2004-09-20

NPM 124-2004

Requesting Entity: Department of Labor and Employment-Regional Office VI

Issues Concern: Procurement Under Section 52 of the Implementing Rules and Regulations Part A of Republic Act 9184

 

Details

Whether or not the alternative method of procurement of Shopping under Section 52 of Republic Act 9184 (R.A. 9184) and its Implementing Rules and Regulations Part A (IRR-A) may also be used in procurement of services.

The phrase “readily available off-the-shelf goods or ordinary/regular equipment” in the above-quoted provision seems to exclude services from being procured through Shopping. The term “off-the-shelf” refers to something that is available as a stock item; not specially designed or made. To be available as a stock item, a thing must be tangible and capable of being stored. Since services are intangible by nature and cannot be stored or kept in stock, logic dictates that Section 52(a) of the IRR-A of R.A. 9184 excludes services from its coverage. Consequently, janitorial and security services, regardless of the amount involved, cannot be procured through Shopping.

However, it is important to clarify that the above-mentioned interpretation will not hold true for certain services such as catering, photocopying, mimeographing, repair, and other similar services where the foremost intention is to procure a tangible good and the service component, which may cost more than the tangible good procured, is merely ancillary thereto. In these cases, there is a readily available off-the-shelf good that will be procured and an accompanying service component that is provided for the proper use or consumption of such good. To illustrate, using repair service as example, the primary or foremost consideration is the replacement of a defective part of an equipment – a tangible good; the installation of which is an ancillary service required for the proper use of the procured good. As regards maintenance services, although tangible goods are procured for maintenance of equipments, the same may not be procured through Shopping considering that these types of services do not arise from unforeseen contingency.

Based on the foregoing, subject to the existence of any condition set forth in Section 52(a) of R.A. 9184 and its IRR-A, Shopping may be used in procuring services where the primary intent is the acquisition of a readily available off-the-shelf goods and the service component is just ancillary to its acquisition. In relation to this, procurement of services which do not have readily available off-the-shelf goods component, or those which include goods component but do not arise from an unforeseen contingency, cannot be procured through Shopping.

We are of the opinion that the Department of Labor and Employment-Regional Office VI may procure catering services, photocopying, and mimeographing, and other similar services as discussed above subject to Section 52(a) of R.A. 9184 and its IRR-A.