Direct Contracting

Good day sir:

I would like to seek clarification on section 50 of the revised RA 9184 mode of procurement. What would be our mode of procurement if it involves delivery of goods, implementation through infrastructure development and project management with consultation. It's actually the combination of the three procurement processes. Our project is enhancement of our mail service, the software we are using is a proprietary one which deemed advantageous to us because of the technical support and software patches which automatically updated in our mail server. Is it applicable for us to use Direct Contracting, per section 50 conditions? We have already asked our COA for its legality, but they were not sure of their answers. Kindly, give us your knowledgeable advise on our query. Thank you and more power.

engrjhez wrote:

You will have to divide your procurement independently (not by splitting) where applicable or you may opt to use the Design-Build Scheme if the criteria permits.

Regarding the acquisition of proprietary software using Direct Contracting, you could refer to this.

Sir Thank you for your reply...just a follow-up question...

We wanted to upgrade our proprietary software using direct contracting as stated in section 50-c. Is there a violation on the statement "no suitable substitute can be obtained"? because as far as I know there are other mail software suite that is available in the market which has lower cost or even no-cost at all in an open-source software. But, we opted to stick with our current mail system because of its scalability, familiarity, ease of use, and end-user support. In addition, we already have e-documents and e-forms developed in the said mail system which is currently being used by our end-users. Changing for another mail system would not only costly for us, but will require huge amount of resource adjustments such as re-packaging and alteration of e-forms, re-training of technical staff and end-users, and re-assessment of the software requirements with the hardware specification. These and lots more can be our problem paths if we will change or substitute. Please enlighten us with your advise, since you are in the best position to answer my question. Thank you.

matclem wrote:Good day sir:

I would like to seek clarification on section 50 of the revised RA 9184 mode of procurement. What would be our mode of procurement if it involves delivery of goods, implementation through infrastructure development and project management with consultation. It's actually the combination of the three procurement processes. Our project is enhancement of our mail service, the software we are using is a proprietary one which deemed advantageous to us because of the technical support and software patches which automatically updated in our mail server. Is it applicable for us to use Direct Contracting, per section 50 conditions? We have already asked our COA for its legality, but they were not sure of their answers. Kindly, give us your knowledgeable advise on our query. Thank you and more power.

Your project (enhancement of mail service) is what is called a "mix procurement" since it involves procurement of GOODS, Infra, and Consulting Services. As to the procurement method to be used, whether it will be that of procurement of Goods, Infra, or Consulting, will depend on the primary purpose of the project, the determination of which is best left to the procuring entity concerned. If it is other than procurement of infra, then the Design and Build Scheme will not apply.

I don' think Direct Contracting (which is applicable only for procurement of Goods) is applicable also to your case, if only because you will be using a software which is of a proprietary nature. The software is not the one actually being procured but you are just using the software to develop or enhance the mail service. It is the latter that is being procured, your service in developing or enhancing the mail service of the procuring entity.

Having said that, the method of procurement is more likely that of procurement of Consulting Services. The use of the (application) software, which you said is more advantageous to you, could just be one of the many ways by which the project could be developed. Other suppliers may have also their own way of implementing the project. So, if it is procured using the method of procurement of Consulting Services, the procuring entity may use the Quality-Based Evaluation procedure by which the different bidders will be rated based on the a set of qualitative criteria prescribed by RA 9184 and its IRR, including the use of the software that you mentioned.

Those are my thoughts on the clarification that you raised.

RDV

Hi sir thanks for the reply,

We will procure the software, actually it is an upgrade and at the same time redevelopment of e-forms.

matclem wrote:Hi sir thanks for the reply,

We will procure the software, actually it is an upgrade and at the same time redevelopment of e-forms.

Exactly, it is you, the supplier, which will be procuring the software, not the procuring entity. The procuring entity, on the other hand, is procuring your Services

Please clarify exactly what you would want to procure . is it merely an acquisition & installation of software (goods) to upgrade your email services or just an upgrade of your existing software to upgrade your email services, the hardware component of which is separate from the supply of software, or is it "management and related services, i.e. Information and communications technology services, including but not limited to, information systems design and development, and network design and installation (consulting services); or "civil works components of information technology projects" (civil works).
we noted that your query is that for a procuring entity but your agency is that of a vendor/supplier, hence the confusion. or you are asking in behalf of a procuring entity.
it is important that these things be clarified so we could help clarify.

mealigan wrote:Please clarify exactly what you would want to procure . is it merely an acquisition & installation of software (goods) to upgrade your email services or just an upgrade of your existing software to upgrade your email services, the hardware component of which is separate from the supply of software, or is it "management and related services, i.e. Information and communications technology services, including but not limited to, information systems design and development, and network design and installation (consulting services); or "civil works components of information technology projects" (civil works).
we noted that your query is that for a procuring entity but your agency is that of a vendor/supplier, hence the confusion. or you are asking in behalf of a procuring entity.
it is important that these things be clarified so we could help clarify.

Hi mam,

Thank you for your reply, i am asking in behalf of a government procuring entity. I'll just hide their names for their privacy, anyway this is just a clarification. As I have explained in my previous statements, the mode of procurement is a little bit complex. There are goods, infra and services involved in one big project. We are asking if this can be considered in direct contracting method, under section 50-b and c, where goods that are sold by an exclusive dealer or manufacturer may be procured through direct contracting. I found some answers already but it still not concrete answers which still vague to me. It will all depending on the BAC's decision if they will allow it or not. Under the law procuring government entity are mandated to adopt public bidding, but I have seen many government institution doing direct contracting even on goods. What would be the best alternative on such scenario as this. Thanks.