R E S OL U T I O N NO . 2 6 - 2 01 4
DENYING THE REQUEST OF THE DEPARTMENT OF NATIONAL
DEFENSE TO RESORT TO LIMITED SOURCE BIDDING UNDER
SECTION 49 OF REPUBLIC ACT NO. 9184 AND ITS REVISED
IMPLEMENTING RULES AND REGULATIONS
WHEREAS, Republic Act (RA) No. 9184, otherwise known as the “Government
Procurement Reform Act” and its revised Implementing Rules and Regulations (IRR) took
effect on 26 January 2003 and 2 September 2009, respectively;
WHEREAS, Section 63 of RA 9184 mandates the Government Procurement Policy
Board (GPPB) to protect national interest in all matters affecting public procurement;
WHEREAS, Executive Order (EO) No. 423, s. 2005, as amended by EO 645, s. 2007,
prescribes the rules and procedures for the review and approval of all government contracts to
conform with RA 9184;
WHEREAS, Section 4 of EO 423, s. 2005, as amended, provides that where the Head
of the Procuring Entity (HOPE) has made a determination that a Government contract
involving an amount of at least Five Hundred Million Pesos (PhP500,000,000.00) falls under
the exceptions from public bidding, the HOPE shall, before proceeding with the alternative
methods of procurement, obtain the approval of the GPPB that said Government proposed
procurement undertaking falls within the exceptions from public bidding and that the
proposed specific alternative mode of procurement is appropriate;
WHEREAS, the GPPB issued Resolution No. 11-2006 on 14 June 2006, providing for
the “Internal Rules for the Exercise by the GPPB of its Approval Power under EO 423”,
which created the GPPB Review Committee (GRC), tasked to assist the former in carrying
out its functions under EO 423, as amended, specifically in making recommendations to the
GPPB whether the contemplated procurement undertaking falls within the exceptions from
public bidding;
WHEREAS, on 3 September 2014, the Department of National Defense (DND)
submitted a request for approval to resort to Limited Source Bidding under Section 49 of RA
9184 and its revised IRR for the procurement of the AFP Joint Command, Control,
Communications, Computers, Intelligence, Surveillance, Target Acquisition, and
Reconnaissance (C4ISTAR) Acquisition Project Phase 1 (Focused on the West Philippine
Sea), with an Approved Budget for the Contract of One Billion Four Hundred Forty Five
Million Pesos (PhP 1,445,000,000.00);
WHEREAS, in accordance with GPPB Resolution No. 15-2006 dated 25 October 2006,
entitled “Approving the List of Minimum Documents to be Submitted Pursuant to the
Internal Rules for the Exercise by the GPPB of its Approval Power under EO 423”, on 10
September 2014, the GPPB-Technical Support Office (GPPB-TSO) requested the DND to
submit the necessary documentary requirements in support of its request;
GPPB Resolution No. 26-2014, dated 5 December 2014
page 1 of 4
WHEREAS, the DND submitted the necessary documentary requirements to GPPBTSO on 24 October 2014 with a request that appropriate measures be adopted in handling the
documents to ensure the confidentiality of sensitive and confidential information pertaining
to the project;
WHEREAS, on 5 November 2014, the GPPB-TSO requested the DND to submit
additional documents to support its request, thus:
a) Updated Annual Procurement Plan (APP) for 2014;
b) Certification that after diligent market research conducted by the PE, the
goods sought to be procured are not available from Local Suppliers, and when
applicable, a certification from the appropriate Government regulatory body,
that based on its available records, the goods sought to be procured are not
available from local suppliers1;
c) Certification (i) justifying the recourse to LSB; (ii) verifying the compliance
with the criteria previously set; and (iii) certifying that the pre-selected list is a
list of known suppliers or consultants where resort to public bidding will not
likely result in any additional suppliers or consultants participating in the
bidding2; and
d) Certification attesting to the fact that the PE has expertise on the subject
matter of procurement by virtue of its mandate and nature of its functions and
operations, if claiming as the relevant government authority3;
WHEREAS, in the GRC meeting held on 14 November 2014, DND’s request was
heard and its representatives presented the following justifications supporting the use of the
proposed alternative procurement modality:
a) DND asserted that the requirements for the implementation of AFP Joint
C4ISTAR Acquisition Project Phase I involve highly specialized types of
goods because of the highly sophisticated defense materiel included in the
requirements;
b) DND emphasized that the requirements for AFP Joint C4ISTAR Acquisition
Project Phase I are not locally available in the Philippines because no local
supplier has the ability to integrate a C4ISTAR system;
c) DND pointed out that there are 16 companies included in the pre-selected list
of suppliers and will be invited to participate in the Limited Source Bidding
using a two-stage bidding process; and
1
GPPB Resolution No. 18-2005 dated 12 September 2005 entitled Guidelines in the Determination of Eligibility
of Foreign Suppliers, Contractors, and Consultants to participate in Government Procurement Projects, Section
5.2,
2
GPPB Resolution No. 06-2012 dated 30 March 2012 entitled Guidelines Amending the Pre-Selection
Procedure in the Conduct of Limited Source Bidding under GPPB Resolution No. 05-2011, Section 4.6
3
Ibid, Section 4.6.1.
GPPB Resolution No. 26-2014, dated 5 December 2014
Page 2 of 4
d) DND claimed that there is a need to limit the participation of bidders in the
market because the procurement involves matter of national security.
WHEREAS, no specific recommendation was agreed by the GRC members. The
required ten (10) votes to approve or disapprove was not obtained as representatives from
four (4) agencies voted in favor of recommending the DND’s request to GPPB’s approval,
while representatives from six (6) agencies voted against the recommendation;
WHEREAS, the request of DND was presented to the GPPB for further review, subject
to the following conditions:
a) The DND shall submit the updated APP for CY 2014 and Omnibus
Certification by the DND Secretary prior to the GPPB Meeting; and
b) The DND shall present the timeline for the implementation of the procurement
project in case it will be approved;
WHEREAS, on 1 December 2014, DND submitted to GPPB-TSO the updated APP for
CY 2014, and the Omnibus Certification by the DND Secretary which the GPPB-TSO,
through a letter dated 2 December 2014, requested to be amended to include the provision of
Section 4(b) of the AFP Modernization Act as additional basis in engaging foreign suppliers
for the AFP (C4ISTAR) Acquisition Project Phase I, and an attestation that AFP, through its
AFP TWG, has the expertise on the subject matter procurement by virtue of its mandate and
nature of its functions and operations;
WHEREAS, in the 7th GPPB and 6th IATWG Joint Meeting held on 5 December 2014,
the GPPB discussed and took into consideration the findings of the GRC and the presentation
of the DND;
NOW, THEREFORE, for and in view of all the foregoing, WE, the Members of the
GOVERNMENT PROCUREMENT POLICY BOARD, by virtue of the powers vested on US by law
and other executive issuances, hereby RESOLVE to confirm, adopt, and approve, as WE
hereby confirm, adopt, and approve the following:
1. DENY the Department of National Defense’s request to resort to Limited
Source Bidding under Section 49 of RA 9184 and its revised IRR for the
procurement of the AFP Joint C4ISTAR Acquisition Project Phase 1 with
an Approved Budget for the Contract of One Billion Four Hundred Forty
Five Million Pesos (PhP 1,445,000,000.00) for failure to meet the
requirement that only a few suppliers of the goods are known to be
available such that resorting to public bidding method will not likely result
in any additional suppliers participating in the bidding;
2. ACKNOWLEDGE that the project involves matter of national security
and appreciate the decision of the Department of National Defense in
recognizing the GPPB’s authority to approve its request to resort to
Limited Source Bidding despite the nature of the project; and
3. INFORM the Department of National Defense that the procurement of the
project may be undertaken through other methods such as Competitive
GPPB Resolution No. 26-2014, dated 5 December 2014
Page 3 of 4
Bidding, US Foreign Military Sales, Defense Cooperation Agreement and
through any other legal means that the DND may deem proper and
appropriate in consideration of the sensitive nature and national security
concerns involving the project.
This Resolution shall take effect immediately.
APPROVED this 5th day of December 2014 at Pasig City, Philippines.
(Sgd.)
_____________________________________
DEPARTMENT OF BUDGET AND
MANAGEMENT
_____________________________________
NATIONAL ECONOMIC AND
DEVELOPMENT AUTHORITY
(Sgd.)
_____________________________________
DEPARTMENT OF EDUCATION
_____________________________________
DEPARTMENT OF ENERGY
(Sgd.)
_____________________________________
DEPARTMENT OF FINANCE
(Sgd.)
_____________________________________
DEPARTMENT OF HEALTH
_____________________________________
DEPARTMENT OF THE INTERIOR
AND LOCAL GOVERNMENT
_____________________________________
DEPARTMENT OF NATIONAL
DEFENSE
(Sgd.)
_____________________________________
DEPARTMENT OF PUBLIC WORKS
AND HIGHWAYS
_____________________________________
DEPARTMENT OF SCIENCE AND
TECHNOLOGY
_____________________________________
DEPARTMENT OF TRADE AND
INDUSTRY
(Sgd.)
_____________________________________
DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS
(Sgd.)
_____________________________________
PRIVATE SECTOR REPRESENTATIVE
Attested by:
(Sgd.)
_____________________________________
DENNIS S. SANTIAGO
Board Secretary, GPPB
Executive Director, GPPB-TSO
GPPB Resolution No. 26-2014, dated 5 December 2014
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GPPB Resolution No. 26-2014, dated 5 December 2014
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