Circular No. 08-2017 purpose and scope
- Circular No. 08-2017 clarifies government employees’ cooperatives participation in government procurement.
- The Circular covers all Departments, Bureaus, Offices and Agencies of the National Government, including State Universities and Colleges.
- The Circular covers Government-Owned and/or Controlled Corporations and Government Financial Institutions.
- The Circular covers Local Government Units.
- The Circular guides Procuring Entities on the participation and limitations of government employees’ cooperatives.
Rules on cooperative participation in procurement
- RA 9184 is governed by the principle of competitiveness, which extends equal opportunity to eligible and qualified private contracting parties to participate in public bidding.
- Under Sections 23.4.1.1(d), 23.4.2.1(d), and 24.3.1(d) of the 2016 Revised IRR of RA 9184, cooperatives duly organized under the laws of the Philippines may participate in procurement of:
- goods,
- infrastructure projects, and
- consulting services.
- GPPB Circular 02-2010 provides guidelines on comparison of bids submitted by cooperatives, ensuring that cooperative bids are compared fairly and on equal footing.
- Government employees’ cooperatives may participate in procurement opportunities of the government when they:
- meet all requirements under the 2016 Revised IRR of RA 9184, and
- are evaluated on equal footing with other bidders,
- subject to existing laws, rules, and regulations.
Cooperatives’ exemption from pre-qualification
- Article 62, paragraph 10 of RA 9520 provides that cooperatives transacting business with the Government of the Philippines or any of its political subdivisions or agencies or instrumentalities, including government-owned and controlled corporations, are exempt from pre-qualification bidding requirements notwithstanding RA 9184.
- RA 9184 already abolished pre-qualification, replacing it with simple eligibility checking.
- The Circular explains that pre-qualification had been required under Presidential Decree No. 1594 (infrastructure projects) and Executive Order No. 302 (goods), but that these were replaced by eligibility checking under RA 9184.
- The Circular states the legislative intent of RA 9184 is to subject bidders (including cooperatives) to simple eligibility check using an objective and non-discretionary pass or fail criterion for eligibility documents.
- Because the exemption in Article 62(10) of RA 9520 covers pre-qualification only, there is no exemption other than the pre-qualification exemption.
Participation limits and conflict-of-interest disqualifications
- Under Section 47 of RA 9184 and its IRR, bidders are automatically disqualified when related by consanguinity or affinity within the third civil degree to specified procurement decision-makers and personnel, including:
- the Head of the Procuring Entity (HOPE),
- the BAC,
- the Technical Working Group (TWG),
- the BAC Secretariat,
- the head of the Project Management Office (PMO),
- the end-user unit, and
- project consultants, if any.
- For a cooperative bidder, the automatic application of Section 47 extends to all its officers, directors, and controlling shareholders or members.
- Section 47.2 of the 2016 Revised IRR of RA 9184 requires disqualification of bidders found to have conflicting interests with each other.
- A general conflict of interests exists when a bidder has a relationship, directly or through third parties, putting the bidder in a position to:
- have access to information about another bidder’s bid, or
- influence decisions of the Procuring Entity regarding the bidding or procurement process.
- Under Section 3(i) of RA 6713 (Code of Conduct and Ethical Standards for Public Officials and Employees), conflict of interest arises when an official or employee is a member of the Board of Directors and the interest of the corporation or business, or the official’s or employee’s rights or duties therein, are opposed to or affected by faithful performance of official duty.
- RA 6713 requires that when a conflict of interest arises, the involved official or employee must:
- resign from the position and/or
- divest shareholdings or interest,
- within the prescribed period reckoned from the date the conflict arose,
- and must avoid conflict of interest at all times.
- The Circular emphasizes that government employees’ cooperatives participating within their own agencies can raise concerns of undue advantage through access to information not generally available to other bidders and can lead to suspicion of partiality or familiarity.
- The Circular provides that the determination of the existence of conflict of interest is essentially and primarily lodged with the BAC of the Procuring Entity.
- Government employees’ cooperatives’ participation—especially within their own agencies—is restricted by the presence of conflict of interest, which the BAC must determine using the 2016 Revised IRR of RA 9184, the Philippine Bidding Documents (PBDs), RA 6713, and other applicable rules.
- The Circular directs that participation is therefore allowed unless the BAC determines the presence of conflict of interest.
Effectivity and publication requirement
- Circular No. 08-2017 takes effect fifteen (15) days following publication in the Official Gazette or in a newspaper of general nationwide circulation.
- Resolution No. 31-2017 takes effect immediately upon approval.