ALTERNATIVE METHODS

OF PROCUREMENT

CAPACITY DEVELOPMENT DIVISION

Government Procurement Policy Board
Technical Support Office (GPPB-TSO)

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 PROCUREMENT STANDARD

GENERAL RULE
Procuring Entities shall adopt public bidding as the general
mode of procurement.
EXCEPTION
Alternative methods shall be resorted only:
1. In highly exceptional case
2. To promote economy and efficiency
3. Justified by conditions specified in IRR
4. GPPB approval as required under EO 423, S. 2005 (as
amended)

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 ALTERNATIVE METHODS

1. Limited Source Bidding

2. Direct Contracting
3. Repeat Order
4. Shopping
5. Negotiated Procurement

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 LIMITED SOURCE BIDDING
APPLICABILITY:
Goods
Consulting services

CONDITIONS:
Highly specialized types where only a few bidders are
known to be available
Major plant components beneficial to limit bidding to
known qualified bidders to maintain uniform quality and
performance of the plant

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 LIMITED SOURCE BIDDING
List to be maintained by the relevant government authority
PE may be the relevant government authority
Should be updated periodically and submitted to the GPPB

Pre-selection based on capability and resources to perform the

contract taking into account:
Experience and past performance on similar contracts
Capabilities with respect to personnel, equipment, and/or
manufacturing facilities
Financial position

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 LIMITED SOURCE BIDDING
PRE-SELECTION PROCEDURES
GPPB Resolution 06-2012

PE identifies LSB as Acquires/Issues a

applicable mode Pre-selected List

HOPE transmits list

to the GPPB

PE posts GPPB-TSO
procurement acknowledges
opportunity and receipt and posts the
conducts LSB list in the website

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 LIMITED SOURCE BIDDING
PRE-SELECTION PROCEDURES
GPPB Resolution 06-2012

Relevant Y Request for a

Government
List
Authority?

PE represents Y Limited Source

itself as the Issues a List?
Bidding
RGA

Competitive
Bidding

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 LIMITED SOURCE BIDDING
In order to apply LSB on the procurement of motor vehicle,
PE should first establish that the motor vehicle sought to be
procured is either a highly specialized type of goods or a
major plant component; otherwise, Competitive Bidding
shall apply. (NPM 63-2013)

Catering Services does not involve highly specialized

requirements, and is undoubtedly not a major plant
component. Limited Source Bidding cannot be resorted to
in the procurement of Catering Services. Competitive
Bidding should be resorted to in the acquisition of the
contemplated service. (NPM 61-2013)

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 DIRECT CONTRACTING
APPLICABILITY:
Goods

CONDITIONS:

Items of proprietary nature from proprietary source

Critical components from a specific supplier to hold a contractor to
guarantee its project performance
Items sold by an exclusive manufacturer or dealer

no other suppliers selling it at lower prices

no suitable substitute can be obtained at more
advantageous terms to the Government

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 DIRECT CONTRACTING

Since there are other Passport Readers available in the

market apart from that manufactured by 3M
Corporation, Direct Contracting cannot be utilized for
the acquisition of brand new passport readers.

Even though 3M Passport Reader is proprietary in

nature and can be obtained from the proprietary source,
there may be other Passport Readers in the market,
which are likewise proprietary in nature that can be
obtained. (NPM 41-2013)

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 REPEAT ORDER
APPLICABILITY:
Goods

CONDITIONS:
1.Same or lower unit prices, provided that such prices are still the
most advantageous to the GOP after price verification
2.No splitting of contracts
3.Availed of within 6 months from the contract effectivity date
stated in the NTP arising from the original contract, except in
cases duly approved by the GPPB
4.Not to exceed 25% of the quantity of each item
5.Original contract awarded through competitive bidding

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 REPEAT ORDER

Repeat Order under Section 51 of RA 9184 does not

require post-qualification.

The phrase subject to post-qualification process

described in the Bidding Documents, as stated in the
provision refers to Competitive Bidding and not to
Repeat Order. (NPM 13-2013)

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 SHOPPING
APPLICABILITY [52.1(A) AND (B)]:
Goods

CONDITIONS [SHOPPING UNDER 52.1(A)]:

1.There is an unforeseen contingency requiring immediate purchase
2.Amount does not exceed the threshold

CONDITIONS [SHOPPING UNDER 52.1(B)]:

1.Procurement of ordinary or regular office supplies and equipment not
available in PS-DBM
2.Amount does not exceed the threshold

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 THRESHOLD FOR UNFORESEEN
CONTINGENCIES [S. 52.1(a)]

NGAs, GOCCs, GFIs, SUCs PhP100,000

LGUs
Maximum Amount (in Philippine Pesos)
Classification
Province City Municipality
1st Class 100,000 100,000 50,000
2nd Class 100,000 100,000 50,000
3rd Class 100,000 80,000 50,000
4th Class 80,000 60,000 50,000
5th Class 60,000 50,000 50,000
6th Class 50,000 50,000 50,000
In the case of Barangays, the maximum amount is PhP50,000

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 NEGOTIATED PROCUREMENT
SMALL VALUE PROCUREMENT

APPLICABILITY
All types of Procurement

CONDITIONS:
1.Procurement does not fall under Shopping [52]
2.Amount does not exceed the threshold

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 SHOPPING [S 52.1(b)] AND
SMALL VALUE PROCUREMENT
NGAs, GOCCs, GFIs, SUCs PhP500,000

LGUs
Maximum Amount (in Philippine Pesos)
Classification
Province City Municipality
1st Class 500,000 500,000 100,000
2nd Class 500,000 500,000 100,000
3rd Class 500,000 400,000 100,000
4th Class 400,000 300,000 50,000
5th Class 300,000 200,000 50,000
6th Class 200,000 100,000 50,000
In the case of Barangays, the maximum amount is PhP50,000

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 SHOPPING and SMALL VALUE
PROCUREMENT
Decision to resort to shopping/SVP shall be reflected in
the Annual Procurement Plan (APP)
After approval, BAC may delegate execution

Posting in PhilGEPS required if amount is > PhP50,000

Request for Quotation
Extension of deadline for submission of quotation
Award
PE to validate legal, technical, and financial capability
through relevant documents or other means

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 SHOPPING and SMALL VALUE
PROCUREMENT
PROCEDURAL GUIDELINES:

Send RFQ to at
least 3 suppliers Prepare Abstract of
Prepare RFQ
[may be 1 in case of Quotations
52.1(a)]

Extend deadline if Award to LCB/HRB

no quotation is that complies with
received specs and ABC

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 NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS

APPLICABILITY
All types of Procurement

CONDITIONS:
1.Two failed biddings
2.Mandatory review of the following:
Minimum technical specifications
ABC, which may be adjusted up to 20% from last
bidding

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 NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS

BAC shall invite and engage in negotiations with

sufficient number of suppliers, contractors or consultants
to ensure effective competition

Requirements, guidelines, documents, clarifications, or

other information relative to the negotiations shall be
communicated on an equal basis

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 NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS

Submission of best and final offer by suppliers,

contractors, or consultants on a specified date.

Criteria in selecting the successful offer:

1. Offer should meet the PEs minimum technical
requirements.
2. Offer should not exceed ABC

Observers shall be invited in all stages

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 NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS
PROCEDURAL GUIDELINE

Submission and
Preparation of Invitation of
opening of 1st
RFQ bidders
offer

Submission and
Negotiation with opening of best Awarding of
bidders and final offer (2nd contract
offer)

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 NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS

Where the PE failed to receive any quotations for the

procurement of the services of a private counsel despite
posting twice in the PhilGEPS website, the procuring
entity has the discretion to resort to alternative methods
of procurement, subject to compliance with the
parameters and factors laid out in RA 9184 and its
associated IRR. (NPM 09-2013)

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 NEGOTIATED PROCUREMENT
TWO FAILED BIDDINGS

PE can only resort to Negotiated Procurement under

Section 53.1 (Two-Failed Biddings) of the IRR of RA
9184 for the procurement of the Project if the two-failed
biddings were due to circumstances enumerated
under Section 35 of the same IRR.

If the failure of bidding is due to the declaration by the

HOPE pursuant to Section 41 of the IRR , Negotiated
Procurement (Two Failed Biddings) cannot be resorted
to. (NPM 72-2013)

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 NEGOTIATED PROCUREMENT
EMERGENCY CASES
APPLICABILITY:
All types of Procurement

CONDITIONS:
In case of imminent danger to life or property during a state of
calamity
When time is of the essence arising from natural or man-made
calamities
Other causes where immediate action is necessary
To prevent damage to or loss of life or property
To restore vital public services, infrastructure facilities and other
public utilities

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 NEGOTIATED PROCUREMENT
TAKE-OVER OF CONTRACTS

APPLICABILITY:
All types of Procurement

CONDITIONS:
Rescinded or terminated contract
Immediate action is necessary:
To prevent damage to or loss of life or property
To restore vital public services, infrastructure facilities, and
other public utilities

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 NEGOTIATED PROCUREMENT
TAKE-OVER OF CONTRACTS

Negotiate starting with the 2nd LCB or HRB at the

bidders original bid price, then to the next if negotiation
fails

If negotiation fails, invite a short list of at least 3 to

submit bids and negotiate starting with the LCB or HRB

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 NEGOTIATED PROCUREMENT
ADJACENT OR CONTIGUOUS

APPLICABILITY:
Infrastructure

Consulting Services

CONDITIONS:
1.Subject contract is adjacent or contiguous to an on-going
infra or consulting
2.Original contract is a result of competitive bidding
3.Subject contract has similar or related scopes of work

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 NEGOTIATED PROCUREMENT
ADJACENT OR CONTIGUOUS

4. Within the contracting capacity of the

contractor/consultant
5. The same prices or lower unit prices as the original
contract less mobilization cost
6. Amount does not exceed amount of the on-going
project
7. No negative slippage
8. Negotiations commenced before expiry of original
contract

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 NEGOTIATED PROCUREMENT
AGENCY TO AGENCY
APPLICABILITY:
All types of Procurement

CONDITIONS:
1.Cost-benefit analysis indicating A-to-A is more efficient and
economical
2.A-to-A does not exceed 25% of PEs total budget for each category
(goods, infra, consulting)
3.Servicing agency has mandate to undertake the project
4.Servicing agency owns or has access to necessary tools required for
the project

Other requirements provided in Implementing Guidelines on

Agency-to-Agency Arrangements (GPPB Resolution 18-2007)

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 NEGOTIATED PROCUREMENT
AGENCY TO AGENCY
PITC Pharma, Inc. (PPI) has been given express mandate to be
the central/lead agency for procurement of all government
agencies requirements for drugs and medicines pursuant to
RA 9501. However, RA 9501 does not exempt it from the
procurement policies, rules and regulations established under
RA 9184 and its IRR.
PPI is not exempt from posting a Performance Security under
39 of RA 9184 and its IRR when entering into a contract
with other government agencies and the PE requires such
security. (NPM 37-2013)

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 NEGOTIATED PROCUREMENT
AGENCY TO AGENCY
For the procurement of CTC, the more appropriate method to be
used is A to A rather than Direct Contracting

In cases where procurement from another agency of the

government is more efficient and economical, Negotiated
Procurement under Section 53.5 (Agency-to-Agency Agreements)
may be resorted to. This rule allows a government entity to procure
from another government entity without need of public bidding,
subject to compliance with the prescribed conditions and
procedures under existing rules and the Guidelines on Agency-to-
Agency Agreements (Guidelines). (NPM 52-2013)

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 NEGOTIATED PROCUREMENT
PROCUREMENT AGENT
APPLICABILITY:
All types of Procurement

CONDITIONS:
HOPE has determined that PE does not have procurement proficiency
or capability to undertake a particular procurement

ACTIONS AVAILABLE:
Request other GOP agencies to undertake such procurement for them
Recruit and hire consultants or procurement agents to assist them
directly and/or train their staff in the management of the procurement
function

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 NEGOTIATED PROCUREMENT
PROCUREMENT AGENT
Where a PE has determined that it lacks the proficiency or capability
to undertake its rehabilitation project, which need not be based
solely on the PEs failure to constitute its BAC, the PE may request
another government agency to be its Procurement Agent as Section
53.6 of the IRR may also apply in cases where a BAC is validly
constituted, but due to the number of bidding activities to be
undertaken by the procuring entity; magnitude and complexity of the
project; experience of the members of the BAC; location and situs of
both the principal and the agent; and, other valid and reasonable
circumstances, the procuring entity may not have the proficiency or
capability to undertake the particular procurement activity. (NPM 38-
2013)

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 NEGOTIATED PROCUREMENT
HIGHLY TECHNICAL PROCUREMENT
APPLICABILITY:
Consulting Services

CONDITIONS:
1.Individual
consultant
2.Work involves:

Highly technical or proprietary

Primarily confidential or policy determining, where trust and
confidence are the primary consideration
3.Term is, at the most, 6 months, renewable at the option of the
appointing HOPE, but in no case to exceed the term of the latter

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 NEGOTIATED PROCUREMENT
LEASE OF REAL PROPERTY

APPLICABILITY:
Goods (Real Estate and Venue)
CONDITIONS:
1.Cost-benefit analysis indicating leasing privately-owned real estate or venue is
more efficient and economical
2.APP reflect the proposed lease
3.Selection to follow the guidelines (GPPB Resolution 08-2009)

Eligibility documents need not be submitted, but PE must validate whether

lessor is technically, legally, and financially capable through other means
Lease contracts costing > PhP50,000 should be posted in the PhilGEPS

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 NEGOTIATED PROCUREMENT
NGO PARTICIPATION

APPLICABILITY:
All types of Procurement

CONDITIONS:
Appropriation law or ordinance earmarks an amount to be contracted
to NGOs

PE may opt to conduct public bidding or negotiated procurement for

the selection of NGO, subject to the rules provided in the guidelines
(GPPB Resolution 12-2007)

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 NEGOTIATED PROCUREMENT
COMMUNITY PARTICIPATION

APPLICABILITY:
Delivery of goods, including non-consulting services and simple
infrastructure projects

CONDITIONS:
1.In the interest of project sustainability or to achieve certain specific
social objectives
2.PE to propose procedures, specifications, and contract packaging for
GPPB approval

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 NEGOTIATED PROCUREMENT
UN AGENCIES

APPLICABILITY:
All types of Procurement

CONDITIONS:
Procure from UN Agencies
Small quantities of off-the-shelf goods, primarily in the fields of
education and health
Specialized products where the number of suppliers is limited (e.g.,
vaccines or drugs)

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 OTHER TERMS AND CONDITIONS
Most advantageous price for government should be obtained (S48.1)
Splitting of contracts strictly prohibited (S54.1)
Advertisement and posting for the following methods may be dispensed
with provided that the BAC through its Secretariat shall post the Invitation
or Request for Submission of Price Quotations:
Shopping [52.1(b)]
Except: PhP50,000 and below
Negotiated Procurement under Two Failed Biddings [53.1]
NGO Participation [53.11]
Small Value Procurement [53.9]
Except: PhP50,000 and below

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 OTHER TERMS AND CONDITIONS

ALL awards should be posted, except

Shopping and Small Value Procurement with ABC of PhP50,000 and
below

Bid security NOT necessary, except in Limited Source Bidding

Performance and warranty securities necessary, except:

Shopping [52]
Emergency Cases [53.2]
Small Value Procurement [53.9]
Lease of Real Property [53.10]
Procurement from UN agencies [53.13]

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 SUMMARY

Method Goods Infrastructure Consulting

1. Limited Source Bidding

2. Direct Contracting

3. Repeat Order

4. Shopping

5. Negotiated Procurement

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 SUMMARY

Negotiated Procurement Goods Infra Consulting

1. Small Value Procurement

2. Two Failed Biddings

3. Emergency Cases

4. Take Over Contracts

5. Adjacent or Contiguous

6. Agency to Agency

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 SUMMARY

Negotiated Procurement Goods Infra Consulting

7. Procurement Agent

8. Highly Technical Consultants

9. Lease of Real Property

10. NGO Participation

11. Community Participation

12. UN Agencies

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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

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