NPM No. 137-2015
Requesting Entity: Philippine Institute for Development Studies (PIDS)
Issues Concern: Agency-to-Agency Agreement
How to proceed with the engagement of the Philippine Statistiscal Authority (PSA) through the Agency-to-Agency procurement where the Approved Budget for the Contract (ABC) is more than the allowed 25% limit provided in the Implementing Guidelines on Agency-to-Agency Agreements (Guidelines)?
It is the general policy of government to purchase its requirements from the private sector and only in highly exceptional cases may one government agency procure from another government agency when it is determined to be more efficient and economical.
Bearing this in mind, the GPPB opted to place a 25% cap in the respective budgets for each procurement category of government agencies under Paragraph 5(a)(ii) of the Guidelines. The condition is intended to discourage government agencies from adopting Agency-to-Agency arrangements as the general rule in procurement transactions.
In this regard, we are of the view that the 25% limitation cannot be dispensed with unless there is another law or rules that govern such procurement. As of this writing, this office is not aware of any other justification for the use of such modality under the 1st paragraph of Section 53.5.