NCDDP Revised CBPM Volume One Ver Oct25_ 2014

7/23/2019 NCDDP Revised CBPM Volume One Ver Oct25_ 2014

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NATIONAL

COMMUNITY

DRIVENDEVELOPMENT

PROGRAM

NCDDP


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Department of Social Welfare and DevelopmentKALAHI-CIDSS

NATIONAL COMMUNITY DRIVEN DEVELOPMENT PROJECT(NCDDP)

COMMUNITY BASEDPROCUREMENT

MANUALVOLUME ONE

(October 2014)


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PREFACE


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TABLE OF CONTENTS

Preface ............................................................................................................................ iAcronyms and Abbreviations ....................................................................................... iv

CHAPTER ONE: GENERAL PROVISIONS FOR COMMUNITY BASED PROCUREMENT 11.1. Purpose ..................................................................................................................... 21.2. Scope ........................................................................................................................ 21.3. Coverage .................................................................................................................. 31.4. Application ................................................................................................................. 31.5. Principles in Community Driven Procurement ........................................................... 3

CHAPTER TWO: PROCUREMENT ORGANIZATION AND CAPACITY BUILDING ...... 52.1. Organizational Structure at the Community Level ..................................................... 62.2. Barangay Sub-Project Management Committee ..................................................... 62.3. Bids and Awards Committee .................................................................................... 62.4. Procurement Team ................................................................................................... 7

2.5. Technical Working Group .......................................................................................... 72.6. Observers ................................................................................................................. 72.7. Functions and Responsibilities ................................................................................. 82.8. Other Procurement Stakeholders .............................................................................. 102.9. Capacity Building for Community Based Procurement Groups ................................. 11

CHAPTER THREE: PROCUREMENT PLANNING FOR COMMUNITY BASEDPROCUREMENTS ........................................................................................................... 133.1. Community Empowerment Activity Cycle (CEAC) ..................................................... 143.2. Procurement Planning ............................................................................................. 143.3. Preparation of the Program of Works ....................................................................... 153.4. Preparation of the Initial Community Procurement Plan ............................................ 173.5. Finalization of the Community Procurement Plan ..................................................... 22

CHAPTER FOUR: COMMUNITY BASED PROCUREMENT METHODS AND SUB-PROJECTS ..................................................................................................................... 234.1. Community Participation in Procurement ................................................................. 244.2. Community Based Procurement Methods ................................................................ 244.3. Thresholds for the Use of Community-Based Procurement Methods and

Prior Review Thresholds .......................................................................................... 254.4. Possible Types of Community Projects Requiring Procurement ............................... 26

CHAPTER FIVE: COMMUNITY BASED PROCUREMENT PROCEDURES .................... . 30

5.1. Community Shopping for Goods and Works ............................................................ 315.2. Community Direct Contracting for Goods and Works ............................................... 395.3. Community Repeat Order for Goods ........................................................................ 465.4. Small Value Procurement for Goods and Works ...................................................... 485.5. Pakyaw Contracts .................................................................................................... 515.6. Community Bidding .................................................................................................. 545.7. Consultant Qualification Selection/Single Source Selection and

Individual Consultant Selection for Consulting Services ........................................... 76

CHAPTER SIX: CONTRACT IMPLEMENTATION FOR COMMUNITY BASED GOODSAND SERVICES ............................................................................................................... 97

6.1. Warranty .................................................................................................................. 986.2. Amendment to Order ............................................................................................... 99


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6.3. Suspension of Delivery ............................................................................................ 1016.4. Delays in Delivery and Liquidated Damages ............................................................ 1026.5. Incidental Services ................................................................................................... 1036.6. Spare Parts and Maintenance .................................................................................. 1036.7. Prices ....................................................................................................................... 1046.8. Payments ................................................................................................................ 1046.9. Subcontracts and Assignments ............................................................................... 1046.10. Standards ............................................................................................................... 1056.11. Inspection and Tests ................................................................................................ 1056.12. Force Majeure .......................................................................................................... 1056.13. Contract Termination ............................................................................................... 1066.14. Blacklisting ............................................................................................................... 108

CHAPTER SEVEN: CONTRACT IMPLEMENTATION FOR COMMUNITY BASEDWORKS ... 1097.1.Subcontracting ............................................................................................................ 1107.2. Contractors Program of Works ................................................................................ 111

7.3. Inspection and Tests ................................................................................................ 1117.4.Dayworks .................................................................................................................... 1127.5. Measurement of Works .............................................................................................. 1127.6. Contractors Obligations and Responsibilities.......................................................... 1137.7.Contract Price and Payment ....................................................................................... 1137.8. Variation Orders ....................................................................................................... 1157.9. Suspension of Work ................................................................................................... 1177.10. Contract Time Extension .......................................................................................... 1187.11. Delays in Work Completion and Liquidated Damages .............................................. 1207.12. Contract Termination ............................................................................................... 1207.13. Contract Completion ................................................................................................ 1227.14. Warranty and Defects Liability Period ...................................................................... 123

7.15. Settlement of Disputes ............................................................................................. 124

CHAPTER EIGHT: COMMUNITY BASED PROCUREMENT MONITORING ................... 1258.1. Importance of Community Procurement Monitoring .................................................. 1268.2. Community Procurement Compliance Monitoring ..................................................... 1268.3. Project Billboard ........................................................................................................ 1278.4. Community Procurement Performance Monitoring .................................................... 1288.5. Integrated Procurement Compliance and Performance Monitoring Report ................ 1298.6. Procurement Post Review Assessment .................................................................... 129

GLOSSARY OF TERMS .................................................................................................. 130PERIOD OF ACTION ON PROCUREMENT ACTIVITIES ................................................ 139


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ACRONYMS, ABBREVIATIONS

ACT Area Coordinating TeamBA Barangay AssemblyBAC Bids and Awards Committee

BDC Barangay Development CouncilC/BSPMC Community/Barangay Sub-Project Management CommitteeCBPM Community Based Procurement ManualCD Calendar DaysCDD Community Driven DevelopmentCEAC Community Empowerment Activity CycleCENRO Community Environment and Natural Resource Management OfficerCFA Community Force AccountCFMS Community Financial Management SystemCIO Community Infrastructure OfficerCOA Commission on AuditCPO Community Procurement Officer

CPP Community Procurement PlanCSO Civil Society OrganizationDSWD Department of Social Welfare and DevelopmentDA Department of AgricultureDENR Department of Environment and Natural ResourcesDEPED Department of EducationDOH Department of HealthDPWH Department of Public Works and HighwaysDTI Department of Trade and IndustryDV Disbursement VouchersECPP Emergency Community Procurement PlanGOP Government of the PhilippinesGPRA Government Procurement Reform ActIB Invitation to BidIPCPMR Integrated Procurement Compliance and Performance Monitoring

ReportIRR Implementing Rules and RegulationsITB Instruction to BiddersKALAHI- CIDSS Kapit-bisig Laban sa Kahirapan-Comprehensive and Integrated Delivery

of Social ServicesKC-NCDDP KALAHI-CIDDS National Community Driven Development ProjectLCB Lowest Calculated BidLCC Local Counterpart Contribution

LCCQ Lowest Calculated and Complying QuotationLCRB Lowest Calculated and Responsive BidLCRQ Lowest Calculated and Responsive QuotationLGC Local Government CodeLGU Local Government UnitMAO Municipal Agricultural OfficerME Municipal EngineerMENRO Municipal Environmental and Natural Resource OfficeMFA Municipal Financial AnalystMIAC Municipal Inter Agency CommitteeMIBF Municipal Inter-Barangay ForumMIT Monitoring and Inspection Team

NDRRMC National Disaster Rick Reduction Management CouncilNFCC Net Financial Contracting Capacity


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NOA Notice of AwardNOL No Objection LetterNPMO National Project Management OfficeNPMT National Project Management TeamNRM Natural Resources ManagementNRQ Notice of Request for QuotationNTP Notice to ProceedOR Official ReceiptPCAB Philippine Contractors Accreditation BoardPCMR Procurement Compliance Monitoring ReportPDNA Post-Disaster Needs AssessmentPhil-GEPS Philippine Government Electronic Procurement SystemPIAC Provincial Inter Agency CommitteePIT Project Implementation TeamPNS Philippine National StandardsPO Purchase OrderPOW Program of Works

PPMR Procurement Performance Monitoring ReportPPT Project Preparation TeamPS Project SupervisorPT Procurement TeamRCIS Regional Community Infrastructure SpecialistRFQ Request for QuotationROW Right of WayRPM Regional Program ManagerRPMO Regional Program Management OfficeRPMT Regional Program Management TeamRPO Regional Procurement OfficerRTA Resolution to Award

SEC Securities and Exchange CommissionSOW Scope of WorkSPA Special Power of AttorneyTA Technical AssistanceTAF Technical Assistance FundTF Technical FacilitatorTWG Technical Working GroupWB World Bank


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CHAPTER ONE: GENERAL PROVISIONS

FOR COMMUNITY BASED PROCUREMENT

1.1. Purpose1.2. Scope1.3. Coverage1.4. Application1.5. Principles in Community Driven

Procurement


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1.1. Purpose

This Community Based Procurement Manual (CBPM) for the KALAHI-CIDSS1 NationalCommunity Driven Development Project (KC-NCDDP) is developed for the purpose of settingguidelines for community participation in procurement based on the experience gained from thefirst KALAHI-CIDDS project. It aims to provide community based officials and volunteersimplementing planning and investment grants under the project with a clear and concise set ofprocedures to follow in its procurement activities. These procedures incorporate the relevantprovisions of the Government Procurement Reform Act (RA 9184) and its implementing rulesand regulations, the Local Government Code (LGC), and the procurement guidelines ofinternational financing institutions involved in the project, among them, the Asian DevelopmentBank (ADB) and the World Bank (WB). It also discusses important issues that may confrontcommunity based officials in the different stages of procurement.

The Government Procurement Reform Act (GPRA) states that for foreign funded procurements,its implementing rules and regulations (IRR) shall apply, unless a treaty or international orexecutive agreement expressly provides for the use of the procurement procedures and

guidelines of the foreign governments or international financing institutions. However, in case ofconflict between the terms of the treaty or international or executive agreement and this IRR,the former shall prevail. (Section 4.2. IRR-A)

Community driven development (CDD) is an approach that gives control over planning decisionsand investment resources for development projects to community groups based on theprinciples of local empowerment, participatory governance, demand-responsiveness,administrative autonomy, greater downward accountability and enhanced local capacity.Procurement is one of the most critical activities in community project planning andimplementation as it empowers communities to establish needs, identify activities to addresssuch needs, and to take control of decision making in the judicious use and disbursement oflimited resources. It can also help stir up the local economy through the purchase of goods and

services from local entrepreneurs and the employment of local labor. It is, therefore, importantto provide a standardized set of procurement procedures in accordance with the loanagreements to prevent confusion and ensure transparency among community officials and otherstakeholders. Community based procurement provides equal opportunity for men and womento take part in all procurement activities.

The CBPM is a harmonized version of the procurement and contract implementation proceduresunder the GPRA as well as the ADB and WB procedures on community participation inprocurement based on the experience gained from the first KC project. This edition clarifiesmany gray areas that were not discussed in the previous manual and includes strengthenedprovisions on contract implementation and procurement monitoring.

1.2. Scope

The CBPM shall apply to all community based procurement activities under the KC-NCDDPbased on the approved Community Procurement Plan (CPP) regardless of source of funds. Itshall not cover the acquisition of right-of-way site or location for infrastructure projects, leasingof government-owned facilities and those projects included in the negative list discussed inSection 4.4 of this manual.

1KALAHI-CIDSS stands for Kapit-Bisig Laban sa Kahirapan Comprehensive and Integrated Delivery of Social

Services.


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1.3. Coverage

The procedures provided in this CBPM shall cover all procurements of goods and services,infrastructure or works projects and consulting services under the Community EmpowermentActivity Cycle (CEAC) stages of social preparation; project identification, preparation, selectionand planning; and implementation of sub-projects.

1.4. Application

The procurement procedures provided in this manual shall apply to the following:

1. Goods and servicesThis refers to all items, supplies, materials, and general supportservices which may be needed in undertaking the project related activities or in theoperations of the Community/Barangay Sub-Project Management Committee(C/BSPMC). This includes, among others, equipment (transport, production, postproduction, processing and storage), furniture, office supplies, construction materials,agricultural or aquacultural inputs, seedlings or trees, hand tools. It also refers to non-

personal or contractual services such as fabrication, lease, repair and maintenance ofequipment, trucking, hauling, security, rental of venues and facilities, hiring of short termresource persons or facilitators, catering services for workshops and trainings,attendance to external trainings and seminars and other short term services notconsidered as consulting services.

2. Works or Infrastructure ProjectsThis refers to undertakings to construct, improve,upgrade, rehabilitate, demolish, repair, restore, or maintain small scale infrastructure andall types of physical works such as construction, improvement, upgrading of barangayroads and bridges, buildings, classrooms, barangay health stations, day care centers,communal irrigation, flood control and drainage, water supply, sanitation, sewerage,solid waste, water shed protection and other natural resource management systems,

shore and slope protection, energy/power and electrification and other common servicefacilities, as well as physical labor to complete such projects.

3. Consulting ServicesThis refers to services provided by external technical serviceproviders2or experts that are beyond the capacity of the C/BSPMC or Local GovernmentUnit (LGU) staff to undertake such as but not limited to feasibility studies; engineeringand architectural design; construction supervision; capacity building; and, specialstudies, among others.

1.5. Principles in Community Driven Procurement

Community driven procurement under the KC-NCDDP shall be governed by the followingprinciples:

1. Fairness (Fair dealing)- it should provide fair and equal opportunities to all competingbidders ensuring fair grounds for competition where no single bidder influences theoutcome of the process. Competition should urge bidders to offer more beneficial termsto the community. Service providers should be treated fairly and without unfairdiscrimination, including protection of commercial confidentiality where required.

2. Effectiveness the processes must be simple and streamlined to encouragecommunities to plan and implement sub-projects that will redound to their benefit rather

2Service providers referred to in these guidelines pertain to suppliers, contractors and consultants.


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than creating layers of bureaucratic red tape that will delay service delivery. Procurementshould also be carried out in the most cost effective manner as possible.

3. Economyit should ensure that communities obtain the optimal benefit from projectsthrough processes that promote value for money approaches. Thus, award of contractsshall be based on the Lowest Calculated and Responsive Bid/Quotation for communitybidding and bids or quotations that are most advantageous to the community. Thecommunitys ownership of the project encourages its responsible use, extends theproject life, thereby maximizing its beneficial value to the community.

4. Transparency procurement policies and procedures should be clear and should beopen in its implementation. The community should be made aware of importantdecisions ensuring that the rationale behind such decisions and actions are understood.Financial management of project funds is open and shared with the entire community.Toward this end, posting of contract award and implementation information includingpayments to suppliers, contractors and local workers must be well disseminated. Bidopportunities shall be published in regional or provincial newspapers (for Community

Bidding) and in conspicuous places within the Region, Province, Municipality orBarangay, in television or radio stations or any other possible means, as applicable, forall procurements. Other procurement related information shall be reported through theconduct of barangay assemblies or the posting of such reports in the KC-NCDDPdesignated billboards or bulletin boards within the barangay. The BAC shall also inviteobservers to observe any or all stages of the procurement process. Finally, eachprocurement transaction must be properly documented and such records must bemaintained and made available at the C/BSPMC office/s.

5. Accountabilityall roles and responsibilities as well as liabilities of community officialsdirectly or indirectly involved in the procurement and implementation of contracts andprivate parties that deal with the community shall be made clear and legally identifiable.

When warranted by circumstances, they shall be investigated and held liable for anyunfavorable actions and decisions. Participating communities which violate theprescribed procurement policies, methods and procedures are liable for sanctions andwill be penalized. Procurement that does not follow guidelines will be disallowed andgrant funds used will be returned to the KC-NCDDP. Depending on the degree ofviolation, the sanctions can range from disallowance, suspension of further fundreleases, and withdrawal of the community project. If there are anomalous transactions,persons responsible will be charged with civil and/or criminal cases. Blacklisted andsuspended suppliers and contractors by the KC-NCDDP and the Government of thePhilippines (GOP) shall not be allowed to participate in project related procurement.


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CHAPTER TWO: PROCUREMENT

ORGANIZATION AND CAPACITYBUILDING

2.1. Organizational Structure at theCommunity Level

2.2. Barangay Sub-Project Management

Committee (C/BSPMC)2.3. Bids and Awards Committee (BAC)2.4. Procurement Team2.5. Technical Working Group2.6. Observers

2.7. Functions and Responsibilities2.8. Other Procurement Stakeholders

2.9. Capacity Building for Community BasedProcurement Groups


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2.1. Organizational Structure at the Community Level

Figure 1: Barangay Sub-Project Organization Structure

At the community level, the KC-NCDDP works with the Barangay Assembly (BA) in the planningand implementation of community based projects. For procurement related activities, the

following are the important units involved:

2.2. Community/Barangay Sub-Project Management Committee (C/BSPMC)

The Community/Barangay Sub-Project Management Committee (C/BSPMC) provides overallmanagement of the community based sub-projects and oversees sub-project implementation,monitoring, completion. The C/BSPMC serves as the community procuring entity (CPE), hasthe authority to make decisions related to procurement and ensures the quality of the goods andservices based on the technical specifications. It is in charge of the Procurement Team (PT).They make sure that the procurement processes used for sub-projects are in accordance withthis Community Based Procurement Manual (CBPM). They also verify that the award is madeusing the criterion of Lowest Calculated and Responsive Bid/Quotation and makes sure that

transparency and fair competition is observed among qualified contractors and suppliers.

2.3. Bids and Awards Committee (BAC)

Each C/BSPMC establishes a single Bids and Awards Committee (BAC) for its procurement.The C/BSPMC may use the existing BAC (from previous KALAHI CIDSS projects) or create anew BAC with the following composition:

1. Barangay Treasurer2. Chairperson of the Barangay Sub-Project Preparation Committee3. One member to be elected by C/BSPMC Executive Committee3.

3The BSPMC executive committee is composed of the BSPMC chairperson and heads of teams under the BSPMCas shown in Figure 1.

Barangay Assembly

Barangay Development Council

BarangayRepresentation

Team (BRT)

Community/BarangaySub-Project Management

Committee (C/BSPMC)

Audit andInventory Team

(AIT)

Secretary

ProjectPreparation Team

(PPT)

Barangay Treasurer

Bookkeeper

Project Implementation

Team (PIT)

Operation and Maintenance

Team(OMT)

Bids and Awards

Committee (BAC)

TechnicalWorking Group

Observers

Procurement Team

(PT)Monitoring and

Inspection Team (MIT)


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The BAC members shall elect the BAC chairperson. The following officials are disqualified to sitas member of the BAC: (a) elected barangay officials who are members of the BDC as the LocalGovernment Code (RA 7160) specifies that their principal function involve the monitoring andevaluation of local programs and projects; and (b) the C/BSPMC Chairperson, as approvingauthority for all transactions. The Barangay Treasurer is disqualified to act as BAC Chairpersonsince he/she will certify to the fairness and soundness of the transactions.

The simple majority (two members) of the BAC members constitutes a quorum in all meetingsand deliberations. The Chairperson presides over the meetings. In his absence, any one of thetwo members present may preside. All BAC decisions are embodied in resolutions or minutesof meetings duly signed by at least a majority of the members.

2.4. Procurement Team

The Procurement Team (PT) is responsible for preparing the procurement requirements for thesub-project and for providing support to the Bids and Awards Committee (BAC) in ensuring that

the appropriate procurement procedures are applied in accordance with this manual. It is incharge of activities required to facilitate acquisition of all supplies, materials, equipment, laborfrom suppliers and contractors for the sub-projects.

The Procurement Team shall be composed of at least three members who are elected by theBarangay Assembly (BA) during the social preparation stage of the project cycle. In order toqualify for selection, a PT member should have completed a minimum of elementary or gradeschool studies. They should be able to read, write, perform the procurement functions and arecommitted to performing the assigned tasks. Members who automatically meet the minimumqualifications must also be able to comply with all the documentary and other requirementsspecified in this manual and must be a person known for his/her integrity within the community.

2.5. Technical Working Group

The BAC shall form a Technical Working Group (TWG) with the assistance of the AreaCoordinating Team (ACT) to provide technical, financial or legal support in the procurementprocess. The TWG shall be created based on the required expertise and nature of theprocurement. The TWG shall assist the BAC in bid evaluation and shall be composed of thefollowing:

1. Area Coordinator or Technical Facilitator2. Municipal Engineer/Municipal Agricultural Officer/CENRO/MENRO (depending on the

type of contract)3. Supervising Community Project Engineer/Leadman/Foreman (if municipal engineer is

not available)4. Municipal Financial Analyst5. Volunteer professionals in the community with expertise related to the sub-project (if

any)

2.6. Observers

To enhance the transparency of the procurement process, the BAC shall invite any of thefollowing to act as observers: the LGU Commission on Audit (COA) Auditor, Barangay Captain,local government officials, Area Coordinator, Technical Facilitator, Regional InfrastructureEngineer, Barangay Audit and Inventory Committee Head, or where available representativesfrom Civil Society Organizations (CSOs). They shall sit as non-voting members and shallobserve any or all stages of the procurement process. Other interested parties are alsoencouraged to observe as long as they have knowledge, experience or expertise in procurement


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or in the subject matter of the contract to be bid and have no direct or indirect financial interestin the contract to be bid. The mere non-attendance of observers does not invalidate theproceedings.

The community through the Barangay Assembly or the municipality through the mayor may alsodesignate community observers composed of volunteers who are not involved in any of theNCDDP related activities and whose function is to observe whether the procedures followed bythe C/BSPMC, BAC, PT and TWG are in accordance with those discussed in this manual. Thecommunity observers shall be trained alongside the C/BSPMC, BAC and PT on procurementprocedures to carry out their responsibilities. The Special Participatory Audit Team (SPAT) isan example of an innovative idea to mobilize community volunteers as observers by themunicipality of Ajuy, Iloilo under the KC project. Communities are encouraged to adapt similarinitiatives to mobilize community volunteers in observing procurement and other relatedactivities to ensure transparency in project implementation. Where such community observershave been organized, they may provide their services or share their experience with othercommunities within the vicinity or municipality.

2.7. Functions and Responsibilities

2.7.1. C/BSPMC

The Community/Barangay Sub-Project Management Committee (C/BSPMC) has thefollowing functions and responsibilities:

i. Acts for and in behalf of the barangay as Procuring Entity;ii. Ensures that the procurement procedures and requirements are in accordance

with the CBPM;iii. Acts on the recommendations of the BAC and approves or disapproves the award

of contracts and purchase orders;

iv. Reviews and signs Resolution to Award (RTA)v. Issues Notice of Award (NOA) and Notice to Proceed (NTP)vi. For contracts requiring prior review, requests for clearance from the ACT to sign

contracts and coordinates any assistance from the TWG relevant to theprocurement on hand;

vii. Imposes the necessary administrative sanctions on errant members of the PT andBAC and bidders in accordance with appropriate rules and regulations.

2.7.2. Bids and Awards Committee

The Bids and Awards Committee (BAC) has the following functions and responsibilities:

i. Advertises and /or posts the invitation to bid;ii. Conducts pre-procurement and pre-bid conferences;iii. Determines eligibility of prospective bidders;iv. Receives bids;v. Conducts the evaluation of bids with assistance of the TWG;vi. Undertakes the post-qualification proceedings;vii. Recommends the award of contract to C/BSPMC Chairperson; andviii. Performs such other related functions as may be necessary, including the creation

of Technical Working Group from a pool of technical, financial and/or legal expertsto assist in the procurement process

2.7.3. Procurement Team

The Procurement Team (PT) has the following functions and responsibilities:


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i. Acts as Secretariat and provides administrative support to the BAC (organize andattend meetings, assist in the drafting of resolutions, minutes);

ii. Prepares and takes custody of procurement documents;iii. Prepares and delivers invitation to bid and requests for quotationiv. Prepares quotation forms and acts as canvassers by delivering quotation forms to

suppliers;v. Prepares and finalizes the Community Procurement Plan (CPP) with the

assistance of BAC;vi. Assists in the presentation of CPP during Barangay Assembly;vii. Receives and records bids/quotations, quotations;viii. Assists in updating the status of CPP;ix. Prepares and delivers purchase orders and contract documents;x. Performs such other related functions as may be necessary to assist in the

procurement process.

2.7.4. Technical Working Group

The Technical Working Group has the following functions and responsibilities:

i. Provides assistance to the BAC in terms of the technical, legal and other aspectsof the procurement at hand;

ii. Assists the BAC in the conduct of eligibility screening, evaluation of bids, postqualification and preparation of the accompanying reports for the C/BSPMCconsideration and approval;

iii. Assists the BAC and PT in drafting contracts and in preparing the resolutionrecommending award, with regard to the technical aspect, if necessary;

iv. Performs such other functions as may be necessary

2.7.5. Observers

The Observers have the following functions and responsibilities:

i. Observes and assesses the extent of compliance with the substantive andprocedural requirements of this manual;

ii. Where there are findings of substantive or procedural irregularities (red flags) in theprocurement at hand, bring this to the attention of the Technical Facilitator (TF)who shall include the findings in the Procurement Compliance Monitoring Report tobe submitted to the Regional/National Office for appropriate action. The Observermay request copies of any procurement related documents;

iii. Signs as witness in the Records of Bid Opening, Abstract of Bids, Post-

Qualification Report and in the Resolution to Award.

2.7.6. Bidders

An eligible bidder shall be responsible for having:

i. Taken steps to carefully examine all of the bidding documents;ii. Acknowledged all conditions, local or otherwise, affecting the implementation of the

contract;iii. Made an estimate of the facilities available and necessary requirements for the

contract to be bid, if any; andiv. Complied with his responsibilities as stipulated in the instruction to bidders and

in the condition of contracts and relevant project regulations that may affectthe contract in any way.


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2.8. Other Procurement Stakeholders

In addition to the key procurement related personnel discussed above, there are otherstakeholder who are in one way or another involved in the community based procurementprocess. These individuals and their functions and responsibilities include the following:

2.8.1. Community Level

2.8.1.1. C/BSPMC Bookkeeperresponsible for keeping records of procurement andfinancial management transactions and documents for the sub-project from planning toimplementation

2.8.1.2. Monitoring and Inspection Team (MIT)responsible for signing the purchase

order, receiving and storing goods procured for the project, preparing stock cards orrecords and turning over these items to the Project Implementation Team (PIT).

2.8.1.3. C/BSPMC Chairperson as head of the community procuring entity, he isresponsible for approving the Community Procurement Plan (CPP), contracts andpurchase orders, reviewing and signing the Resolution to Award (RTA), Notice of Award(NOA), Notice to Proceed (NTP), request for clearance or No Objection Letters (NOL)from Area Coordinator (AC),Regional Program Management Team (RPMT), NationalProject Management Team (NPMT) and International Development Partners (such asthe WB, ADB, AECID, others) to purchase goods and works in accordance with thespecified prior review thresholds found in Chapter 4.3 prior to signing of purchase ordersand notices, among others.

2.8.1.4. Barangay Treasurer responsible for certifying to availability of funds andpreparation of disbursement vouchers and checks.

2.8.1.5. Community Facilitatorresponsible for providing guidance to the C/BSPMCin the preparation of minutes of meetings ensuring that the contents are in order andfiled accordingly, monitoring red flag abnormalities in the procurement process,conducting contract review ensuring the completeness of documents. The CF may alsoassist the PTs during the first issuance of request for quotation or Instruction to Bidders(ITB) and help organize pakyaw groups.

2.8.2. Municipal and Regional Level

2.8.2.1.Municipal Finance Analyst (MFA) responsible for keeping and maintainingcopies of procurement documents at Area Coordinating Team (ACT) Office, conductingfiduciary review based on the provisions of the Community Financial ManagementSystem and Community Based Procurement Manual.

2.8.2.2. Technical Facilitator (TF) togetherwith the municipal engineer, providestechnical support and training on procurement and project implementation and isresponsible for assisting the community in the preparation of the CPP, attending the pre-bid conference and the bid opening as a member of the TWG, providing technicalsupport during bid evaluation and recommending action to be taken when there arefindings on red flags and abnormalities


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2.8.2.3. Area Coordinator (AC)responsible for issuing clearance for the procurementof goods within the limit of his approving authority and endorsing the request for NOL toRPMO, NPMO, ADB/WB, attending the pre-bid conference and the bid opening asobserver, and providing the appropriate action on findings regarding red flags andabnormalities.

2.8.2.4. Regional Community Infrastructure Specialist (RCIS)Assists the RegionalProcurement Officer (RPO) and Community Procurement Officers (CPO) in providingtechnical assistance to the ACTs/MCTs through but not limited to on-the job-training andcoaching, attending the pre-bid conference and bid opening as observer and providinginputs on the preparation of technical specifications based on the program of works(POW) and plans, consolidating all action taken regarding findings of red flags andabnormalities on procurement, and in ensuring that subproject implementation andprocurement activities are coordinated.

2.8.2.5. Regional Program Manager (RPM)responsible for providing action regardingred flags and abnormalities not resolved by the ACT, issuing clearance for direct

contracting and appropriate actions for requests of No Objection Letters forVariation/Change Orders and procurement actions in accordance with the specified priorreview thresholds found in Chapter 4.3.

2.8.2.6. Regional Procurement Officer (RPO)responsible in overseeing the overallprocurement at the RPMO and ACTs in accordance with the NCDDP procurementguidelines. The RPO provides technical assistance to the CPOs in (i) training ACTs,LGUs, community volunteers on community based procurement processes; (ii) providingTechnical Assistance (TA) to Sub-Regional Program Management Teams (SRPMT),ACTs and LGUs in setting-up systems and processes for community-based procurementmanagement and fiduciary control; (iii) directly exercising Quality Assurance (QA) andQuality Control (QC) responsibilities over community procurement actions and activities;

and (iv) coordinating procurement actions required from the National ProjectManagement Office (NPMO) and providing consolidated procurement reports.

2.8.2.7. Community Procurement Officer (CPO) acts as the focal person forprocurement technical assistance and monitoring at the Sub-Regional ProgramManagement Office SRPMO), responsible for ensuring that the implementation ofcommunity procurement systems in the region is compliant with the CBPM.

2.8.2.8. Community Infrastructure Officer (CIO) - acts as focal person forinfrastructure at the Sub-Regional Program Management Office (SRPMO) office perregion, responsible for reviewing first time works submitted by the municipalities andthose requiring procurement action from the ACTs, developing standards, mechanisms

and tools to improve the project implementing capability of project field engineers andcommunities.

2.9. Capacity Building for Community Based Procurement Groups

Capacity building refers to the development of knowledge, skills and attitudes among communityvolunteers involved in the planning, management and implementation of the community sub-project including those involved in procurement related activities. Upon selection andappointment as representatives of community based procurement groups discussed above, themembers of the C/BSPMC, BAC, and PT undergo capacity building activities to perform theirtasks more effectively. In addition, the C/BSPMC Chairperson, Bookkeeper, Storekeeper, andBarangay Treasurer also attend the procurement training. The general scope of the capacitybuilding activities for community procurement personnel include the following:


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2.9.1. General Orientation on Community Based Procurement

At the social preparation stage, the community is briefed on the KC-NCDDP through anorientation workshop. The C/BSPMC, BAC and PT members are required to undergo anorientation on the community based procurement process particularly on their individualroles, functions, responsibilities and expectations. The orientation shall explain therequirements for various stages of procurement to determine the level of commitment andspecific training needs of each procurement group member.

2.9.2. Skills Training

At the project identification, selection and planning stage, the procurement group membersare exposed to the key processes and tools to identify, select, and design appropriatesolutions to address community problems and are trained on the salient provisions of theCBPM. This is to enable members to plan and package community procurementrequirements based on the identified community proposals for sub-projects proposed forKC-NCDDP funding. At the end of the training, procurement group members are expected

to prepare the Community Procurement Plan (CPP) based on inputs from the feasibilitystudy, project technical design, program of works and estimated budgets for contracts.

2.9.3. Job Coaching and Mentoring

In the course of sub-project implementation and the conduct of actual procurement, thespecific technical assistance requirements of the procurement groups are identified andwhere needed, practical on-the job training, job coaching and mentoring are provided to helpthem carry out their tasks. During this period, procurement team members are advised onhow to resolve issues and challenges faced by the procurement at hand. Job coaching isgenerally provided during the updating and finalization of the CPP, the preparation of biddingdocuments, evaluation of bids, postqualification. The Technical Facilitator (TF) provides

technical assistance to the community volunteers relative to matters relating to procurementand contract management with assistance from the Community Procurement Officer (CPO)and the Regional Community Infrastructure Specialist (RCIS) who also provides coachingand on-the-job training.


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CHAPTER THREE: PROCUREMENTPLANNING FOR COMMUNITY BASED

PROCUREMENTS

3.1. Community Empowerment ActivityCycle (CEAC)

3.2. Procurement Planning3.3. Preparation of the Program of Works3.4. Preparation of the Initial Community

Procurement Plan3.5. Finalization of the Community

Procurement Plan


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3.1. Community Empowerment Activity Cycle (CEAC)

It is important to understand the Community Empowerment Activity Cycle (CEAC) and its rolein the community development process in order to better situate the procurement planningprocess for community based procurements. The CEAC has four major stages: socialpreparation; project identification, selection and planning; project approval and projectimplementation. Figure 2 shows where the procurement related activities occur under thisprocess.

Figure 2. Procurement Related Activities under the CEAC Process

It is at the social preparation stage where the C/BSPMC, PPT and BAC are organized. At theproject identification, selection and planning stage, the procurement related communityvolunteers begin their training on the CBPM and conduct preliminary planning relatedprocurement activities. At the project approval stage, the Barangay Sub-Project PreparationTeam (BSPPT) completes the detailed project proposal and budget, technical specifications,drawings and bill of materials (for infra community projects). After project approval, the cyclemoves on to the implementation of sub-projects where the most important procurement activitiestake place.

3.2. Procurement Planning

Procurement planning is important in community based projects as it enables the C/BSPMC toeffectively manage and track procurement activities to ensure achievement of overall projectgoals and objectives. It involves identifying the sub-project procurement requirements, writingthe technical specifications, determining the approved estimated budget, the schedule ofmilestone activities, and determining the method of procurement to be used.

Transition

SocialPreparation

Stage

Project

Identification ,Selection and

Planning Stage

Project ApprovalStage

Implementationof SP & O&MPlan & M&E

Stage

COMMUNITYEMPOWERMENTACTIVITY CYCLE

Organizationof BSPMC,

PT and BAC

Training ofProcurementVolunteers

Preparationof Initial CPP

Finalization ofCPP,

TechnicalSpecs, TOR,

POW

CPPImplemen

tation

Conduct ofActual

Procurement


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Procurement planning begins during the Project Development Workshop and the training ofcommunity volunteers where the sub-project requirements such as the conduct of feasibilitystudy and the preparation of the program of work (POW) are undertaken. The CommunityProcurement Plan (CPP) is prepared simultaneously and in close coordination with the POW.

Figure 3 provides an overview of the procurement planning process for community based sub-projects.

Figure 3. Community Procurement Planning Process

3.3. Preparation of the Program of Works

The program of work (POW) provides detailed information on how the sub-project is to beimplemented and includes among others the following: detailed estimates, bill of materials,construction schedule, manpower and equipment requirements, construction method, initialinventory of contractors and suppliers, local counterpart contribution plan, other requirementsspecific to the project at hand. It is based on a feasibility study to determine technical viability ofthe project and its conformance to land use and zoning guidelines and environmental and socialsafeguards prescribed by applicable laws. During the preparation of the POW, project

preparation team (PPT) to identify items to be procured, quantities, estimated costs, marketavailability, delivery and implementation schedules which serve as inputs to the CommunityProcurement Plan (CPP). An important consideration in the preparation of the POW is thepreparation of technical and design specifications, scope of work and terms of reference. Otheractivities that are conducted simultaneous with the preparation of the POW are discussed in thenext section on the preparation of the Community Procurement Plan.

3.3.1. Technical Specifications, Scope of Work and Terms of Reference

In the planning process for sub-projects, the initial Technical Specifications (for Procurementof Goods) and Scope of Works (for Infrastructure Projects) are prepared and finalized to

consider inputs from the community and other stakeholders as well as project requirements.

Preparation of TechnicalSpecifications

Terms of ReferenceFinal Program of WorkItems to be ProcuredNumber of Packages

Procurement MethodsEstimated Costs and Schedule of

Funds ReleaseProposed Implementation

Schedule

Preparation ofProgram of

Works

Project Identification,

Selection and Planning

Preparation ofInitial CPP

Finalization of

CPPPro ect A roval

Conduct of Actual

Procurement

Sub-Project Implementation


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For goods, the term technical specifications refer to the physical description of the goodsor services, as well as the requirements of the community in terms of the functional,performance, environmental interface and design standard requirements to be met by thegoods to be manufactured or supplied, or the services to be rendered. The technicalspecifications must include the testing parameters for goods, when such testing is requiredin the contract.

i. Functional description is the description of the functions for which the goods areto be utilized, for example, in the case of water pumps this may include pipe size,materials (stainless steel, galvanized or cast iron, etc.), length, water demandvolume, method of displacement.

ii. Performance description refers to the manner in which goods are required to performthe functions expected of them, for example, in the case of water pumps, this mayinclude horsepower or pressure capacity, flow rate, outlet pressure or inlet suction ofhead (feet or meters).

iii. Environmental interface refers to the environment in which the required functionsare performed at the desired level, for example in the case of water pumps, kindsand types of pump priming (centrifugal, twin screw, progressive cavity, electricsubmersible, buffer tank) .

iv. Design refers to the technical design or drawing of the goods being procured. ADesign standard is particularly useful in cases where the goods procured arespecially manufactured for the community.

In determining the technical specifications of the goods it will procure, the community mustconsider the objectives of the project or the procurement at hand, and identify the standardsthat should be met by the goods in terms of function, performance, environmental interface

and/or design. In-house experts who are part of the TWG may be tapped to provide technicaladvice in the preparation of technical specifications.

As a general rule, Philippine national standards (PNS), as specified by the Bureau of ProductStandards (BPS), shall be used in the preparation of technical specifications. This is toensure that the goods to be procured have passed the quality, safety, reliability, testing andcertification requirements specified for such products. Community planners must thereforeinclude the appropriate PS Mark, where applicable, in the technical specifications of goodsto be procured. The PS Mark reveals a manufacturers compliance to the requirements of aPhilippine National Standard (PNS). The BPS authorizes a manufacturer to affix the PSmark on its product or its products packaging material, to let the buying public know that themarketed product has successfully passed Department of Trade and Industry (DTI)

requirements.

I t is imp ortant to no te that the use of brand n ames is proh ibi ted. This limits competition,fairness and the provision of other alternatives that may be of better quality and price.Specifications for the procurement of goods shall be based on relevant characteristics and/orperformance requirements. Hence, a generic description of the product or service shall beused.

For works, the technical designs and specifications to be used must be in accordance withrelevant national, municipal and local design codes and standards applicable to the project.Construction supervision, quality control, contract management, completion inspection,acceptance, operation and maintenance procedures shall be in accordance with therequirements of the projects.


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Most technical plans and specifications for KC-NCDDP sub-projects were adopted from thestandard plans of partner agencies implementing or mandated to perform suchprograms/services. This includes the Barangay Health Station (BHS) from the Departmentof Health (DOH), school buildings from the Department of Education (DepEd) and structures,sections and profiles of rural roads and bridges from the Department of Public Works andHighways (DPWH). These specification were modified to suit the local conditions andrequirement of the project.

In setting the standards and technical specifications for works, the following should beconsidered:

i. Standards and technical specifications quoted in the bidding documents shouldpromote the broadest possible competition, while assuring the criticalperformance or other requirements for the works under procurement;

ii. As far as possible, the community should specify prevailing local standards forrural infrastructure prescribed by local government units with which the equipment

or materials or workmanship should comply.

The PPT may also refer to the standards developed in the first Kalahi CIDSS project.

For short term services or consulting services, the Terms of Reference for the servicerequired should specify the type of required expertise, qualifications, scope of work,expected output or deliverable and schedule and duration of the engagement.

3.4. Preparation of the Initial Community Procurement Plan

Upon completion of the program of work, community based procurement planning commencesthrough the preparation of the initial Community Procurement Plan (CPP). The initial CPP

summarizes the project requirements based on identified needs and available alternativesolutions for the purpose of procurement. Proper planning ensures that only the appropriategoods and infrastructure projects have been included in the approved CPP. At this stage, theproject preparation team (PPT) is responsible in the preparation of the initial procurement plan.

This is done through the identification of required materials and work items based on the detailedestimates, bill of materials, proposed construction method and work schedule. This information(CBPM Form A-1) will assist in the determination of the appropriate number of packages andprocurement methods to be used for the proposed sub-project. Among the many considerationsin the preparation of the CCP are the following:

3.4.1. Market Survey for Goods, Works and Consulting Services

After the review of the items to be procured, an assessment of the resources within thebarangay or municipality should be conducted to find out which items are available in thelocal market. For goods, the PPT can visit the municipalitys commercial center to check forpossible suppliers and prevailing prices. The survey should also check the availability ofgoods, equipment and construction materials with the appropriate PS mark that meet therequired technical specifications. Please refer to CBPM Form A-3 for goods and servicesand Form A-4 for works.

If there are no available suppliers within the municipality, the PPT may inquire from otherpossible sources in the area near the municipality or the province. They can also refer tothe ACT (Area Coordinating Team) and RPMT (Regional Program Management Team)inventory of resource institutions, technical assistance (TA) providers and suppliers for a


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possible list of suppliers and the prevailing prices. The data can be used in the preparationof the project budget and the selection procurement methods.

For works, the PPT can conduct an inventory of possible contractors and constructionmaterials suppliers as well as skills of construction workers available in the community,municipality or province. The availability and number of skilled and unskilled constructionworkers in the community can help determine the types of work that can be done throughpakyaw contracts.

For consulting services, the Technical Facilitator (TF) shall conduct an inventory of potentialservice providers (individuals or firms) within the municipality or the province. The list shallbe classified according to the area of expertise (e.g. surveying, engineering designconstruction supervision, among others, and/or its combination of services). This shall besupported by company profile for firms, information sheet or curriculum vitae for individualfirms, including track record or work experiences which shall be duly validated. The TF shallalso conduct research on the prevailing professional fees for the required service incoordination with professional associations (e.g. Philippine Institute of Civil Engineers

(PICE) in the municipality, province or region. The list of potential consultants shall beconsolidated at the RPMO and shall serve as a data base for service providers in the area.Service providers who are personnel of construction firms interested in bidding or offeringquotations for community sub-projects shall not be engaged in the preparation of detaileddesigns or cost estimates to avoid conflict of interest during the procurement process. Thelist of service providers shall be made available to communities or municipalities requiringtechnical assistance.

3.4.2. Preparation of Procurement Packages

A procurement package is a group of similar goods, works or services that can bepurchased from one supplier, or work items that can be performed or implemented by a

single contractor. There are generally two forms of procurement packages: (a) grouping ofrequirements into a category (goods, works or services) for the purpose of procuring themunder one contract; (b) grouping of several procurement categories (e.g. supply and installcontracts) when this is considered most practical.

3.4.2.1. Examples of Procurement Packages

As a general rule, goods, supplies or construction and other types of similar materialscan be grouped and purchased from possible suppliers in the locality through theinventory of suppliers obtained during the market survey. General works or specific itemsof work can be performed or implemented by a single contractor or labor requirementscan be done through pakyaw.

Case 1:Grouping of Requirements in a Category (Goods, Works, Services)Under a Single Contract or Several Contracts

Example: For the following list of construction materials, depending on the availabilityof suppliers in the locality, this can be grouped or package into only one, or moreprocurement packages (where suppliers can supply all the materials needed).

Particulars Quantity Unit

Selected Filling Materials 50 cubic meter

Aggregate Base Coarse 40 cubic meterSand 30 cubic meterBoulders 20 cubic meterPortland Cement 100 bags


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16 mm diameter RSB x 6M 110 pieces


2"x3"x10' Coco Lumber 500 board foot

1/4" thick Ordinary Plywood 12 pieces

3 inches CWN 15 kilos

Possible Packaging:

Package 1: (for similar or related types of materials such as aggregates availablethrough a local gravel and sand supplier)

Selected Filling Materials 50 cubic meterAggregate Base Coarse 40 cubic meterSand 30 cubic meterBoulders 20 cubic meter

Package 2: (for different types of materials available from one supplier)

Portland Cement 100 bags



1/4" thick Ordinary Plywood 12 pieces

3 inches CWN 15 kilos

Package 3:(for one material available from only one supplier)

2"x3"x10' Coco Lumber 500 Bd. Ft.

The number of procurement packages may be determined by the number ofavailable suppliers in the locality. Contract packaging should be applied to facilitatethe procurement of goods. The Procurement Team is advised that contract splittingis not allowed. Under no circumstances should the community combine items intoone package to favor only one supplier.

Case 2:For Works, grouping of Requirements into Items of Work that can beDone Through Community Bidding or Pakyaw Contracts

Example: For a road project with common work items such as: Item 100 (Clearingand Grubbing), Item 105 (Sub-grade Preparation), Item 200 (Aggregate Sub-BaseCoarse), Item 201 (Aggregate Base Coarse), Item 311 (Portland Cement ConcretePavement), Item 500 (Reinforced Concrete Pipe Culvert), Item 505 (GroutedRiprap) packaging can be as follows:

Possible Packaging

Option 1:(one package since all items can be undertaken by one contractor)

Item 105 Sub-grade Preparation

Item 200 Aggregate Sub-Base

Item 201 Aggregate Base Coarse

Item 311 300 Linear Meter Item 311 (PCCP)

Item 500 RCPC (0.61M diameter)

Item 505 Grouted Riprap


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Option 2: (two packages since some items can be done by one contractor andothers through pakyaw contracts)

Package 1: (this can be done through Community Bidding or Shopping by onecontractor depending on the package threshold since the items of work aremechanized)

Item 105 Sub-grade Preparation

Item 200 Aggregate Sub-Base

Item 201 Aggregate Base Coarse

Package 2:or more (this can be done through Pakyaw Contracts since materialsand labor are available in the community by one or two pakyaw groups)

Item 311 300 Linear Meter (PCCP)

Item 500 RCPC (0.61M diameter)

Item 505 Grouted Riprap

In this case, the use of two procurement methods is not considered contract splittingsince the decision was based on the availability of local materials and the capacityof local laborers to implement the project. Moreover, majority of the community canparticipate in the implementation and procurement process thus generatingemployment for local labor.

Case 3: Grouping of Several Procurement Categories When this is ConsideredMost Practical

Example: For a Level I Water Supply system that involves deep well drilling (works),supply of submersible pump and motor (goods), supply of concrete water tank (works),

construction of pump house (works) packaging can be as follows:


Deep Well Drilling and installation ofpipe casing 400 feet

Supply of Submersible Pump andMotor 1 unit

Supply of concrete water tank 1 unitConstruction of pump house 1 unit

Option 1:(one package since all items can be undertaken by one contractor)

Option2:(two or more packages since some items can be done by one or morecontractors or through pakyaw contracts and equipment can be provided by asupplier)

Package 1:(this can be done through Community Bidding or Shopping by a drillingcontractor depending on the package threshold since the items of work aremechanized)


Deep Well Drilling and installation ofpipe casing 400 feet


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Package 2: (this can be done through Community Bidding or Shopping by anequipment supplier depending on the package threshold since the items of workare mechanized)


Supply of Submersible Pump andMotor 1

unit

Package 3: or more (this can be done through Pakyaw Contracts since materialsand labor are available in the community by one or two pakyaw groups)


Supply of concrete water tank 1 unitConstruction of pump house 1 unit

The above examples are only a few of the options available to the ProcurementTeam in the preparation of the CPP. The Procurement Team should also consider

the approved procurement thresholds, and schedules for the release of grant fundsand project implementation in the preparation of planned procurement packages.

3.4.2.2. Splitting of Contracts

The project does not allow splitting of goods and items of works for the purpose ofavoiding the approved procurement thresholds and prior review requirements. Splittingis defined as the act of dividing or breaking up contracts into smaller quantities andamounts, or dividing contract implementation into sub-contracts in order to evade orcircumvent the procurement regulations specially the necessity for public bidding andthe requirements for alternative methods of procurement. Contract splitting may occur ifthe procurement requirements are divided into several contract packages using

shopping or other alternative methods of procurement when it is clearly more efficient touse Community Bidding in order to avoid the No-Objection-Letter (NOL) requirementfrom the National Project Management Office (NPMO) or the funding donors (WorldBank, ADB, others) or to favor certain suppliers or contractors. Members of theC/BSPMC, the Procurement Team or colluding bidders, who are found guilty of contractsplitting, shall be held liable and appropriate sanctions shall be imposed that may includedisallowance of fund grants, suspension of fund releases or withdrawal of the communitysub-project notwithstanding the filing of criminal or civil cases in accordance with theprovisions of the Anti-Graft and Corrupt Practices Act (RA 3019).

3.4.3. Identification of Appropriate Procurement Methods

Upon determination of the procurement packages, the appropriate methods of procurementneed to be identified. This can also been done simultaneously with the preparation of theprocurement packages and the preparation of the project budget. The detailed discussionon the different modes of community based procurement is found in Chapter Four.

3.4.4. Estimated Costs and Schedules of Fund Release

Once the items to be procured and the packages have been determined, the unit cost peritem of materials or work can be provided based on the survey of prevailing market pricesin order to arrive at the cost per package and total project cost. The cost per package canalso provide information on applicable procurement methods to be used and should beidentified accordingly. The total project cost and the cost for each package will be the basisfor determining the amount and percent of grant funds that will be requested for release forthe project. The normal allocation of tranches for community based sub-projects is as


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follows: 50% for the first release; 40% for the second release and 10% for the final release.Communities may request for a different schedule of fund releases depending on projectneed. For community projects requiring larger initial investments, as required in the sub-project schedule, the community may request an allocation of 80% under the open tranchefor the first release, 10% for the second and final release.4 Another consideration in thepreparation of procurement packages and estimated costs is the availability of the localcounterpart contribution (LCC). Some communities will be able to provide funds comingeither from the municipality or the community itself to augment and support sub-projectcosts. This should be clearly indicated in the designated columns for the schedule of LCCrelease. The schedule for the release of both grant and LCC funds should also be taken intoaccount when the estimated costs and procurement packages are prepared.

Other considerations in determining the estimated project cost should include the following:cost or market price of the goods or works itself, freight, insurance as may be applicable andother incidental expenses, quantities, supply of spare parts and/or maintenance services(for equipment), applicable taxes, cost of securing all types of securities other than cash,among others.

3.4.5. Project Implementation Schedule

The project implementation schedule is a major consideration in preparing the CPP as itserves as a guide in determining the applicable tranche to be requested from grant fundsand from local counterpart contribution. Since most sub-projects are expected to becompleted within a period of 2-6 months, realistic projections have to be kept in mind inpreparing the procurement packages and time schedules. Weighted percentage of possiblework items to be completed per month has to be reflected in the Gantt chart to determinethe required physical accomplishments needed in the requests for succeeding tranches. Itis important for community planners and the PT to determine the activities andcorresponding package/s needed to provide significant accomplishment in the first tranche

as the minimum requirement for the second tranche is 30% of sub-project physicalaccomplishment. The total amount for funding of contract packages should be consistentwith the implementation schedule.

3.5. Finalization of the Community Procurement Plan

After the initial CPP is prepared, these are presented to the barangay assembly and theTechnical Working Group for final review. Suggestions on possible suppliers and contractors,improvements on project design and technical requirements, commitments on local counterpartfunds are obtained and issues related to the project are resolved during this period. The CPP isthen revised, updated and finalized and forms part of the documents attached to thecommunitys final community project proposal for submission to the municipal inter-barangay

forum (MIBF). The final CCP will be used as basis for the preparation of cash flow requirements,release of funds and project implementation.

4For emergency procurement in SPs due to disaster/calamity sub-projects, the first tranche may be up to 90%.


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CHAPTER FOUR: COMMUNITY BASEDPROCUREMENT METHODS AND SUB-

PROJECTS

4.1. Community Participation inProcurement

4.2. Community Based ProcurementMethods

4.3. Thresholds for the Use of Community-Based Procurement Methods and PriorReview Requirements

4.4. Possible Types of Community Projects

Requiring Procurement


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4.1. Community Participation in Procurement

The KC-NCDDP employs two project implementation models. These models vary depending onthe availability of local suppliers, contractors and labor force as well as the capacity of C/BSPMCto manage and supervise the work or contract at hand. If the community does not have therequisite technical staff and workers to undertake the required tasks, it would be moreeconomical if the project were executed by contract either through community bidding, shoppingor direct contracting with a qualified contractor or supplier. However, if the community has thetechnical personnel and laborers who are capable and competent enough to undertake the

design of the project as well as implement the project, then the community can administer orexecute the project by force account or through pakyaw contracts.

The first model, implementation through contracts, involves hiring one or more contractors orsuppliers to provide the requisite materials, equipment and labor to complete the workdepending on the availability and capacity of the community to manage and supervise theseworks. This may be done through community bidding, shopping or direct contracting and followsa uniform set of conditions and procedures discussed in this manual.

The second model, implementation by adminis t rat ion or force account, refers to thecommunity itself executing the work since it has the materials, equipment, labor and capacity toperform the work. Sub-projects may be undertaken by administration where there is conclusive

evidence that greater economy and efficiency would be achieved through this arrangement. Incases where there is sufficient labor (skilled and unskilled) to undertake all or portions of thework, this can be done through pakyaw contracts.

The decision to complete the project through one or a combination of these implementationmodels is done at the planning and procurement packaging stages of the CPP.

Community participation in procurement refers to the activities that the community undertakesto procure project related requirements through one or a combination of the modes ofimplementation, including the disbursement of grant funds and local counterpart contribution,preparation of monitoring reports and full reporting of activities to the community. In the previousmanual, this was referred to as community force account (CFA).

For purposes of this manual and to clarify the terminologies used in community basedprocurement, this and other procurement related activities are now referred to as communi typart ic ipat ion in procu rement5. It may also refer to the different methods of community basedprocurement.

4.2. Community Based Procurement Methods

The following are the generally acceptable methods of procurement for community based sub-projects:

1. Community Shopping

5To be consistent with RA 9184 IRR and ADB and WB Guidelines


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2. Community Bidding3. Community Direct Contracting4. Repeat Order5. Small Value Procurement

5.1. Off-the Shelf Goods5.2. Short Term Services5.3. Small Works

6. Single Source Selection or Individual Consultant Recruitment for Consulting Services7. Pakyaw Contract8. Emergency Procurements

4.3. Thresholds for the Use of Community-Based Procurement Methods and PriorReview Requirements

The threshold amount for procurement methods sets the allowable value of the contract forwhich the method is to be used. Prior review refers to evaluation conducted by staff within theproject implementation hierarchy to ensure that the requirements for the use of the procurement

method are met. It also defines the extent and depth of supervision, post review and audits tobe carried out for the procurement at hand.The threshold amount for prior review identifies thelimit set by the KC-NCDDP for the review and evaluation of procurement contracts. This isconducted by higher authorities, in this case, the Regional Program Management Office(RPMO), the National Project Management Office (NPMO) and the Asian Development Bank(ADB) and World Bank (WB). Contracts that need to undergo prior review require the issuanceof a No Objection Letter (NOL) indicating that the reviewing authority has examined saidcontract, found it in order and is not objecting to its provisions or award. For purposes of thismanual, the following thresholds for the use of community based procurement methods and theprior review requirements are provided in Table 1.

Table 1. Procurement Methods and Prior Review Thresholds for

Community Based Procurement

Procurement Method Threshold Amount(P)

Prior/Post Review RequirementThreshold (P)

RPMO NPMO

Community Bidding

- Works 2.0 M & above > 500 K but 500 K but


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- Works None all Post

- Goods None all Post

Direct Contracting for Adjacent and Contiguous Projects

- Works None all

Repeat Order

- Goods 50% of previous contract all PostSmall Value Procurement

1.Off-the-Shelf (Goods) 10,000.00

2.Short Term services 10,000.00

3.Small Works 10,000.00

Qualification/Single Source /Individual Consultant Selection for Consulting Services

Single Source/IndividualConsultant Selection

None Below 1.0 M Above 1.0 M

Pakyaw Contract

- Works (labor only) 100,000.00

- Works (labor with local6materials)

300,000.00

Variation Order for Works Up to 20% of originalcontract

All

Aggregated contracts 2M to 3.0 M above 3.0M

In addition to the contracts above the specified thresholds, ADB/WB prior review requirementshall cover the first three contracts for the first year sub-projects in each of the three newRegions (I and III). This shall be adjusted in the succeeding years based on the findings of thepost review and the assessment of performance and risk analysis for the whole of Component1.

Aggregated contracts7 refer to one or more on-going KC-NCDDP contracts with a single

contractor/supplier regardless of KALAHI-CIDSS area. Prior-review threshold for aggregatedcontracts consider all contracts with below 50% physical accomplishment or delivery.Completed contracts will not be included in the threshold of aggregated contracts.Contractors/suppliers with aggregated contracts should have completed at least fifty (50%)percent of all on-going contracts and should have performed well in these contracts with noslippages due to poor performance or reasons by contractor/supplier negligence before any newcontracts are awarded to them. In cases where there are more than one new contracts inaddition to the ongoing contracts that reached the aggregated threshold, the higher/est contractcost shall be subject to prior review as specified in Table 1 to ensure that they continue to havethe capacity to deliver or perform the procurement at hand. A list/table of all ongoing contractsindicating the contract costs and percentage of physical accomplishment will be submitted aspart of the documents for review by the ACT.

4.4. Possible Types of Community Projects Requiring Procurement

The KC-NCDDP provides two types of grants to participating communities. Planning grantscover costs associated with community mobilization, preparation of proposals by communityvolunteers, project operations, maintenance, and community-based monitoring. The TechnicalAssistance Fund (TAF) is a fund under planning grants which is provided to support thecommunity by engaging technical services in the preparation and implementation of sub-projects. Investment grants provide funding assistance for selected community sub-projectproposals. KC-NCDDP supports those that: are not on the negative list; have been prioritized

6e.g. boulders, sand , gravel, lumber scaffoldings and others which are indigenous in the area and can be provided by the

community pakyaw group7Prior review for aggregated contracts aims to determine the capacity of contractor/supplier to perform the works or deliver the

goods/services required.


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and approved by the community through a barangay assembly; have a clear long-term strategy,e.g., operations and maintenance plan, business plan, etc.; will have buy-in from the community,as shown by the amount of community contribution/counterpart; and are technically andeconomically viable.

The KC-NCDDP has adopted an open menu that allows the community to propose almost anytype of community sub-project that can respond to their priority needs. Under the open menuscheme, communities can request funds to construct infrastructure, such as roads, bridges,water supply systems, and sanitation facilities. The community can also propose livelihoodsupport sub-projects, such as, agricultural production or funding for small-scale productionequipment, and additional capital for community enterprises.

For purposes of procurement, the following are some examples of community projects underthe KC-NCDDP identified by sub-project category:

4.4.1. Construction, Repair, Improvement, Upgrading of Small Scale Infrastructure

1. Access/Barangay roads;2. Bridges (footbridge, reinforced concrete, cable foot, rural road bridge);3. Pathways for pedestrians;4. School buildings/classrooms for basic education (elementary and high school);5. Day care centers;6. Barangay Health Center;7. Domestic water supply systems;

a. Level Ib. Level IIc. Level III

8. Rural electrification (on-grid, off-grid, renewable energy);9. Small-scale communal irrigation;

10. Public sanitation facilities (toilets);11. Flood control facilities

4.4.2. Environmental Protection and Conservation

i. Seawall;ii. Slope protection;iii. River control;iv. Drainage;v. Waste/sanitation management facility

4.4.3. Enterprise or Common Service Facilities

i. Post harvest facilities (equipment for production, harvest, drying, processing,storage);

ii. Processing facilities (meat, vegetables, etc.);iii. Corn or rice mill;iv. Fabrication works

4.4.4. Disaster Recovery Operations8

The list shall be guided by an open menu to be determined in the course of projectimplementation and a limited number of activities not allowed under regular KC-NCDDP process shall be permitted.

8Please refer to NCDDP Disaster Response Operations Manual


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i. Repair of rural and local roads;ii. Backfill, reshaping and landscaping of areas affected by erosion;iii. Repair of riverbank protection systems and earth-fill dykes up to 5m height if

supervised by a qualified engineer;iv. Repair/reconstruction of small bridges (up to 15m);v. Construction of temporary bypass roads up to 500 m length, if not located in

sensitive habitats and land acquisition follows the provisions of the main ESMF andbypasses are completely removed and the alignment restored to its originalconditions once the need for their service has expired;

vi. Repair / reconstruction of communal irrigation and water supply systems and offacilities that have been completed with project funding;

vii. Collection and removal of technogenic debris (building parts, mixed waste, timber)as uprooted trees and plant debris from public infrastructure, public spaces andagricultural areas, and its deposition in pre-existing waste management facilities thatare operating under national licensing and regulations and comply with normalpractice in the country;

viii. Repair of public buildings (including government offices, meeting hall and places ofreligious worship) and infrastructure (e.g. transmission lines, street lighting, trafficsigns, bus stops);

ix. Collection and removal of earth, mud and plant debris from public infrastructureand spaces as well as agricultural areas and its deposition, landscaping andgreening at appropriate locations.

xi. Construction/reconstruction of bunk houses or damaged homes of the mostaffected households.

xii. Other similar undertaking such as temporary setting up of school, health and waterfacilities for access to basic needs and services of affected population includingtemporary housing for vulnerable population such as children, lactating andpregnant women, elderly and persons with disabilities (PWD).

4.4.5. Consulting services

i. Consultancy services for the following: survey works, preparation of technicalplans, specifications, detailed cost estimates, work programs, required pay items,design and shop drawings; feasibility studies for enterprise development sub-projects and other special technical proposals; supervision of critical sub-projects(i.e., bridges, water system, road construction and rehabilitations) beyond the LGUand/or project capacity, as well as implementation of appropriate quality controlprocedures; preparation and/or training on operations and management plans forrevenue-generating sub-projects or those with cost recovery schemes.

4.4.6. Negative List

The negative list includes projects that are not eligible for funding and include the following:

i. Acquisition or purchase of land;ii. Construction or repair of government offices, meeting halls and places of

worship;iii. Environmentally hazardous materials, such as, explosives, asbestos and other

potentially dangerous materials;iv. Fishing boats (beyond the weight limit set by the Bureau of Fisheries and

Aquatic Resources (BFAR);)v. Road construction into protected areas;vi. Activities that have alternative prior sources of committed funding;vii. Recurrent government expenditures such as remuneration of government


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employees;viii. Micro-credit and livelihood activities which involve on-lending of project funds;ix. Activities for fiesta and other religious and cultural activities;x. International travel;xi. Maintenance and operation of infrastructure built from project funds;xii. Assistance to, or training of, the military, police, national guard, or other quasi-

military organization or unit;xiii. Salaried activities that employ children below the age of 16 years;xiv. Activities that unfairly exploit women or men at any age;xv. To pay for performance of abortions as a method of family planning or to

motivate or coerce any person to practice abortions, to pay for the performanceof involuntary sterilizations as a method of family planning or to coerce orprovide any financial incentive to any person to undergo sterilizations;

xvi. Any activity or funds relating to trafficking of person/s;xvii. Any proposed projects intended to benefit commercial logging, (provided this

shall not include tree removal incidental to the project), must be sent to thefunding donor for review prior to project approval;

xviii. Other activities with environmental or social impact as governed by ADB/WBsafeguard environmental or social impact as governed by ADB/WB safeguardpolicies.


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CHAPTER FIVE: COMMUNITY BASEDPROCUREMENT PROCEDURES

5.1. Community Shopping for Goods andWorks

5.2. Community Direct Contracting forGoods and Works

5.3. Community Repeat Order for Goods5.4. Small Value Procurement for Goods and

Works5.5. Pakyaw Contracts for Works5.6. Community Bidding for Goods and

Works5.7. Qualification/Single Source orIndividual Consultant Selection forConsulting Services

5.8. Emergency Procurement


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This chapter explains the procedures for the procurement of goods, works and consultingservices using the different procurement methods. The discussions shall be based on themost commonly used methods under the KC NCDDP.

5.1. Community Shopping for Goods and Works

Commu ni ty Shoppingis a method of procurement where the community simply requestsfor the submission of price quotations from a minimum of three suppliers for readily availableoff-the-shelf goods or standard specification commodities of small value or a minimum of

three contractors for simple works of small value with known qualifications.Community Shopping is expected to be the most frequently used among the differentmethods.

The price quotations are compared to assure competitive prices. Requests for quotationsshall indicate the description and quantity of the goods or specifications of works, as well asthe desired delivery (or completion) t

NCDDP Revised CBPM Volume One Ver Oct25_ 2014

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Transcript of NCDDP Revised CBPM Volume One Ver Oct25_ 2014