2012-10-08

NPM 122-2012

Requesting Entity: Development Bank of the Philippines (DBP)

Issues Concern: Negotiated Procurement (Agency-to-Agency Agreements)

 

Details

Whether government agencies should first secure banking services from government financial institutions (GFIs) before deciding to procure these services from the private sector through competitive bidding.

[T]he option to transact with another government agency through the Agency-to-Agency modality is an exception to the general rule and is subject to several conditions precedent prior to its implementation. Accordingly, it is not accurate to state that government agencies should first secure banking services from GFIs before deciding to procure these services from the private sector through competitive bidding.

Whether Agency-to-Agency agreement is a valid alternative to public bidding, and therefore, cannot be a result of competitive bidding exercised between a GFI and a private bank?

Participation in public bidding requires GFIs to compete with private banks as the former are not given preference over the latter. Further, in case the GFI wins, the resulting contract with the procuring agency will not be in the form of a Memorandum of Agreement as contemplated under Negotiated Procurement (Agency-to-Agency Agreements), but will be in the nature of a contract executed between the government agency and the GFI, as a private bidder.

Negotiated Procurement (Agency-to-Agency Agreements) contemplates negotiation with another government agency but this option is only available after conducting CBA and satisfying the conditions laid down in the corresponding Guidelines.