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Appropriate Procurement Method

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Appropriate Procurement Method

Post by candice on Sun Jun 13, 2010 7:23 pm

Please give me an advice on what method is appropriate in the procurement of L300 Mitshubihi vehicle and the computerization of the billing and collection system for a gov't entity? One water district merely secured quotations from three suppliers for these two mentioned purchases. Is there any violation? Please specify, Thanks!
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Re: Appropriate Procurement Method

Post by sunriser431 on Sun Jun 13, 2010 10:34 pm

candice wrote:Please give me an advice on what method is appropriate in the procurement of L300 Mitshubihi vehicle and the computerization of the billing and collection system for a gov't entity? One water district merely secured quotations from three suppliers for these two mentioned purchases. Is there any violation? Please specify, Thanks!
In my opinion, Public bidding is the default mode, and you can never go wrong. With regards to the aquisition of vehicle try this link http://www.gppb.gov.ph/laws_rules/laws/NBC_446-A.pdf. Hope it might help. bounce
n.b. the procurement law prohibits the use brand names, ex. L300 Mitsubishi, this will limits the competition.
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Re: Appropriate Procurement Method

Post by RDV @ GP3i on Mon Jun 14, 2010 8:52 am

candice wrote:Please give me an advice on what method is appropriate in the procurement of L300 Mitshubihi vehicle and the computerization of the billing and collection system for a gov't entity? One water district merely secured quotations from three suppliers for these two mentioned purchases. Is there any violation? Please specify, Thanks!

As a general rule, as pointed out by sunriser, Competitive Public Bidding should be the mode of procurement. It is only in extraordinary cases, and when the conditions prescribed by R.A. 9184 and its IRR are present, will the alternative methods of procurement could be undertaken.

In the two cases you mentioned, only three (3) price quotations from suppliers were obtained. I would surmise that the probable alternative methods used are either Shopping or Small Value Procurement which falls under Negotiated Procurement.

In the case of Shopping (Sec. 53.1.b) and Small Value Procurement (Sec. 53.9), the threshold amount is maximum of P500,000 for the water district (GOCC). The motor vehicle (L300 van) is already in excess of the amount. That one condition alone, Shopping or SVP could no longer be undertaken. Of course, the use of brand name (Mitsubishi L300) is also not allowed under Sec. 18 of RA 9184.

What about the use of the alternative method of Direct Contracting using exclusive distributor as the justification? It is also in violation, first, because reference to brand name is not allowed; second, even if brand name is not used, there are other conditions required in the case of Direct Contracting for reason of exclusive manufacturer or dealer, such as there should be no sub-dealers selling at lower prices, and there are no suitable substitutes.

In the case of the computerization project, if the ABC is also beyond P500,000, it could not qualify under Small Value Procurement. The proper method would still be Public Bidding, procurement of consulting services.
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Re: Appropriate Procurement Method

Post by jomai on Fri Oct 15, 2010 10:47 am

I would like to solicit opinions on what appropriate procurement method should be adapted in the procurement of fuel (gasoline/diesoline)? Considering that we do not have facilities to store the fuel, we just award the contract to a gasoline station and withdraw fuel up to the amount stated in the PO. The price of fuel used for billing purposes vary depending on the date of issuance, since the cost is dependent on the dictate of oil companies. In other words, the contract mearly states the total amount for fuel but not the quantity. Is it proper? Is their any specific GPPB Issuances regarding procurement of fuel?
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Re: Appropriate Procurement Method

Post by engrjhez® on Fri Oct 15, 2010 2:39 pm

jomai wrote:I would like to solicit opinions on what appropriate procurement method should be adapted in the procurement of fuel (gasoline/diesoline)? Considering that we do not have facilities to store the fuel, we just award the contract to a gasoline station and withdraw fuel up to the amount stated in the PO. The price of fuel used for billing purposes vary depending on the date of issuance, since the cost is dependent on the dictate of oil companies. In other words, the contract mearly states the total amount for fuel but not the quantity. Is it proper? Is their any specific GPPB Issuances regarding procurement of fuel?

Since you do not have a storage facility or depot and if such conditions will not be advantageous to the government, then you may refer to the Guidelines on the Use of Ordering Agreement. The Procurement Mode is still Competitive Public Bidding. Now, about the question on how to determine the pricing of Petroleum, Oil, and Lubricants, you may use the Guidelines on Index Based Pricng of POL Products.

Hope it helps. Smile
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Re: Appropriate Procurement Method

Post by jcolas on Fri Oct 15, 2010 3:10 pm

Sir jomai wrote:

I would like to solicit opinions on what appropriate procurement method should be adapted in the procurement of fuel (gasoline/diesoline)? Considering that we do not have facilities to store the fuel, we just award the contract to a gasoline station and withdraw fuel up to the amount stated in the PO. The price of fuel used for billing purposes vary depending on the date of issuance, since the cost is dependent on the dictate of oil companies. In other words, the contract mearly states the total amount for fuel but not the quantity. Is it proper? Is their any specific GPPB Issuances regarding procurement of fuel?


Procurement of Fuel is under Procurement of Goods. Even if you have an arangement with the Gas Station that your fuel will stay at the gas station, you should prepare your Purchase Order as mandated by COA Circular 96-010 dated August 15, 1996. The circular mandates, among others, that we reflect the unit price in the Purcahse Order. Reflecting the unit price in the Purchase Order before the Purchase Order is signed by the Accountant and approved by the HOPE, their is no way that you can vary your price anymore as the price that is reflected in the PO shall prevail. If the Purchase Order is signed and concurred in by the Supplier, then he will abide by the price that is relfected in the PO which he concurred in. By the way,wala bang reaction ang Auditor mo upon receipt of of the PO five days upon its perfection? D ba nya tinawag yong pansin bakit walang price ang iyong PO? And wala din reaction ang iyong Accountant who shall certifiy that available funds are earmarked for the purpose? And your Budget Officer who shall obligate the procurement? What amount shall they certify and obligate nga pala? Unless, if my hunch is true, you only prepare the voucher when you are ready to pay. You just gather all the invoices which are priced on the day that you are ready to pay and the total will be what will be reflected in the Purchase Order.
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Re: Appropriate Procurement Method

Post by sunriser431 on Sun Oct 17, 2010 11:46 pm

In addition to what has been said by other forum members, try this LINK .(GPPB Resolution No. 11-2007, dated 31 May 2007)
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Re: Appropriate Procurement Method

Post by charlie brown on Mon Oct 18, 2010 12:02 pm

jomai wrote:I would like to solicit opinions on what appropriate procurement method should be adapted in the procurement of fuel (gasoline/diesoline)? Considering that we do not have facilities to store the fuel, we just award the contract to a gasoline station and withdraw fuel up to the amount stated in the PO. The price of fuel used for billing purposes vary depending on the date of issuance, since the cost is dependent on the dictate of oil companies. In other words, the contract mearly states the total amount for fuel but not the quantity. Is it proper? Is their any specific GPPB Issuances regarding procurement of fuel?

this is a contentious issue that unfortunately GPPB has not or perhaps refused to recognize. First, the procurement of fuel and lubricants of ordinary agencies cannot use index based pricing - unlike those of big ticket or bulk procurement of agencies such as the DND. index based pricing is used when POL is a mojor operational requirement for the prosecution of their principal mandate. bacause of its magnitude, it does not include procurement of POL from retailers and dealers selling to the general public for ultimate consumption.

likewise, ordering agreements pertains to non-inventory items (parts) as defined in gppb res 06-2005.

so what we have left is actually the use of the default mode and any other applicable alternative such as SVP. Since you dont have a fuel depot, procuring huge quantities would be very dangerous hence the other obvious option would be to do SVP every time you procure. Of course this can be very tedious and inefficient as most agencies and LGUs would need to procure fuel on a daily basis. My suggestion sana to gppb is to allow fuel procurement in the same manner that we procure light, water and telephone services. We do a one year contract and cost per actual withdrawal is based on the prevailing market price. Monthly payment is based on actual consumption. this is actually quite similar to what you are doing right now. I am advancing several reasons for my proposal:
1. suppliers of fuel and lubricants price their products competitively and the quality is comparable, thus we need not worry that we lose so much if we chose the wrong supplier.
2. prices tend to fluctuate often based on external factors (demand on the international market, supply, etc.) such that no gasoline station would agree on a predetermined price for a supply contract of even a month - much less a year.
3. the hanky panky in the procurement of fuel as we all know is not really on the pricing - but on the quantity, on the actual withdrawal at the gas station. Schemes such as conversion to cash is all to common.
4. In some LGUs, there is only one gasoline station (some dont even have one) thus insisting on 3 quotations would be absurd.
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Re: Appropriate Procurement Method

Post by jomai on Tue Oct 19, 2010 10:38 am

Thank you Mr. Charlie Brown for expounding my concerns..
No gasoline station would enter into a contract on a pre determined amount since the fuel will stay in their depot.
As to whether it is advantageous to the government, well since the price being billed is the current prevailing, I would say it is.
Our accountant noticed and questioned but since the terms and conditions was properly spelled out in the contract, and if it will not be passed, we cannot purchase fuel needed by the LGU.
I agree with Mr. Charlie Brown that it's about time the GPPB would address this issue. specifics to lower class LGUs.
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Re: Appropriate Procurement Method

Post by jbd on Tue Oct 19, 2010 4:46 pm

Good day!

May I ask what is the appropriate procurement method for the Spanish-English Translator.

Thank you
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Re: Appropriate Procurement Method

Post by charlie brown on Tue Oct 19, 2010 6:06 pm

jbd wrote:Good day!

May I ask what is the appropriate procurement method for the Spanish-English Translator.

Thank you

hi jbd,

before i can attempt to answer your question i need to know what is the cost per item, how much is the ABC, is this protected by copyright? and such sort of things.
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Re: Appropriate Procurement Method

Post by jbd on Wed Oct 20, 2010 12:09 pm

Our budget for this project is 800,000 but unfortunately translators are individual who do not have DTI registration and not registered at Philgeps
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Re: Appropriate Procurement Method

Post by riddler on Wed Oct 20, 2010 12:25 pm

jbd wrote:Our budget for this project is 800,000 but unfortunately translators are individual who do not have DTI registration and not registered at Philgeps

jbd, hope this link may help you http://gppb.topicsolutions.net/to-bid-or-not-to-bid-f16/procurement-of-talent-services-t92.htm?highlight=talent
9i
in addition translators may belong to procurement of goods/services or consultancy (see Section 5(i) and 5(r) of the new IRR) ... you need to make a "TERms of Reference" for this services or specification of the services needed as your PE's qualification for them to Bid there services. Cool
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Re: Appropriate Procurement Method

Post by RDV @ GP3i on Wed Oct 20, 2010 1:04 pm

jbd wrote:Good day!

May I ask what is the appropriate procurement method for the Spanish-English Translator.

Thank you

The Spanish-English Translator could fall under non-personal contractual services; hence, the appropriate method is Procurement of Goods (and Services).

It could also fall under personal contractual services, in which case there is employer-employee relationship, therefore, not covered by the procurement law but by civil service rules and regulations.
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Re: Appropriate Procurement Method

Post by sunriser431 on Wed Oct 20, 2010 7:57 pm

jomai wrote:Thank you Mr. Charlie Brown for expounding my concerns..
No gasoline station would enter into a contract on a pre determined amount since the fuel will stay in their depot.
As to whether it is advantageous to the government, well since the price being billed is the current prevailing, I would say it is.
Our accountant noticed and questioned but since the terms and conditions was properly spelled out in the contract, and if it will not be passed, we cannot purchase fuel needed by the LGU.
I agree with Mr. Charlie Brown that it's about time the GPPB would address this issue. specifics to lower class LGUs.
I believe GPPB has address the issues properly. Try this LINK bounce
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