PM 001-2011

Requesting Entity: Department of Budget and Management - Regional Office I

Issues Concern: Head of Procuring Entity in Local Governments



1. Head of Procuring Entity in Local Governments

[The GPPB] is of the considered opinion that the procurement activities of the Sanggunian should not be isolated from the procurement activities of the local government as a whole. It believes that the Sanggunian should be considered as an end-user, similar to another bureaus or offices in the local government, and not as a separate procuring entity. Thus, the procurement activities of the Sanggunian remains part of the local government, where the LCE continues to be regarded as the HOPE.

This is without prejudice, however, to the oversight function of the Sanggunian over the LCE. In resolving this issue, the GPPB was guided by the Supreme Court decision in Quisumbing vs. Garcia,2 which it believes, delves more deeply into the contract approval function of the Sanggunian. In this case, the Supreme Court ruled that the Sanggunian is the "appropriate authority" which approves the contract before the HOPE is allowed to issue the notice to proceed under Section 37 of the Implementing Rules and Regulations (IRR) of Republic Act (RA) 9184. Accordingly, the Supreme Court considers the foregoing section, on the power of the Sanggunian to approve contracts, to blend seamlessly with Section 22(a) of RA 7160, on the power of the LCE to award contracts.

Based on the foregoing pronouncements of the Supreme Court, the GPPB believes that there are separate and distinct levels of contract approval in local procurement transactions. The role of the LCE in approving contract awards and notices to proceed partakes of an executive function. On the other hand, the contract approval by the Sanggunian partakes of an oversight function over the LCE and cannot be construed as an exercise of the authority as HOPE under Section 37 of the IRR of RA 9184. One should not be confused with the other.

2. Creation of a Separate BAC for Sanggunian

[If] the LCE deems necessary, in view of the number and complexity of items to be procured, he/she may create a separate BAC for the Sanggunian procurements, which shall be composed of representatives from the regular offices under the Office of the LCE and a representative from the Sanggunian, as end user unit. It should be emphasized, however, that such separate BAC does not in any way affect the fact that the HOPE in a local government is the LCE.