Policies and Procedures in the Procurement of Supplies, Materials and Equipment, Repair of Equipment, Furnishing of Services and Printing of BIR Forms and Other Printed Matters

July 21, 1978 REVENUE MEMORANDUM ORDER NO. 20-78 SUBJECT : Policies and Procedures in the Procurement of Supplies, Materials and Equipment, Repair of Equipment, Furnishing of Services and Printing of BIR Forms and Other Printed Matters TO : All Internal Revenue Officers Concerned To effect economy and efficiency in the procurement of supplies, materials and equipment, repair of equipment, furnishing of services and printing of BIR forms and other printed matters and to insure availability of forms and supplies in the required quantity at the proper time, the following policies and procedures are hereby prescribed: cdt A. POLICIES 1. Contracts for the purchase of supplies, materials and equipment, repair of equipment, furnishing of services and printing of forms and other printed matters shall generally be awarded to the lowest complying offer or to the offer most advantageous to the government taking into account such factors as price and the provisions of the Flag Law, quality, delivery, performance, vendor's reliability and public interest. 2. As far as practicable, the Bureau shall enter into procurement contracts after necessary public bidding. 3. Negotiated purchase shall be resorted to only in any of the following instances: a. Whenever the supplies are urgently needed to meet an emergency which involves the loss of, or danger to, life and/or property; b. Whenever the supplies are to be used in connection with a project or activity which cannot be delayed without causing detriment to the public service; c. Whenever the supplies are sold by an exclusive distributor or manufacturer who does not have sub-dealers selling at lower prices and for which no suitable substitute can be obtained elsewhere at more advantageous terms to the government; d. Whenever the supplies under procurement have been unsuccessfully placed on bid for at least two consecutive times, either due to lack of bidders or the offers received in each instance were exorbitant or non-conforming to the specifications; e. Whenever it is apparent that the requisition of the needed supplies through negotiated purchase is most advantageous to the government as determined by the Commissioner of Internal Revenue; f. Whenever the purchase is made from an agency of the government; g. Whenever the purchase is made from the U.S. Government or any other foreign government; 4. Emergency purchases shall be allowed only in any of the following cases: a. Whenever the need for supplies, materials or equipment or the furnishing of services is exceptionally urgent or absolutely indispensable to prevent immediate danger to, or loss of, life and/or property; b. Whenever the supplies are to be used in connection with the project or activity which cannot be delayed without causing detriment to the public service; 5. Whenever possible, requisitions for commonly used office supplies shall be filled from the stores of the Bureau of Supply or duly authorized government agencies and instrumentalities in preference to private suppliers, provided that the quality desired is met and the price is reasonable. Printing and binding requirements for accountable forms shall be executed by the Government Printing Office or the APO-NEDA Production Unit, Inc. If for some reasons, the Government Printing Office or the APO-NEDA Production Unit, Inc. cannot perform the work order, the printing work may be awarded to a private printer who submits the most advantageous offer after a competitive public bidding or canvass and only after prior authority shall have been obtained from the Department of General Services and the Commission on Audit. In the case of non-accountable forms and other printed matters, the same may be caused to be printed by private contractors through bidding or canvass, provided that they offer more advantageous terms than those offered by the Government Printing Office or any other government authorized printing establishments. 6. Prices quoted should be kept confidential and should not be disclosed by those involved in the procurement process. 7. To insure continuity of supply and prevent stock-outs, inventory stock levels for all items should be established taking into consideration the date the re-order should be placed and the length of time required for delivery. 8. To obtain the most advantageous terms, a minimum of five (5) written quotations from suppliers located in different areas within Metro Manila should normally be solicited for all purchases. 9. Purchase orders or job orders shall be approved by the following officials: a. Purchases for procurement of materials, spare parts and printing of forms: (1) Up to P20,000 Deputy Commissioner of Internal Revenue (2) Over P20,000 but not over P50,000 Commissioner of Internal Revenue However, requisitions for printing and binding of accountable forms and requisitions for surcharging shall be signed by Assistant Commissioner Abrahan and approved by the Commissioner of Internal Revenue. b. Job orders for repair of equipment: (1) Up to P30,000 Deputy Commissioner of Internal Revenue (2) Over P30,000 but not over P50,000 Commissioner of Internal Revenue Job orders for the repair of motor vehicles and office equipment as well as the emergency purchase of office supplies up to P1,000 in the regional offices shall continue to be signed by the regional directors concerned. c. Purchases of equipment: (1) Up to P30,000 Deputy Commissioner of Internal Revenue (2) Over P30,000 but not over P50,000 Commissioner of Internal Revenue d. Purchases and job orders exceeding P50.000 but less than P2,000,000 Presidential Committee created under Executive Order No. 323, series of 1971 upon the recommendation of the Minister of Finance. e. Purchases of P2,000,000 or more, including subsequent changes thereto involving a net increase in contract cost of 25% and above The President of the Philippines thru the Contract Review Committee created under Letter of Instructions No. 646, dated December 22, 1977. 10. The Bidding and Award Committee, through the Commissioner of Internal Revenue, may consult other government and/or private parties for specific supplies about which they have technical knowledge, familiarity and integrity. B. PROCUREMENT PROCEDURES 1. The Bidding and Award Committee shall submit an annual procurement program for the printing of BIR forms, including accountable forms, and other printed matters, purchase of ordinary supplies, materials and equipment and the furnishing of services for approval by the Commissioner of Internal Revenue. This program shall be based on the projected annual needs submitted by the various offices of the Bureau on the form prescribed for the purpose. The Committee can call on the services of any official or employee of the Bureau to prepare the program for the committee, subject to its approval. 2. The Budget Division shall set aside the funds to cover the approved procurement program. Of the total allotted funds for supplies, materials and equipment and furnishing of services, the Budget Division shall provide a reserve of not more than 15% for contingency and miscellaneous items, the need for which cannot be anticipated during the preparation of the procurement program. 3. The Property Division or the Accountable Forms Division shall forward to the Committee all subsequent requisitions not included in the annual procurement program, allowing sufficient time to secure quotations, to execute the purchase order and to obtain timely delivery of the item. 4. The Committee shall then determine whether the items covered under the approved procurement program and subsequent requisitions not included therein shall be procured through public bidding, negotiation, emergency purchase or through the Government Printing Office, APO-NEDA Production Unit, Inc. or any other duly authorized government agency or instrumentality. 5. Thereafter, the Committee shall select the prospective bidders/offerors who will be asked to bid in public bidding or to quote in negotiated purchase or emergency purchase by reference to established bidders list, catalog files, trade journals and publications, telephone company yellow pages and other similar sources. The search for suppliers shall also include obtaining information about the quality of the suppliers' products, reliability of deliveries, availability of spare parts in case of office equipment, after-sales service and the reputation of suppliers and/or contractors for honesty and integrity. 6. The detailed procedures applicable in the selection of bidders/suppliers and evaluation of bids/offers are as follows: a. PUBLIC BIDDING (1) The Bidding and Award Committee shall cause the widest publicity possible of the invitation to bid by a combination of some or all of the following: (a) advertisement in at least two newspapers of general circulation for three (3) consecutive days; (b) solicitation by mail; (c) posting of copies of invitations to bid on the bulletin board of the Bureau; and (d) personal delivery of the invitation to bid to prospective bidders. (2) Thereafter, tenderers should either be given specially printed envelopes or be asked to write "TENDER" or "QUOTATION" on their own envelopes. At the time of invitation, the date for the return of tenders should be given. A tender arriving after this date should be returned unopened to the sender with the explanation that it arrived after the deadline. (3) Tenders should not be opened when received prior to the date set for opening bids. They should be stamped with the time and date of receipt and kept in a safe, the key of which is entrusted to an official to be designated by the Commissioner of Internal Revenue. (4) At the date, time and place set in the invitation to bid, the safe is then unlocked and all the tenders are opened by the Chairman of the Bidding and Award Committee in the presence of its members and the bidders or their authorized representatives. (5) The documents are subsequently stamped with the date and time of the opening of the bids and an abstract thereof shall be prepared by the Committee. The abstract shall among others provide the following details: (a) Name of bidder; (b) Specifications; (c) Price offered; (d) Discounts or allowances; (e) Delivery date offered; (f) Remarks or exceptions. Notation of special conditions requested by the supplier or any important variation between the invitation to bid and the offer. All the copies of the bid tenders shall be initialed by the Chairman and the members of the Committee. The abstract shall be certified as to its correctness and authenticity also by the Chairman and the members of the Committee. (6) The Committee shall then determine the lowest complying bid or the bid most advantageous to the Bureau by considering among others the following factors: (a) Conformity with the specifications in the invitation to bid; (b) Price quoted, considering the Flag Law, and other laws and policies pertinent to procurement; (c) Public interest; (d) When time is of the essence, the bidder who offers to deliver within the period stipulated in the invitation to bid shall be awarded the contract, provided that the price is not unreasonably higher than the lowest price offered; (e) All other things being equal, the bidder who offers to supply the whole quantity shall be preferred in order to obtain uniformity in quality, tensile strength, color shade, etc.; (f) Reliability of bidder as a supplier or contractor. In the evaluation of offers, the Committee may avail of the services of the technical personnel of the Bureau who shall examine the various offers, compare them with the specifications and submit a written report thereon which shall also indicate the reason for recommending any particular preference or for discarding any of the tenders. The Committee shall then determine and choose from among the bidders, one who has tendered the most advantageous offer. b. NEGOTIATED PURCHASE (1) When any of the instances enumerated in Paragraph A-3 (Policies) is present, the Committee may resort to a negotiated purchase. (2) A thorough canvass of responsible suppliers/contractors shall be made by the Committee or its designated representative except when it has been reliably established that the supplier is the exclusive distributor of said supplies; there is no suitable substitute in the market at more advantageous terms to the government; and no sub-dealers are offering lower prices. (3) The Committee shall prepare an abstract of canvass of prices/quotations submitted by the prospective suppliers/contractors in the same manner as that indicated for public bidding. (4) It shall then determine and choose from among the suppliers, one who has tendered the most advantageous offer. c. EMERGENCY PURCHASE (1) When any of the situations enumerated in Paragraph A-4 (Policies) exist, the Committee shall resort to emergency purchase. (2) The canvass of prices required in emergency purchases shall be done through sealed written quotations or through personal canvass by the representatives of the Committee under specific guidelines to be issued by it. Actual personal canvass may also be conducted by the Committee. (3) The Committee shall then prepare an abstract of the canvass in the same manner as that prepared for public bidding or negotiated purchase. (4) It shall determine and choose from among the suppliers, one who has tendered the most advantageous offer. 7. The Committee shall then recommend to the Deputy Commissioner or the Commissioner, as the case may be, and shall cause the preparation of the purchase order/contract in favor of the bidder/supplier who tenders the most advantageous offer. The Committee shall see to it that all the requirements for the same item are consolidated in one purchase order or contract. 8. After approval by the Deputy Commissioner, Commissioner, Minister of Finance or the President, as the case may be, the purchase order/contract shall be served to the supplier without delay and it shall become the basis for delivery. For substantial orders, the supplier should be required to confirm his offer in writing to avoid possible misunderstanding. The Committee must make certain that the item is delivered on time and in accordance with the purchase order/contract. 9. The Property Division or Accountable Forms Division, as the case may be, shall immediately make arrangements for the inspection of the item delivered to ensure that its quality is in accordance with the specifications/requirements and that the item is suitable for the purpose for which it is intended. 10. Upon the submission of the usual accounting and auditing requirements by the supplier, the Property Division or the Accountable Forms Division, as the case may be, shall prepare the corresponding voucher and transmit the same to the Accounting Division for final liquidation. 11. A monthly report of procurement awards made shall be submitted by the Committee to the Commissioner not later than the second week of the following month, showing the following: a. Mode of procurement; b. Description of the item purchased or service rendered; c. Name of supplier/contractor; and d. Quantity of item purchased, unit price and total amount involved. C. EFFECTIVITY This Order shall take effect immediately and supersedes all provisions of existing orders or issuances which are inconsistent herewith. aisa dc EFREN I. PLANA Acting Commissioner of Internal Revenue TAN P4519-F2828A-8