Presidential Decree No. 526 (PD 526) — Providing for an Improved System of Acquisition, Utilization, Care, Custody and Disposal of Supplies in the Local Governments, Amending for the Purpose Section Three of Republic Act Numbered Twenty-Two Hundred Sixty-Four, Otherwise Known as "The Local Autonomy Act of 1959", and Other Related Laws.
WHEREAS, the availability at all times of supplies,
materials and equipment is crucial to the efficient discharge of
governmental functions;
WHEREAS, the provisions of existing laws need to be revised
and updated to make them more responsive to the growing supply
requirements of local developmental projects;
WHEREAS, it has become imperative to install administrative
innovations that will make the procurement operations of local
governments cheaper, faster, and more effective and which at the same
time will induce the proper maintenance, use and conservation of
supplies, materials and equipment at the local levels;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution,
do hereby decree, order and make as part of the law of the land the
following amendments to Republic Act No. 2264 and other related laws:
Scope.
SECTION 1. Scope.—This Decree shall govern the
procurement, care, utilization and disposal of supplies by the local
governments and the other aspects of supply management at the local
levels.
General rule in procurement or disposal.
SEC. 2. General rule in procurement or disposal.—Except
as otherwise herein provided, procurement of supplies by local
government units shall be thru competitive public bidding. Supplies
which have become unserviceable or no longer needed shall be sold,
whenever applicable, at public auction.
Scope of term "supplies".
SEC. 3. Scope of term "supplies".—"Supplies", as
herein used, includes everything, except real estate, which may be
needed in the transaction of public business, or in the pursuit of any
undertaking, project, or activity, whether of the nature of equipment,
furniture, stationery, materials for construction, or personal property
of any sort, including non-personal or contractual services such as the
repair and maintenance of equipment and furniture, as well as trucking,
hauling, janitorial, security, and related or analogous services.
Requirement of requisition.
SEC. 4. Requirement of requisition.—No order for
supplies shall be filled by the provincial, city or municipal treasurer
concerned for any office or department of the local government except
upon written requisition as herein-above provided.
Officers having authority to draw requisitions.
SEC. 5. Officers having authority to draw requisitions.—
Requisitions shall be drawn by the head of office or department needing
the supplies, who shall certify as to their necessity for official use,
and specify the project or activity where the supplies are to be used.
Certificate showing existence of appropriation.
SEC. 6. Certificate showing existence of appropriation.—
Every requisition must be accompanied by a certificate, signed by the
local treasurer showing that an appropriation therefore exists and that
the estimated amount of such expenditure has been set aside for its
liquidation.
Approval of requisitions.
SEC. 7. Approval of requisitions.—Approval of the
requisition by the head of office or department concerned who has
administrative control of the appropriation against which the proposed
expenditure is chargeable is sufficient, except in the following cases:
Requisitions for supplies to be carried in stock which shall
be approved by the local chief executive and the provincial or
city auditor concerned: Provided, That such supplies are listed
or included in the annual procurement plan and the maximum quantity
thereof does not exceed the estimated consumption corresponding to a
programmed three-month period: And provided, further,
That nothing herein contained shall be construed as
authorizing the purchase of furniture and equipment for stock purposes;
and
Requisitions the total estimated cost of which is over ten
thousand (P10,000.00), which shall likewise be approved by the
respective local chief executive and provincial or city auditor
concerned.
The call for bids.
SEC. 8. The call for bids.—When procurement is to be
done at the local government level and save in exempt cases, the local
treasurer shall call bids for open public competition. The call for bids
shall show the complete specifications and technical descriptions of
the supplies desired and shall embody all terms and conditions of
participation and award, terms of delivery and payment and of all other
covenants affecting the transaction.
In all calls for bids, the right to waive any defect in the
tender as well as the right to accept the bid most advantageous to the
government shall be reserved. In no case, however, shall failure to meet
the specifications or technical requirements of the supplies desired be
waived.
Publication of call for bids.
SEC. 9. Publication of call for bids.—The
call for bids shall be given the widest publicity possible, providing,
by mail or otherwise, any known prospective participant in the locality,
of copies of the call and by posting copies of the same in at least
three conspicuous public places within the immediate environs of the
provincial capitol, or city or municipal hall of the local government
unit involved.
In addition to the above modes of publicity, the
notice of the bidding may be published for three times within a week in a
newspaper of general circulation in the locality when the local
treasurer deems it necessary in order to obtain the lowest responsible
and complying bid.
"Locality" as used herein shall mean the
territorial jurisdiction of the province and in the case of a city, the
province of which the city is a geographical part and in the case of a
municipality, the province of which it is a component part.
The
opening of bids shall be in the presence of the provincial or city
auditor or his duly authorized representative who shall identify and
secure copies of the bids and certify the abstract of the bidding.
The Committee on Award.
SEC. 10. The Committee on Award.—There shall be in every
province, city and municipality a Committee on Award to decide winning
bids and questions of awards on procurement and disposal of property.
The Committee on Award shall be composed of the local chief executive
as Chairman with the local treasurer and the head of office or
department for whose use the supplies are being procured, as Members. In
case the head of office or department involved is already a member and
as such would sit in a dual capacity, a member of the local
legislative body chosen by the local chief executive shall sit as a
third member.
Rule on awards.
SEC. 11. Rule on awards.—Awards in
the procurement of supplies shall be made to the lowest complying and
responsible bid which meets all the terms and conditions of the
contractor undertaking.
As used herein, the term "lowest
complying and responsible bid" shall be the proposal of one who offers
the lowest price meeting all the technical specifications and
requirements of the supplies desired and as a dealer in the line of
supplies involved, maintains a regular establishment, and has complied
religiously with previous commitments.
"Terms and conditions"
refers to other requirements not affecting the technical specifications
and requirements of the supplies desired such as bonding, terms of
delivery and payment, and related or analogous preferments.
SEC.
12. Procurement without public bidding.—Procurement of
supplies may be made without the benefit of public bidding in the
following modes:
Personal canvass of responsible merchants;
Emergency purchases;
Direct purchases from manufacturers or exclusive distributors;
Thru the Bureau of Supply Coordination; and
Purchase from other government entities or foreign governments.
Procurement thru personal canvass.
SEC. 13. Procurement thru personal canvass.—Procurement
of supplies may be effected after personal canvass of at least three
responsible merchants in the locality by a committee of three composed
of representatives of the individual members of the Committee on Award.
The award shall be decided by the Committee on Award.
Purchases
under this Section shall not exceed the amounts specified hereunder for
all items in any one month:
Provinces and Cities
1st & 2nd class
—
thirty thousand pesos
3rd & 4th class
—
twenty thousand pesos
5th class
—
ten thousand pesos
Municipalities
1st class
—
twenty thousand pesos
2nd & 3rd class
—
ten thousand pesos
4th class and below
—
five thousand pesos
Emergency purchases.
SEC. 14. Emergency purchases.—In cases of emergency
where the need for the supplies is exceptionally urgent or absolutely
indispensable to prevent immediate danger to, or loss of, life, local
government units may make emergency purchases or place repair orders
without public bidding regardless of amount. Delivery and utilization of
purchase and/or repair orders under this section shall be made within
fifteen (15) days after the placing of the same. Immediately after the
emergency purchase or repair order is made, the chief of office or
department making the emergency purchase or repair order shall draw a
regular requisition to cover the same showing thereon:
A complete description of the supplies acquired or the work
done or to be performed;
By whom furnished or executed;
Date of placing the order and the date, time of delivery or
execution;
The unit price and the total amount contracted for;
A clear explanation of the circumstances why procurement was of
such urgency that same cannot be done thru regular course without
involving danger to, or loss of, life;
A certification to the effect that the price paid or
contracted for was the lowest at the time of procurement; and
A certification of the local treasurer as to availability of
appropriations and funds for the purpose.
Procurement from duly licensed manufacturers.
SEC. 15. Procurement from duly licensed manufacturers.
—Procurement may be made direct from duly licensed manufacturers in
cases of supplies of Philippine manufacture or origin and in case there
are two or more manufacturers of the supplies desired, canvass of the
known manufacturers should be made to obtain the lowest price for the
quality of the supplies desired.
Procurement from exclusive Philippine agents or distributors.
SEC. 16. Procurement from exclusive Philippine agents
or distributors.—Procurement may, in the case of supplies of foreign
origin, be made direct from the exclusive Philippine distributor or
agent as certified to by the Bureau of Supply Coordination, subject to
the following conditions:
That the exclusive Philippine distributor has no
sub-dealers selling at lower prices; and
No suitable substitutes of substantially the same quality are
available at lower prices.
"Suitable substitute" means that kind of article which would serve
substantially the same purpose or produce substantially the same results
as the brand, type or make of article originally desired or
requisitioned.
Procurement thru the Bureau of Supply Coordination.
SEC. 17. Procurement thru the Bureau of
Supply Coordination.—Local government units may have their supply
needs serviced by the Bureau of Supply Coordination under the rules and
regulations of said office.
Procurement from government entities or foreign governments.
SEC. 18. Procurement from government entities or
foreign governments.—Procurement may be made direct from government
entities producing the supplies desired including units or agencies of
foreign governments with whom the Philippines maintains diplomatic
relations. In the latter case, prior authority from the Office of the
President shall be required.
Annual procurement program.
SEC 19. Annual procurement program.—On or before
the fifteenth day of April each year, the local treasurer shall prepare,
for the approval of the local chief executive, an annual procurement
program for the ensuing fiscal year which shall contain and show an
itemized list of the estimated quantity of supplies needed for the
entire ensuing fiscal year, a complete description thereof as to kind,
quantity and quality, the estimated cost, and the balanced on hand.
However, the total estimated cost of the approved annual procurement
program shall not exceed the total appropriations authorized for the
acquisition of supplies.
Except in emergency cases or where urgent indispensable needs
could not have been reasonably anticipated no purchase of supplies shall
be made unless included in, or covered by, the approved procurement
program. In the absence of such a program, however, supplies for
essential operations and services may be procured within the limits of
existing appropriations.
The conversion of excess cash into
supplies stock is hereby prohibited except to the extent of the kind and
quantity specified in the approved annual procurement plan.
SEC.
20. Primary and secondary accountability for government property.—Every
head of department or office of a province, city or municipality shall
be primarily accountable for all government property assigned or issued
to his department or office. The person or persons entrusted with the
possession or custody of government property under the accountability of
any head of department or office shall be immediately accountable to
such officer.
The head of department or office primarily
accountable for government property may require any person in possession
of the property or having custody and control thereof under him to keep
such records and make such reports as may be necessary for his own
information and protection.
Buildings and other physical
structures shall be under the accountability and responsibility of the
local treasurer.
Every officer primarily accountable for
government property shall keep a complete record of all property under
his charge and render his accounts therefor semi-annually to the
treasurer of the local government unit concerned.
SEC. 21.
Responsibility for the proper use and care of government property.—The
person in actual physical possession of government property or
entrusted with its custody and control shall be responsible for the
proper use and care of the property and he shall exercise due diligence
in the utilization and safe-keeping thereof.
Measure of liability of persons accountable for government property.
SEC. 22. Measure
of liability of persons accountable for government property.—The
person immediately accountable for government property shall be liable
for its money value in case of the illegal, improper or unauthorized use
of the property, or misapplication thereof, by himself or any other
person for whose acts he may be responsible, and he shall be liable for
all loss, damage, or deterioration occasioned by negligence in the
keeping or use of such property unless it is shown or proved that he has
exercised due diligence and care in the utilization and safekeeping of
the property.
No accountable person shall be relieved from
liability by reason of his having acted under the direction of a
superior officer in using property with which he is chargeable; but the
officer directing any illegal, unauthorized or improper use of property
shall first be required to answer therefor.
In cases of loss,
damage or deterioration of government property arising from, or
attributable to, negligence in security, the head of the security agency
shall be held liable therefor.
Credit for loss occuring in transit or due to casualty.
SEC. 23. Credit for
loss occuring in transit or due to casualty.—When a loss of
government property occurs while the same is in transit or is caused by
fire, theft, force majeure, or other casualty, the officer
accountable therefor or having custody thereof shall immediately notify
the provincial or city auditor concerned within thirty days from the
date the loss occured or for such longer period as the provincial or
city auditor concerned may in the particular case allow, and he shall
present his application for relief, with the available evidence in
support thereof. An officer who fails to comply with this requirement
shall not be relieved of liability or allowed credit for any such loss
in the settlement of his accounts.
A provincial or city auditor
shall not allow credit for these losses unless the Chairman of the
Commission on Audit shall give him express authority to that effect, to
be exercised only if the loss is not in excess of ten thousand pesos.
When, in any case, the allowance of credit is not within the competency
of the provincial or city auditor, the application and evidence, with
the recommendation of the auditor shall be forwarded to the Chairman of
the Commission on Audit for his action.
Property disposal.
SEC. 24. Property
disposal.—When property of any local government unit has become
unserviceable for any cause, or, is no longer needed, it shall, upon
application of the officer accountable therefor, be inspected and
appraised by the Provincial or City Auditor or any of his duly
authorized representative or that of the Commission on Audit, and if
found, valueless or unsaleable, shall be destroyed in the presence of
the inspecting officer.
If found valuable, the same shall be sold
at public auction to the highest bidder under the supervision of the
Committee on Award and in the presence of the Provincial or City Auditor
or his duly authorized representatives. Notice of the public auction
shall be posted in at least three conspicuous places and if the
acquisition cost exceeds ten thousand pesos in the case of provinces,
pub-provinces and cities, and five thousand pesos in the case of
municipalities, notice of auction shall be published at least three
times within a reasonable period in a newspaper of general circulation
in the locality.
Negotiated sale of property.
SEC. 25. Negotiated sale of property.—Property
no longer needed may also be disposed of at a private sale at such
prices as may be determined by the Committee on Award, subject, however,
to the approval of the Commission on Audit when the acquisition or
transfer cost of the property exceeds five thousand pesos in the case of
provinces, sub-provinces and cities, and by the Provincial Auditor, in
the case of municipalities when the acquisition cost is more than three
thousand pesos.
When real property is involved, the disposal
shall be subject to the approval of the Office of the President and the
Commission on Audit regardless of the value or cost involved.
SEC.
26. Transfer without cost.—Property unserviceable or no
longer needed by any local government unit may be transferred without
cost to another government unit, local, national or corporate, at an
appraised valuation determined by the local Committee on Award. Such
transfer shall be subject to the approval of the local legislative body
of the local government unit making the transfer and by the head of the
department or office receiving the property.
Transitory provisions.
SEC. 27. Transitory
provisions.—Upon approval of this Decree all government property
issued or assigned to the different offices or departments of local
governments shall be deemed ipso facto transferred to the primary
accountability of the office or department head concerned, and within
ninety days thereafter the said transfer shall be accomplished and
reflected in the manner and official form prescribed for the purpose.
Implementing rules and regulations.
SEC. 28. Implementing rules and regulations.—The
Secretary of Finance jointly with the Secretary of General Services
shall promulgate rules and regulations to effectively implement the
provisions of this decree, including requirements as to testing,
inspection and standardization which rules and regulations shall be
deemed part of this decree. Said rules and regulations shall not be
effective without the concurrence of the Commission on Audit.
SEC.
29. Repealing clause.—All acts, laws or decrees or parts of
acts, laws or decrees inconsistent with the provisions of this Decree
are hereby revoked, repealed or modified, accordingly.
SEC.
30. Effectivity.—This Decree shall take effect upon its
approval.
Done in the City of Manila this 2nd day of August, in the year
of Our Lord nineteen hundred and seventy-four.
(Sgd.)
FERDINAND E. MARCOS
President of the Philippines
By the President:
(Sgd.)
ALEJANDRO MELCHOR
Executive Secretary
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
