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PRESIDENTIAL DECREE NO. 526
PRESIDENTIAL DECREE NO. 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
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chanroblesvirtualawlibrary
WHEREAS,
the availability at all times of supplies, materials and equipment is
crucial to the efficient discharge of governmental functions;chanroblesvirtualawlibrary
WHEREAS, the provisions of existing laws need to be revised and updated
to make them more responsive to the growing supply requirements of
local development projects;chanroblesvirtualawlibrary
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;chanroblesvirtualawlibrary
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:cralaw:red
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.
Section 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.
Section 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.
Section 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 hereinabove provided.
Section 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.
Section 6. Certificate showing existence of
appropriations. — Every requisitions 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.
Section 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:cralaw:red
(1) 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
(2) 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: chanroblesvirtualawlibrary
Section 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 participations 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.
Section 9. Publication of call for bids. — The call
for bids shall be given the widest publicity possible, providing, by
mail 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. chanroblesvirtualawlibrary
"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 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.
Section 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.
Section 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. chanroblesvirtualawlibrary
"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.
Section 12. Procurement without public bidding. —
Procurement of supplies may be made without the benefit of public
bidding in the following modes:cralaw:red
(1) Personal canvass of responsible merchants;chanroblesvirtualawlibrary
(2) Emergency purchases;chanroblesvirtualawlibrary
(3) Direct purchases from manufacturers or exclusive
distributors;chanroblesvirtualawlibrary
(4) Thru the Bureau of Supply Coordination; and
(5) Purchase from the other government entities or
foreign governments.
Section 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: chanroblesvirtualawlibrary
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
Section 14. Emergency purchase. — 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:cralaw:red
(a) A complete description of the supplies acquired
or the work done or to be performed;chanroblesvirtualawlibrary
(b) By whom furnished or executed;chanroblesvirtualawlibrary
(c) Date of placing the order and the date, the time
of delivery or execution;chanroblesvirtualawlibrary
(d) The unit price and the total amount contracted
for;chanroblesvirtualawlibrary
(e) 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;chanroblesvirtualawlibrary
(f) A certification to the effect that the price paid
or contracted for was the lowest at the time of procurement; and
(g) A certification of the local treasurer as to
availability of appropriations and funds for the purpose.
Section 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. chanroblesvirtualawlibrary
Section 16. Procurement from exclusive Philippine
agents or distributor. — Procurement may, in 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:cralaw:red
(a) That the exclusive Philippine distributor has no
sub-dealers selling at lower prices; and
(b) 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
purpose or produce substantially the same result as the brand, type or
make of article originally desired or requisitioned.
Section 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.
Section 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.
Section 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 balance 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. chanroblesvirtualawlibrary
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.
Section 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 of 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 made 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.
Section 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.
Section 22. Measure of liability of persons
accountable for government property. — The person immediately
accountable for the 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 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. chanroblesvirtualawlibrary
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 case 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. chanroblesvirtualawlibrary
Section 23. Credit for loss occurring in transit or
due to casualty. — When a loss of government property occurs while the
same is in transit or in 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 occurred 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. chanroblesvirtualawlibrary
Section 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 unsalable, shall be destroyed in
the presence of the inspecting officer.
If found valuable, the same shall be sold at public action 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, sub-provinces and cities, and
five thousand pesos in the case of municipalities, notice of auction
shall be published at least three times within reasonable period in a
newspaper of general circulation in the locality.
Section 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 of cost involved.
Section 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.
Section 27. Transitory provisions. — Upon approval of
this Decree all government property issued or assigned to the different
offices or departments of local government 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.
Section 28. Implementing rules and regulations. — The
Secretary of Finance jointly with the Secretary of General Services
shall promulgate rules and regulations to effectivity 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.
Section 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.
Section 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.
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