Establishment and Organization of the Procurement Service
- The Procurement Pilot Project is institutionalized as the Procurement Service.
- The Service reports to the Procurement Council attached to the Office of the President.
- The Procurement Council is chaired by the Minister of the Budget and includes key ministers and officials.
- The Procurement Service is staffed by detailed or contractual personnel without permanent employees.
- The Council guides policies ensuring procurement of commodities at least prices and maximum quality.
Functions and Responsibilities of the Procurement Council and Service
- Identify supplies and materials suitable for centralized procurement.
- Determine technical specifications for items procured.
- Identify reliable sources offering best price and terms.
- Manage purchase, warehousing, and distribution for government agencies including government corporations.
- Operate ancillary facilities like a paper converting plant.
- Continuously study and improve procurement systems and procedures.
Supplier Selection and Procurement Policies
- Supplier prequalification to ensure reliability and adequate capitalization.
- Engage directly with licensed manufacturers for local products and exclusive distributors for imports.
- Priority to companies registered with the Board of Investments and those without overdue government obligations.
- Government agencies must procure covered items exclusively from the Procurement Council/Service.
- Exceptions possible with Council approval for regional offices, agencies, or certain items.
Reporting and Monitoring Requirements
- Government agencies to routinely report purchase data to the Procurement Council for cost monitoring.
- Resident and Corporate Auditors required to report purchase information to the Procurement Service.
Funding and Financial Management
- Budget Ministry may withhold agency procurement funds from allotments for transfer to the Procurement Service with agency concurrence.
- Withheld funds serve as deposits for agencies to withdraw supplies.
- Release of funds from the National Priorities Support Fund for warehouse rehabilitation and operational expansion.
- Authorization to establish a revolving fund up to 25 million pesos subject to accounting and auditing rules.
Exemptions from Certain Executive Orders and Regulations
- Procurement Service transactions are subject to post-audit only.
- Exempt from various enumerated Executive Orders and Letters of Instructions related to procurement.
- Exempt from specified COA Circulars and other procurement-related rules, to streamline operations.
Implementation and Regulatory Authority
- The Procurement Council is empowered to issue implementing rules and regulations for these Instructions.
Supersession of Conflicting Orders
- Any prior executive orders, letters, or rules inconsistent with these Instructions are superseded or modified accordingly.