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PHILIPPINE PROCUREMENT PARADIGM

• Post/Advertise
• Review studies opportunity
• Consolidate into APP Procure
Assess • Decide procurement
• Open and evaluate bids
• Post-qualify
method • Award and enter into
• Approve APP contract
• Determine readiness

• Oversee
• Cost-benefit
Identify implementation
analysis
• Feasibility
• Inspect and Implement
accept deliveries
study
• Release payment
• Market study
• PPMP

Capacity Development Division 3


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PLANNING

PLANNING

- refers to
predetermined
course/s of action
to achieve a
desired end/goal.

Capacity Development Division 5


PROCUREMENT PLANNING

PROCUREMENT PLANNING
“Process of identifying which project
needs can be best met by procuring
products and services outside the project
organization and should be
accomplished during the project
planning effort”

It is the government’s fiduciary


responsibility
− protect the taxpayers’ interests
− safeguard the resources allotted to
each department
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PROCUREMENT PLANNING

Involves 2 levels:
1. Procuring entity’s over-all
strategic plan
2. Project and/or operational
plans

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WHY PROCUREMENT PLANNING
 Procurement Planning ensures that the overall
goal of a particular project will be effectively
and efficiently achieved.
 Precludes occasions for unnecessary
government purchases and circumventions of
the prescribed procurement procedures
−advance deliveries
−suki system
−unwarranted resort to alternative methods
procurement
 However, it must be done within budgetary context
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SECTION 7.1 OF IRR

 Within approved budget of procuring entity


 Judiciously done
 Consistent with government fiscal measures
 Considered crucial to the efficient discharge of
governmental functions
o Required for the day-to-day operations
o In pursuit of the principal mandate of the
procuring entity concerned
SECTION 7.2 OF IRR

• No procurement unless in accordance


with the Annual Procurement Plan
(APP)
• Approval of Head of Procuring Entity
(HOPE) or designated second-
ranking official

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PROJECT PROCUREMENT MANAGEMENT
PLAN (PPMP)

 A guide document in the procurement


and contract implementation process, as
well as a vital reference in procurement
monitoring.
 Tool allowing the PE the flexibility to
optimize the utilization of scarce
resources.
 Minimize the practice of doing short-cuts
 Prepared by the end-user unit during
the budget preparation to support the
cost estimates in the budget proposal.

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PROJECT PROCUREMENT
MANAGEMENT PLAN (PPMP)

Contracting
Arrangement

Estimated Type and


budget Objective

PPMP
Time Extent
schedule /size
Procure-
ment
methods

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PPMP FORMAT

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DEVELOPING PROJECT
Developing Project Requirements
REQUIREMENTS

Identify
the need
Identify
alternative of the
solutions/
products/
PMO/End-
services user unit

Compare the Choose the Best


alternatives Alternative - the
(consider one that is most
qualitative and beneficial to the
quantitative Procuring Entity
factors)
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IDENTIFYING THE NEED

Suggested basis for identifying needs:

1. Core functions of the end-user unit in the organization,


i.e Accounting, Legal etc.
2. Historical data/Foreseen contingencies;
3. Identified purpose/goals/MFOs;
4. P.E’s Strategic Plans;
5. Current supply inventory;
6. Other maintenance and operating needs.

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HOW TO WRITE TECHNICAL
SPECIFICATIONS?

 Functional Description
– a pen is expected to write 1.5 km of straight, continuous
lines
 Performance Description
– should do so continuously and smoothly, without
skipping, and with the color of the ink being consistent
 Environmental Interface
– on pad paper or bond paper, but not necessarily on wood
or on a white board
 Design
– Ballpoint, gel-tip, sign pen, technical pen, etc.

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APPROVED BUDGET FOR THE
CONTRACT (ABC)
 The ABC reflected in the APP or PPMP shall be
consistent with the appropriations for the project
authorized in the GAA. For procurement short of award,
based on budget levels under the proposed national budget
(National Expenditure Program or NEP) submitted by the
President to Congress.
 End user to conduct market study
 Market price, inflation and cost of money related to the
procurement time table must also be considered.
 In determining the ABC, the end-user unit, with the
assistance of the TWG (when necessary), must consider
the different cost components.

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COST COMPONENTS
IN DETERMINING ABC
 Cost or market price of the product or service itself;
 Freight, insurance, taxes, and other incidental expenses
(For goods only);
 Cost of money, to account for government agencies
usually buying on credit terms;
 Inflationary factor (For goods only);
 Quantities, considering that buying in bulk usually
means lower unit prices;
 Supply of spare parts and/or maintenance services, if
part of the contract package (For goods only);

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COST COMPONENTS
IN DETERMINING ABC
 Cost for securing all types and forms of securities other
than cash (e.g. premiums for surety bond, bank fees and
other charges to be incurred by the bidder in obtaining
bid, performance and warranty securities); and
 Currency valuation adjustment for contracts with
foreign component.
 Acquisition Cost
 Operation Cost
 Replacement/Repair Cost
 Disposal Cost

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COST COMPONENTS
IN DETERMINING ABC
 If the sum of the different cost components is lower than
the appropriation for the procurement, then the ABC
should be equal to the sum of the cost components.

 If the resulting sum is higher than the appropriation, it is


advisable to review the technical specifications and the
computation of the ABC. In any case, the ABC should
not exceed the appropriation.

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Procurement Planning

• Key steps
o Deciding what the government needs and
how to acquire it
• Market Research
• Deciding what procurement method to use
o Writing key tender documents
• Specifications
• Evaluation criteria for selecting the winner
– How will price be assessed?
– Will there be non-price evaluation criteria as well?

Source: Global Procurement Initiatives – USTDA & The George Washington University

DEPARTMENT OF EDUCATION 21
Which Procurement Method to Use

• Key questions in this critical step in the


acquisition planning process
– Do we need to contract for this good/service?
• Is there a real need? Can the gov’t. provide it itself?
– Is there an existing contract we can use, or do we
need a new one?
– Are we allowed to procure without a
competition?
– Are we allowed to use streamlined competition
methods (for example, for small purchases)?
Source: Global Procurement Initiatives – USTDA & The George Washington University

DEPARTMENT OF EDUCATION 22
Key Challenges

• Anti-competitive forces:
– Inertia – but what you have/know
– “expert” preferences – they know what they
want
– Corruption – buy from friends, donors, or
relatives
– Tension between contracting office and others

Source: Global Procurement Initiatives – USTDA & The George Washington University

DEPARTMENT OF EDUCATION 23
• Red flags
– Watch for:
• Excessive use of single-source contracts (direct
contracting)
• Specifications tied to one company:
– Either explicitly calling for a brand name, or
– Not mentioning a brand name, so creating the
appearance of competition, but the specifications, in fact
favor one company

Source: Global Procurement Initiatives – USTDA & The George Washington University

DEPARTMENT OF EDUCATION 24
Key Challenges

• Challenges in defining the needs:


– Balancing openness to industry against the
risk of loss of independence, or even a conflict
of interest
– Balancing specificity (design specifications)
against flexibility (performance specification)
– Need for clarity
• Ask: Have we written clearly enough and in
enough detail that an intelligent, informed
company will know what the procuring entity is
looking for?

Source: Global Procurement Initiatives – USTDA & The George Washington University

DEPARTMENT OF EDUCATION 25
Key Challenges

• Challenges in choosing evaluation criteria:


– Low price
• Most transparent approach, with greatest
protection against corruption
• Risk is that government will buy low quality
– Potential solution: Require high quality through the
specifications
– Price + non-price criteria
• Non-price criteria need to be carefully chosen, to
avoid anti-competitive restrictions and to avoid
criteria that are overly subjective
• Overly complex criteria can cause problems
Source: Global Procurement Initiatives – USTDA & The George Washington University

DEPARTMENT OF EDUCATION 26
Key Challenges

• Challenges related to time pressures


– Many failures of acquisition planning can be
traced to shortage of time
– Time pressures may be genuine or through
incompetence or lack of coordination
– Result is often failure to do adequate market
research
– Specifications that are too demanding or not
specific enough

Source: Global Procurement Initiatives – USTDA & The George Washington University

DEPARTMENT OF EDUCATION 27
Key Challenges

• Challenges in estimating the cost to the


government
– Unrealistic government cost-estimate (high or
low)

– Impact
• Unrealistically low estimate : Gov’t may
misevaluate bids with realistic prices
• Unrealistically high estimate: Gove’t may agree to
too high a price (especially if the ABC is disclosed)
Source: Global Procurement Initiatives – USTDA & The George Washington University

DEPARTMENT OF EDUCATION 28
Key Challenges

• Challenges in providing information to


potential bidders:
– Providing information late, with little time for
preparing bids, may favor “insiders”
– The same could be true if information
provided to potential bidders is unclear or
confusing

– Impact: Could discourage competition

Source: Global Procurement Initiatives – USTDA & The George Washington University

DEPARTMENT OF EDUCATION 29
Market Research

• A continuous process of collecting and


analyzing data on products, services,
business practices and vendor capabilities
to satisfy government needs.
• Learning about the market to make
informed and suitable decisions and
choices about the acquisition of goods and
services.
• A critical tool in helping the procuring
entity find qualified suppliers/vendors.
Source: Global Procurement Initiatives – USTDA & The George Washington University

DEPARTMENT OF EDUCATION 30
Market Research

• Purpose
• –To understand the nature of industry and
characteristic of potential suppliers to help
align government requirements and
procurement strategies with realities of the
industry.
• –To understand the differences in supplier’s
terms of offerings/solutions and pricing
methods, among others.
• –To help draft the requirements that best
meet the needs of the end-user with fair and
open competition.
Source: Global Procurement Initiatives – USTDA & The George Washington University

DEPARTMENT OF EDUCATION 31
Market Research

• Methodologies:
– Reading industry literature, attending
industry conferences, etc.
– Holding “industry days”
– Issuing requests for information
– Issuing draft tender documents
– Meetings with potential suppliers and
associations
– Using website to create a central knowledge
center
Source: Global Procurement Initiatives – USTDA & The George Washington University

DEPARTMENT OF EDUCATION 32
LIFE CYCLE COSTING
LCC – Life Cycle Costing

“Cost” should consider all costs throughout the life-


cycle – acquisition cost, utility costs (energy/water
consumption, maintenance), and disposal costs.

 “Cradle to Grave” vis-à-vis “Cradle to Cradle”

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PROCUREMENT MILESTONES

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PROCUREMENT MILESTONES

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PROCUREMENT MILESTONES
Factors to consider in identifying procurement timelines:
1. Budget rules, i.e. CSE – every quarter;
2. Nature of Procurement Projects, whether simple or
complex
3. For shopping/small value procurement, give at least
two weeks
4. Foreseen/Unforeseen Contingencies, i.e. frequent
change in specifications, etc.
5. Availability in the market.

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METHOD OF PROCUREMENT
 As a general rule, all procurement should be through
public bidding

 The selection of the method of procurement is


dependent on the presence or absence of specific
conditions of other methods of procurement in Sections
48 to 54 of the revised IRR

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PPMP vs PR

Purchase Request (P.R.) – Request for purchase


or requisition of supplies, materials and
equipment or its equivalent shall be duly
approved by proper authorities. (Source:
Training Handbook on Government Expenditures)

In no way that the End-user Unit submit their


P.R. ahead of the approved PPMP item.

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ANNUAL PROCUREMENT PLAN
(APP)
 Legal Basis: Section 7 of the IRR of RA 9184
 Refers to the entirety of the procurement activities that will be
undertaken by the procuring Entity within the calendar year
using the prescribed format required by the GPPB.
 Shall be consolidated by the BAC Secretariat from the PPMPs
of end-user units. The BAC shall take into consideration the
following factors:
 One year planning perspective
 Emergency or Contingency Fund
 Schedule of Activities
 No procurement shall be undertaken unless in accordance
with APP

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ANNUAL PROCUREMENT PLAN
(APP)

 All procurement should be meticulously and


judiciously planned by procuring entity

 APP should be maintained and updated regularly

 In the consolidation of PPMPs, the BAC may adopt a


strategy through where similar items of procurement
are packaged into one procurement undertaking.

 A review and updating of the individual PPMPs and


the APP shall be done regularly, at least once every 6
mos. or as often as necessary.

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PREPARATION OF APP

When GAA,
Corporate Budget
or Appropriation
Upon approval Ordinance
of HOPE, Budget becomes final,
Submit Budget Office will PPMPs will be
Proposal to forward PPMPs finalized and
HOPE to BAC submitted to BAC
Submit to
Budget Office Secretariat for Secretariat for
for Consolidation consolidation and
evaluation and Review approval of the
HOPE.
Prepare Project
Procurement
Management
Plan (PPMP)

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ANNUAL PROCUREMENT PLAN
(APP)

Per GPPB Resolution No. 20-2015

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APP vis-a-vis APP-CSE
 APP being referred to in the IRR of RA 9184 is different from
the APP-CSE

 APP-CSE serves as basis of DBM – PS in projecting its


inventory requirements, scheduling of activities, and over-all
management of the central procurement of common-use
goods (DBM Circular Letter 2011-6 & 2011-6a)

 Common-use supplies – refers to those supplies and materials


and equipment included in the price list of the PS which are
necessary in the transaction of the official business of the
procuring entity and consumed in its day-to-day operations

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APP-CSE

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TIPS IN CONSOLIDATING PPMPS
1. Sort the procurement activities by type of procurement:
goods, civil works or consulting.

2. Check which can be merged into one procurement activity

i.e Civil works or consulting services are usually distinct


entries in the APP, unless the PE finds merit in merging
infrastructure project scopes (civil works) or deliverables
(consultants).

3. Goods procurement can be separated into three categories:


common-use supplies (CSE) for the Procurement Service
(PS), common-use supplies (non-PS), other goods
procurement

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TIPS IN CONSOLIDATING PPMPS
4. All CSE whether for procurement from PS or not shall be
consolidated into an APP-CSE which shall be submitted to
the Procurement Service

5. For the APP, CSE shall be separated whether to be bought


from the PS and CSE which shall be bought outside the PS

6. All partitions shall again be separated into mode of


procurement (public bidding or alternative methods)

7. All entries can then be grouped by source of funds

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TIPS IN CONSOLIDATING PPMPS

Sort by Type of Procurement


Goods Infra Consulting

Check for Items which can be merged


i.e: IT Equipment, Design and Build projects, Office Furniture, etc

Common Use Supplies


CSE NON-CSE

Mode of Procurement

Sources of Funds

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REVISIONS ON APP

Update
PPMP/Suppleme
ntal PPMP

Consolidate
PPMP to
APP/Supplemen
tal APP

Approve
Updated
APP/Supplemen
tal APP

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5 RIGHTS IN PUBLIC
PROCUREMENT

Source
Value for Money

Time/
Quantity
Delivery

Procurement

Price Quality

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COA – GUIDE ON AUDIT OF
PROCUREMENT (GAP)
3.2. Annual Procurement Plan (APP) – the requisite
document that the agency must prepare to reflect
the entire procurement activity (i.e., goods, services,
civil works to be procured) that it plans to
undertake within the calendar year. This document
contains the following information:

3.2.1. Name of the procurement program/project;


3.2.2. Project management office or end-user unit;
3.2.3. General description of the procurement;
3.2.4. Procurement method to be adopted;
3.2.5. Time schedule for each procurement activity;
3.2.6. Source of fund; and
3.2.7. Approved Budget for the Contract.
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COA – GAP CHECKLIST
1. To verify if the procuring entity has an Annual Procurement
Plan (APP)

2. To verify if the APP is approved by the HOPE or by a


second-ranking official designated by the HOPE to act on his
behalf
3. To verify if the APP contains the following information:
a. name of the procurement program/ project;
b. project management office or end-user unit;
c. general description of the procurement;
d. procurement method to be adopted;
e. time schedule for each procurement activity;
f. source of fund;
g. approved budget for the contract.

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COA – GAP CHECKLIST

4. To verify if the APP is supported by PPMPs prepared by


the respective end-user units

5. To verify if the items in the approved APP were included


in the PPMPs

6. To verify if the APP matches the budget per GAA,


corporate budget, appropriation ordinance, as the case
may be

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POSSIBLE CONSEQUENCES

1. Possible COA AOMs/Disallowances

2. Wastage of Government Funds

3. Suspension of Officials

4. Possible administrative/criminal liabilities

5. Project Delays

6. Project Failures

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WHAT IS MONITORING?

Defined as:

• Tracking of inputs, activities, outputs, and outcomes of


the procurement activity; and

• Tracking results of current operations on a regular basis.

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MONITORING AND EVALUATION

 It is the BAC who shall be responsible for ensuring that the


procuring entity abides by the standards set forth under R.A. 9184
and its IRR.

 BAC is required to prepare a PROCUREMENT MONITORING


REPORT (PMR) in the form prescribed by the GPPB.

 The PMR shall cover all procurement activities specified in the APP,
whether on-going and completed from holding of the pre-
procurement conference to the issuance of the notice of award and
approval of the contract, including the actual time for each major
procurement activity.

 The PMR shall be approved and submitted by the Head of the


Procuring Entity (HOPE) the GPPB in printed and electronic format
within 14 cd after the end of each semester.
( Executive Orders 662, 662-A and 662-B, series of 2007)

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WHY MONITOR?

 Compliance to R.A. 9184 and its IRR

 Performance
– Efficiency
– Effectiveness

 Aid GPPB in crafting policies that address weaknesses


and uphold strengths of the Philippine Procurement
System

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PROCUREMENT MONITORING
REPORT (PMR)

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MONITORING AND EVALUATION

 Monitoring entails tracking of inputs, activities,


outputs, and outcomes of the procurement activity

 Ex-post evaluation examines the project outcomes and


impacts. It is a determination of the benefits derived
from the project, the attainment of specific targets for
key indicators, and the sustainability of the project.

 GPPB Circular No. 03-2015 - Reminding PEs of the


Requirement on the Submission of the PMR after every
semester in accordance with Section 12.2 of the revised
IRR of RA 9184

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COA – GAP CHECKLIST

1. To verify if the BAC:


a. prepared a procurement monitoring report in the form
prescribed by the GPPB;
b. covering all procurement activities specified in the Annual
Procurement Plan (APP), whether on-going and
completed, from the holding of the pre-procurement
conference to the issuance of the notice of award and the
approval of the contract, including the standard and actual
time for each major procurement activity;
c. submitted the monitoring report to the Head of the
Procuring Entity (HOPE) for approval and submission to
the GPPB in printed and electronic format within 14 days
after the end of each semester
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COA – GAP CHECKLIST

2. To verify if the HOPE:


a. approved the Procurement Monitoring Report and
b. submitted it to the GPPB in printed and electronic format
within 14 days after the end of each semester
3. To verify if appropriate actions have been taken by the HOPE
in case of instances of noncompliance committed by the BAC,
BAC TWG, BAC Secretariat and/or bidders
4. To verify what actions have been taken by the GPPB in regard
to instances of noncompliance

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SUBMISSION & POSTING
REQUIREMENTS
• APP
– Submission to the GPPB (AO 222) and posting in the procuring
entity's website of its APP for CY 2012 (Section 1.1 of the IRR of
EO 662), following the form and format downloadable from the
GPPB website

• PMR
– Submission to the GPPB (Section 12.2 of IRR of RA 9184) and
posting in the procuring entity's website of its approved
Procurement Monitoring Report every semester, following the
form and format downloadable from the GPPB website (Section
1.2 of the IRR of EO 662)

• GPPB Website

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THANK YOU!!

Contact us at:

Unit 2506 Raffles Corporate Center


F. Ortigas Road, Ortigas Center
Pasig City, Philippines 1605

TeleFax: (632)900-6741 to 44
Email Address: gppb@gppb.gov.ph

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