Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 526)
Presidential Decree No. 526 governs the procurement, care, utilization, and disposal of supplies by local governments, as well as other aspects of supply management at the local levels.
Procurement of supplies by local government units shall be done through competitive public bidding, except as otherwise provided in the decree.
"Supplies" include everything except real estate needed in public business or projects, such as equipment, furniture, stationery, construction materials, personal property, and certain non-personal or contractual services like repair, janitorial, trucking, and security services.
The head of the office or department needing the supplies has the authority to draw requisitions, certifying their necessity and specifying the project or activity.
Every requisition must be accompanied by a certificate signed by the local treasurer showing that an appropriation exists and funds have been set aside for the expenditure.
Approval by the head of the office concerned is generally sufficient, except for requisitions for stock supplies (approved by local chief executive and auditor) and requisitions exceeding ₱10,000 (also require approval by local chief executive and auditor).
Calls for bids must be given the widest publicity possible, including notifying prospective participants, posting notices in at least three conspicuous public places, and optionally publishing in a newspaper of general circulation within the locality.
The Committee on Award consists of the local chief executive as Chairman, the local treasurer, and the head of the office or department for whose use supplies are being procured. If the head of office sits in dual capacities, a legislator chosen by the chief executive serves as a third member.
Awards are made to the lowest complying and responsible bidder who meets all terms and conditions and technical requirements, maintains a regular establishment, and has complied with previous commitments.
Procurement without public bidding is allowed in cases of personal canvass of responsible merchants, emergency purchases, direct purchases from manufacturers or exclusive distributors, procurement through the Bureau of Supply Coordination, or purchase from other government entities or foreign governments.
For provinces and cities: 1st & 2nd class - ₱30,000; 3rd & 4th class - ₱20,000; 5th class - ₱10,000. For municipalities: 1st class - ₱20,000; 2nd & 3rd class - ₱10,000; 4th class and below - ₱5,000, per month for all items.
Emergency purchases can be made without bidding when the need is urgent or indispensable to prevent danger to or loss of life. Delivery must be within 15 days, with a regular requisition drawn immediately after detailing description, price, supplier, urgency, and certification of lowest price and available appropriation.
The accountable officer must notify the auditor within 30 days and apply for relief with evidence. Credit may be allowed only with authority from the Commission on Audit, and failure to comply results in no relief from liability.
The property shall be inspected and appraised by the auditor; if valueless, destroyed; if valuable, sold at public auction with proper notices posted. Properties may also be disposed of via negotiated sale subject to approval depending on value and type of property.
They are primarily accountable for government property assigned to their office and must keep complete records and render semi-annual accounts. They may require custodians to keep records and reports, and they are liable for loss, damage, or misapplication unless due diligence is shown.