Guidelines and Procedures on the Grant of Honoraria to BIR Personnel Involved in Procurement Activities

August 24, 2004 REVENUE MEMORANDUM ORDER NO. 42-04 TO : All Revenue Officials and Employees Concerned SUBJECT : Guidelines and Procedures on the Grant of Honoraria to BIR personnel involved in procurement activities I. OBJECTIVES: This order prescribes the guidelines and procedures for the receipt of collections and grant of honoraria in accordance with Section 15 of RA 9184 (Government Procurement Reform Act) and National Budget Circular No. 2004-5 dated March 23, 2004. II. POLICIES: 1. A separate account shall be opened and maintained at LBP exclusively for deposit of 50% of collections from payments of the following: a) sale of bid documents; b) fees from contractor/supplier registry; c) fees charged for copies of minutes of bid openings, BAC resolutions and order BAC documents; d) protest fees; e) liquidated damages; and f) proceeds from bid/performance security forfeiture. 2. A separate official receipt shall be issued to acknowledge payment. 3. A project that has been issued a Notice of Award and duly acknowledged by the supplies/contractor shall be considered a successfully completed procurement project. III. GUIDELINES AND PROCEDURES: A. Receipt and Recording of Collections : 1. BAC Secretariat : a) Prepare billing statement for payment enumerated under item II.1; b) Release bid documents/eligibility forms/minutes/resolutions to the bidder upon presentation of proof of payment. 2. Accounting Division/Finance Division (AD/FD) a) Prepare order to accept payment in favor of supplier/contractor with the following accounting entries: DR CR Cash collecting officer 102 xx xx Miscellaneous Income 678 xx xx Payment of Collection and Deposit b) Process and record Report of Collection in the Bureau's Regular Agency Book. 3. General Services Division/Administrative Division : a) Open and maintain an account with LBP for the 50% of the collection under item II.1. b) Issue separate official receipt corresponding to the 50% of the payment under item II.1 to be deposited to the account under item III.3.a and the other 50% to be remitted to the Bureau of Treasury. c) Prepare and submit report of collection and deposit to AD/FD. B. Requirements for Honoraria Entitlement . To be entitled to honoraria , revenue personnel concerned must meet the following requirements: 1. Must be duly designated as chairman and members of the Bids and Awards Committee (BAC), the Technical Working Group and Secretariat covered by a Revenue Special Order. 2. Must have participated in any of the procurement activities enumerated under Section 12.1 of the IRR of RA No. 9184 for a particular contract, as certified by the Chair or Vice-Chair, Bids and Awards Committee. 3. Members of the secretariat who perform the attendant functions on an ad hoc basis as certified by the Chair or Vice-Chair, Bids and Awards Committee. C. Honoraria Rates 1. The honoraria shall not exceed the rates indicated below per procurement project: Honorarium rate per project BAC Chair 3,000 BAC Members 2,500 TWG Chair and Members 2,000 2. Honoraria received in a month should not exceed twenty five percent (25%) of the monthly basic salary. AEaSTC 3. The members of the BAC Secretariat who perform the attendant functions on an ad hoc basis may be paid honoraria at the same rate as the TWG Chair/Members. D. Claim and Payment of Honoraria : 1. Payment of honoraria shall be on a monthly basis. 2. Payment of honoraria shall be made only for successfully completed procurement projects. 3. The BAC Chair or Vice-Chair shall be responsible for identifying the BAC Secretariat members entitled to receive honoraria in a specified project. 4. Box A of the Disbursement Voucher shall be signed by the BAC Chair or Vice Chair. 5. Disbursement voucher shall be supported with the following documents: a) Payroll b) Notice of award duly acknowledged by the supplier/contractor. c) Certification from the Head, BAC Secretariat that the employees entitled to receive honoraria has participated in the procurement activities. IV. LIMITATION CLAUSE: 1. Those who are receiving honoraria for their participation in procurement activities shall not be allowed to render overtime services with pay or overtime services to be compensated through time/days off work. TaSEHC 2. Members of the BAC Secretariat whose positions are in the Procurement Unit of the agency shall not be entitled to honorarium. Overtime services may be allowed subject to the guidelines under Budget Circular No. 10 dated March 29, 1996 and Section 1.d of Administrative Order No. 103 dated August 31, 2004. V. EFFECTIVITY This order shall govern the grant of honoraria effective March 23, 2004 in accordance with National Budget Circular No. 2004-5. (SGD.) GUILLERMO L. PARAYNO, JR. Commissioner of Internal Revenue March 23, 2004 DBM BUDGET CIRCULAR NO. 05-04 TO : Heads of Departments, Bureaus, Offices and Agencies of the National Government, Including Local Government Units, State Universities and Colleges, Government-Owned and -Controlled Corporations, and All Others Concerned SUBJECT : GUIDELINES ON THE GRANT OF HONORARIA TO GOVERNMENT PERSONNEL. INVOLVED IN GOVERNMENT PROCUREMENT 1.0 PURPOSE Section 15 of RA 9184 (Government Procurement Reform Act) provides: "Section 15. Honoraria of BAC Members . The Procuring Entity may grant payment of honoraria to the BAC members in an amount not to exceed twenty five percent (25%) of their respective basic monthly salary subject to availability of funds. For this purpose, the Department of Budget and Management (DBM) shall promulgate the necessary guidelines." This Budget Circular (BC) is issued to provide the guidelines on the grant of honoraria to government personnel involved in government procurement in accordance with said provision of law. 2.0 COVERAGE This Circular shall apply to all national government agencies, and its instrumentalities, including Local Government Units (LGUs), State Universities and Colleges (SUCs), and Government-Owned and Controlled Corporations (GOCCs). 3.0 RATIONALE Honoraria is a form of compensation granted to individuals owing to the performance of task(s) and/or involvement in activity(ies) beyond their regular functions. Equity calls for equal compensation for performance of substantially similar duties, will substantially similar degrees of responsibility and accountability. Propriety dictates that only persons who have successfully completed their tasks and/or participated in accomplished activity(ies) ought to be compensated. aSTECA 4.0 GUIDELINES 4.1 The chairs and members of the Bids and Awards Committee (BAC) and the Technical Working Group (TWG) may be paid honoraria only for successfully completed procurement projects. The honoraria shall not exceed the rates indicated below per procurement project: Honorarium rate Per procurement project BAC Chair 3,000 BAC Members 2,500 TWG Chair and Members 2,000 4.2 The total amount of honoraria received in a month may not exceed twenty five percent (25%) of the monthly basic salary. 4.3 To be entitled to honoraria , personnel should be duly designated as members of BAC or the TWG by the head of the department/agency concerned. 4.4 The members of the BAC Secretariat who perform the attendant functions on and ad hoc basis may likewise be paid honoraria at the same rate as the TWG Chair/Members, subject to the same regulations. 4.4.1 The members of the BAC Secretariat whose positions are in the Procurement Unit of the agency shall not be entitled to honoraria . The payment of overtime services may be allowed however, subject to the guidelines under Budget Circular (BC) No. 10 dated March 29, 1996. 4.5 Heads of government entities are prohibited from paying honoraria to personnel involved in procurement activities outside of those covered herein. 4.6 By reason of jurisprudence, a Department Undersecretary or Assistant Secretary who concurrently serves the BAC, in whatever capacity, shall not be entitled to honoraria . 4.7 In lieu of honoraria , the payment of overtime services may be allowed for the administrative staff such as clerks, messengers and drivers supporting the BAC, the TWG and the Secretariat for procurement activities rendered in excess of official working hours. 4.7.1 The payment of overtime services of these personnel shall be in accordance with the guidelines under BC No. 10. 4.8 Those who are receiving honoraria for their participation in procurement activities; shall not longer be paid overtime pay for procurement activities rendered in excess of official working hours. SETaHC 5.0 FUNDING SOURCE Agencies may retain fifty percent (50%) of their collections from: Sale of bid documents; Fees from contractor/supplier registry; Fees charged/for copies of minutes of bid openings, BAC resolutions and other BAC documents; Protest fees; Liquidated damages; and Proceeds from bid/performance security forfeiture. The amount retained shall be exclusively used for the payment of the honoraria authorized herein which shall not exceed 25% of the monthly salary of the employee entitled thereto and overtime pay as provided in 4.1 and 4.7. Any excess of the retained amount over the actual payments at the end of the year shall be remitted to the National Treasury. EIAaDC 6.0 SAVING CLAUSE Cases not covered by the provisions of this Circular shall be referred to the Secretary of Budget and Management for resolution. 7.0 EFFECTIVITY This Circular shall take effect immediately. (SGD.) EMILIA T. BOCODIN Secretary