Photo from Pexels | TRAN NHU TUAN
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of a lawyer or you may directly contact and consult Alburo Alburo and Associates Law Offices to address your specific legal concerns, if there is any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
The New Government Procurement Act (NGPA) or Republic (RA) No. 12009 was enacted in line with the declared policy of the State to promote the ideals of good governance with a view towards transparency, competitiveness, efficiency, proportionality, accountability, public monitoring, procurement, professionalization, sustainability, and value for money in government procurement.
This new law aims to eliminate, if not, further minimize graft and corruption in the government procurement process. It also aims to reduce the negative environmental impact of the public procurement process through “Green Public Procurement Strategy”, which shall integrate and implement green practices, as well as environmentally relevant criteria or requirements, in the design and specifications of procurement projects.
Here is Part I of our discussion of the most notable changes and additions to the procurement law.
Most Economically Advantageous Responsive Bid (MEARB)
Under the old procurement law or RA No. 9184, the government’s priority was to choose an eligible bidder with the lowest price offer. The bid with the lowest price offer shall be deemed as the Lowest Calculated Responsive Bid (LCRB) and shall be chosen as the winning bid in the public procurement process.
However, there have been several instances in the past wherein the LCRB consist of goods or services that are subpar and therefore do not really address the needs of the end-users. For example, computers with the lowest price tend to be easily damaged and become outdated. Therefore, in effect, another bidding process shall ensue to procure new computers to replace the damaged or outdated ones. This process proved to be more costly and time consuming than purchasing computers that are not lowest priced but have good quality and have more advanced specifications.
Thus, the lawmakers determined that the price of the bid should not be the only basis or criterion for choosing the winning bid and introduced the “Most Economically Advantageous Responsive Bid” or MEARB criterion in the NGPA. As the name suggests, the MEARB criterion may be used by the procuring entity in cases wherein both the qualitative and economic aspect of a project should be taken into consideration. The LCRB shall still be applicable if the procuring entity would like to prioritize the budget considerations for a project.
According to the Government Procurement Policy Board – Technical Support Office (GPPB-TSO) website, by having both the LCRB and MEARB criteria, the NGPA addresses the need for both cost-effectiveness and broader value considerations in procurement decisions, deemed as the “fit-for-purpose” approach to achieve value for money, procurement efficiency, and quality public services.
Strategic Procurement Planning
The GPPB-TSO determined that half of the causes of delays and failures of procurement were caused by poor cost estimates, late submission of Purchase Requests by the end-users, unclear technical specifications or terms of reference.
Therefore, to address these issues, the lawmakers emphasized in the NGPA the need for strategic procurement planning, which requires all kinds of procurement to be conducted with sufficient planning and preparation to ensure sound procurement decisions. This involves a detailed approach including market analysis, supply positioning, assessment of procurement methods, risk management, and disposal strategies.
The GPPB-TSO discussed that such a planning process would allow for the evaluation of economic, social, and environmental impacts of the procurement process to meet both the sustainability and economic objectives of a procuring entity.
RELATED ARTICLES:
How can a Company become an Eligible Bidder in a Government Procurement Process?
Distinguishing Contract of Sale from Contract to Sell
Click here to subscribe to our newsletter
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
All rights reserved.