PM 002-2004

Requesting Entity: National Transmission Corporation (TransCo)

Issues Concern: Request for GPPB Opinion on the Procurement of Remote Terminal Units (RTUs) for Mindanao Under World Bank Guidelines



Whether or not TransCo may still pursue the award of contract procured using the World Bank Guidelines notwithstanding the fact that the funding for the project was already cancelled with finality.
From the above-cited provision (Section 1, IRR-A, R.A. 9184), it can be deduced that all fully domestically funded procurement activities of the government are now governed by a standard set of rules prescribed by R.A. 9184 and its IRR-A. The GPRA, as a matter of fact, envisions a streamlined procurement process that uniformly applies to all government procurement activities. The only situation contemplated under the law, wherein a different set of procurement rules may be applied, is that provided in Section 4 thereof, to wit:

x x x x

Thus, for foreign funded procurement activities, the guidelines of the concerned International Financing Institution (“IFI”) shall govern foreign assisted projects considering that loan agreements such as those entered into with IFIs fall within the purview of the phrase “international agreements or commitments” under Section 4 of R.A. 9184.

Whether or not World Bank Guidelines can be validly used to support an award using local funds.
On account of the cancellation of the funding by the World Bank for the supply and delivery of RTUs for Mindanao, it follows that said project is no longer considered as foreign funded. As such, it is characterized to be beyond the purview of Section 4 of R.A. 9184, which grants exemption from the coverage of the law. x x x x

Considering that it is now the intention of TransCo to fund the project from local sources, the procurement of RTUs for Mindanao should be undertaken under R.A. 9184 and its IRR-A, commencing from pre-procurement until contract implementation and termination. For this reason, Siemens, A.G., the German firm, which was post-qualified for the supply and delivery of RTUs for Mindanao under the World Bank Guidelines could no longer be the recipient of the award of the project, since the entire project will have to be re-bid under R.A. 9184 and its IRR-A. Additionally, since Section 23.11.1 of the IRR-A of R.A. 9184 prescribes Filipino equity requirement as one of the eligibility criteria for entities that wish to participate in the procurement of goods by the government, Siemens, A.G. may not be able to conform with such nationality requirement.