Review the management’s directives and program’s strategic plans (i.e. Medium Term Expenditure Program) to identify essential commodities for implementation. 

Check if identified commodities are: 

• Locally registered and available  (i.e. Food and Drug Administration portal, market study) 

• Aligned with standards of care (i.e. Omnibus Health Guidelines, World Health Organization, Clinical Practice Guidelines)

• Eligible for procurement (i.e., Philippine National Formulary, with Health Technology Assessment recommendations)  

Links to relevant references:

1.FDA Verification Portal

2.Philippine National Formulary 

3. Latest version of Omnibus Health Guidelines

Pursuant to Executive Order No. 49, all Government entities shall use the Philippine National Formulary as basis of procurement of pharmaceutical products. Likewise, as provided by the Universal Health Care Act (RA 11223), the DOH and PhilHealth cannot procure or fund a new health technology without the HTA Council’s positive recommendation.

Applications for inclusion in the PNF may be submitted to the HTA Technical Secretariat (hta@dost.gov.ph) by accomplishing the inclusion forms downloadable at https://hta.dost.gov.ph/topic-nomination.

For further details on the process of nomination of new health technologies, coordinate with the DPCB - Evidence Generation and Technical Support Division (HTA focal).

Links to relevant references:

1. DOST-HTA Topic Nomination 

Identify the standards that should be met by the commodity in terms of dose, dosage form, shelf-life, function, performance, interface, design, and cost. 

Conduct market study to support the technical specifications development: 

• • Request for quotations from prospective suppliers

  • Refer to product brochures, industry newsletters, Internet for details 

  • Refer to historical procurement data

Links to relevant references:

1.Directory of Suppliers

The Approved Budget for the Contract or the "ABC" is the budget for the contract duly approved by the Head of the Procuring Entity (may be from annual General Appropriations Act or other appropriations)

Consider the following, whichever are applicable: 

• Cost of the product or service

• Incidental expenses (freight, insurance, taxes, installation costs, training costs) 

• Inflationary factor, since the planning phase is usually done one year ahead of the actual procurement date

• Quantity requirement (take note of economies of scale)  

• Supply of spare parts and/or maintenance services, if part of the contract package.

The Schedule of Requirement specifies the delivery schedule for a commodity to be procured. There are several considerations that must be taken into account when setting this requirement:

• Total stocks (on hand and incoming stocks)

• Timelines of procurement (~4 months), inspection and FDA testing (~2 months), and delivery (~14 days)

• Scenarios that may affect the availability of goods (i.e., global shortage, etc) or require an urgent response (i,e., outbreaks)

In general, the DPCB follows Department Order No. 2020-0011 for the delegation of approving authorities on the different procurement transactions of the Bureau.

• 20 Million and below - Director IV (see DPO 2024-3230 for the designation of OICs, if absent)

• More than 20 Million but less than 50 Million- Assistant Secretary (Undersecretary, if no Asec)

• 50 Million but less than 500 Million - Undersecretary

• 500 Million and above - Secretary of Health

The Procurement Service strictly requires all procurement documents to be signed in wet ink, except in certain circumstances (i.e., emergency, deemed allowable by the COBAC)/PS).

During the Pre-Bidding Conference, a potential supplier may find the unit cost of the commodity too low or unacceptable. 

Assess if there are other suppliers that can meet the initially set unit cost. If yes, retain the unit cost. 

Otherwise, assess if the reason of the supplier for the requested price escalation can be objectively justified. Additionally, review the potential implications of either retaining or increasing the unit cost to the supply planning of the program.

During the Pre-Bidding Conference, a potential supplier may request for a change in schedule of requirement. 

Assess if there are other suppliers that can meet the initially set schedule. If yes, retain.   

Otherwise, assess if the reason of the supplier can be objectively justified. Refer back to the supply plan of the program to check if requests can be accommodated without compromising the planned distribution.  

Link to relevant file:(list of justifiable reasons) 

If no bids were received, a COBAC Resolution declaring the bidding a failure will be issued.

Conduct mandatory review of the terms, specifications, and ABC in the bidding documents. Assess the potential implications of either rebidding or no procurement  to the supply planning of the program. If deemed more advantageous, revise technical specifications or adjust ABC and submit documents for re-bidding.

As a general rule, an alternative modality can be resorted to only if the original mode of procurement is competitive bidding and there has been a failure of bidding for the second time in accordance with Sec. 35 of the IRR of RA 9184.

However, if after diligent assessment of the market, historical trends and urgency, the program deems that resorting to competitive bidding for the procurement of a particular commodity is not efficient, a Certification or Justification must be prepared and submitted to COBAC to support the use of an alternative procurement modality.

As a general rule, any inquiry or request for clarification from a potential bidder should be addressed to and responded to by the COBAC through supplemental bids or bid bulletins. This is to mitigate risks to integrity in the public procurement process. 

End-user should avoid any conduct, or situation, which could reasonably be construed as creating an appearance of a conflict of interest. 

Endorse all received inquiries to COBAC/PS for proper facilitation. However, the  program could proactively prepare responses in anticipation of the request for inputs from COBAC/PS.

If no request for extension of delivery was received, the program may issue a reminder or demand letter to the supplier with the following timelines:

• Reminder letter - One (1) month before lapse of Notice to Proceed

• Initial demand letter - Fifteen (15) days before lapse of Notice to Proceed

• Final demand letter - After lapse of Notice to Proceed

Link to related files: 

1.Sample Template for Initial Demand Letter 

Under Administrative Order No. 2019-0041, only selected commodities are required to undergo routine FDA testing. However, in practice, all commodities procured by DPCB are subject to FDA testing, prior to delivery.

If exemption from testing can be objectively justified, the program should prepare and submit a request memo for approval of the Secretary of Health.

Secure supporting documents from the supplier for submission to the National Economic and Development Authority (NEDA) for a two-stage review process. Supporting documents are as follows:

• Certification from HOPE that the request for price escalation is justified;

• Details of the request;

• Certified copy of the original contract;

• Original cost estimates;

• Original request for price escalation submitted by supplier;

• Other information/documents as may be required by NEDA

NEDA will submit recommendations to the Government Procurement Policy Board (GPPB) for approval.

Under RA 9184, a contract may be terminated either by (1) default or (2) convenience. 

• Terminate contract by default: Outside of force majeure, the supplier fails to deliver or perform any or all of the Goods within the period(s) specified in the contract, or within any extension thereof granted, and such failure amounts to at least 10% of the contract price. 

• Terminate contract for convenience: Project implementation is economically, financially or technically impractical and/or unnecessary (i.e., fortuitous event or changes in law and national government policies)

During contract implementation, the end-user is not prohibited to communicate with a supplier, provided that safeguards against potential conflict of interests are in place.

All inquiries/requests for engagement (written communication in the form of letters, memorandum, or electronic mail) should be coursed through the Office of the Director for initial review.

In the event that a meeting with a supplier is necessary, all DPCB personnel are highly encouraged to adhere with the following guidelines:

• All proposed meetings shall be subject to approval of the Director.

• The agenda must be set in writing prior to the commencement of the meeting.

• Hold physical meetings within the premises of the DPCB/DOH.

• Ensure that any photograph taken during this meeting is strictly for documentation purposes only.

• Write the official minutes of the meeting.

A foreign or local supplier must be entirely responsible for all taxes, stamp duties, license fees, and other such levies imposed up to the delivery of the goods to the warehouse as specified in the contract. 

A supplier that fails to satisfactorily deliver within the contract implementation period (inclusive of duly granted time extensions) shall be liable and pay for liquidated damages.

Liquidated damages (LD) is 1/10 of 1% (0.001) of the cost of the unperformed portion for every day of delay.

Once the cumulative amount of LD reaches 10% of the total amount of the contract, the contract shall be terminated by default, without prejudice to other remedial actions available.

Payment can be made even after termination of contract, provided there is partial fulfilment of obligation by the supplier. Payment on a quantum meruit basis may be made in favor of the supplier/manufacturer/distributor in case of contract termination for any cause other than engaging in corrupt, fraudulent, collusive or coercive practices, in competing for or in executing the contract.

“Quantum meruit” means “as much as he deserves.” It is an equitable doctrine, based on the concept that no one who benefits by the labor and materials of another should be unjustly enriched thereby; under these circumstances, the law implies a promise to pay a reasonable amount for the labor and materials furnished.

As a general rule, payments must be made in no case later than sixty (60) days after the supplier’s request/s for payment in writing, accompanied by an invoice and upon fulfilment of other obligations in the contract, as well as upon inspection and acceptance of the goods. 

Delayed release of payment may be attributed to the following factors:

• Incomplete documents (for compliance)

• Findings on the delivered items during payment and distribution

• Issues that may arise to contract termination

The program should ensure strict monitoring of payables (monitoring tool) and adhere to requirements to reduce risk of delayed payment.