Law Summary
Legal Basis and Need for Transparent Procurement
- Section 43 (f)(v) of EPIRA requires verification by ERC of operating costs and project investments affecting rate base.
- Contracting and procurement must follow transparent and accepted industry practices.
- Proper procurement ensures right pricing and quality to maintain competitive, low power rates.
Issuance of Pro-forma Bidding Documents
- NEA provides pro-forma bidding documents as guides for ECs.
- Complete bidding documents and specifications must be prepared prior to advertisement.
- Templates for substation equipment specifications are also provided.
Cost of Bidding Documents
- ECs may charge up to a maximum of P10,000 for bidding documents.
- This amount covers expenses for publication and reproduction of documents.
Advertising Requirements for Bidding
- Procurement exceeding P500,000 must be advertised twice in newspapers within one week.
- Advertisement must also be posted on the EC’s website if available.
- Procurement below P500,000 requires posting in EC Headquarters and/or notification to accredited suppliers.
- Sealed canvass with at least three accredited suppliers can be used for fast-moving or emergency items.
Approved Budget Cost (ABC) as Ceiling for Awards
- ABC based on approved ICPM/annual work plan or supplemental budget.
- ABC must be indicated in invitation to bid.
- Bids exceeding ABC must be rejected automatically.
Two-Stage Bidding Process
- First stage: Technical evaluation of bidders’ eligibility.
- Second stage: Opening and evaluation of financial proposals from eligible bidders only.
- Technical and financial proposals to be sealed separately.
- Financial proposals of ineligible bidders returned unopened.
- Preparation of a checklist and abstract of bids, attendance of BAC and observers.
- BAC constituted by the General Manager, including department managers, Internal Auditor, and rank-and-file observer.
Recommendation and Approval of Contract Awards
- BAC makes recommendation of award to General Manager.
- General Manager endorses to Board of Directors.
- Board approves via resolution and submits all bidding documents and checklist to NEA for approval.
Principles to Ensure Proper Procurement
- Adherence to transparency, accountability, equity, efficiency, and economy.
- Observance of due diligence to prevent doubts and delays in contract awards.
- ECs encouraged to review and update own procurement policies to meet current needs.
Directive for Strict Compliance
- The guidelines and procedures mandated by NEA are for strict enforcement.
- Designed to improve procurement practices and safeguard public interest.
- Official directive accompanied by Memorandum dated October 7, 2005.