procurement planning and monitoring

PROCUREMENT PLANNING and MONITORING

CAPACITY DEVELOPMENT DIVISION

GOVERNMENT PROCUREMENT POLICY BOARD

TECHNICAL SUPPORT OFFICE (GPPB-TSO)

Capacity Development Division 1

Capacity Development Division

1. What is planning?2. Nature of Planning3. Procurement Planning

3.1 Importance of Planning3.2 Preparing the PPMP

3.2.1 Identifying the need3.2.2 Developing project requirements3.2.3 Technical Specifications3.2.4 Costing (Determining the ABC)3.2.5 Procurement Timelines3.2.6 Procurement Methods3.2.7 PPMP format3.3 Consolidating PPMPs into APP3.3.1 Techniques in consolidating items in the APP3.4 Updating the PPMP and APP

4. Procurement Monitoring

OUTLINE

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PROCUREMENT PLANNING

Preparation of PPMP and APP

PHILIPPINE PROCUREMENT PARADIGM


• Review studies• Consolidate into

APP• Decide procurement

method• Approve APP• Determine

readiness

• Post/Advertise opportunity

• Open and evaluate bids

• Post-qualify• Award and enter

into contract

• Cost-benefit analysis

• Feasibility study• Market study• PPMP

• Oversee implementation

• Inspect and accept deliveries

• Release payment

Assess Procure

Identify Implement

NEEDS SATISFACTION


PLANNING

PLANNING

- refers to predetermined course/s of action to achieve a desired end/goal.

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“Process of identifying which project needs can be best met by procuring products and services outside the project organization and should be accomplished during the project planning effort”

It is the government’s fiduciary responsibility

− protect the taxpayers’ interests

− safeguard the resources allotted to each department

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Involves 2 levels:

1. Procuring entity’s over-all strategic plan

2. Project and/or operational plans


WHY PROCUREMENT PLANNING

Procurement Planning ensures that the overall goal of a particular project will be effectively and efficiently achieved.

Precludes occasions for unnecessary government purchases and circumventions of the prescribed procurement procedures

−advance deliveries −suki system −unwarranted resort to alternative methods

procurement

However, it must be done within budgetary context


SECTION 7.1 OF IRR

Within approved budget of procuring entity Judiciously done Consistent with government fiscal measures Considered crucial to the efficient discharge of

governmental functionso Required for the day-to-day operationso In pursuit of the principal mandate of the

procuring entity concerned


SECTION 7.2 OF IRR

• No procurement unless in accordance with the Annual Procurement Plan (APP)

• Approval of Head of Procuring Entity (HOPE) or designated second-ranking official


PROJECT PROCUREMENT MANAGEMENT PLAN (PPMP)


A guide document in the procurement and contract implementation process, as well as a vital reference in procurement monitoring.

Tool allowing the PE the flexibility to optimize the utilization of scarce resources.

Minimize the practice of doing short-cuts

Prepared by the end-user unit during the budget preparation to support the cost estimates in the budget proposal.

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PROJECT PROCUREMENT MANAGEMENT PLAN (PPMP)


PPMP

Contracting Arrangement

Type and Objective

Extent/sizeProcurement methodsTime scheduleEstimated budget

PPMP FORMAT


Developing Project Requirements

Identify the need of the PMO/End-user unit

Identify alternative solutions/ products/ services

Compare the alternatives (consider

qualitative and

quantitative factors)

Choose the Best

Alternative - the one that

is most beneficial to

the Procuring Entity

DEVELOPING PROJECT REQUIREMENTS


Important Consideration

Suggested basis for identifying needs:

1. Core functions of the end-user unit in the organization, i.e Accounting, Legal etc.

2. Historical data/Foreseen contingencies;3. Identified purpose/goals/MFOs;4. P.E’s Strategic Plans;5. Current supply inventory;6. Other maintenance and operating needs.

IDENTIFYING THE NEED

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TECHNICAL SPECIFICATIONS, SCOPE OF WORK, AND TERMS OF REFERENCE


Consult Stakeholders In developing the project requirements and

TS/SOW/TOR, the Procuring Entity may engage the services of technical experts, whether in-house or consultants, to ensure that the requirements and the TS/SOW/TOR are adequate to achieve the objectives of the particular procurement.”

Set clear Specifications:– Generic and flexible– Clear and unambiguous– Reminder on Reference to Brand Names (Section 18)– Updated, where technology is taken into account– Fits the actual requirements of the PMO/End-user

HOW TO WRITE TECHNICAL SPECIFICATIONS?


Functional Description– a pen is expected to write 1.5 km of straight,

continuous lines Performance Description

– should do so continuously and smoothly, without skipping, and with the color of the ink being consistent

Environmental Interface– on pad paper or bond paper, but not necessarily on

wood or on a white board Design

– Ballpoint, gel-tip, sign pen, technical pen, etc.

APPROVED BUDGET FOR THE CONTRACT (ABC)

The ABC reflected in the APP or PPMP shall be consistent with the appropriations for the project authorized in the GAA

End user to conduct market study

Market price, inflation and cost of money related to the procurement time table must also be considered.

In determining the ABC, the end-user unit, with the assistance of the TWG (when necessary), must consider the different cost components.


COST COMPONENTS IN DETERMINING ABC

Cost or market price of the product or service itself;

Freight, insurance, taxes, and other incidental expenses

(For goods only);

Cost of money, to account for government agencies usually

buying on credit terms;

Inflationary factor (For goods only);

Quantities, considering that buying in bulk usually means

lower unit prices;

Supply of spare parts and/or maintenance services, if part

of the contract package (For goods only);



Cost for securing all types and forms of securities other than cash (e.g. premiums for surety bond, bank fees and other charges to be incurred by the bidder in obtaining bid, performance and warranty securities); and

Currency valuation adjustment for contracts with foreign component.

Acquisition Cost

Operation Cost

Replacement/Repair Cost

Disposal Cost



If the sum of the different cost components is lower than the appropriation for the procurement, then the ABC should be equal to the sum of the cost components.

If the resulting sum is higher than the appropriation, it is advisable to review the technical specifications and the computation of the ABC. In any case, the ABC should not exceed the appropriation.


PROCUREMENT MILESTONES



Pre-Procurement Conference

Factors to consider in identifying procurement timelines:

1. Budget rules, i.e CSE – every quarter;2. Nature of Procurement Projects, whether

simple or complex3. For shopping/small value procurement, give

at least two weeks 4. Foreseen/Unforeseen Contingencies, i.e

frequent change in specifications, etc.5. Availability in the market.


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Advertisement and Posting

As a general rule, all procurement should be through public bidding

The selection of the method of procurement is dependent on the presence or absence of specific conditions of other methods of procurement in Sections 48 to 54 of the revised IRR

METHOD OF PROCUREMENT

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Adveartisement and PostingPPMP vs PR

Purchase Request (P.R) – Request for purchase or requisition of supplies, materials and equipment or its equivalent shall be duly approved by proper authorities. (Source: Training Handbook on Government Expenditures)

In no way that the End-user Unit submit their P.R ahead of the approved PPMP item.

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ANNUAL PROCUREMENT PLAN (APP)


Legal Basis: Section 7 of the IRR of RA 9184 Refers to the entirety of the procurement activities

that will be undertaken by the procuring Entity within the calendar year using the prescribed format required by the GPPB.

Shall be consolidated by the BAC Secretariat from the PPMPs of end-user units. The BAC shall take into consideration the following factors:

One year planning perspectiveEmergency or Contingency FundSchedule of Activities

No procurement shall be undertaken unless in accordance with APP

All procurement should be meticulously and judiciously planned by procuring entity

APP should be maintained and updated regularly

In the consolidation of PPMPs, the BAC may adopt a strategy through where similar items of procurement are packaged into one procurement undertaking.

A review and updating of the individual PPMPs and the APP shall be done regularly, at least once every 6 mos. or as often as necessary.

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PREPARATION OF APP


Prepare Project Procurement Management Plan (PPMP)

Submit to Budget Office for evaluation

Submit Budget Proposal to HOPE

Upon approval of HOPE, Budget Office will forward PPMPs to BAC Secretariat for Consolidation and Review

When GAA, Corporate Budget or Appropriation Ordinance becomes final, PPMPs will be finalized and submitted to BAC Secretariat for consolidation and approval of the HOPE.

End-User Unit

Budget Office APP

BAC Secretariat


Eligibility Documents

APP being referred to in the IRR of RA 9184 is different from the APP-CSE

APP-CSE serves as basis of DBM – PS in projecting its inventory requirements, scheduling of activities, and over-all management of the central procurement of common-use goods (DBM Circular Letter 2011-6 & 2011-6a)

Common-use supplies – refers to those supplies and materials and equipment included in the price list of the PS which are necessary in the transaction of the official business of the procuring entity and consumed in its day-to-day operations

APP vis-a-vis APP-CSE

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In the case of foreign consultants, the foregoing eligibility requirements under Class “A” Documents may be substituted by the appropriate equivalent documents.

NPM 42-2013

APP-CSE

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1. Sort the procurement activities by type of procurement: goods, civil works or consulting.

2. Check which can be merged into one procurement activity

i.e Civil works or consulting services are usually distinct entries in the APP, unless the PE finds merit in merging infrastructure project scopes (civil works) or deliverables (consultants).

3. Goods procurement can be separated into three categories: common-use supplies (CSE) for the Procurement Service (PS), common-use supplies (non-PS), other goods procurement

TIPS IN CONSOLIDATING PPMPS

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4. All CSE whether for procurement from PS or not shall be consolidated into an APP-CSE which shall be submitted to the Procurement Service

5. For the APP, CSE shall be separated whether to be bought from the PS and CSE which shall be bought outside the PS

6. All partitions shall again be separated into mode of procurement (public bidding or alternative methods)

7. All entries can then be grouped by source of funds

TIPS IN CONSOLIDATING PPMPS

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Tips in consolidating PPMPsTIPS IN CONSOLIDATING PPMPS

REVISIONS ON APP


Update PPMP

Consolidate PPMP to APP

Approve Supplementa

l APP

End-user Unit

BAC Secretariat

HOPE


EligibLE Bidders

3.2. Annual Procurement Plan (APP) – the requisite document that the agency must prepare to reflect the entire procurement activity (i.e., goods, services, civil works to be procured) that it plans to undertake within the calendar year. This document contains the following information:

3.2.1. Name of the procurement program/project;3.2.2. Project management office or end-user unit;3.2.3. General description of the procurement;3.2.4. Procurement method to be adopted;3.2.5. Time schedule for each procurement activity;3.2.6. Source of fund; and3.2.7. Approved Budget for the Contract.

COA – GUIDE ON AUDIT OF PROCUREMENT

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EligibLE Bidders

1. To verify if the procuring entity has an Annual Procurement Plan (APP)

2. To verify if the APP is approved by the HOPE or by a second-ranking official designated by the HOPE to act on his behalf

3. To verify if the APP contains the following information:a. name of the procurement program/ project;b. project management office or end-user unit;c. general description of the procurement;d. procurement method to be adopted;e. time schedule for each procurement activity;f. source of fund; g. approved budget for the contract.

COA – GAP CHECKLIST

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EligibLE Bidders

4. To verify if the APP is supported by PPMPs prepared by the respective end-user units

5. To verify if the items in the approved APP were included in the PPMPs

6. To verify if the APP matches the budget per GAA, corporate budget, appropriation ordinance, as the case may be


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POSSIBLE CONSEQUENCES


1. Possible COA AOMs/Disallowances

2. Wastage of Government Funds

3. Suspension of Officials

4. Possible administrative/criminal liabilities

5. Project Delays

6. Project Failures

04/21/2023 43

04/21/2023 44

04/21/2023 45


PROCUREMENT MONITORINGPreparation of PMR

WHAT IS MONITORING?


Defined as:

• Tracking of inputs, activities, outputs, and outcomes of the procurement activity; and

• Tracking results of current operations on a regular basis.

MONITORING AND EVALUATION


It is the BAC who shall be responsible for ensuring that the procuring entity abides by the standards set forth under R.A. 9184 and its IRR.

BAC is required to prepare a PROCUREMENT MONITORING REPORT (PMR) in the form prescribed by the GPPB.

The PMR shall cover all procurement activities specified in the APP, whether on-going and completed from holding of the pre-procurement conference to the issuance of the notice of award and approval of the contract, including the actual time for each major procurement activity.

The PMR shall be approved and submitted by the Head of the Procuring Entity (HOPE) the GPPB in printed and electronic format within 14 cd after the end of each semester.

( Executive Orders 662, 662-A and 662-B, series of 2007)

WHY MONITOR?


Compliance to R.A. 9184 and its IRR

Performance– Efficiency– Effectiveness

Aid GPPB in crafting policies that address weaknesses and uphold strengths of the Philippine Procurement System

PROCUREMENT MONITORING REPORT (PMR)


MONITORING AND EVALUATION


Monitoring entails tracking of inputs, activities, outputs, and outcomes of the procurement activity

Ex-post evaluation examines the project outcomes and impacts. It is a determination of the benefits derived from the project, the attainment of specific targets for key indicators, and the sustainability of the project.



1. To verify if the BAC:a. prepared a procurement monitoring report in the

form prescribed by the GPPB;b. covering all procurement activities specified in the

Annual Procurement Plan (APP), whether on-going and completed, from the holding of the pre-procurement conference to the issuance of the notice of award and the approval of the contract, including the standard and actual time for each major procurement activity;

c. submitted the monitoring report to the Head of the Procuring Entity (HOPE) for approval and submission to the GPPB in printed and electronic format within 14 days after the end of each semester



2. To verify if the HOPE:a. approved the Procurement Monitoring Report and b. submitted it to the GPPB in printed and electronic

format within 14 days after the end of each semester

3. To verify if appropriate actions have been taken by the HOPE in case of instances of noncompliance committed by the BAC, BAC TWG, BAC Secretariat and/or bidders

4. To verify what actions have been taken by the GPPB in regard to instances of noncompliance

SUBMISSION & POSTING REQUIREMENTS


• APP– Submission to the GPPB (AO 222) and posting in the

procuring entity's website of its APP for CY 2012 (Section 1.1 of the IRR of EO 662), following the form and format downloadable from the GPPB website

• PMR– Submission to the GPPB (Section 12.2 of IRR of RA

9184) and posting in the procuring entity's website of its approved Procurement Monitoring Report every semester, following the form and format downloadable from the GPPB website (Section 1.2 of the IRR of EO 662)

• GPPB Website

http://www.gppb.gov.ph/index2012.php

THANK YOU!!

Contact us at:

Unit 2506 Raffles Corporate CenterF. Ortigas Road, Ortigas CenterPasay City, Philippines 1605

TeleFax: (632)900-6741 to 44Email Address: [email protected]


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