 82. Disclosure of Relations. ~ In addition to the proposed contents of the
invitation to bid as mentioned under Section 23 of this Act, all bidding documents shall be
accompanied by a sworn affidavit, that the bidder, or any officer of their corporation, is not
related to the head of the procuring entity by consanguinity or affinity up to the third civil
degree. Failure to comply with the aforementioned provision shall be a ground for the
automatic disqualification of the bid in consonance with Section 55 of this Act.

ARTICLE XV

ALTERNATIVE METHODS OF PROCUREMENT

SEC. 83. Alternative Methods. ~ Subject to the prior approval of the head of the
procuring entity or the duly authorized representative, and whenever justified by the conditions
provided in this Act, the procuring entity may, in order to promote economy and efficiency,

resort to any of the following alternative methods of procurement:

(@) Limited Source Bidding, otherwise known as Selective Bidding ~ a method of
procurement that involves direct invitation to bid by the procuring entity from a set of
preselected suppliers or consultants with known experience and proven capability relative to

the requirements of a particular contract;

(b) Direct Contracting, otherwise known as Single Source Procurement — a method of
procurement that does not require elaborate bidding documents because the supplier is simply
asked to submit a price quotation or a pro-forma invoice together with the conditions of sale,

which offer may be accepted immediately or after some negotiations;

(©) Repeat Order — a method of procurement that involves a direct procurement of

goods from the previous winning bidder, whenever there is a need to replenish goods procured


under a contract previously awarded through competitive bidding;

(@ Shopping — a method of procurement whereby the procuring entity simply requests
for the submission of price quotations for readily available off-the-shelf goods or ordinary or

regular equipment to be procured directly from suppliers of known qualification; or

(e) Negotiated Procurement — a method of procurement that may be resorted under the
extraordinary circumstances provided for in Section 89 of this Act and other instances that
shall be specified in the IRR, whereby the procuring entity directly negotiates a contract with
technically, legally and financially capable supplier, contractor or consultant. In all instances,
the procuring entity shall ensure that the most advantageous price for the government is

obtained.

(f) Express Mode - a method of procurement that involves direct procurement from a
previous competitive bidding winning bidder, subject to challenges from better offers;

(g) Electronic Shopping - a method of procurement whereby the procuring entity
requests the submission of price quotations for rated products through an online platform and

proceeds to select a supplier from said quotations.

SEC. 84. Limited Source Bidding. — Limited source bidding may be resorted to only

in any of the following conditions:

a. Procurement of highly specialized types of goods and consulting services which are
known to be obtainable only from a limited number of sources or for technical reasons there is

no real competition; or

b. Procurement of major plant components where it is deemed advantageous to limit
the bidding to known eligible bidders in order to maintain an optimum and uniform level of

quality and performance of the plant as a whole


SEC. 85. Express Mode. - Procuring entities who wish to procure the same goods or
services from a previous winning bidder may do so subject to a challenge period for better

offers.

The procuring entity utilizing the express mode of procurement shall post a notice to
challenge, indicating the present supplier, the goods or services to be procured, the present
contract price of goods or services, an invitation to challenge the existing supplier, and a period

for accepting better offers, which period shall not be less than seven (7) days.

In the event that there are no better offers submitted, the procuring entity may directly
procure from the previous winning bidder.

In the presence of better offers, the previous winning bidder shall be given seven (7)
working days to match the better offer. If the previous winning bidder matches the better offer,
the procuring entity shall be allowed to directly procure form the previous winning bidder.
Otherwise, procuring entity directly procure from the supplier that produced the better offer.

Prior to the procurement, the procuring entity shall publicly post the result of the

challenge.

SEC. 86. Shopping. — Shopping may be resorted to under any of the following

instances:

a. When there is an unforeseen contingency requiring immediate purchase: Provided,

‘That the amount shall not exceed Two hundred thousand pesos (P200,000); or

b. Procurement of ordinary or regular office supplies and equipment not available in
the procurement service involving an amount not exceeding One million pesos (P1,000,000):
Provided, however, That the procurement does not result in splitting of contracts: Provided,

‘further, That at least three (3) price quotations from bona fide suppliers shall be obtained. In


case the required number of quotations are not received, the procuring entity may canvass on

its own from at least three (3) reputable suppliers.

The above amounts shall be subject to a period review by the GPPB. For this purpose,
the GPPB shall be authorized to increase or decrease the said amount in order to reflect changes

in economic conditions and for other justifiable reasons.

SEC. 87. Electronic Shopping. — Procuring entities may purchase goods that have
undergone an online platform rating process. The online platform may receive requests for
quotations from procuring entities. In making their request for quotations, the procuring entity
shall provide information on the description, quantity, delivery location, minimum rating
requirement, and such other information as it may deem necessary.

Within seven (7) days, the online platform shall furnish the procuring entity with a list
of rated products, and the quotations from applicant-suppliers. For purposes of transparency,
a copy of the list and quotations shall be immediately transmitted to the Department of Budget
and Management and the Commission on Audit.

The end-user of the goods being procured shall select from among the quotations
received and make a recommended purchase to the head of the procuring entity for approval.

The procuring entity shall be given a maximum of seven (7) calendar days from date
of issuance of quotations to enter into a contract with the selected supplier: Provided, That in
no instance shall the contract price exceed the approved budget for the contract or 120% of the
lowest quoted price, whichever is higher.

SEC. 88. Rating System. — Within one year from the effectivity of this Act, there shall

be a rating system for goods that may be procured by government.


‘The rating system shall be made available to the procuring entities, suppliers, and the
general public through an online platform that shall be maintained by the Department of
Budget and Management, or its relevant attached agency.

For purposes of rating products, there shall be a technical working group headed by the
GPPB and composed of technical experts from at least one (1) government agency and end-
users from at least one (1) government agency. To ensure transparency, an industry
representative from the private sector is allowed to observe and act as resource person during
the rating process: Provided, That in the event that there is no technical expert from the
government, a technical expert from the private sector shall be invited to rate the product:
Provided, further, That in the procurement of products that were never used by government,
the intended end-users from the government shall be invited to rate the product.

End-users from procuring entities shall be required to provide feedbacks on products
procured through electronic shopping within three (3) months from date of delivery. Said
feedbacks shall be used by the system to update product ratings.

There shall be a mechanism for suppliers and industry representatives to challenge the
rating given to products. Any challenge to an existing rating shall not result in the exclusion

of the product from being listed in the online platform.

For purposes of rating suppliers, the online platform shall assign badges to participating
suppliers that have achieved different milestones such as promptness in delivery, number of
contracts fulfilled, value of contracts fulfilled, and other criteria that would determine the

worthiness of a supplier.

SEC. 89. Negotiated Procurement. — Negotiated procurement shall be allowed only

in the following instances:

a. In case of two (2) failed bidding as provided in Section 61 hereof;


b. In case of imminent danger to life or property before, during, or after a state of
calamity, or when time is of the essence arising from natural or man-made calamities or other
causes where immediate action is necessary to prevent damage to or loss of life or property, or

to restore vital public services, infrastructure facilities and other public utilities;

(©) Take-over of contracts, which have been rescinded or terminated for causes
provided for in the contract and existing laws, where immediate action is necessary to prevent
damage to or loss of life or property, or to restore vital public services, infrastructure facilities

and other public utilities;

(d) Where the subject contract is adjacent or contiguous to an on-going infrastructure
Project, as defined in the IRR: Provided, however, That the original contract is the result of a
competitive bidding; the subject contract to be negotiated has similar or related scopes of work;
it is within the contracting capacity of the contractor; the contractor uses the same prices or
lower unit prices as in the original contract less mobilization cost; the amount involved does
not exceed the amount of the ongoing project; and, the contractor has no negative slippage:
Provided, further, That negotiations for the procurement are commenced before the expiry of
the original contract. Whenever applicable, this principle shall also govern consultancy
contracts, where the consultants have unique experience and expertise to deliver the required

service; or,

(©) Subject to the guidelines specified in the IRR, purchases of goods from another
agency of the government, such as the procurement service of the Department of Budget and
Management, which is tasked with a centralized procurement of commonly used goods for the
government in accordance with Letters of Instruction No. 755 and Executive Order No. 359,

Series of 1989.

SEC. 90. Terms and Conditions for the Use of Alternative Methods. — The specific


terms and conditions, including the limitations and restrictions, for the application of each of
the alternative methods mentioned in this Article shall be specified in the IRR.
ARTICLE XVI

SUSTAINABLE PUBLIC PROCUREMENT

SEC. 91. Environment-Friendliness Criterion in Procurement. — \nfrastructure

projects, the sustainability of materials to be procured shall be given greater weight in the

evaluation of bids.

SEC. 92. Inter-Agency Task Force on Sustainable Public Procurement Task Force.
~ an Inter-Agency Task Force on Sustainable Public Procurement (IATF-SPP) is hereby
created to be headed by the Secretary of Environment and Natural Resources, with the
Secretaries of Trade and Industry, Public Works and Highways, Science and Technology, and

Education, and a representative from environmental organizations, as members.

The IATF-SPP shall be recommend to the GPPB the sustainable procurement policy
that shall be applicable to the all government agencies and instrumentalities including, but not
limited to, the criteria to be used in the assessment of sustainability of products and services

and their corresponding certification.

SEC. 93. Promotion of Certified Sustainable Products. — Certified sustainable products

shall be promoted in PhilGEPS.

Green products certified by the PGPTF shall be organized by product names to promote

the use of green products in the government.

ARTICLE XVIL

INCLUSIVE PUBLIC PROCUREMENT


SEC. 94. Registration of Priority Enterprises. — The PhilGEPS shall maintain a registry
of priority enterprises: Provided, That prior to registration, a priority enterprise shall first have
been duly certified as such by the national council for disability affairs, the cooperative
development authority, or the micro, small and medium enterprises development council as
the case may be. These agencies shall likewise exert efforts to have priority enterprises
registered in the PhilGEPS.

Information conceming registered priority enterprises in the PhilGEPS, as defined in
the IRR, shall be included in order to facilitate their patronage in accordance with the
alternative methods of procurement in Article XV_of this Act.

SEC. 95. Prioritization of Enterprises. — The BAC, upon review of the technical and
financial components of participating bidders during bid evaluation, shall favor a priority
enterprise over a non-priority enterprise and shall accordingly award to the former the contract
in the event both such entities display comparably equal competence when analyzed using
parameters defined by the GPPB in the IRRR, which shall include a permissible margin which
shall still be in favor of priority enterprises,

This prioritization does not apply when there is an enterprise, priority or not, clearly
more capable than the rest of those involved.

SEC. 96. Hierarchy of Priority Enterprises. - The parameters and the permissible
margin mentioned in the next preceding Section for the IRR shall reflect the following
hierarchy from the most prioritized enterprise to the least: (j) sheltered workshops, (ii)
cooperatives, (iii) micro enterprises, (iv) small enterprises, and (v) medium enterprises.
In case two priority enterprises are found to be of comparably equal competence, the one more
prioritized shall be awarded the contract.

SEC. 97. Ceilings, Reductions, or Exemptions on Bid and Performance Securities,

Warranties, and Other Guarantees. — The GPPB, after due consultation with the National


Council For Disability Affairs, the Cooperative Development Authority, and the Micro, Small
And Medium Enterprises Development Council, shall prescribe instances wherein a reduction
of or outright exemption from bid and performance securities, warranties, and other guarantees
shall be extended to a priority enterprise, especially when the BAC determines that the priority
enterprise has difficulty accessing credit or capital for such securities but is otherwise
technically competent and financially capable to fulfill the contract. The GPPB shall likewise
prescribe in the IRR ceilings for such securities for priority agencies.

SEC. 98. Reserved Transactions and Earmarking for Priority Enterprises. —Twenty-
five percent (25%) of a procuring entity’s procurements every fiscal year shall be allotted to
priority enterprises: Provided, That such limit shall only apply to transactions ordinarily within
the capacity of priority enterprises as shall be defined in the IRR. Procuring entities shall exert
eamest efforts to meet the above percentage but shall not be faulted if no priority enterprise is
available, competent, and capable to meet a procuring entity’s contracts.

Procurements of relatively small value, the amounts of which shall be prescribed in the
IRR, and which may be coursed through the alternative methods of procurement as provided
in Article XI, shall be earmarked to priority enterprises.

SEC. 99. Prohibition on Exclusion. — It shall be unlawful for procuring entities to
outright exclude or otherwise limit the participation of priority enterprises during the
determination of qualified bidders, eligibility screening, or in any other phase of the
procurement process.

ARTICLE XVIII
GRIEVANCE MECHANISM

SEC. 100. Decisions of the BAC; Deviations in Bidding Process. - Decisions of the

BAC in all stages of procurement as well as any observed deviations from proper bidding

procedure or practice may be questioned via a motion for reconsideration or submitted, as the


case may be, to the BAC within five (5) working days from notice of the decision or the
occurrence of the deviation in writing. The BAC shall have five (5) working days to decide
on the motion or act on the observation and shall furnish copies thereof to all parties involved
in the motion or submission.

SEC. 101. Appeal to the Head of the Procuring Entity; Motion for Reconsideration.
Decisions or actions and inactions of the BAC in accordance with the next preceding Section
may be protested to the head of the procuring entity by filing a verified position paper and
paying a non-refundable protest fee, which shall in no case exceed one-tenth percent (0.1%)
of the approved budget for contract. The head of procuring entity shall render a decision within
five (5) working days from receipt of the position paper. decisions of the head of the procuring
entity may be questioned via a motion for reconsideration which shall be filed within five (5)
working days from notice of the decision. Decisions of the head of the procuring entity, which
shall be rendered within five (5) working days from the receipt of the motion for
reconsideration, shall be final and executory. no second motion for reconsideration shall be
allowed. Decisions of the head of the procuring entity shall be final and executory.

SEC. 102. Publication of Decisions. - Decisions of the BAC and the head of the
procuring entity shall be kept and be made publicly available and accessible through the
PhiIGEPS.

SEC. 103. Non-interruption of the Bidding Process. — In no case shall any protest taken
from any decision treated in this Article stay or delay the bidding process. Protests must first
be resolved before any award is made.

SEC. 104. Resort to Regular Courts; Certiorari. - Court action may be resorted to only
after the protests contemplated in this Article shall have been completed and shall be based
only upon grave abuse of discretion amounting to lack or excess of jurisdiction on the part of

the head of the procuring entity. Cases that are filed in violation of the process specified in this


Article shall be dismissed for lack of jurisdiction. The Regional Trial Court shall have
jurisdiction over final decisions of the head of the procuring entity. Court actions shall be
governed by Rule 65 of the 1997 Rules of Civil Procedure.

This provision is without prejudice to any law conferring on the Supreme Court the
sole jurisdiction to issue temporary restraining orders and injunctions relating to infrastructure
projects of government.

ARTICLE XIX
SETTLEMENT OF DISPUTES

SEC. 105. Arbitration. - Any and all disputes arising from the implementation of a
contract covered by this Act shall be submitted to arbitration in the Philippines according to
the provisions of Republic Act No. 876, otherwise known as the "Arbitration Law": Provided,
That disputes that are within the competence of the Construction Industry Arbitration
Commission to resolve shall be referred thereto. The process of arbitration shall be
incorporated as a provision in the contract that will be executed pursuant to the provisions of
this Act: Provided, That by mutual agreement, the parties may agree in writing to resort to
alternative modes of dispute resolution, in accordance with Republic Act No. 9285.

SEC. 106. Appeals. - The arbitral award and any decision rendered in accordance with
the foregoing Section shall be appealable by way of a petition for review to the Court of
Appeals. The petition shall raise only pure questions of law and shall be governed by the Rules
of Court.

ARTICLE XX
CONTRACT PRICES AND WARRANTIES
SEC. 107. Contract Prices. - For the given scope of work in the contract as awarded,

all bid prices shall be considered as fixed prices, and therefore not subject to price escalation


during contract implementation, except under extraordinary circumstances and upon prior
approval of the GPPB, or when a treaty or international agreement otherwise provides.

For purposes of this Section, “extraordinary circumstances” refer to events that may
be determined by the National Economic and Development Authority in accordance with the
Civil Code of the Philippines, and upon the recommendation of the procuring entity concemed.

SEC. 108. Warranty. — (a) For the procurement of goods, in order to assure that
manufacturing defects shall be corrected by the supplier, manufacturer, or distributor, as the
case may be, for a specific time after performance of the contract, a warranty shall be required
from the contract awardee for such period of time as may be provided in the IRR, the obligation
for which shall be covered by either retention money in the amount equivalent to a percentage
of every progress payment, or a special bank guarantee equivalent to a percentage of the total
contract price, to be provided in the IRR. The said amounts shall only be released after the
lapse of the warranty period, provided that the goods supplied are free from defects and all the
conditions imposed under the contract have been fully met.

(b) For the procurement of infrastructure projects, the contractor shall assume full
responsibility for the contract work from the time project construction commenced up to a
reasonable period as defined in the IRR taking into consideration the scale and coverage of the
project from its final acceptance by the government and shall be held responsible for any
damage or construction of works except those occasioned by force majeure. The contractor
shall be fully responsible for the safety, protection, security, and convenience of the
contractor’s personnel, third parties, and the public at large, as well as the works, equipment,
installation and the like to be affected by the construction work and shall be required to put up
a warranty security in the form of cash, bank guarantee, letter of credit, Government Service

Insurance System bond, or callable surety bond.


The contractor shall undertake the repair works, at contractor’s own expense, of any
defect or damage to the infrastructure projects on account of the use of materials of inferior
quality within ninety (90) days from the time the head of the procuring entity has issued an
order to undertake repair. In case of failure or refusal to comply with this mandate, the
government shall undertake such repair works and shall be entitled to full reimbursement of
expenses incurred therein upon demand.

Any contractor who fails to comply with the preceding paragraph shall suffer perpetual
disqualification from participating in any public bidding and contractor’s property or
properties shall be subject to attachment or garnishment proceedings to recover the costs. All
payables of government in contractor’s favor shall be offset to recover the costs.

ARTICLE XXI
GOVERNMENT PROCUREMENT POLICY BOARD

SEC. 109. Organization and Functions. — A Government Procurement Policy Board
(GPPB) is hereby established to: (a) protect national interest in all matters affecting public
procurement, having due regard to the country’s regional and international obligations; (b)
formulate and amend, whenever necessary, the IRR and the corresponding standard forms for
Procurement; (c) ensure that procuring entities regularly conduct procurement training
programs and prepare a procurement operations manual for all offices and agencies of
government; and (4) conduct an annual review of the effectiveness of this Act and recommend
any amendments thereto, as may be necessary. The GPPB shall convene within fifteen (15)
days from the effectivity of this Act to formulate the IRR and for other related purposes. The
GPPB shall be supported by a technical support office. In addition to the powers granted under
this Act, the GPPB shall absorb all the powers, functions and responsibilities of the

Procurement Policy Board created under Executive Order No. 359, Series of 1989. All affected


functions of the Infrastructure Committee of the National Economic and Development
Authority Board are hereby transferred to the GPPB.

SEC. 110. Membership. — The GPPB shall be composed of the Secretary of Budget
and Management, as chairperson, the Director-General of the National Economic and
Development Authority, as alternate Chairperson, with the following as members; the
Secretaries of the Public Works and Highways, Finance, Trade and Industry, Health, National
Defense, Education, Interior and Local Government, Science and Technology, Transportation
and Communications, and Energy, or their duly authorized representatives and a representative
from the private sector to be appointed by the President upon the recommendation of the
GPPB. The GPPB may invite a representative from the Commission on Audit to serve as a
resource person.

ARTICLE XXII
PENAL CLAUSE

SEC. 111. Offenses and Penalties. — (a) Without prejudice to the provisions of
Republic Act No. 3019, otherwise known as the “Anti-Graft and Corrupt Practices Act” and
other penal laws, public officers who commit any of the following acts shall suffer the penalty
of imprisonment of not less than six (6) years and one (1) day, but not more than fifteen (15)
years:

(1) Unauthorized access to the content of any bid submitted to the procuring entity,
including, but not limited to bids that have been submitted through an electronic procurement
system and any and all documents required under a confidentiality clause prior to the appointed
time for the public opening of bids or other documents.

(2) Delaying, without justifiable cause, the screening for eligibility, opening of bids,
evaluation and post evaluation of bids, and awarding of contracts beyond the prescribed

periods of action provided for in the IRR.


(3) Unduly influencing or exerting undue pressure on any member of the BAC or any
officer or employee of the procuring entity to take a particular action which favors, o tends to
favor a particular bidder.

(4) Splitting of contracts which exceed procedural purchase limits and competitive
bidding.

(5) When the head of the procuring entity agency abuses the exercise of power to reject
any and all bids as mentioned under Section 67 of this Act with manifest preference to any
bidder who is closely related to the head of the procuring entity agency or who has an agent or
shareholder related to the head of the procuring entity in accordance with Section 82 of this
Act.

(6) Outright excluding or otherwise limiting the participation of priority enterprises in
the procurement process.

When any of the foregoing acts is done in collusion with private individuals, the private
individuals shall likewise be liable for the offense.

In addition, the public officer involved shall also suffer the penalty of temporary
disqualification from public office, while the private individual shall be permanently
disqualified from transacting business with the government.

(b) Private individuals who commit any of the following acts, including any public
officer, who conspires with them, shall suffer the penalty of imprisonment of not less than six
(6) years and one (1) day but not more than fifteen (15) years:

(1) When two or more bidders agree and submit different bids as if they were bona fide,
when they knew that one or more of them was so much higher than the other that it could not
be honestly accepted and that the contract will surely be awarded to the pre-arranged lowest

bid.


(2) When a bidder maliciously submits different bids through two or more persons,
corporations, partnerships or any other business entity in which a bidder has interest to create
the appearance of competition that does not in fact exist so as to be adjudged as the winning
bidder.

(3) When two or more bidders enter into an agreement which call upon one to refrain
from bidding for procurement contracts, or which call for withdrawal of bids already
submitted, or which are otherwise intended to secure an undue advantage to any one of them.

(4) When a bidder, by himself or in connivance with others, employ schemes which
tend to restrain the natural rivalry of the parties or operates to stifle or suppress competition
and thus produce a result disadvantageous to the public.

In addition, the persons involved shall also suffer the penalty of temporary or perpetual
disqualification from public office and be permanently disqualified from transacting business
with the government.

(©) Private individuals who commit any of the following acts, and any public officer
conspiring with them, shall suffer the penalty of imprisonment of not less than six (6) years
and one (1) day but not more than fifteen (15) years:

(1) Submit eligi

ity requirements of whatever kind and nature that contain false

information or falsified documents calculated to influence the outcome of the

bility
screening process or conceal such information in the eligibility requirements when the
information will lead to a declaration of ineligibility from participating in public bidding.

(2) Submit bidding documents of whatever kind and nature that contain false
information or falsified documents or conceal such information in the bidding documents, in
order to influence the outcome of the public bidding.

(3) Participate in a public bidding using the name of another or allow another to use

one’s name for the purpose of participating in a public bidding.


(4) Withdraw a bid, after it shall have qualified as the lowest calculated bid or highest
rated bid, or refuse to accept an award, without just cause or for the purpose of forcing the
procuring entity to award the contract to another bidder. This shall include the non-submission
within the prescribed time, or delaying the submission of requirements such as, but not limited
to, performance security, preparatory to the final award of the contract.

d) When the bidder is a juridical entity, criminal liability and the accessory penalties
shall be imposed on its directors, officers or employees who actually commit any of the
foregoing acts.

SEC. 112. Jurisdiction. — Jurisdiction over the offenses defined under this Article shall
belong to the appropriate courts, according to laws existing at the time of the commission of
the offenses.

ARTICLE XXII
CIVIL LIABILITY

SEC. 113. Civil Liability in Case of Conviction. — Without prejudice to administrative
sanctions that may be imposed in proper cases, a conviction under this Act or Republic Act
No. 3019 shall carry with it civil liability, which may either consist of restitution for the
damage done or the forfeiture in favor of the government of any unwarranted benefit derived
from the act or acts in question or both, at the discretion of the courts.

SEC. 114. Liquidated Damages. — A\l contracts executed in accordance with this Act
shall contain a provision on liquidated damages which shall be payable in case of breach
thereof. The amount thereof shall be specified in the IRR.

ARTICLE XIV
ADMINISTRATIVE SANCTIONS
SEC. 115. Imposition of Administrative Penalties. — (a) In addition to the provisions

of Articles XXII and XXIII of this Act, the head of the procuring entity, subject to the authority


delegated to the BAC, if any, shall impose on bidders or prospective bidders, the administrative
penalty of suspension for one (1) year for the first offense, and suspension of two (2) years for
the second offense from participating in the public bidding process, for the following
violations:

(1) Submission of eligibility requirements containing false information or falsified
documents.

(2) Submission of bids that contain false information or falsified documents, or the
concealment of such information in the bids in order to influence the outcome of eligibility
screening or any other stage of the public bidding.

(3) Allowing the use of one’s name, or using the name of another for purposes of public
bidding.

(4) Withdrawal of a bid, or refusal to accept an award, or enter into contract with the
government without justifiable cause, after he had been adjudged as having submitted the
lowest calculated responsive bid or highest rated responsive bid.

(5) Refusal or failure to post the required performance security within the prescribed
time.

(6) Termination of the contract due to the default of the bidder.

Refusal to clarify or validate in writing its bid during post-qualification within a period
of seven (7) calendar days from receipt of the request for clarification.

Any documented unsolicited attempt by a bidder to unduly influence the outcome of
the bidding in said bidder’s favor.

All other acts that tend to defeat the purpose of the competitive bidding.

(b) In addition to the penalty of suspension, the bid security or the performance security

posted by the concerned bidder or prospective bidder shall also be forfeited.


(© The head of the procuring entity may delegate to the BAC the authority to impose
the aforementioned administrative penalties.

SEC. 116. Preventive Suspension. — The head of the procuring entity may preventively
suspend any member of the technical working group or the secretariat, or the BAC if there are
strong reasons or prima facie evidence showing that the officials or employees concerned are
guilty of the charges filed against them under Articles XXII and XXIII of this Act or for
dishonesty as defined by the civil service laws. In all cases, procedural and substantive due
process as mandated by the Constitution and civil service laws, rules and regulations, shall be
strictly observed.

SEC. 117. Lifting of Suspension and Removal of Administrative Disabilities. —
Lifting of preventive suspension pending administrative investigation, as well as removal of
administrative penalties and disabilities shall be in accordance with the provisions of Sections
52 and 53, Chapter 6 (Civil Service Commission), Book V of Executive Order No. 292, the
Administrative Code of 1987.

ARTICLE XXV
MISCELLANEOUS PROVISIONS

SEC. 118. Lease Contracts. - Lease of construction and office equipment, including
computers, communication and information technology equipment are subject to the same
public bidding and to the processes prescribed under this Act.

SEC. 119. Additional Eligibility Requirements for Bidders and Contractors. - In order
for bidders and contractors to participate in the public bidding or to deal with the government
in the implementation of infrastructure projects, they must be operating within the area or
region where the project is to be implemented and must secure an authority to participate from
the regional director and the Undersecretary for Operations of the Department of Public Works

and Highways.


ARTICLE XXVI

LEGAL ASSISTANCE AND INDEMNIFICATION OF BAC MEMBERS

SEC. 120. Private Legal Assistance. — All the members of the BAC are hereby
authorized to engage the services of private lawyers or extend counsel immediately upon
receipt of court notice that a civil or criminal action, suit or proceeding is filed against them.
The lawyer's fee shall be part of the indemnification package for the BAC members, subject
to the provisions of Section 121 hereof.

SEC. 121. Indemnification of BAC Members. — The GPPB shall establish an equitable
indemnification package for public officials providing services in the BAC, which may be in
the form of free legal assistance, liability insurance, and other forms of protection and
indemnification for all costs and expenses reasonably incurred by such persons in connection
with any civil or criminal action, suit or proceeding to which they may be, or have been made,
a party by reason of the performance of their functions or duties, unless they are finally
adjudged in such action or proceeding to be liable for gross negligence or misconduct or grave
abuse of discretion.

In the event of a settlement or compromise, indemnification shall be confined only on
‘matters covered by the settlement, as to which the procuring entity had been advised by counsel
that the public officials to be indemnified have not committed gross negligence or misconduct
in the performance of their functions and duties.

The members of the BAC and the BAC Secretariat shall also be entitled to medical
assistance for injuries incurred in the performance of their functions.

ARTICLE XXVII
FINAL PROVISIONS
SEC. 122. Oversight Committee. — A Joint Congressional Oversight Committee is

hereby created to oversee the implementation of this Act for a period not exceeding five (5)


years from the effectivity of this Act. The Committee shall be composed of the Chairperson of
the Senate Committee on Finance and two members thereof appointed by the Senate President,
and the Chairperson of the House Committee on Appropriations, and two members thereof to

be appointed by the Speaker of the House of Representatives.

SEC. 123. Appropriations. - The amount necessary to carry out the provisions of this

Act shall be included in the annual General Appropriations Act.

SEC. 124, Implementing Rules and Regulations. - The GPPB shall formulate the IRR
of this Act within ninety (90) days from its promulgation.

SEC. 125. Transitory Provision. - Procurement transactions commenced before the
effectivity of this Act shall continue to be governed by Republic Act No. 9184. Government
agencies and instrumentalities affected by this Act shall be given one (1) year transitory period
from the effectivity of the IRR to comply with the requirements of this Act.

SEC. 126. Separability Clause. - If any provision or part hereof is held invalid or
unconstitutional, the remainder of the law or the provision not otherwise affected shall remain
valid and subsisting.

SEC. 127. Repealing Clause. - Republic Act No. 9184, otherwise known as the
“Government Procurement Reform Act” is hereby repealed. Except as otherwise expressly
provided in this Act, all other laws, decrees, executive orders, proclamations and
administrative regulations or parts thereof inconsistent herewith are hereby repealed or
modified accordingly.

SEC. 128. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
publication in at least two (2) national newspapers of general circulation.

Approved,