New Government Procurement Act 2024

The session introduces Republic Act No. 12009, the New Government Procurement Act (NGPA), enacted on July 20, 2024. This new law supersedes the older RA 9184 (Government Procurement Reform Act of 2003) and represents a significant shift from a compliance-based system to a performance-based and 'fit for purpose' procurement regime. The NGPA acknowledges that a 'one size fits all' approach is inefficient and introduces flexibility, digitalization, and sustainable development. Its policy focuses on good governance, efficiency, proportionality, accountability, public monitoring, professionalization, sustainability, and value for money.

The NGPA's governing principles include transparency and public monitoring, mandating disclosure of data and documents at all procurement stages, including video recording and live streaming of bid examinations and openings. Competitiveness is ensured by prohibiting acts that restrict competition and requiring disclosure of beneficial ownership. Efficiency is emphasized through the 'fit for purpose' approach, allowing procuring entities (PE) to select suitable methods beyond competitive bidding. Proportionality dictates that requirements must match the procurement's object, preventing excessive or lax standards. Sustainability and green public procurement are institutionalized, with the law allowing for premiums on environmentally friendly products. Finally, professionalism mandates training and certification for government procurement practitioners.

The IRR of RA 12009 applies to the procurement of goods, infrastructure projects, and consulting services by all government branches and instrumentalities, including national government agencies, GOCCs, GFIs, state universities, and local government units. It covers procurement regardless of funding source (general appropriations, corporate budgets, foreign loans), unless a treaty or international agreement specifies otherwise. Critical exceptions include projects funded by foreign grants (under R.A. 8182), acquisition of right of way (governed by the Right of Way Act), and public-private partnerships (covered by a separate PPP code).

Key terms defined in the act include 'Procuring Entity' (PE), 'Head of Procuring Entity' (HOPE), 'Approved Budget for the Contract' (ABC), 'Bids and Awards Committee' (BAC), 'Common-Use Supplies and Equipment' (CSE), 'Early Procurement Activity' (EPA), 'Net Financial Contracting Capacity' (NFCC), 'Fit for Purpose', 'Beneficial Ownership', and 'Most Economically Advantageous Responsive Bid' (MEARB). Goods include supplies and general support services, infrastructure projects involve civil works and construction, and consulting services require external technical or professional expertise.

The NGPA promotes strategic procurement, starting with market scoping (Section 10). This involves market research, consultations with suppliers, and using a market scoping checklist to ensure realistic requirements and avoid bidding failures. The process also includes target costing exercises to prevent setting an ABC that is too low. This market scoping report informs the Annual Procurement Plan (APP) and Project Procurement Management Plan (PPMP). The APP consolidates procurement needs for a fiscal year and must be approved by the HOPE and publicly posted. Early Procurement Activities (EPA) are encouraged to prevent delays by allowing the BAC to proceed with advertisement, bid opening, and post-qualification before budget approval. The law also mandates efficient warehousing and inventory systems, encouraging cloud-based systems for real-time visibility and audit trails.

Competitive bidding remains the primary mode. The process involves several steps: preparation of bidding documents (BDS) that detail specifications, evaluation criteria (LCRB or MEARB), domestic preference (up to 25% for local goods), and protest fees. A pre-procurement conference (mandatory for contracts exceeding specific thresholds) verifies appropriations and confirms technical specifications, with proceedings often live-streamed. The Invitation to Bid (ITB) is publicly posted on the PE's website and PhilGEPS. A pre-bid conference clarifies requirements and must be video-recorded. Bid submission follows a two-envelope system (technical and financial), with preliminary examination and opening live-streamed. Late bids are automatically rejected, and modifications are allowed only before the deadline.

Bid evaluation determines the winning bid based on specific criteria. The Lowest Calculated Responsive Bid (LCRB) is used for standard goods and infrastructure, ranking bids from lowest to highest price. The Most Economically Advantageous Bid (MEAB) uses a quality-plus-price evaluation, with technical quality heavily weighted (60-85%) and price (15-40%), aiming for the highest combined score. The Most Advantageous Bid (MAB) prioritizes technical quality; only the highest-ranked technical bid proceeds to financial evaluation. The financial proposal must be within the Approved Budget for the Contract (ABC) to win. Domestic preference, under the Tatak Pinoy Act (RA 181), gives priority to Filipino products, with contracts awarded to domestic bidders if their bid is not more than 25% higher than the lowest foreign bid.

The NGPA introduces alternative modes for specific scenarios. Competitive Dialogue is used when the PE knows its needs but not how to achieve them, involving discussions with potential bidders. Unsolicited Offer with Bid Matching (Swiss Challenge) allows suppliers to propose innovative solutions, with other bidders invited to match, and the original proponent having the right to match the lowest bid. Direct Acquisition is permitted for goods (non-CSE or unavailable CSE) and services below a certain threshold (currently Php 200,000), allowing direct purchase from reputable sources without canvas. Direct Sales allow procuring entities to purchase from suppliers who have satisfied other government agencies, provided the price is equal to or lower than the original contract. Small Value Procurement (SVP) covers goods, infrastructure, and consulting below Php 2 million, and a single quotation can suffice. Direct Procurement for Science, Technology, and Innovation supports R&D and startups by bypassing standard competitive hurdles.

The NGPA mandates transparency and accountability through disclosure. Section 81 requires a sworn affidavit from bidders declaring no relation by consanguinity or affinity (up to the third civil degree) with HOPE or BAC members. Failure results in automatic disqualification. Section 82 establishes a Beneficial Ownership Registry for public access, combating collusion and money laundering; non-disclosure leads to blacklisting. Blacklisted entities face bans from government projects, civil and criminal liabilities, and potential dismissal from service. Contract award requires a performance security (cash, manager's check, or surety bond) from the winning bidder. Advanced payment (typically 15% for infrastructure) is allowed. Liquidated damages are imposed for delays. Contract implementation includes retention money (10% for infrastructure, 1% for goods) to cover defects or warranty. Contracts can be terminated for default, lack of project need, insolvency, unlawful acts, or force majeure.

A bidder can file a request for reconsideration with the BAC within three calendar days of a decision; the BAC has seven days to resolve. If denied, a protest can be filed with the HOPE via the GPPB system within seven days, requiring a non-refundable fee. Court action is permitted only after exhausting administrative remedies, and generally, courts are prohibited from issuing injunctions against government procurement, save for the Supreme Court. The IRR, effective in 2024, includes a three-year transitory period for procuring entities to comply, while RA 9184 remains active for projects initiated before NGPA's effectivity. In conclusion, the NGPA is a modern framework fostering strategic, green, and digitized procurement, shifting towards value delivery and efficiency in Philippine bureaucracy.