Consolidating Procurement Rules and Procedures for all National Government Agencies, Government-Owned or Controlled Corporations and Government Financial Institutions, and requiring the use of the Government Electronic Procurement System

Case Overview and Summary

Summary of Executive Order No. 40

General Provisions:
- Covers procurement of goods, civil works, and consulting services by national government agencies, state universities and colleges, government-owned or controlled corporations, and government financial institutions. (Section 1)
- Procurement shall be competitive and transparent through public bidding, except as provided. (Section 2)
- Guided by principles of simplification, use of lowest calculated and responsive bid, approved budget as ceiling, and transparent criteria. (Section 3)

Procurement Management Plan:
- Each agency shall prepare and maintain an Agency Procurement Management Plan (APMP) and Project Procurement Management Plan (PPMP). (Section 4)

Common-use Supplies and Electronic Procurement System (EPS):
- Agencies shall procure common-use supplies from the Procurement Service using the EPS. (Section 5)
- The EPS is a centralized electronic portal for procurement, including features like electronic bulletin board, suppliers' registry, electronic catalogue, and online transactions. (Section 37)
- Agencies are mandated to fully use the EPS. (Section 38)

Bids and Awards Committee (BAC):
- Each agency shall establish a single BAC chaired by at least a third-ranking officer. (Section 7)
- The BAC determines eligibility, receives and opens bids, evaluates bids, conducts post-qualification, and recommends award. (Section 8)
- The BAC shall invite observers from relevant sectors to monitor proceedings. (Section 9)
- The BAC chairperson and the official approving the contract shall not be the same person. (Section 10)
- The BAC shall have a Secretariat as its main support unit. (Section 11)
- The BAC may create a Technical Working Group for bid evaluation. (Section 12)

Standardized Procedures for Public Bidding:
- Pre-procurement conference to assess readiness and review documents. (Section 13)
- Invitation to bid shall contain details like description, eligibility requirements, deadlines, approved budget, and bid opening. (Section 14)
- Pre-bid conference for contracts of P1,000,000 or more to explain requirements. (Section 15)
- Eligibility check of prospective bidders based on submitted requirements. (Sections 16 and 17)
- Submission and receipt of bids with technical and financial components. (Section 18)
- Bids shall be accompanied by a bid security, except for consulting services. (Section 19)
- Modification and withdrawal of bids allowed under certain conditions. (Section 20)
- Single calculated/rated and responsive bid may be considered under exceptional circumstances. (Section 21)
- Bid opening and examination of technical components first. (Section 22)
- Bid evaluation, correction for minor deviations, and ranking from lowest to highest calculated price or rating. (Sections 23 and 24)
- Approved budget as the ceiling for bid price. (Section 25)
- Automatic disqualification for major deviations. (Section 26)
- Post-qualification of the bidder with the lowest calculated and responsive bid or highest rated and responsive bid. (Section 27)
- Agencies may outsource procurement or hire consultants/agents. (Section 28)
- Reservation clause allowing rejection of bids or failure of bidding. (Section 29)

Award of Contract:
- The head of agency or authorized representative shall award and issue notice to proceed to the winning bidder. (Section 30)
- Winning bidder shall post a performance security, except for consulting services. (Section 31)
- Failure to enter into contract and post performance security may result in forfeiture of bid security and administrative sanctions. (Section 32)
- Price adjustments may be allowed under extraordinary circumstances with PPB approval. (Section 33)
- Timeframes for procurement activities and action on recommendations/awards. (Section 34)

Alternative Methods of Procurement:
- Alternative methods like limited source bidding, direct contracting, repeat order, shopping, or negotiated procurement may be adopted under extraordinary conditions with agency head's approval. (Section 35)

ICT Projects:
- Procurement of ICT projects shall follow specific rules based on the components involved (equipment/software, physical networks, software/systems development). (Section 36)

Procurement Monitoring:
- The head of the BAC Secretariat shall monitor performance and prepare a quarterly procurement monitoring report. (Section 42)

Incentives and Sanctions:
- PPB and Infracom shall establish incentives and indemnification packages for BAC, Secretariat, and Technical Working Group members. (Section 43)
- Administrative penalties for bidders/prospective bidders for violations like submission of false information, withdrawal without cause, and attempts to unduly influence the outcome. (Section 44)

Final Provisions:
- Procurement of local government units funded by the national government shall be governed by this Executive Order. (Section 45)
- Decisions of the BAC may be appealed to the head of the agency. (Section 46)
- PPB and Infracom shall jointly issue the implementing rules and regulations (IRR) within 60 days. (Section 47)
- Repealing, separability, and effectivity clauses. (Sections 48-50)