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contract for purchase of goods

Post by gherzy27 on Thu Jul 28, 2011 2:09 pm

Hi All,

These are my queries:

1. Is there a need for a contract when what is procured is goods? The ABC does not exceed 1M.
2. Can a Purchase Order be used as a contract?
3. Is supply of roll-ups considered goods?

Thanks for your prompt reply.

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Re: contract for purchase of goods

Post by ikuz23 on Thu Jul 28, 2011 2:43 pm

gherzy27 wrote:Hi All,

These are my queries:

1. Is there a need for a contract when what is procured is goods? The ABC does not exceed 1M.
2. Can a Purchase Order be used as a contract?
3. Is supply of roll-ups considered goods?

Thanks for your prompt reply.

good day sir,

1. yes, a contract agreement must be made under public bidding for goods & infra projects (please see PBD 4th edition for the forms).
2. Purchase Order's can be use as contract but for alternative method of procurement only.
3. supply of roll-ups are considered goods (that is from "Pins to Battleship" are considered goods)
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Re: contract for purchase of goods

Post by gherzy27 on Thu Jul 28, 2011 2:53 pm

yes exactly....however, the bidding of roll-up failed twice and that is why we resort to negotiated contract...so that means we no longer need a contract agreement since it is negotiated procurement, an alternative one?because the auditor is asking a contract that is why i'm confused.

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Re: contract for purchase of goods

Post by ikuz23 on Thu Jul 28, 2011 3:58 pm

sorry sir but I agree with your coa. a negotiated procurement (failed twice) is under alternative mode of procurement provided that the bac have invited and engaged in negotiations with a sufficient number of suppliers, contractors or consultants to ensure effective competition. but a contract agreement still suggested to be use, not purchase order.
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Re: contract for purchase of goods

Post by gherzy27 on Thu Jul 28, 2011 4:16 pm

yap...we invited through a publication (for 17 days) but only one has responded...so here is my followup question...you said sir that purchase order can be used for alternative method of procurement. does it mean all alternative method of procurements needs contract agreement per revised forms?or only for negotiated procurement.

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Re: contract for purchase of goods

Post by ikuz23 on Thu Jul 28, 2011 4:51 pm

yes sir, we use P.O's on alternative methods like svp, shopping, direct contract, etc... all negotiated proc except "NP on two failed biddings", it must be contract agreement not Purchase Order.
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Re: contract for purchase of goods

Post by sunriser431 on Thu Jul 28, 2011 7:04 pm

gherzy27 wrote:Hi All,

These are my queries:

1. xxxx
2. Can a Purchase Order be used as a contract?
3. xxxx

Thanks for your prompt reply.
For similar topic, follow the LINK bounce
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CONTRACT FORM FOR PROCUREMENT OF GOODS

Post by enyl on Wed Feb 15, 2012 10:22 am

GOOD AM. CLARIFICATION LANG.
SA CONTRACT FORM ON GOODS, WALANG AVAILABILITY OF FUND TO BE FILLED AND SIGNED BY THE ACCOUNTANT.
MY QUESTION IS, IS IT OK OR LEGAL BA YUN? KASI FROM WHAT I KNOW, IN EVERY GOVERNMENT CONTRACT WITH REGARD TO PROCUREMENT, IT IS ALWAYS A REQUIREMENT NA MAY FUNDS AVAILABILITY. THEREFORE, KUNG WALANG AVAILABILITY OF FUNDS ANG CONTRACT FORM, THE CONTRACT IS NOT BINDING. UNLIKE SA CONTRACT AGREEMENT FOR INFRA AT PURCHASE ORDER FOR ALTERNATIVE MODE NA MAY AVAILABILITY OF FUNDS.

IF THERE IS ANY COA AUDITOR ONLINE, I REALLY NEED THIS ISSUE TO BE CLARIFIED
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Re: contract for purchase of goods

Post by Recks1925 on Wed Feb 15, 2012 3:09 pm

enyl wrote:GOOD AM. CLARIFICATION LANG.
SA CONTRACT FORM ON GOODS, WALANG AVAILABILITY OF FUND TO BE FILLED AND SIGNED BY THE ACCOUNTANT.
MY QUESTION IS, IS IT OK OR LEGAL BA YUN? KASI FROM WHAT I KNOW, IN EVERY GOVERNMENT CONTRACT WITH REGARD TO PROCUREMENT, IT IS ALWAYS A REQUIREMENT NA MAY FUNDS AVAILABILITY. THEREFORE, KUNG WALANG AVAILABILITY OF FUNDS ANG CONTRACT FORM, THE CONTRACT IS NOT BINDING. UNLIKE SA CONTRACT AGREEMENT FOR INFRA AT PURCHASE ORDER FOR ALTERNATIVE MODE NA MAY AVAILABILITY OF FUNDS.

IF THERE IS ANY COA AUDITOR ONLINE, I REALLY NEED THIS ISSUE TO BE CLARIFIED

Hi Enyl,
I am not an auditor but this may help.
Contract has many attachments and one of them is the bidding document (RA9184 IRR Sec 37).. the bidding document on the other hand is composed of many documents (section 17 )and one of them is the Approved Budget for the COntract where the PE signifies the availability of fund for the project. Smile
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Re: contract for purchase of goods

Post by Jovinal on Wed Feb 15, 2012 8:53 pm

In the procurement of goods, before the posting of invitation to bid , the Treasurer / Accountant will certify on the Purchase Request the Availability of Fund.

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Re: contract for purchase of goods

Post by RDV @ GP3i on Wed Feb 15, 2012 11:55 pm

enyl wrote:GOOD AM. CLARIFICATION LANG.
SA CONTRACT FORM ON GOODS, WALANG AVAILABILITY OF FUND TO BE FILLED AND SIGNED BY THE ACCOUNTANT.
MY QUESTION IS, IS IT OK OR LEGAL BA YUN? KASI FROM WHAT I KNOW, IN EVERY GOVERNMENT CONTRACT WITH REGARD TO PROCUREMENT, IT IS ALWAYS A REQUIREMENT NA MAY FUNDS AVAILABILITY. THEREFORE, KUNG WALANG AVAILABILITY OF FUNDS ANG CONTRACT FORM, THE CONTRACT IS NOT BINDING. UNLIKE SA CONTRACT AGREEMENT FOR INFRA AT PURCHASE ORDER FOR ALTERNATIVE MODE NA MAY AVAILABILITY OF FUNDS.

IF THERE IS ANY COA AUDITOR ONLINE, I REALLY NEED THIS ISSUE TO BE CLARIFIED

The Accountant has to issue a Certificate of Availability of Funds (CAF) which should be attached to the contract.

You are correct, it is a necessary requirement before contract signing. A contract without the required CAF is considered null and void ab initio per ruling of the Supreme Court.
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Re: contract for purchase of goods

Post by Jovinal on Thu Feb 16, 2012 9:23 am

I dont think failure to prepare CAF can make contract null and void ab initio because this ruling apply only if there is really no actual appropriation or Fund for that contract entered.
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Re: contract for purchase of goods

Post by accounting on Thu Feb 16, 2012 10:04 am

CAF Link. Laughing

this may help


Last edited by accounting on Thu Feb 16, 2012 10:05 am; edited 1 time in total (Reason for editing : no tag link)
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Re: contract for purchase of goods

Post by RDV @ GP3i on Thu Feb 16, 2012 10:15 am

Jovinal wrote:I dont think failure to prepare CAF can make contract null and void ab initio because this ruling apply only if there is really no actual appropriation or Fund for that contract entered.

Please read the Supreme Court ruling in DOH vs. C.V. Canchela and Associates because I am not the one saying that a contract without a CAF is null and void ab initio.

And there are other more recent Supreme Court rulings on the same; i.e. DPWH vs Ronaldo Quiwa, G.R. 183444, October 12, 2011 and PNR vs, Kanlaon Construction Enterprises Co., Inc., G.R. 182967, April 6, 2011
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Re: contract for purchase of goods

Post by Jovinal on Thu Feb 16, 2012 9:33 pm

This are the Sections of PD No. 1445:

Section 85. Appropriation before entering into contract.

1. No contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefor, the unexpended balance of which, free of other obligations, is sufficient to cover the proposed expenditure.

2. Notwithstanding this provision, contracts for the procurement of supplies and materials to be carried in stock may be entered into under regulations of the Commission provided that when issued, the supplies and materials shall be charged to the proper appropriation account.

Section 86. Certificate showing appropriation to meet contract. Except in the case of a contract for personal service, for supplies for current consumption or to be carried in stock not exceeding the estimated consumption for three months, or banking transactions of government-owned or controlled banks no contract involving the expenditure of public funds by any government agency shall be entered into or authorized unless the proper accounting official of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and that the amount necessary to cover the proposed contract for the current fiscal year is available for expenditure on account thereof, subject to verification by the auditor concerned. The certificate signed by the proper accounting official and the auditor who verified it, shall be attached to and become an integral part of the proposed contract, and the sum so certified shall not thereafter be available for expenditure for any other purpose until the obligation of the government agency concerned under the contract is fully extinguished.

Section 87. Void contract and liability of officer. Any contract entered into contrary to the requirements of the two immediately preceding sections shall be void, and the officer or officers entering into the contract shall be liable to the government or other contracting party for any consequent damage to the same extent as if the transaction had been wholly between private parties.



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Re: contract for purchase of goods

Post by RDV @ GP3i on Thu Feb 16, 2012 9:57 pm

The following is a quote from the SC decision in the C.V Canchela case in relation to the quoted sections of PD 1445:

"P.D. 1445 (The Auditing Code of the Philippines) provides that no contract involving the expenditure of public funds shall be entered into unless there is an appropriation therefor and unless the proper accounting official of the agency concerned shall have certified to the officer entering into the obligation that funds have been duly appropriated for the purpose and that the amount necessary to cover the proposed contract for the current fiscal year is available for expenditure on account thereof, subject to verification by the auditor concerned.  The certificate signed by the proper accounting official and the auditor who verified it shall be attached to and become an integral part of the proposed contract. Any contract entered into contrary to the foregoing requirements is void."
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Re: contract for purchase of goods

Post by engrjhez® on Thu Feb 16, 2012 10:02 pm

Can anyone also comment on the argument that ab initio nullity may not be totally applicable apply to LGUs as what "accounting" cited.

http://gppb.forumotion.com/t1409-is-a-certificate-of-availability-of-funds-caf-prior-to-entering-contract-in-lgus-mandatory

For academic purposes and for the argument of Jovinal. Smile
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Re: contract for purchase of goods

Post by RDV @ GP3i on Thu Feb 16, 2012 10:14 pm

There is a principle in statutory construction that "where the law does not distinguish, we should no distinguish." Another principle is that a "special law prevails over a general law" even if the general law comes later than the special law.

The following is a quote from the SC ruling in PNR vs Kanlaon Construction:

"The law expressly declares void a contract that fails to comply with the two requirements, namely, an appropriation law funding the contract and a certification of appropriation and fund availability. The clear purpose of these requirements is to insure that government contracts are never signed unless supported by the corresponding appropriation law and fund availability.
 
The three contracts between PNR and Kanlaon do not comply with the requirement of a certification of appropriation and fund availability. Even if a certification of appropriation is not applicable to PNR if the funds used are internally generated, still a certificate of fund availability is required. Thus, the three contracts between PNR and Kanlaon are void for violation of Sections 46, 47, and 48, Chapter 8, Subtitle B, Title I, Book V of the Administrative Code of 1987, as well as Sections 85, 86, and 87 of the Government Auditing Code of the Philippines."
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Re: contract for purchase of goods

Post by Jovinal on Thu Feb 16, 2012 10:21 pm

For me a mere failure to prepare and attached the CAF but in reality there is an appropriation and Funds/Cash Available for payment, does not make the Contract null and void ab initio.
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