SOP Library
SOP NO:
Memo AO-97-11-020-A
(List of Exhibits/Attachments)
Missi
on
:
Finance and Administration
Area:
General Services (GS)
Activity:
Purchasing/Inspection and Fixed Asset Disposition (GS-PD)
Title:
Guidelines on the Divestment of NFA's Non-Performing Real Properties and Peripheral Projects
Date Approved/Issued:
11/25/1997
Date Effective:
11/25/1997
Digest:
I. TERMS OF REFERENCE
A. Rationale
B. Objective
C. Scope
D. Basis
II. IMPLEMENTING GUIDELINES
A. Statement of Policies
1. Proceedings on the disposal of non-performing real properties and peripheral projects shall be undertaken by a divestment committee in the presence of the COA Auditor or its representative.
2. The divestment committee which shall be created by Management through issuance of a Special Order will cover all concerns relative to the divestment of non-performing real properties and peripheral projects to wit:
a) Recommend for approval of the Administrator and confirmation of the NFA Council the disposition of non-performing and underutilized real properties and peripheral projects through the most advantageous and expeditious mode and terms of disposition;
b) Undertake the bidding of the real properties approved by the Administrator for disposition. In case of failure of bidding, it will pursue other ways of disposing the identified assets.
3. Should there be developments that warrant retention of the properties previously identified for divestment, (ex. A non-performing real property previously identified for disposition can be used in furtherance of the agency's programs such as Project-Self Reliance and Gintong Ani Program) the divestment committee shall submit for approval of the Administrator and confirmation of the NFACouncil the retention of the non-performing real property.
B. Specifications of Authority
The specifications of authority on the divestment or disposal of non-performing real properties and peripheral projects are as follows:
1. Below P 1 M
Recommending Approval - Divestment Committee
Approval - Administrator
2. P 1 M and above
Recommending Approval - Divestment Committee
Approval - Administrator
Confirmation - NFA Council
C. Appraisal of Non-Performing Real Properties and Peripheral Projects
In appraising the value of non-performing real properties and peripheral projects, the following factors must be considered:
Cost of Acquisition of Propeties
Accumulated Depreciation (if any)
Net Book Value at the time of appraisal; and
Other information relative to the asset which will assist in arriving at the reasonableness of the appraisal or valuation of the property.
D. Modes of Disposal/Divestment
Non-performing real properties and peripheral projects shall be disposed in the manner advantageous to the Agency which may either be one of the following modes:
1. Sale Thru Public Bidding
The divestment or disposal of non-performing real properties and peripheral projects shall be undertaken primarily thru public bidding which should observe and adhere to established mechanics and procedures. The property shall be sold to the highest bidder under the supervision of the divestment committee with due consideration to the following:
a) Adequate publicity and notification so as to attract the greatest number of interested parties
Non-performing real properties and peripheral projects must be advertised thru printed notice in the official gazette or in an any newspaper of nationwide circulation for not less three (3) consecutive days.
b) Sufficient time frame between publication and date of bidding;
c) Opportunity afforded to interested parties to inspect the property or assets to be disposed of;
d) Bond and other pre-qualification requirements to guarantee performance; and
e) Fair evaluation of tenders and proper notification of award.
2. Sales thru Negotiation
For justifiable reasons and as demanded by the exigencies of the service, disposal thru negotiated sale maybe resorted to and udnertaken by the divestment committee taking into consideration the following factors:
a) There was failure of public bidding. There is failure of public bidding in any of the following instances:
If there is lack of offerors
In this case, the offer or bid, shall not be opened.
All the offers/tenders are non-complying or unacceptable.
A tender is non-complying or unacceptable when it
does not comply with the prescribed legal, technical
and financial requirements for pre-qualification.
b) The negotiation maybe conducted on one-on-one basis or in group, provided that due communication between the offerors and the NFA is established to ensure that the NFA gets the best price.
c) To prevent possible collusion among unscrupulous parties, a record of the proceeds of the negotiation must be maintained by the divestment committee.
d) It is understood that the price agreed upon at the negotiation shall not be lower than the floor price fixed by the NFA.
3. Swapping/Exchange
Swapping which is the direct exchange of properties without the use of money and without reference to price, or the exchange of properties of one character for properties of another, maybe made with other government agencies or government-owned and/or controlled corporations. This shall be resorted to where there is an offer that would redound to the interest of and is advantageous to NFA.
4. Transfer/Sale to other Government Agencies
Where the property or assets involved are no longer serviceable or needed by the agency, they maybe transferred/sold to other government entities/agencies at a price not lower than the appraised value of the property, upon authority of the NFA Council and in accordance with prescribed procedures.
5. Divestment Programs covered by "Negotiated Projects" (as differentiated with one-shot negotiated sales) - this concerns divestment of NFA's non-performing real properties thru negotiated sale to LGUs and other government agencies at a price set by NFA.
E. Pre-Disposal/Divestment Report to COA
To facilitate audit of the disposal/divestment of corporate assets, the divestment committee shall furnish the Auditor at least twenty (20) days before the advertisement of the call to public bidding with a copy each of the following documents:
1. Program for disposal with time schedule
2. Inventory Report showing the itemized list and complete description of the assets.
3. Appraisal Report showing the appraised values of the assests, prepared by an in-house and/or independent appraiser.
4. Disposal procedures to be adopted
The divestment committee shall furnish the Auditor with a copy of the schedule or notice of opening of bids, at least five (5) days before the scheduled time.
F. Specific Responsibilities of Concerned Departments
1. Department for Corporate Planning (DCP)
DCP in coordination with the Department for Marketing Operations (DMO) will identify and evaluate non-performing real properties and/or post harvest facilities on real properties to be disposed;
Also in coordination with DMO, it shall evaluate non-performing real properties and peripheral projects identified and recommended for disposal by the field officials and if warranted recommend same to the divestment committee.
2. Special Project Office (SPO)
SPO will formulate detailed divestment programs for every non-performing real and/or post harvest facillities on real properties approved for divestment. This includes the preparation of terms and conditions of divestment biddings and of divestment bidding activites, and bases of negotiations, if any, with prospective buyers.
SPO will also serve as the central depository of records of all divestment activities undertaken by the divestment committee, and shall initiate third party appraisal.
3. Technical Services Department (TSD) will conduct in-house appraisal of real properties.
4. The General Services Department (GSD) will conduct the physical inventory of the real properties submitted and/or approved for divestment.
5. The Department for Accounting Services (DAS) will update the accounting records, in terms of cost and depreciation of the real and/or post-harvest facilities on such real properties, in coordiantion with concerned departments.
6. The Department for Legal Affairs will provide the legal research and prepare documents relative to divestment proceedings.
7. COA will act as an observer during the divestment proceedings. The Auditor shall confirm the appraised value as agreed upon by divestment committee.
8. The Regional Managers will identify and recommend the divestment of non-performing real properties and peripheral projects to DCP copy furnished DMO for evaluation.
9. The field officials will be responsible in preparing the initial spadwork for the eventual divestment of identified real properties including clearing of squatters, verification of titles, update of payment, coordination, liaison, production of necessary documents until final consummation of the divestment transaction.
G. Budget for the Divestment Activities
SPO shall request annually for a budget to cover the expenses to be incurred in the divestment of real properties. The budget shall cover, but shall not be limited to the following:
payment of real property taxes
appraisal expenses
publication of bidding
legal cases
demolition expenses
contingency
All rulings and/or issuances inconsistent herewith are deemed superseeded.
III. RESPONSIBILITIES
IV. FLOW CHART
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