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B. Industrial Commodities

1. Fertilizers such as potash and urea;

2. Thermal coal;

3. Steel (slabs and coil); and

4. Other commodities such as zinc ingots, ammonia and graphite electrodes.

The type and quantity of commodities sourced under this Project will be determined by mutually agreed Annual Procurement Plans prepared by NEDA with the assistance of the CIDA procurement advisor/monitor.  The acceptability of Canadian commodities to the PHILIPPINES will, in part, be based on their continued competitiveness compared to other international sources.  All commodities, with the exception of the vaccines, will be procured by the PHILIPPINES’ designated purchasers through a competitive tendering process. In the case of vaccines, Supply and Services Canada will conduct the procurement.  For all other commodities, the PHILIPPINES’ designated purchasers will issue the tenders to Canadian Suppliers as described in Annex "D".

A procurement advisor/monitor will be hired by CIDA to assist NEDA and CIDA in the project's implementation.  The consultant will monitor the procurement activities, provide up-to-date information on the PHILIPPINES' requirements, Canadian supply capacity and pricing, and assist in the preparation of the Annual Procurement Plans. He/she will also monitor the monetization process of the industrial commodities and the deposit of the proceeds from their sale into the special account set up for the Development Fund.

A year prior to the end of the project, CIDA shall hire a Canadian consultant to evaluate the efficiency in the timing and coordination of the Project, and shall measure the results obtained and the extent to which those results contributed in achieving the objectives of the Project.

The Canadian procurement advisor/monitor and evaluation consultant may be assisted by locally hired consultants as part of the Canadian contribution.

Project Estimated Budget (in Canadian $)

Should there be a need to increase the amount allocated for support commodities, the increase should not be more than 10 per cent of the project total budget for both types of commodities, in which case the allocation for industrial commodities will be reduced accordingly.

ANNEX "B"
  ROLES AND RESPONSIBILITIES OF CANADA

CANADA shall ensure that the following responsibilities are carried out:

A. Canadian International Development Agency (CIDA)

The CIDA Project Team, headed by a Project Team Leader (PTL), will perform administrative functions to ensure effective and efficient Project implementation and will provide the necessary coordination for the discharge of the responsibilities of CANADA under this Project. Generally the Project Team will:

1. Liaise with NEDA and provide requested information relating to the Project (especially in regard to the Annual Procurement Plans and tendering procedures) to ensure its timely implementation;

2. Approve the procurement process, plan the detailed allocation of funds, and issue purchase order confirmations to Canadian suppliers;

3. Control the disbursement of project funds for the procurement of commodities and make payments to Canadian Suppliers;

4. Monitor the procurement process through the procurement advisor/monitor to ensure conformity with Canadian regulations;

5. Consult with the PHILIPPINES on the schedule of visits and activities of the procurement advisor/monitor and the project evaluation consultant; and

6. Conduct project reviews to assess the progress of the Project and the extent to which its objectives have been achieved.

B. Canadian Procurement Advisor/Monitor
  The Canadian procurement advisor/monitor shall monitor the tendering and other activities of the project to ensure that procurement is consistent with established CIDA guidelines.

The Canadian procurement advisor/monitor will also assist the Philippine executing agencies in preparing the annual procurement profiles.

C. Canadian Evaluation Consultant

The Canadian evaluation consultant shall evaluate the efficiency in the timing and coordination of the Project, and shall measure the results obtained and the extent to t which those results contributed in achieving the objectives of the Project.

ANNEX "C"
  ROLES AND RESPONSIBILITIES OF THE PHILIPPINES

A. National Economic and Development Authority (NEDA)

NEDA shall act as the representative of the PHILIPPINES in general and shall coordinate the Project in the Philippines.

More specifically, NEDA shall:

1. Designate the Philippine executing agencies and prepare, in coordination with said executing agencies, Annual Procurement Plans (APPs) with the assistance of the CIDA procurement advisor/monitor for CIDA's concurrence. The APPs will consist of estimates of the quantity and value of commodities that will be procured for the relevant Canadian fiscal year (April-March). This activity will usually occur in December/January of the prior fiscal year.

2. Advise the executing agencies of their allocation for the relevant fiscal year according to the CIDA approved APP.

3. Monitor the progress of the Project in the Philippines, assuring its timely execution and providing the necessary coordination for the discharge of the responsibilities of the PHILIPPINES.

B. Other Departments

1. The Bureau of Customs shall facilitate the entry and clearing of commodities provided under the Project.

2. The Bureau of the Treasury (BTr) shall open and maintain a special account designated as "The Canada-Philippines Development Counterpart Fund" as established under the MOU signed on 19 December 1988.

3. The Department of Budget and Management (DBM) shall ensure the timely releases of the necessary funds for the effective implementation of the Project.

C. Executing Agencies

The Philippine executing agencies shall:

1. With the exception of the Department of Health (DOH), prepare draft tender documents with the assistance of the CIDA procurement advisor/monitor, as required, for CIDA's approval before issuance.

2. With the exception of DOH, issue tenders in Canada for their respective commodity requirements in accordance with the allocated funds and APP as agreed upon by NEDA and CIDA.

3. With the exception of DOH, analyze the tenders received from the Canadian Suppliers and consult with CIDA through the procurement advisor/monitor before proceeding to issue purchase orders/contracts.

4. With the exception of DOH, take responsibility for all matters relating to the importation of commodities into the Philippines including the clearing with import regulatory authorities, advising the Central Bank of the Philippines of no-dollar imports, payment of import duties and taxes, inspection fees, storage charges and any other related costs.

5. Facilitate the clearance and release of commodities in the Philippine ports of entry.

6. Provide all necessary in-country transportation following delivery and discharge of the commodities at Philippine ports of entry.

7. With the exception of Educational Development Project Implementing Task Force (EDPITAF) and DOH, remit to the Development Fund the net peso proceeds generated from the sale of Canadian commodities under the Project. These executing agencies may retain up to 1% of the peso proceeds to cover administrative and other related expenses subject to the terms determined by NEDA and DBM.

8. Provide information to the Canadian procurement advisor/monitor and project evaluation consultant as required and keep CIDA informed of any significant activities pertaining to the Project.

9. Immediately notify CIDA and NEDA of loss or damage to goods and equipment related to the Project while in transit, and of any payments received for such loss or damage under insurance policy covered by the procurement contracts.

ANNEX "D"
  PROCUREMENT AND PAYMENT PROCEDURES

PART I: PROCUREMENT PROCEDURES

A. General

1. Commodities eligible for funding pursuant to this Memorandum of Understanding shall be procured by the PHILIPPINES in accordance with established Philippine contracting regulations and procurement rules and regulations of CANADA.

2. For the efficient management and financial control of the Project, NEDA will:

- provide CIDA with the list of designated executing agencies;

- prepare, in coordination with Philippine executing agencies, Annual Procurement Plans with the assistance of the procurement advisor/monitor for CIDA's concurrence; - allocate the Canadian contribution, subject to CIDA's annual allocation, to the designated executing agencies;

- ensure that the designated executing agencies adhere to the procurement terms and conditions of this Memorandum of Understanding; and

- ensure that a representative of the Canadian Embassy has access to all tender openings.

B. Executing Agencies Procurement Procedures

With the exception of DOH where Supply Services of Canada (SSC) will take responsibility for the vaccine procurement, all other executing agencies shall adhere to the following guidelines:

1. All procurement to be made pursuant to this Memorandum of Understanding shall be done by a competitive tender call.

2. The executing agencies shall provide CIDA and NEDA with detailed specification of, and quantity of commodities required, along with a delivery schedule and any other condition(s) which may have cost implications.

3. CIDA, through the procurement advisor/monitor, shall provide the executing agencies with a list of Canadian firms capable of providing the required goods and services.

4. Executing agencies shall prepare tender documents with the assistance of the procurement advisor/monitor and shall not release them prior to CIDA's concurrence.

5. The executing agencies shall provide CIDA with a copy of each competitive tender call, for review, prior to its release and advertisement. CIDA will review the tender to determine if it contains adequate information to ensure maximum benefit from the Project.

6. The executing agencies shall ensure that the competitive tender calls are furnished to the Canadian firms sufficiently in advance of the tender closing date to permit adequate time for preparation, despatching and receipt of offers prior to the established closing date.

7. The following information shall be included in all tender calls:

a) detailed specifications, quantity of commodities required, delivery schedules, payment terms and any other condition(s) which may be required;

b) the date, hour and address that bids are to be received in order to be eligible for consideration;

c) instructions that prices are to be quoted in Canadian dollars on GIF liner or free out terms Philippines port of entry basis;

d) instructions to suppliers that CIF liner or free out terms cost will be paid by CIDA under the Project on behalf of the PHILIPPINES; and

e) instructions to suppliers that a copy of the quotation submitted must be sent to CIDA headquarters, within 2 days of tender closing and be accompanied by a completed Canadian Content Declaration form.

f) In the event that all submitted offers fail to meet the required specifications or conditions of the competitive tender calls and therefore cannot be considered for acceptance, a competitive tender call must be recalled from all eligible Canadian firms on the basis of acceptably modified specifications and conditions.

g) For a Bond stipulated in the tender call, the Bond shall be issued to the PHILIPPINES and the Receiver General of Canada jointly and any funds obtained will be returned to the Project.

8. Upon the closing of the competitive tender call, the executing agency shall:  

a) consider only offers received within the time and date set by the competitive tender call;

b) return all late offers to the tenderers unopened;

c) select the lowest priced technically responsive offer, or where consideration is given to other offers, obtain the prior written concurrence of CIDA before selecting that offer;

d) advise CIDA immediately after the assessment of the offers, the names of the tenderers together with the details of the quotations and the name of the tenderer to whom it is proposed to award the tender; and

e) ensure that no Purchase Order is issued to the successful tenderer until CIDA has reviewed and approved the documentation and advised the executing agency in writing to proceed with the award.

C. Procurement Procedures for Vaccines

1. DOH with the assistance of UNICEF shall submit their annual vaccine requirements for the EPI to CIDA with information to NEDA.

2. The CIDA Project Team Leader shall forward these requirements to SSC.

3. SSC, through an agreement with CIDA, shall:

a) bear the overall procurement responsibility to execute the procurement of the vaccines;

b) arrange for quality assurance services in Canada; and

c) arrange for their transportation and delivery to the designated port of entry in the Philippines.

PART II: PAYMENT PROCEDURES

A. Purchase Order

1. Once the tender has been awarded or the selection of the Canadian firm has been approved by CIDA, the executing agency shall issue a Purchase Order to the successful Canadian firm and forward a copy of the said Order to CIDA through the Canadian procurement advisor/monitor at the same time it is despatched  to the successful tenderer.

2. Each Purchase Order shall contain the following information:

a) detailed specification, quantity, unit of measure, unit price of the commodities;

b) a delivery schedule in accordance with schedule offered by the successful tenderer;

c) information that the CIF price will be paid by CIDA under the Project;

d) advice concerning the distribution of required documentation;

e) the name and address of the consignee, the party to notify (if applicable) and the port of discharge; and

f) information to the effect that CIDA shall examine the purchase order and issue a Purchase Order Confirmation.

3. The Purchase Order shall not contain specifications and conditions which are not consistent with the specifications contained in the competitive tender call and agreed to by the successful tenderer in his offer.

4. Upon review of the Purchase Order by CIDA, CIDA shall issue a Purchase Order Confirmation and a copy of this Confirmation shall be provided to the executing agency and to the procurement advisor/monitor. This Purchase Order Confirmation will be binding and any charges resulting from its cancellation will be for the account of the PHILIPPINES and will be automatically debited from the contribution of CANADA.

B. Payment Procedures

The payment for the supply of the commodities under this Project shall be carried out in the following manner:

1. Upon delivery of the commodities, Canadian Suppliers shall submit to CIDA all pertinent invoices and documentation in accordance with the Purchase Order Confirmation.

2. Upon the delivery of the vaccines, the suppliers shall submit to CIDA through SSC all required documentation according to their respective supply contracts.

3. Upon receipt of the above documents, CIDA shall make payment directly to the suppliers, according to terms specified in the purchase contracts.

The Philippine executing agencies for the industrial commodities shall, at terms determined by NEDA and DBM, deposit the net peso proceeds from the sale of the Canadian commodities to the Development Fund established according to the terms of the MOU dated December 19, 1988.

C. Insurance

The preparation and submission of claims for loss or damage to the commodities, except the vaccines, while in transit shall be the responsibility of the executing agency the proceeds of the insurance will be returned to the Project.