Issuance of a Policy Matter Opinion to Anti-Trapo Movement of the Philippines, Inc. Regarding R.A. No. 10349

October 27, 2016

GPPB RESOLUTION NO. 25-16

ISSUANCE OF A POLICY MATTER OPINION TO ANTI-TRAPO MOVEMENT OF THE PHILIPPINES, INC. REGARDING REPUBLIC ACT NO. 10349 ENTITLED "AN ACT AMENDING REPUBLIC ACT NO. 7898, ESTABLISHING THE REVISED AFP MODERNIZATION PROGRAM AND FOR OTHER PURPOSES"

WHEREAS, Republic Act (RA) No. 9184 entitled "An Act Providing for the Modernization, Standardization and Regulation of the Procurement Activities of the Government and for Other Purposes," took effect on 26 January 2003;

WHEREAS, Section 76 of RA 9184 provides that the relevant provisions of RA 7898 are repealed, and that any other law, presidential decree or issuances, executive order, letter of instruction, administrative order, proclamation, charter, rule or regulation and/or parts thereof contrary to or inconsistent with provisions of RA 9184 are repealed, modified or amended accordingly;

WHEREAS, the Government Procurement Policy Board (GPPB), through Resolution No. 20-2006 dated 6 December 2006, confirmed that the fourth proviso under Section 4 (b) of RA 7898, which states "Provided, furthermore, That only offers from suppliers who are themselves the manufacturers shall be entertained" was impliedly repealed by RA 9184 and its IRR-A; 1

WHEREAS, RA 10349 was passed on 11 December 2012 re-enacting the fourth proviso in Section 4 (b) of RA 7898 stating that only offers from suppliers who are themselves the manufacturers shall be entertained;

WHEREAS, on 27 November 2015, the GPPB-Technical Support Office (TSO) received a letter from Anti-Trapo Movement of the Philippines, Inc. (ATMPI) requesting an official review and evaluation of the conduct by which the Department of National Defense (DND), through its Bids and Awards Committee (BAC) and Technical Working Group (TWG), undertook the procurement of the requirements for "Marine Forces Imagery and Targeting Support Systems" (MITSS) Acquisition Project and the propriety, validity and legality of the actions of the DND, alleging, among others, with reference to the re-enacted provision of Section 4 (b) of RA 7898, the following:

1. DND allowed mere integrators to participate in the bidding based on the definition of similar contracts for MITSS Acquisition Project;

2. DND prequalified an obviously disqualified local proponent, but disqualified the more qualified foreign competitor just because of an error in the form used, which form was prescribed by the DND BAC TWG;

3. The local proponent has never undertaken any military projects involving manufacture and integration of any of the components required for the MITSS Acquisition Project;

4. There is still an outstanding protest filed by the foreign competitor since 2014 which remains unresolved as of 26 November 2015 (date of letter ATMPI letter request); and

5. DND Post-Qualification Team post-qualified the local proponent even if the major components sought to be supplied by such proponent have neither been proven to be used together as a system which the MITSS Acquisition Project calls for nor proven to be used, as a system, by the armed forces of the country of its origin (USA and UK) or two other countries.

WHEREAS, on 22 March 2016, the Inter-Agency Technical Working Group (IATWG), during its 3rd Regular Meeting, discussed the request of ATMPI and after careful review of the issues and the legal arguments on the matter, agreed to recommend to the GPPB the issuance of a Policy Matter Opinion clarifying the following:

1. RA 9184 shall yield to the provisions of RA 10349 as it is the later expression of legislative will, as regards the fourth proviso under Section 4 (b) of RA 7898 stating that only offers from suppliers who are themselves the manufacturers shall be entertained; and

2. GPPB and its TSO shall not pass upon the propriety, validity and legality of the actions of the DND in the procurement of the requirements for MITSS Acquisition Project, considering that it has no quasi-judicial powers and functions and it cannot encroach upon or interfere with the exercise of the functions of the Head of the Procuring Entity (HOPE) and the BAC.

WHEREAS, during the 10th Regular GPPB Meeting on 23 September 2016, the request of ATMPI, including the IATWG recommendation, was presented but the GPPB deferred decision on the matter pending the GPPB-TSO's study on the definition of the word "manufacturer" in the Implementing Guidelines Rules and Regulations (IGRR) of RA 10349;

WHEREAS, during the 11th GPPB Regular Meeting on 27 October 2016, the GPPB-TSO presented that under Section 1.3.11 of the IGRR of RA 10349, a "manufacturer" refers to an entity which makes, develops, fabricates, assembles, builds or otherwise produces an equipment or weapon system, which definition was emphasized by the DND in the resolution of the protest filed for the MITSS Acquisition Project, explaining that an integrator or assembler falls within the ambit of a "manufacturer";

WHEREAS, during the same meeting, the DND representative acknowledged and confirmed that the only offer from suppliers who are themselves the manufacturers shall be entertained;

WHEREAS, the GPPB, after due deliberation and careful review, resolved to adopt the recommendation of the IATWG to issue a Policy Matter Opinion clarifying that RA 9184 shall yield to the provisions of RA 10349 as it is the later expression of legislative will;

NOW, THEREFORE, for and in view of all the foregoing, WE, the Members of the GOVERNMENT PROCUREMENT POLICY BOARD, by virtue of the powers vested on Us by law and other executive issuances, hereby RESOLVE to confirm, adopt, and approve, as WE hereby confirm, adopt, and approve the issuance of a Policy Matter Opinion clarifying that RA 9184 shall yield to the provisions of RA 10349 as it is the later expression of legislative will, stating that only offers from suppliers who are themselves the manufacturers shall be entertained.

This Resolution shall take effect immediately.

APPROVED this 27th day of October 2016 at the City of Manila, Philippines.

___________________________________Department of Budget and Management

________________________________________National Economic and Development Authority

__________________________________Department of Education

__________________________________Department of Energy

__________________________________Department of Finance

__________________________________Department of Health

__________________________________________________Department of Information and Communications Technology

_________________________________________________Department of the Interior and Local Government

__________________________________Department of National Defense

_____________________________________Department of Public Works and Highways

__________________________________Department of Science and Technology

__________________________________Department of Trade and Industry

__________________________________Department of Transportation

__________________________________Private Sector Representative

 

Footnotes

1. Took effect on 8 October 2003 and remained effective until 2 September 2009 upon the effectivity of the revised Implementing Rules and Regulations of RA 9184, which was subsequently superseded by the 2016 Revised Implementing Rules and Regulations of RA 9184 that took effect on 28 October 2016.