Government Bidding Process in the Philippines: A Step-by-Step Guide

Government bidding in the Philippines is governed by Republic Act No. 12009, the New Government Procurement Act, and its Implementing Rules and Regulations (IRR). The IRR covers procurement by all national government branches, departments, bureaus, offices, and agencies, including state universities and colleges (SUCs), government-owned or controlled corporations (GOCCs), government financial institutions (GFIs), and local government units (LGUs). The process runs from procurement planning through contract implementation, and it is built on transparency, competitiveness, efficiency, proportionality, accountability, public monitoring, professionalism, and sustainability. For a supplier or contractor, the practical path is: watch the PhilGEPS portal, prepare eligibility documents, submit a bid, undergo bid evaluation and post-qualification, and await the notice of award.

What counts as procurement, and who must follow the rules

Under Section 5 of the IRR, procurement refers to the acquisition of Goods, Consulting Services, and the contracting for Infrastructure Projects by a Procuring Entity. It also includes the lease of goods and real estate. A Procuring Entity is any branch, department, bureau, office, agency, or instrumentality of the government, including SUCs, GOCCs, GFIs, and LGUs.

Not everything the government does is covered. Section 4.3 excludes, among others, acquisitions of real property (governed by RA No. 10752, the Right of Way Act) and public-private partnership projects covered by RA No. 11966, except for portions financed by the government. Section 4.4 also excludes direct cash or in-kind assistance to beneficiaries, scholarships and trainings, engagement of Contract of Service and Job Order workers, and disposal of government properties.

Step 1: Procurement planning and the APP

No government procurement may be undertaken unless it is in accordance with the approved Indicative Annual Procurement Plan (APP) or final APP of the Procuring Entity, as provided in Section 7.8 of the IRR.

The planning chain works like this:

1. End-User or Implementing Units prepare their Project Procurement Management Plans (PPMPs), covering the type, objective, quantity, procurement mode, schedule, estimated budget, and technical specifications of each project.
2. The Indicative PPMPs are evaluated and, if approved for the budget proposal, forwarded to the BAC Secretariat for consolidation into an Indicative APP.
3. The Indicative APP goes to the Bids and Awards Committee (BAC) for its final recommendation to the Head of the Procuring Entity (HoPE) on the appropriate mode of procurement.
4. Once the General Appropriations Act or budget becomes final, the PPMPs are finalized and consolidated into the final APP, which the HoPE approves. The approved final APP is posted on the Procuring Entity's website and submitted to the Government Procurement Policy Board (GPPB) on or before the end of January of the budget year.

Step 2: Detailed engineering for infrastructure projects

For Infrastructure Projects, Section 8.1 of the IRR provides that no bidding and award of contract shall be made unless the detailed engineering investigations, surveys, and designs have been sufficiently carried out and duly approved, and the required right-of-way has been acquired under RA No. 10752.

Where right-of-way, site, or location is still pending, the procurement process may commence, but no award of contract shall be made until an authority or permit to enter is issued by the property owner, a notarized deed of sale or donation is executed in favor of the government, or a writ of possession is issued by a court.

Step 3: Bidding Documents and the ABC

The Bidding Documents are issued by the Procuring Entity as the basis for bids, furnishing all information necessary for a prospective bidder to prepare a bid. These must be prepared in accordance with the IRR.

Every contract has an Approved Budget for the Contract (ABC) — the budget duly approved by the HoPE within the authorized amount under the General Appropriations Act, continuing, and automatic appropriations, or other authorized source of funds. For multi-year contracts requiring a Multi-Year Contractual Authority (MYCA), the ABC is the total project cost reflected in the MYCA.

Step 4: Eligibility and bid submission

A Bid is a signed offer, proposal, or quotation submitted in response to the requirements stated in the Bidding Documents. A Bidder is a supplier, manufacturer, distributor, contractor, consultant, or service provider, whether public or private, who submits a bid.

Bidders must satisfy three kinds of eligibility under Section 5:

• Legal Eligibility — the legal capacity to act as an entity, evidenced by permits, licenses, and registrations required by law.
• Financial Eligibility — the financial capacity to manufacture, distribute, or deliver what is being procured.
• Technical Eligibility — the experience or expertise to undertake the services, manufacturing, distribution, or delivery required.

The IRR also defines a Beneficial Owner as a natural person who ultimately owns or dominantly influences the management or policies of the juridical entity, or exercises ultimate effective control over it.

Step 5: Bid evaluation, post-qualification, and award

Bids are evaluated against the criteria stated in the Bidding Documents, and the bidder with the most responsive bid undergoes post-qualification. The IRR refers to post-qualification in connection with subcontracting but does not set out the full post-qualification procedure in the provisions available here, so the specific documentary requirements and timelines should be checked against the complete IRR and the Bidding Documents for the project.

The IRR also provides for blacklisting — an administrative penalty imposed by the HoPE that prohibits a person or entity, including its affiliates, from participating in all government procurement activities during the period of disqualification, with the rules found in Rule XXI.

Frequently asked questions

Where do I find government bidding opportunities in the Philippines?

Procurement opportunities are posted on the Philippine Government Electronic Procurement System (PhilGEPS), the single electronic procurement portal managed by the Procurement Service-DBM under Section 20 of the IRR. The approved APP is also posted on the Procuring Entity's website.

Can a private individual join a government bidding?

A bidder may be a supplier, manufacturer, distributor, contractor, consultant, or service provider, whether public or private, provided it meets the legal, financial, and technical eligibility requirements in the Bidding Documents.

How much can be subcontracted in a government project?

Under Section 7.5.1.1 of the IRR, the subcontracted portion shall not exceed twenty percent (20%) for Goods and fifty percent (50%) for Infrastructure Projects, unless the GPPB approves a different percentage on a per-project basis. Subcontractors must meet the same eligibility criteria and submit the same eligibility documents as the general contractor.

Practical takeaways

• All procurement must be within the approved budget and in accordance with the approved APP — no APP, no procurement.
• Watch PhilGEPS and the Procuring Entity's website for postings; the final APP is submitted to the GPPB by the end of January of the budget year.
• Prepare legal, financial, and technical eligibility documents before bids are called.
• For infrastructure projects, remember that no award can be made until detailed engineering is approved and right-of-way is secured.
• Subcontracting is capped at 20% for Goods and 50% for Infrastructure Projects unless the GPPB approves otherwise.

Primary sources

The rules discussed above are drawn from the following primary sources, as published in the Official Gazette and the national statute book.

• IRR of REPUBLIC ACT NO. 12009 - THE IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 12009 OR THE NEW GOVERNMENT PROCUREMENT ACT

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.