Requesting Entity: Davao City Water District
Issues Concern: Procurement of Domestic and Foreign Goods; Reference to Brand Name
(1) Whether procuring entities are allowed to limit the procurement of items only to those manufactured by certain countries but with no reference to a specific brand;
Under Section 43.1.1 of the Implementing Rules and Regulations (IRR) of Republic Act (RA) 9184, consistent with the obligations of the Philippines under international treaties or agreement, goods may be obtained from domestic or foreign sources and the procurement shall be open to all eligible suppliers, manufacturers, and distributors. As such, although procuring entities are given leeway in formulating the specifications in the terms of reference, they cannot limit the origin of goods to their preferred countries of origin to the exclusion of other countries.
(2) Meaning/Implication of the phrase "unless specified in the BDS" stated under Clause 7, Section II of the Philippine Bidding Documents (PBDs) in light of the restriction as to origin of goods.
The phrase "unless specified in the BDS" seeks to allow adoption of conditions on origin of goods depending on the institution funding the procurement activity in view of the fact that the PBDs for Goods is harmonized with Development Partners which have differing rules on origin of goods. Our policy is to allow goods to be obtained from domestic or foreign sources. In this regard, the BDS provision for Clause 7, Instructions to Bidders of the PBDs for Goods state "no further instructions."
In this light, the rule on origin of goods provided in said Clause 7 may be changed depending on the applicable rule of the institution funding the procurement activity. In cases of projects governed by RA 9184 and its IRR, the rule provided in Section 43.1.1 thereof applies.
(3) Whether Section 18 of the revised Implementing Rules and Regulations (IRR) of Republic Act (RA) 9184 prohibiting reference to brand names applies as well as to specifications based on country of origin.
Section 18 of the IRR is limited to the prohibition on specifying the brand name of the items to be procured and does not apply to prohibition on restriction of sources by country of origin.
Although said section mandates specifications to be based on performance requirements, it does not provide basis for restricting country of origin. As discussed above, the proven quality, durability, and workmanship of the equipment to be procured may be tested, not on the basis of its country of origin, but on the basis of recognized industry standards.