Rationalization of Project Management Offices

Applies to national government agencies, instrumentalities, government-owned/controlled corporations, and government financial institutions.
Includes those implementing locally-funded and/or foreign-assisted projects.

Project Management Office (PMO): A unit within an agency responsible for project implementation, coordination, and monitoring.
Unified PMO: A consolidated PMO overseeing all development projects within an agency.
Implementing Agency: Government units such as department offices, attached agencies, bureaus, or GOCCs implementing projects.
Scrap and Build: Strategy involving creation of new units or positions equivalent in cost to abolished ones.
Development Project: Priority, non-recurring activities aimed at specific objectives to enhance agency outputs and outcomes over a fixed period.

Agencies should manage development projects within their regular structures and staff whenever possible.
PMOs may be established if two or more projects require focused implementation.
A unified PMO can be established for a single project if capital-intensive, involves multiple agencies, or spans multiple areas.
PMOs must manage projects in a consolidated and unified manner and may be activated or deactivated based on project needs.
Separate PMOs should not be created for every project except under specified conditions.

Unified PMO functions as overall manager ensuring coordination and alignment with agency core functions.
Internal PMO structures must adhere to scrap and build policies, organizational staffing standards, and budget ceilings.
PMO headed by a senior official or designated Project Implementation Officer (PIO).

Project operations planning including detailed scheduling, budgeting, and implementation strategies.
Monitoring and evaluation of physical and financial progress with regular performance assessments.
Project coordination and oversight to ensure policy consistency and interagency harmonization.
Daily project operation and management including decision-making.
Troubleshooting through emergency or permanent interventions.
Financial management covering budgeting, accounting, cash management, and audits.
Coordination with stakeholders, funding institutions, and beneficiaries.
Post-completion mainstreaming of project concerns into the regular agency activities.

Core structure includes administration, finance, project monitoring/evaluation, operations, and management.
Agencies determine detailed structure consolidating finance, administration, monitoring, and technical operations.
Core PMO staffed by organic personnel, supplemented by contractual staff based on project complexity.
Possible substructures like sectoral groupings or field units under regional supervision.
For inter-agency projects, PMO lodged in lead agency with component implementation by participating agencies.

Consists of regular plantilla positions and existing project positions.
Core PMO manned by regular staff through concurrent detail, full-time detail, secondment, or position transfer.
Vacant regular positions may be frozen to create contractual ones without additional personal costs.
Contractual positions may be created subject to donor agreements or agency budget, mainly for technical roles not filled by regular staff.
Contractual positions co-terminus with project duration.

Regular personnel detailed to PMO retain existing salary rules and may receive authorized incentives.
Seconded employees' compensation borne by receiving agency under existing laws.
Contractual personnel paid equivalent to regular positions but not more than immediate supervisor's salary; entitled to allowances and benefits.

Existing PMOs of projects ending by 2004 may continue until completion; projects ending 2005 or later must consolidate PMOs by 2004.
No new project offices shall be established; vacant contractual positions may be converted or transferred to new projects.
Projects not meeting specific criteria must mainstream management into regular units with evaluation of funding needs.
Staffing related to completing projects may be phased out or transferred, subject to evaluation.
Foreign-assisted PMO budgeting shall shift to regular agency budget (Fund 101).

Agencies with multiple project offices must submit rationalization plans to DBM within three months.
Plans to include existing structures, staffing, position duration, proposed unified PMO structure, sources of personnel, and rationalization timetable.

Agencies may propose new PMOs compliant with the circular's provisions.
Proposals require DBM approval and must include documentation per rationalization plan requirements.

Matters not covered by this Circular are referred to the Department of Budget and Management for resolution.