Monday, December 2, 2019

Tips and Tactics for Effective Contract Implementation


TechSpecs as Contract Provisions
1. End-User/OBSUs must be conscientious in doing their own market research for their procurement requirements, carefully scanning for products actually available in the Philippine market, and coming up with Purchase Requests based on standard technical specifications in the industry. It must be emphasized that Branding is strictly prohibited, just like “custom-fitting”; but specific requirements based on reputed quality/service standard and known compatibility to existing equipment currently in use, including considerations of “long-term acquisition costs” for maintenance, repair or replacement of parts, may be allowed.
2. While suppliers themselves indicate specific “brands” of items in their bids/quotations, they are not strictly bound by them and “substitution” is possible if the replacements/substitute goods are still compliant with the original technical specifications (weight in grams, expiration date  reqts) in the PR/TOR and there would be no change in price/cost. In the same manner, the maximum content/grams requirement may be complied with in various packaging (combination of bottles or sachets) if there is no specific or strict instruction. All these must be with End-User approval and consent.
3. For goods requiring approval or prior editing/proofing of sample designs as indicated in the Terms of Reference or PO/contract, End-User should be realistic about timelines and provide allowance in the contract term/periods. As such, instead of exact dates for delivery, we suggest the use of reference dates Ex. 7 days from approval.
4. For supply of goods/equipment with installation, besides ensuring that the technical specifications are accurate, compatibility with other parts must likewise be duly considered. Moreover, it is highly recommended that ocular inspections/site visits be conducted by the supplier/service provider whether they requested or not. It is expected that in such cases, the End-User/OBSU has properly coordinated and requested for technical assistance from the AS-BGMS or ICTMS for matters like electrical connection or wirings.
On Rush/Urgent Procurements
5. Especially for rush/urgent procurements, the End-User should take responsibility for getting all relevant documents duly signed by their HOPE and ensuring that the PO/contract gets funded through the FMS-Budget Division. Otherwise, this is a major source of delay.
6. No delivery shall be received without a duly signed contract/PO. In the same manner, all deliveries shall initially be received by the Supply Unit staff, and even if the End-User has an urgent need for immediate issuance, it must be duly coordinated with the Supply Unit and the Inspection Unit. Note that in such cases, the receiving End-User will be responsible for acknowledging delivery/receipt of goods, waiving prior inspection and/or opportunity for rejection and immediate replacement. Nonetheless, proper documentation shall still be required as basis for payment. 
Of Delivery Schedules and Timelines
7. Sometimes suppliers/service providers Request for Extension due to unavailability/out-of-stock items, End-Users are duly informed of this and must respond immediately if they approve or not, and if they are waiving liquidated damages for the delay. Suppliers/service providers are allowed at least 1 extension for valid reasons and if the delay is not too long. 
8. For delays not of the supplier/service provider’s fault, such as the unreadiness or unavailability of the place where the item is to be installed/stored, End-User must issue a Suspension of Work/Deliveries and coordinate with PMS-CMD to duly inform supplier/service provider when work can be resumed. End-User/OBSUs are discouraged from coordinating directly with suppliers without notifying the PMS-CMD.
Said orders/notice of suspension of deliveries as well as resumption of deliveries must be properly accounted for, dates and durations recorded accordingly for proper accounting of any delays. Said periods shall also be the basis for excusing the delays and waiving the imposition of liquidated damages. Note that anything undocumented and outside said authorized suspended delivery periods will be liable for penalties.
Extensions vs Amendments
9. For Consulting Services, the End-User must ensure that the Terms of Reference (TOR) includes all necessary arrangements with the service provider since these should be the clear agreements reflected in the consultancy contract. Hence, for pending deliverables or unfinished work due to delays, extensions may be requested and granted if there is no additional cost and change in the deliverables except for the extra time. However, for substantial changes in the original terms and conditions affecting the deliverables itself, payment tranches, source of fund, etc., a new/revised TOR is needed which will also be the basis for an Amended Contract. In such cases, the amended contract may entail another round of legal review from the Legal Service as well as a BAC Resolution allowing the extension. Note that extensions are allowed only prior expiration and not for lapsed contracts. Other than these technical aspects handled by PMS, actual contract administration and monitoring of the consultancy is done by the End-User.
Facilitation of Payments
10. Be mindful of the mandated documentary requirements as supporting documents for disbursement vouchers during payment. For Board and Lodging/accommodations, as well as for meals/catering, required to be submitted are the a) complete Attendance Sheet with original signatures of participants/attendees, and b) Certification of Services Rendered. For bus rentals, no separate “Passengers’ List” shall be required where the Attendance Sheet or Special Order of participants for the related activity is available.
End-Users are advised to also submit a feedback/incident report for any unsatisfactory service by the supplier/service provider for appropriate action by the Procurement Mgt Service.
11. In cases of B & L, or meals/catering services, with Additional pax, PS-CMD will only process the original contract/Purchase Order for immediate payment. Additional pax may require a Supplemental Proposal for fund source purposes and/or new PO. Hence, the payment for said extra/additional pax shall be facilitated by the End-User themselves such as receiving directly the new, separate billing statement from the service provider, as well as the preparation of a new PO. Said documents may be transmitted to the FMS afterwards together with the necessary Supplemental Proposal, and accompanying Justifications and Certifications.
Note: To avoid complications from “extras/additional pax”, we recommend that the End-User stick to the maximum number of pax as duly stated in the activity proposal for the PO/quotation, and just arrange with the hotel for a “guaranteed” # of pax only, so we pay for the actual number of pax served/fed, or at best, the “guaranteed” number of pax only. Common mistake is pegging the # of pax to the minimum “guaranteed” for the quotation/PO, when the attached budget proposal clearly covers more. When the number of pax eventually “balloons”, this is difficult to explain in the required supporting Justifications and Certifications.
Documentary Requirements
12. For advocacy Tshirts, training kits, etc. Distribution Lists are required, and even for undistributed items like IEC materials, DSWD vests, laptops, etc. “one-time” Inventory Custodian Slips (ICS) or Property Accountability Receipts (PAR) under a Director’s name may be required to facilitate payment. The ICS shall be subsequently be cancelled and/or transferred once there are named individuals already. (Proc. Advisory #19-002)
13. For equipment like Desktop computers, laptops, notebooks, vehicles, etc., delivered/downloaded to the regions/field offices, these also require Property Transfer Reports (PTRs) in addition to Final Acceptance and Inspection Reports. For NFA rice deliveries, submission of Statement of Acct/actual billing, duly acknowledged/signed Delivery Receipts, warehouse sales invoice (WSI) is required in addition to the PO and/or MOA.
14. Deliveries of goods must be reflected in their actual delivered quantities in the Delivery Receipts (DRs). Said amounts or quantities must be consistent in the Purchase Order delivery terms/schedule, Delivery Receipts, Sales Invoice, Acknowledgement Receipts and Inspection Report. Should the supplier deliver extra quantities/amounts in case of defective items for immediate replacement, said extra amounts should be properly documented in a SEPARATE Delivery Receipt. And in case said extra items are not utilized as replacement for defective goods, and supplier manifests their willingness to “donate” said items instead, DSWD should likewise document such as an official donation through the NRLMB’s Donation facilitation unit.
15. Defective goods requested for replacement must be made within the allowable 3-month warranty period counted from the last date of delivery. As such, we enjoin the relevant offices and bodies, such as the NRLMB’s Quality Assurance Unit and the DSWD Inspection Committee to endeavour to report such defective items as soon as possible to the PMS-CMD for proper coordination with the supplier. Note also that only those defects and damages which were inherent to the delivered goods such as dents, cracks, rusted cans, etc. may be covered by replacement. Other damages caused by subsequent re-packing activities, ie., torn or cut sachets, may not be covered by the warranty.  
16. To facilitate processing of requests for repairs of malfunctioning equipment such as laptops, printers, scanners, still covered/under warranty, kindly attach or provide us copies of the necessary supporting documents, such as the following:
a) Pre-Repair Inspection Report from the OBSU with relevant expertise
b)Technical Assistance Report from the OBSU with relevant expertise;
c) Inventory Custodian Slip (ICS), or
d) Property Accountability Receipt (PAR).  (Proc. Advisory #18-010)



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