2004-03-29

NPM 036-2004-A
Requesting Entity: Philippine Charity Sweepstakes Office
Issues Concern: Negotiated Procurement

1. Whether or not a procuring entity may limit the conduct of its negotiated procurement
to only three (3) bidders.

The requirement under Section 54.2 (b) of the IRR-A of R.A. 9184 is for the procuring
entity to draw up a list of at least three (3) suppliers or contractors which will be invited
to submit bids. This applies only in cases where there has been two (2) failed biddings
or in case of imminent danger to life or property during 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.

The circumstances earlier mentioned contemplates a situation where immediate

determination of a supplier or contractor which will satisfy the procurement requirement
is a necessity.

For this reason, a procuring entity is given the authority to draw up a list of at least three
(3) suppliers or contractors known to be technically, legally and financially capable.
Limiting the list into three (3) suppliers or contractors of known capability helps the
procuring entity in focusing on the proposals rather than the qualification of the suppliers
or contractors. In this light, procuring entities may be able to shorten the time for the
evaluation of the proposals and determine that which will be most advantageous to the
government.

2. Whether or not, in case of a negotiated procurement, may the conduct of a pre-bid

conference be dispensed with.

As defined in Section 5 (h) of IRR-A competitive bidding or public bidding involves the
following process: advertisement, pre-bid conference, eligibility screening of prospective
bidders, receipt and opening of bids, evaluation of bids, post-qualification, and award of
contract.

In this regard, when there has been a failure of bidding for the second time and
negotiated procurement is resorted to, the conduct of a pre-bid conference is required.
Please note, however, that the conduct of a pre-bid conference is required only for
contracts to be bid with an approved budget of one million pesos (P1,000,000.00) or
more. For projects costing less than one million pesos (P1,000,000.00), holding a pre-
bid conference is at the discretion of the Bids and Awards Committee.

3. Whether or not the submission and opening of bids be conducted within five (5) days
or less after the pre-bid conference.
The rules and procedures for the conduct of a public bidding should be followed when a
negotiated procurement is resorted to in case there have been two (2) failed biddings.
As such, the period required for each stage of procurement should also be followed.
Section 22.2 of the IRR-A provides a period of at least twelve (12) calendar days
between the pre-bid conference and the submission and opening of bids, to wit:

The pre-bid conference shall be held at least twelve (12) calendar days before the
deadline for the submission and receipt of bids. However, attendance of the bidders
shall not be mandatory.

In this light, the submission and opening of bids cannot be conducted five (5) days or
less after the pre-bid conference regardless of the fact that the procurement is through
negotiated procurement.

2014-11-12
NPM 124-2014
Requesting Entity: Fertilizer And Pesticide Authority (FPA)
Issues Concern: Negotiated Procurement under Section 53.1 (Two-Failed
Biddings)

1. Whether an Observer needs to be invited for Negotiated Procurement (Two-Failed

Biddings)

For Negotiated Procurement (Two Failed Biddings), we refer, to Section 53.1.6 of the
IRR of RA 9184, which states that "[i]n all stages of the negotiations, Observers shall be
invited." The use of the word "shall" makes the invitation of Observers mandatory. The
word "shall" means ought to, must, obligation used to express a command or
exhortation used in laws, regulations or directives to express what is mandatory.

Following the requirements under Section 13.3 of the revised IRR of RA 9184,
Observers shall be invited at least three (3) calendar days before the date of the
negotiation and the absence of Observers will not nullify the BAC proceedings, provided
that they have been duly invited in writing. If any of the invited Observers fail to attend
the negotiation stage on the indicated schedule, the procurement process should
continue since the absence of any of the Observers is not a ground to delay the
proceedings.

2. Whether the minimum requirements for a contractor to be eligible to participate in the

negotiation process are the same with the eligibility requirements in the conduct of
public bidding.

[T]he revised IRR of RA 9184 is silent as to whether or not the same eligibility
documents required in public bidding must likewise be submitted when resorting to any
of the Alternative Methods of Procurement, except those where competitive bidding or
semblance thereof is present, i.e. Limited Source Bidding and Negotiated Procurement
(Two Failed Biddings).

[T]he procuring entity has the discretion as to what legal, technical and financial
eligibility documents to require, with a caveat that it shall "[d]irectly negotiate a contract
with a technically, legally and financially capable supplier, contractor or consultant." On
the other hand, it must be emphasized that the use of alternative methods of
procurement is couched upon the principles of efficiency and economy, such that
requiring too many eligibility documents may, in the process, defeat the very purpose for
which the relevant alternative procurement modalities were introduced and
institutionalized.

2017-12-21
NPM No. 062-2017
Requesting Entity: PRIVATIZATION AND MANAGEMENT OFFICE
Issues Concern: Failure of Bidding

Whether the bidding, which was declared failed four (4) times due to lack of bidders,
should be procured through Competitive Bidding or Negotiated Procurement.

We note that it is the Procuring Entity (PE) that has the sole authority and is in the best
position to determine the appropriate method of procurement for a specific project
based on the identified needs and requirements of the PE, the attendant circumstances
and the time when these needs must be satisfied.

Section 10 of Republic Act (RA) No. 9184, the Government Procurement Reform Act,
and its 2016 revised Implementing Rules and Regulations (IRR) mandate that all
procurement shall be done through Competitive Bidding, except when resort to
alternative methods of procurement is warranted by attending circumstances. More
importantly, these alternative methods of procurement shall be resorted to only in highly
exceptional cases provided in Sections 49 to 53 of RA 9184 and its 2016 Revised IRR.

Negotiated Procurement through Two-Failed Biddings modality can be resorted to only

if the original or the first mode of procurement, including the second failure, were
conducted through Competitive Bidding, and two-failed biddings were declared in
accordance with Section 35 of the 2016 IRR of RA 9184. The procurement that has
been declared failed four (4) times may still be undertaken through Competitive Bidding,
or through Negotiated Procurement under the Two Failed Biddings modality, depending
on the needs of the procuring entity, the attending circumstances, and the time element
for which these needs must be satisfied.
2015-11-02
NPM No. 106-2015
Requesting Entity: Department of Social Welfare and Development Field Office
National Capital Region (DSWD-NCR)
Issues Concern: Negotiated Procurement under Section 53.1 (Two Failed
Biddings) of the revised Implementing Rules and Regulations (IRR) of Republic
Act (RA) No. 9184

After failure of Negotiated Procurement under Section 53.1 (Two-Failed Biddings) of the
IRR of RA 9184, which of the two (2) options is allowed in accordance with the IRR of
RA 9184:

(1) to conduct a Second (2nd) Negotiated Procurement under Section 53.1 (Two-Failed
Biddings) of the IRR of RA 9184; or

(2) to conduct public bidding since the end-user modified the technical specifications of
the Project, but without changing its ABC.

When the BAC has declared another failure of procurement despite resort to Negotiated
Procurement under Two Failed Biddings), the BAC may still resort to the same
negotiated modality considering that the conditions of Section 53.1 of the IRR of RA
9184 are present.

[R]esort to negotiated procurement after two-failed biddings is not mandatory as the

primary mode of procurement under Section 10 of the procurement law and associated
rules is Competitive Bidding.

[I]t is up to the procuring entity to resolve, in the interest of efficiency and economy,
whether is it still best to resort to Competitive Bidding under Section 10 or Negotiated
Procurement under Section 53.1 of the IRR of RA 9184 after the two (2) failures of
bidding.

2018-01-30
NPM No. 003-2018
Requesting Entity: Ms. Hannah Gomez
Issues Concern: Requirements for Two-Failed Biddings under the 2009 IRR

Inquiry on the required documents to be submitted by the winning supplier, or if its Price
Quotation and Certificate of Availability of the items would already suffice, in the case of
Negotiated Procurement (Two-Failed Biddings), under Section 53.1 of the 2009 revised
Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184.

[T]he same eligibility documents required in public bidding must likewise be submitted
when resorting to alternative methods of procurement where there is competitive
bidding or a semblance thereof is present, i.e. Limited Source Bidding and Negotiated
Procurement (Two-Failed Biddings). Thus, the price quotation and certificate of
availability of the items to be submitted by the bidders would not suffice. The bidder
must submit the eligibility requirements under Section 23 for the procurement of goods
and infrastructure projects, and under Section 24 for the procurement of consulting
services.

Whether a Notice to Proceed (NTP) is still necessary to be issued by the Procuring

Entity (PE).

As to whether there is necessity to issue an NTP when procuring under this Negotiated
Procurement modality, the 2009 revised IRR is silent. Thus, it is not mandatory, but is
not prohibited.

2017-12-20
NPM No. 035-2017
Requesting Entity: Commission on Elections (COMELEC)
Issues Concern: Small Value Procurement; Repair and/or Maintenance of
Government Vehicles

For purchases costing only One Thousand Pesos (₱1,000.00) through Negotiated
Procurement - Small Value Procurement (SVP) under Section 53.9 of the 2016 revised
Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184, is there a
need for the submission of documentary requirements, specially, the Omnibus Sworn
Statement, which requires notarization?

The GPPB recently approved amendments (effective 5 December 2017) to the

documentary submissions for Negotiated Procurement - SVP under Appendix A of
Annex “H” of the 2016 IRR. Consequently, Income or Business Tax Returns shall be
required only for procurement projects with an approved budget for the contract (ABC)
above ₱500,000.00 and the Omnibus Sworn Statement shall be required only for
procurement projects with an ABC above ₱50,000.00.

Accordingly, from 28 October 2017 up until 4 December 2017, the Omnibus Sworn
Statement shall be required for Negotiated Procurement - SVP regardless of the
amount of ABC. From 5 December 2017 onwards, the Omnibus Sworn Statement shall
be required only for procurement projects with ABC above ₱50,000.00.

Aside from Competitive Bidding, is Negotiated Procurement - SVP the appropriate

mode of procurement for the repair/maintenance of government vehicles?

Repair and/or maintenance of government vehicle can be undertaken through

Negotiated Procurement - SVP if the Procuring Entity can establish compliance with the
requirements under Annex “H,” Sections 48 and 53.9 of the 2016 IRR of RA 9184.
2011-12-28
NPM 041-2011
Requesting Entity: Laguna Water District (LWD)
Issues Concern: Procedures for Negotiated Procurement (Two-Failed Biddings)

1. Inquiry on the procedures in the conduct of Negotiated Procurement for goods after
two (2) failed biddings.

As provided under Sections 35.2 and 35.3 of the IRR, whenever a failure of bidding has
occurred, the procuring entity is required to conduct a mandatory review of the terms,
conditions, and specifications in the bidding documents, including its cost estimates. As
the BAC deems fit, it may revise and agree on a new set of technical specifications;
and, if necessary, may adjust the amount of the ABC, subject to the required approvals
under the IRR. However, it should be emphasized that if the procuring entity will resort
to Negotiated Procurement (Two-Failed Biddings), the increase in the ABC should not
be more that twenty percent (20%) of the ABC for the last failed bidding.

2. Whether the disqualified bidders who participated in the two (2) failed biddings are
allowed to join in the negotiated procurement process.

[T]here is nothing in the rules prohibiting bidders from previous failed biddings from
participating in the same procurement activity, albeit conducted through Negotiated
Procurement (Two-Failed Biddings). In as much as RA 9184 and its IRR are governed
by the principle of competition, it is in furtherance of such principle that bidders who
failed to qualify during the previous failed biddings may be allowed to participate in a
subsequent opportunity.

2013-12-19
NPM 093-2013
Requesting Entity: Bureau of Fire Protection (BFP) Regional Head Quarters 3
Issues Concern: Negotiated Procurement (Two-Failed Biddings)

Whether it is proper to adjust the Approved Budget for the Contract (ABC) and resort to
Negotiated Procurement after a second failure of bidding.

The ABC may be adjusted, provided it is not more than twenty percent (20%) of the
ABC for the last failed bidding, and the required approval for the increase have been
obtained.

Sections 35.2 and 35.3 of the revised Implementing Rules and Regulations (IRR) of
Republic Act (RA) No. 9184 provide that whenever a failure of bidding has occurred, the
procuring entity is required to conduct a mandatory review of the terms, conditions,
specifications in the bidding documents, including its cost estimates. As the BAC deems
it fit, and based on the findings in its mandatory review, it may revise and agree on a
new set of technical specifications; and, if necessary, may adjust the amount of the
ABC, subject to the required approvals under the IRR.

If, after two failed biddings under Section 35 of the IRR, the procuring entity decides to
resort to Negotiated Procurement (Two-Failed Biddings), Section 53.1.1 of the IRR also
requires the BAC to conduct a mandatory review of the terms, conditions, specifications,
and cost estimates; and, when necessary, increase the ABC provided that it is not more
than twenty percent (20%) of the ABC for the last failed bidding.