Title
Guidelines for Infrastructure Procurement via Negotiation and Administration
Law
Gppb No. 013-2005
Decision Date
Aug 5, 2005
A Philippine law providing standardized rules for the use of Negotiated Procurement and the implementation of infrastructure projects "by administration" by various government entities, including guidelines for labor component and project limitations.
guidelines
infrastructure projects
negotiated procurement

Legal basis and related issuances

  • The guidelines implement the use of Negotiated Procurement under Section 54.2 (d) of the IRR-A of Republic Act No. 9184.
  • The negotiated procurement mode is tied to Section 53 (b) of the IRR-A, which allows negotiated procurement in exceptional cases.
  • The guidelines address administration/force account implementation as an infrastructure procurement alternative recognized under the IRR-A of RA 9184.
  • The resolution identifies GPPB Resolution 08-2004 as an earlier issuance that adopted guidelines for projects undertaken “by administration” or force account.
  • The guidelines provide that infrastructure projects “by administration” by the Armed Forces of the Philippines Corps of Engineers (AFPCOE) are governed by GPPB Resolution 09-2005 (dated 28 April 2005).
  • The guidelines include a repealing clause expressly revoking GPPB Resolution 08-2004.

Policy intent and standardization purpose

  • The guidelines are adopted to standardize and regulate:
    • the alternative method of Negotiated Procurement under Section 54.2 (d) of the IRR-A of RA 9184, and
    • the implementation of infrastructure projects undertaken “by administration.”
  • The guidelines clarify the conditions and rules for using negotiated procurement under Section 54.2 (d) and the rules governing “by administration” as a mode of implementing infrastructure projects.
  • The guidelines are designed for use by government procuring entities to address infrastructure implementation scenarios where procurement by competitive bidding is not suitable.

Definitions and key terms

  • “By Administration” is the procedure where implementation of an infrastructure project is carried out under the administration and supervision of the concerned agency through its own personnel.
  • “Force Account” is implementation “by administration” applicable when unforeseen events require immediate completion or when work outside the original contract is necessary but costs cannot be determined at the outset; the remaining work is contracted out to a qualified contractor and paid at actual cost plus an agreed mark-up not to exceed ten percent (10%).
  • “Actual cost” is supported by receipts, vouchers, payroll, and the prevailing cost items in the locality.
  • For force account, the amount of remaining work to be completed is not more than ten percent (10%) of the contract/project and not to exceed Two Million pesos (Php. 2,000,000.00).
  • “Implementing Agency” covers any Department, Bureau, Office and Agency of the National Government, any Government-Owned and/or Controlled Corporation, Government Financing Institution, State University or College, or Local Government Unit that undertakes the construction of an infrastructure project.
  • “Job-Contractor” is a person or entity that carries out a specific job, service, or work under its own responsibility, supervision, and control, which another has farmed out for the latter’s benefit.
  • “Job-Order” covers employment of individuals to undertake piece or lump sum works, or intermittent jobs of short duration not exceeding six months on a daily basis.
  • “Labor-Only Contractor” supplies workers/laborers to an employer without substantial capital or investment in tools, equipment, machineries, work premises, among others, and the supplied workers perform activities directly related to the principal business of the employer.
  • “Pakyaw” is a system of hiring a labor group for specific incidental work/service in the implementation of infrastructure projects “by administration,” where tools and materials are furnished by the implementing agency and payment is lump-sum either via a group leader or divided among pakyaw workers, disbursed through a payroll system.
  • “Semi-skilled Work/Job,” “Skilled Work/Job,” and “Unskilled Work/Job” define the complexity and skill level required for the work:
    • Semi-skilled work needs some skills but not the more complex skilled duties.
    • Skilled work requires qualifications and judgment to determine machine/manual operations for proper quality/quantity.
    • Unskilled work needs little or no judgment for simple duties learnable on the job quickly.

Scope, coverage, and who implements

  • The guidelines standardize and govern the use of Negotiated Procurement under Section 54.2 (d) and the implementation of infrastructure projects undertaken “by administration” by:
    • all Departments, Bureaus, Offices and Agencies of the National Government (NGA),
    • GOCCs,
    • GFIs,
    • SUCs, and
    • LGUs.
  • The guidelines govern the implementation of “by administration” projects by NGA, GOCCs, GFIs, SUCs, and LGUs through the defined conditions and procedures.
  • Infrastructure projects “by administration” by AFPCOE are governed by GPPB Resolution 09-2005 dated 28 April 2005.

Negotiated procurement by Section 54.2(d)

  • Negotiated procurement under Section 54.2 (d) is justified only where:
    • time is of the essence to avert imminent danger to life or property or to restore destroyed or damaged vital water, power, and transportation services; and
    • the need arises from a state of natural or man-made calamity or emergency as declared by appropriate authorities.
  • Unless otherwise approved by the President, negotiated procurement under Section 54.2 (d) is limited to infrastructure projects costing not more than Two Million Pesos (Php. 2,000,000.00).
  • For infrastructure projects that involve the conditions stated for time-of-the-essence and calamity/emergency but cost above Two Million Pesos (Php. 2,000,000.00), procurement is done under Section 54.2 (b) of the IRR-A of RA 9184.
  • The Head of the Government Agency or the Local Chief Executive must determine/confirm and certify that:
    • the two conditions stated for justification exist; and
    • there is insufficient time to complete public bidding procedures, or commencing public bidding is less convenient or inefficient, making negotiated procurement justified.
  • The procuring entity must negotiate with a contractor selected from its registry of bona fide contractors licensed with PCAB that has satisfactorily completed a contract of the same nature with the agency.
  • If the procuring entity does not maintain such registry or has not previously undertaken any infrastructure project, it must negotiate with any bona fide contractor licensed with PCAB located within the vicinity of the calamity or emergency that has satisfactorily completed similar infrastructure contract(s) with any government agency or instrumentality defined as “procuring entity” under RA 9184.
  • For transparency, the procuring entity must post in the Government-Electronic Procurement System (G-EPS) bulletin board and in its website (if any) general information on:
    • the procurement activity,
    • the contract recipient, and
    • the reasons for award.

By-administration procurement conditions

  • To undertake projects by administration, the implementing agency must:
    • have a track record of having completed a project “by administration” or by contract, similar to and with a cost of at least fifty percent (50%) of the project at hand; and
    • own the tools and construction equipment to be used or have access to such tools and equipment owned by other government agencies.
  • No contractor may be used by the procuring entity, directly or indirectly, for works undertaken by administration.
  • The head of the implementing agency must certify, before commencing any works under this concept, compliance with the required conditions.
  • The documentary requirements include:
    • a Detailed Engineering Plan,
    • an Equipment Schedule,
    • a Manpower Schedule, and
    • a copy of the Memorandum of Agreement between the implementing agency and the government agency or LGU on the lease or use of equipment in favor of the former, if applicable.
  • Procurement of tools and construction equipment must be undertaken under a Project Procurement Management Plan (PPMP).
  • Projects undertaken “by administration” must bear prior approval of the head of the implementing agency.
  • The maximum amount for infrastructure projects implemented by administration is Five Million pesos (P 5,000,000.00), except that total limits apply by entity:
    • For NGA, GOCCs, GFIs, and SUCs, total projects by administration must not exceed twenty-five percent (25%) of their budget for infrastructure projects as reflected in their approved APP.
    • For LGUs, total projects by administration must not exceed fifty percent (50%) of the fund allocated for infrastructure projects.
  • Under force account, if an implementing agency (or authorized governmental body) is ordered to complete unfinished portions of an infrastructure project abandoned, interrupted, or discontinued, it must directly contract out with a qualified contractor of known reputation and expertise for the remaining works, unless the President otherwise approves.
  • In that force account completion scenario, the remaining portion must not exceed ten percent (10%) of the entire contract/project and must not exceed Two Million Pesos (P2,000,000.000); otherwise, the remaining works are subject to competitive bidding.
  • The project cost for force account completion must be billed at actual cost of labor, materials and equipment, insurance, taxes, etc., plus an agreed percentage for overhead and profit.

Labor component rules for by-administration

  • Manual labor component for projects by administration may be undertaken in-house by the implementing agency, through job-order, or through pakyaw contracting.
  • In-house labor exists when workers are employees or personnel occupying regular plantilla positions in the implementing agency.
  • Job-order contracts are governed by relevant COA and/or CSC rules.
  • Pakyaw labor must be drawn from the vicinity of the project or from pakyaw labor groups belonging to various Barangay Associations contiguous to the project site.
  • Unskilled labor must be drawn from the Barangay where the project is located.
  • Semi-skilled labor must be recruited within the municipality, preferably within the Barangay.
  • Skilled labor must be recruited within the province, but preferably within the Barangay/Municipality.
  • The formation of pakyaw groups must actively involve Barangay leaders and the community.
  • The implementing agency must appoint a Project Facilitator (PF) to assist in organization of pakyaw groups and preparation of pakyaw contracts.
  • The PF must convene community meetings, with assistance of the Barangay Chairperson/s, to inform the community and organize pakyaw groups.
  • The PF must register unemployed or underemployed community members who wish to join forming pakyaw groups.
  • Pakyaw workers must be formed into groups based on lump sum works.
  • In competitive selection, pakyaw groups not selected for one lump sum work may compete for other works requiring pakyaw groups.
  • Where there is competition for pakyaw award, the pakyaw labor contract must be awarded through competitive selection with at least three (3) Pakyaw Groups participating.
  • Competition for pakyaw award is deemed when the number of laborers registered during the community meeting exceeds what is reasonably needed for the lump sum work required.
  • Competitive selection must be done on a “per-output” basis, and winners are determined based on what group(s) will deliver the desired output at the lowest rate, either per item of output or per lump sum work, within the required period.
  • The PF must determine the number of members per group to ensure at least three Pakyaw Groups are organized for competitive selection, using the objective of providing work to as many laborers as possible.
  • A Group Leader is elected from among group members, signs the pakyaw contract and related documents on behalf of the pakyaw group, and may be replaced at any time by election after due notice to the PF and the Barangay Chairperson; replacement does not invalidate previous pakyaw contracts.
  • Pakyaw groups may not be regular or licensed contractors or organized under the management of a regular or licensed contractor.
  • Laborers supplied by job-contractors/labor-only contractors are disqualified from becoming members of pakyaw groups when the job-contracting/labor-only contracting is specifically carried out for that purpose.
  • The amount of a pakyaw labor contract per project may not exceed Five Hundred Thousand Pesos (P500,000.00) per pakyaw group.

Repeal and amendments

  • The guidelines expressly repeal GPPB Resolution 08-2004, which confirmed, adopted, and approved guidelines for projects undertaken “by administration” or force account.
  • The guidelines and any amendments take effect under the publication and filing requirements stated in the effectivity rule.

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