Question & AnswerQ&A (PNP MEMORANDUM CIRCULAR NO. 2012-001)
The Approved Budget for the Contract (ABC) is the budget for the contract duly approved by the head of the procuring entity as provided in the General Appropriations Act (GAA). It is determined based on the price per unit respective to the budget used (proposed, GAA, and SARO issued).
The main objectives are to establish well-planned procurement to ensure that the PNP can purchase its requirements to perform its functions effectively, to prescribe proper procedures in the preparation of the ABC, to safeguard appropriations to be utilized as expected, and to enhance transparency and enforce accountability in procurement implementation.
The Chief of the Supply Management Division (SMD), Directorate for Logistics (DL), or related office is primarily responsible for estimating the price per unit of items, which is then recommended to the Procurement Management Committee (PMC).
Yes, the ABC may be adjusted upwards only if there has been failure of public bidding for the second time due to all bids exceeding the ABC or no bids submitted, or after two failed negotiated procurements, or if there has been a modification of contract terms and specifications as per Section 35 of the IRRA. It can be adjusted downwards to reflect actual market prices or project conditions. Any adjustment requires re-bidding with re-advertisement/posting.
The APP is a consolidation of Project Procurement Management Plans (PPMPs) defining procurement activities with time schedules. It is prepared by the PNP-NHQ BAC Secretariat and approved by the Chief of PNP for implementation. The APP must be consistent with the duly approved yearly budget.
The PMC, chaired by the Deputy Director for Logistics, formulates the consolidated PPMP by reviewing and approving the price per unit determination and the overall procurement plans. It recommends the consolidated PPMP to the NHQ-BAC.
Key cost components include the market price of the product/service, incidental expenses (freight, insurance, taxes, installation, training, inspection), cost of money, inflationary factors, quantity discounts, supply of spare parts or maintenance services, and currency valuation adjustments if foreign components are involved.
Violations may result in administrative or disciplinary action under existing rules and regulations, and may include the filing of appropriate administrative and criminal charges against erring PNP personnel if warranted.
Upon adjustment of the ABC, the procuring entity must conduct re-bidding with re-advertisement or posting. Subsequent adjustments must also comply with these guidelines and applicable rules.
Goods generally refer to items and equipment procured using capital outlay funds by the PNP as defined in this Circular.
The Chief of the Philippine National Police (PNP), as the Head of the Procuring Entity, approves the APP for implementation.
The Circular references the Government Procurement Manual (Volume 2), Revised Implementing Rules and Regulations of RA No. 9184, RA No. 9184 (Government Procurement Reform Act), DPWH Department Order No. 12 s. 2011, National Budget Memorandum No. 107 (2010), and the Philippine Tariff and duty rates.
PPMP refers to the procurement plan of Programs, Activities, and Projects (PAP) prepared by various PNP offices including Police Regional Offices and National Support Units. It includes details on contracting methods, contract scopes, procurement methods, schedules, and estimated budgets.
The PMO or end-user unit may request guidance from the Bangko Sentral ng Pilipinas or refer to BSP forecasts to determine the appropriate currency valuation and inflationary factors to be used.