Annual Procurement Plan

The BAC will require that an approved procurement plan (APP) be available before acting on any bidding package. No procurement can be undertaken unless it is provided for in the APP. The BAC secretariat prepares the APP based on the procurement management plans of the various units or offices within the organization. It is treated as a procurement planning document that is linked to the agency's budget plan and is updated once the organization's budget appropriation ordinance becomes final. Ideally, the APP should contain the same information as that in the procurement management plans of the organization's various units or offices, as follows:

(i)  information on whether the activity will be contracted out or implemented by administration,

(ii)  magnitude of the contract,

(iii)  procurement method to be adopted,

(iv)  time schedule for the procurement activities, and

(v)  estimated budget for the bid package.

If the existing APP of the organization has not yet incorporated the need in hospital management services, it must be updated to ensure the procurement activity is acceptable to the reviewing authorities. Keep in mind that the Commission on Audit (COA) contract review includes verification of the existence of an approved APP with its supporting documents. The APP is one of the basic elements in COA's audit of procurement, during which the auditor will verify the completeness of the required information.

Box 5: Sample Provisions in a Public-Private Partnership in Health Terms of Reference

In one of the local governments assisted by the ADB project PPP in Health (TA 7257-PHI), the following provisions in its draft terms of reference signaled how the bidding document in hospital management services could be customized:

(i)  The organization requires a qualified group of individuals or firm that can provide expertise in hospital operations, marketing, communications, and community development.

(ii)  The qualified group of individuals or firm is required to ensure the availability of quality medical care and services on competitive terms.

(iii)  The qualified group of individuals or firm is required to submit a technical proposal on how they plan to operate and manage the hospital as well as how they intend to promote and market the services being offered by the hospital to the community.

(iv)  The qualified group of individuals or firm shall be responsible for the selection, hiring, and training of the necessary personnel to manage the hospital.

(v)  The local government offers three modes of compensation from which the interested bidders can choose: reimbursement, management fee, or markups.

(vi)  The bidder is required to submit a price proposal for the local government's share of the revenue derived from the hospital management services.

(vii)  The bid shall be evaluated based on the bidder's track record, financial capability, and proposed revenue share to the local government.