Annex “A”
Unit 2506 Raffles Corporate Center,
F. Ortigas Jr. Road, Ortigas Center,
Pasig City, Philippines 1605
CIRCULAR 08-2017
31 July 2017
TO : Heads of Departments, Bureaus, Offices and Agencies of the National
Government including State Universities and Colleges, Government
Owned and/or Controlled Corporations, Government Financial
Institutions, and Local Government Units
SUBJECT : Government Employees’ Cooperatives Participation in Government
Procurement
1.0 Purpose
This Circular is being issued to clarify the government employees’ cooperatives
participation in government procurement.
2.0 Coverage
All Departments, Bureaus, Offices and Agencies of the National Government,
including State Universities and Colleges, Government-Owned and/or Controlled
Corporations, Government Financial Institutions, and Local Government Units.
3.0 Cooperatives Participation in Government Procurement
3.1 Republic Act (RA) No. 9184 is governed by the principle of competitiveness,
which means extending equal opportunity to enable private contracting
parties who are eligible and qualified to participate in public bidding.
3.2 Under Sections 23.4.1.1(d), 23.4.2.1(d) and 24.3.1(d) of the 2016 Revised
Implementing Rules and Regulations (IRR) of RA 9184, cooperatives duly
organized under the laws of the Philippines may participate in the
procurement of goods, infrastructure projects and consulting services,
respectively.
3.3 GPPB Circular 02-2010, entitled “Guidelines on Comparison of Bids
Submitted by Cooperatives”, clarifies the procedure for comparison of bids
submitted by cooperatives in line with the principle that all bids shall be
evaluated on equal footing to ensure fair and competitive bid comparison.
GPPB Resolution No. 31-2017, dated 31 July 2017 page 4 of 6
3.4 Thus, Government employees’ cooperatives may participate in the
procurement opportunities of the government provided that they meet all the
requirements prescribed under the 2016 Revised IRR of RA 9184, and they
are evaluated on equal footing with other bidders, subject to existing laws,
rules and regulations;
4.0 Cooperatives’ Exemption from Pre-Qualification
4.1 Pursuant to Article 62, par. 10 of RA 9520 or the “Philippine Cooperative
Code of 2008”, cooperatives transacting business with the Government of the
Philippines or any of its political subdivisions or any of its agencies or
instrumentalities, including government-owned and controlled corporations,
shall be exempt from pre-qualification bidding requirements notwithstanding
the provisions of RA 9184.
4.2 However, RA 9184 already abolished the pre-qualification process, which
was required under Presidential Decree No. 1594 for infrastructure projects
and Executive Order No. 302 for goods, and was replaced by simple
eligibility checking.
4.3 The legislative intent of RA 9184 is to subject bidders, such as cooperatives,
to simple eligibility check, which utilizes an objective and non-discretionary
pass or fail criterion in the examination of eligibility documents submitted by
the bidder.
4.4 Since the exemption granted to cooperatives was only limited to pre-
qualification, there is no exemption from which cooperatives can rely on.
5.0 Limitation on Participation in Government Procurement
5.1 Under Section 47 of RA 9184 and its IRR, bidders are automatically
disqualified from participating in the procurement activities of a Procuring
Entity when such bidder is related by consanguinity or affinity within the third
civil degree to the Head of the Procuring Entity (HOPE), members of the
BAC, the Technical Working Group (TWG), and the BAC Secretariat, the
head of the Project Management Office (PMO), or the end-user unit, and the
project consultants, if any. If the bidder is a cooperative, the provision applies
to all its officers, directors, and controlling shareholders or members.
5.2 Section 47.2 of the 2016 Revised IRR of RA 9184 and the relevant provision
of the Philippine Bidding Documents (PBDs) mandate that bidders found to
have conflicting interests with each other shall also be disqualified to
participate in the procurement. A general conflict of interests arises when a
bidder has a relationship, directly or through third parties, that puts them in a
position to have access to information about or influence on the bid of another
bidder or influence the decisions of the Procuring Entity regarding this bidding
process.
GPPB Resolution No. 31-2017, dated 31 July 2017 page 5 of 6
5.3 Under Sec. 3(i) of RA 6713 or the ”Code of Conduct and Ethical Standards for
Public Officials and Employees”, a conflict of interest occurs when the official
or employee is a member of the Board of Directors and the interest of such
corporation or business, or the official or employees’ rights or duties therein,
are opposed to or affected by the faithful performance of official duty. In the
event that a conflict of interest arises, the official or employee involved shall
resign from his position and/or divest himself of his shareholdings or interest
within the prescribed period, reckoned from the date when the conflict of
interest had arisen. In any case, it shall be incumbent for any public official or
employee to avoid conflict of interest at all times.
5.4 Government employees’ cooperatives participating in the procurement within
their own agencies poses undue advantage in terms of access to information,
which are generally not available to other bidders, and it sows suspicion of
partiality or familiarity among market operators participating in the
procurement process. The determination of the existence of a conflict of
interest is essentially and primarily lodged with the BAC of the Procuring
Entity.
5.5 Accordingly, government employees’ cooperatives participation in
government procurement, especially within their own respective agencies, is
restricted by reason of presence of conflict of interest, which shall be
determined by the BAC of the Procuring Entity taking into consideration the
surrounding circumstances and applying the relevant provisions of the 2016
Revised IRR of RA 9184, the PBDs, RA 6713 and other applicable rules.
6.0 This Circular shall take effect fifteen (15) days following the publication in Official
Gazette or a newspaper of general nationwide circulation.
7.0 For guidance and compliance.
(SGD)
BENJAMIN E. DIOKNO
Chairperson
GPPB Resolution No. 31-2017, dated 31 July 2017 page 6 of 6
