SOP Library
SOP NO:
GM-PR16
(List of Exhibits/Attachments)
Mission
:
Technical Support Services
Area:
Grains Marketing (GM)
Area:
Grains Marketing (GM)
Activity:
Procurement (GM-PR)
Title:
Grains Procurement Policies and Procedures
Date Approved/Issued:
06/05/1995
Date Effective:
07/03/1995
Digest:
I. TERMS OF REFERENCE
A. Rationale
B. Objective
C. Scope
D. Basis
II. IMPLEMENTING GUIDELINES
1. Direct Procurement
1.1 As a matter of policy and priority, NFA procurement shall be mainly from small
farmers thru their registered Farmers' Organization accredited under our
Institutionalized Procurement Program.
As such, individual farmers who are not accredited FO members must secure
and present endorsement from any IPP-accredited FO nearest to them if they
wish to sell their produce to NFA. However, this concession is valid for only
one delivery and one cropping season, afterwhich they must either join an
accredited FO or organize a new one if they intend to sell again to NFA.
1.2 Procure only marketable surplus from a maximum of 5 has. farm area per
accredited farmer-member of an IPP-accredited farmer organization.
1.3 Produce of FO/Coop member who are individually licensed as traders shall
not be included in the computation of marketable surplus.
1.4 Post in public places such as municipal halls, provincial capitol, buying stations,
public markets, etc. list of farmers who sold their produce to NFA.
2. Indirect Procurement
2.1 Procurement of payment-in-kind stocks from NIA and LBP-Bank Assisted
Cooperatives (BACs).
A. Procurement Schedule
It shall be the responsibility of the Regional Manager (RM) and their respective Provincial
Managers (PM)/OICs to prepare and submit a procurement schedule to the DMO cc. RM
before the start of the procurement. It shall indicate the following:
1. Harvest and Procurement Calendar
The PMs/OICs in coordination with the local Bureau of Agricultural Statistics (BAS)/FOs and ocular inspection by NFA shall determine the harvest schedule of the different municipalities, the commodity and expected quantities. The harvest calendar shall be the basis of preparing the
procurement calendar
which shall then serve as the basis for the request and schedule of remittances of CPF. The
procurement calendar
shall be validated by the R.O. and forwarded to DMO for evaluation as shown in
Exhibit 1.
2. Provincial Procurement Target
Target quantity shall be in bags of 50 kilograms net weight. Said estimates shall be based on the grain production statistics and forecast of ex-farm prices.
3. Facility Requirements
This shall contain the facility requirements needed in the effective implementaiton of the procurement program. Requirements such as warehouse space, moisture meters, empty sacks, trucks and others. This shall help the Regional Office/DMO in the proper allocation and programming of all available facility for procurement operations.
B. Procurement Schemes
The NFA is currently undertaking several systems of procurement in its massive nationwide drive to assure the farmer's organizations (FOs) a ready market for their produce. Hereunder is the order of priority:
1. Direct Procurement - a procurement transaction between the NFA and accredited FOs. Direct procurement is divided into two modes:
a. In-warehouse mode - a procurement teams are stationed in strategically
lcoated NFA owned/leased warehouses. Instead of NFA going to the
field, the FO delivers their produce to NFA designated buying station.
b. In-field mode - this applies to the collection of stocks from FOs pre-assembled
at designated collection centers on scheduled basis.
2. Indirect Procurement
a. Procurement thru Payment in Kind (PIK) - a procurement arrangement whereby
the FO shall deliver their grain produce to NFA as their payment in kind for the
loans with NFA. However, PIK intended to various financial institutions, government
agencies shall be charged with a corresponding service fee based on Memorandum
of Agreement prepared for the purpose. The NFA, upon receipt of such produce,
shall notify the institutions of the amount delivered by the FO for them to credit the
FO's accounts.
b. Procurement thru NFA Special Programs such as the NFA Grains Industry
Financing Technique (GIFT).
C. Accreditation
1. Requirements for Accreditation of FOs
a. Certificate of Registraiton with any of the following:
a.1 SEC
a.2 CDA
a.3 LIVECOR, DTI, DOLE
b. Constitution and By-laws including list of officers;
c. Masterlist of farmer-members stating name and address of farmers,
area cultivated, yield/ha., status of tenure, farm type and signature of
farmer jointly certified by DA Technician and FO Chairman;
d. Assembly meeting/orientation for:
d.1 Adoption of resolution of intent to participate to IPP and
authorizing Farmers Organization's Coordinator (FOC).
d.2 Briefing on NFA Policies and Operation
e. FOC's 2 copies 1 x 1 ID picture;
f. Notarized application for Master Passbook; and
g. Surrender of individual farmer's passbooks previously issued.
2. Revalidationof FO's Accreditation
a. Revalidation of the FO's status shall be evaluated by the NFA Field Offices on
a yearly basis through updated masterlist of farmer-members stating name and
address of farmers, area cualtivated, yield/ha., status of tenure, farm type, and
signature of farmer jointly certified by DA Technician and FO Chairman.
3. Grounds for Cancellation
a. Selling of stocks to NFA other than members produce;
b. Attempt to defraud NFA (i.e. mixing with stones, rocks);
c. Other grounds in violation of existing NFA rules and regulations;
d. Falsifiication of documents;
e. Misrepresentation of facts; and
f. Misuse of CIF.
D. Procurement Team
It shall be the direct responsibility of the Regional Manager (RM) and the respective Provincial Managers (PMs)/OICs to form procurement team/s. Its composition and the individual qualification and responsibilities of the procurement team members are as follows:
1. Team Leader (TL)
He must at least be a regular employee with at least not lower than salary grade level 11 of the Agency and has sufficient training/knowledge and background of procurement operations. The following shall be his duties and responsibilities:
a. Directly supervises and coordinates procurement operations;
b. Sees to it that all necessary facilities/equipment in the operation
such as platform scales, moisture meters, empty sacks,
accountable forms and other procurement logistics are available;
c. Arranges for the trucking, handling, and other warehousing needs
of the procurement operations;
d. Prepares an activity schedule covering stock pick-up dates from
FOs, the team's material requirements and manpower schedule;
e. Sees to it that
abstract of grains purchases
is posted in the
buying station; and
f. The team leader shall be held accountable for stocks procured.
2. Special Disbursing Officer (SDO)
In cases where there are no available employees, the PM/OIC shall request
the RM or the DMO to provide the necessary personnel to act as SDOs.
All designated SDOs prior to handling procurement funds are required to
file the necessary fidelity bond with the Bureau of Treasury. The following
shall be his principal responsibilities:
a. To see to it that imprest funds are available at all times during
the procurement operations;
b. To effect payment to sellers based on the computed amount
corresponding to the grains purchased as reflected on the
Purchase Receipt;
c. Be accountable for all procurement funds entrusted to him;
d. To maintain cereal procurement cashbook;
e. To furnish BIR, TL/WS II copy of
abstract of grains purchases
; and
f. Preparation of timely required reports.
3. Standards and Quallity Assurance Officer (SQAO)
The SQAO (GOO III/II)/Classifiers Pool shall be directly responsible/accountable
for the inspection and classification of grains in consideration of its variety code,
moisture content, quality and purity. They shall follow the institutionalized quality
assurance codes of practice, procedures and regulations.
SQAOs/Classifiers Pool assigned in the province shall automatically become
members of the procuremen team. One SQAO shall be assigned permanently
to one or more warehouses/buying stations. There shall be no rotation of SQAO/QAO
Pool until samples of all the stocks he/she had classified in his/her warehouse
assignment shall have been taken and sent for laboratory analysis.
In case wherein more SQAOs/QAO are needed, the PM/OIC shall immediately
request the RM/DMO for additional personnel from the QAO Pool.
The Provincial SQAO (Sr. GOO) shall not be assigned to any procurement team
except for PO with only one warehouse.
4. Job Order Laborer/Contracted Labor
Laborers and other complementary job order personnel for the procurement teams
may be hired by the PM/OIC subject to confirmation on personnel authorizaiton by
the RM. They shall be responsible in the rebagging, stitching, and handling or
procured stocks.
5. Manpower Schedule
To identify the procurement team complement, the PM/OIC shall submit to the
Regional Office the names of NFA employees, their actual position, and
corresponding temporary designation while involved in procurement.
E. Procurement Quality Standards
1. Local grains procurement quality specifications shall conform to the following
standards:
1.1 Palay (Rough Rice)
a. Maximum 14% M.C.
b. Minimum 95% Purity
c. Maximum 3% yellow and 0% damaged or
Maximum 2% yellow and 1% damaged kernels
d. Maximum 10% chalky and immature kernels
e. Maximum 1% red kernels
f. Free from infestation and foreign matter
Palay with MC above 14% but not greater than 18% and purity below 95% but
not less than 85% shall be subject to weight adjustments using the ENW
factors for palay. Acceptance of palay above 14% MC shall be limited to
the drying capability of the province. Palay with maximum 7% yellow and
0% damaged or 6% yellow and 1% damaged, maximum 25% chalky and
immature kernels, and maximum 5% red kernels shall be procured by the
agency subject to a lower buying price and ENW factors.
Procurement of storm-damaged/rainsoaked palay maybe undertaken upon
approval of the Adminsitrator in calamity areas declared by the President.
A table of procurement prices specifically for this kind of stocks have been
devised.
1.2 White and Yellow Corngrains (Shelled Corn)
a. Maximum 14% MC
b. Minimum 95% Purity
c. Not more than 5% damaged kernels
d. Free from infestation, foreign odors and chemical residue
e. Flint and hybrid type
Corngrains with MC above 14% but not greater than 18% and purity below 95%
but not less than 88% shall be subject to weight adjustments using ENW factors
for corngrains. Acceptance of corn above 14% MC shall be limited to the drying
capability of the province.
1.3 Palay/corn with MC above 14% shall be dried immediately to prevent
fermentation of the grains.
2. Equivalent Net Weight Factor (ENWF) Table
The ENWF table is a columnar presentation of ENW factors basically derived from the
% purity, % MC on the grains and the cost of drying. It serves as the multiplier to the
net weight of procured stocks to arrive at the ENW of the grains. The ENW is the weight
subjected to costing and valuation.
2.1 The ENW Working Committee composed of Technical Services Directorate
(TSD), Technology Resource and Development Directorate (TRDD) and
Directorate for Marketing Operations (DMO) and Internal Audit Services (IAS)
shall review and update tables on ENW based on the prevailing cost components.
It shall also be responsible in coming up with recommendations to Management
regarding changes related to ENW factors.
2.2 The Administrator shall be the approving authority for any revision on the ENWF
table as well as other recommendations related to it that are submitted by the
Committee.
F. Fund Management
F.1 Cereal Procurement Fund (CPF)
a. R.O./P.O. shall advise DMO on their CPF requirements three (3) weeks prior to their needs for funds. Estimated regular CIF should be included by the Field Office in their CPF requirements. Field offices shall likewise indicate the exact date when the funds are to be remitted to their end and shall acknowledge same upon receipt.
b. In turn, DMO shall prepare a schedule of CPF fund releases for approval of the Office of
the Administrator upon the recommendation of the following:
Deputy Administrator for Operations
Assistant Administrator for Finance
Assistant Administrator for Stabilization
Director for Marketing Operations
Director for Treasury and Fund Management
All requests of funds from the field office should be remitted at least one (1) week
before their actual need.
c. Following the SOP on Cash with Procurement Disbursing Officers, there shall be
one (1) imprest fund for every SDO in cereal procurement. The check accountability
ceiling of each SDO shall be determined jointly by the PM, POO (Sr. GOO) and
Provincial Accountant.
d. The CPF ceiling of SDOs shall be authorized by the PM or RM depending on the
amount per existing guidelines, memoranda, or general wires on the same. Any
amount in excess of the RMs authority shall require the DMO's clearance.
F.2 Utilization of CPF
a. CPF for palay and corn shall not be utilized interchangeably without joint authority
from DMO, DAB and DTFM.
b. There shall be no CPF remitance if P.O. fails to submit the
procurement calendar
and CPF balance.
c. CPF requirements within the marketing plan shall be remitted directly to the PO
concerned. However, request for fund requirements not within the marketing plan
shall be coursed through the RM.
d. CPF shall never be used for GOE unless jointly authorized by DMo, DAB and DTFM.
e. CPF intended for procurement from specific sectors such as LBP-BAC and the like
shall not be used for procurement from other sectors unless jointly authorized by
DMO and DTFM.
F.3 Replenishment of the CPF
a. The imprest fund shall be replenished as often as necessary and every end of the
month. For this purpose, the SDO shall submit the
Abstract of Grains Purchases
copies of WSRs, Statement of Deliveries and the Purchase Receipts
to the Sr. Account Specialist.
b. Upon receipt, the Accountant/Sr. Account Specialist shall cross-check and verify
the completeness and accuracy of the documents submitted. The replenishment
shall be approved by the PM/OIC following the normal accounting and auditing
procedures.
F.4 Idle CPF
a. In cases when procurement activities stop and temporarily ceases for a period
of one week, the PM/OIC in consultation with the Team Leader shall advise
the SDO to return the procurement fund. Immediate liquidatiion of said SDO
shall be effected.
b. In cases when procurement operations is unexpectedly low compared to the
anticipated volume of operation such that the set procurement fund for the
province is more than what is actually needed, the PM in consultation with the
POO, Procurement Team Leaders, SDOs, and the Accountant shall reduce
the ceiling to a reasonable level enough to meet local expenditures up to the
end of the procurement season.
c. Any unused CPF allocated for a given municipality/province should not be
transferred by the PM/RM for another municipality/province without informing
the local officials, concerned FOs, DA officials and other affected sectors.
Fund transfer within the region shall be approved by the RM and to be reported
to DMO, DAB, DTFM. Regional transfer of fund shall be jointly approved by
DMO, DAB and DTFM.
G. Procurement Operations
G.1 Strategies
a. As a general strategy, in-warehouse procurement shall be pursued as the first
option.
b. NFA shall only procure paddy and corn from institutions such as:
1. Farmer' Organizations registered with CDA, SEC and other government
registering bodies;
2. Government Agencies and Financing Institutios with PIK-Memorandum
of Agreement with NFA; and
3. Government Agencies/Educational Institutions involved in production
research.
c. Only legitimate FOs who are holders of a Master Passbook shall be entitled to
the NFA procurement program.
d. Only the authorized representative/coordinator shall be allowed to transact
with NFA.
e. Procurement shall be up to the llimit of the maximum procurable volume only
as determined by the NFA Provincial Office and indicated in the Farmer's
Passbook/Master Passbook.
f. A support price for palay and corn shall be approved by the President of
the Philippines as recommended by the NFA Council. It shall be used in
the procurement of grains with adjustments due to quality specifications.
g. Only grain deliveries thru the IPP/FOs shall be entitled to the Cooperative
Incentive Fee (CIF) and other procurement incentives. The mechanics on
the granting and use of the CIF shall be governed by the existing SOPs
on the Institutionalized Procurement Program and the Cooperative Incentive
Fee.
G.2 Procedures
a. Regular procurement of palay shall be undertaken preferrably during peak
harvest season when prices are expected to be low.
b. To observe transparency, PO shall install bulletin boards/signboards in
conspicuous places of each buying station and all warehouses. It shall
indicate therein the procurement target per buying station and municipalities
to be served, quantity procured todate and from whom procured. Indicate
likewise that NFA does not buy from traders.
c. The PM shall ensure the availability of all manpower and logistics requirement
prior to the start of the procurement season. He shall immediately advise
the RM/DMO/TSD on the need for additional facilities and personnel particularly
those who shall act as QAOs/SDOs from the pool.
d. An SDO, PTL, and QAO pool shall be established at the Central and Regional
Office whose members may from time to time be designated as procurement
team members in the provinces needing same. For this purpose, the DMO
and TSD in coordination with HRMD shall regularly conduct trainings and
seminars for personnel to be included in the pool.
Members of the QAO pool should be assigned to specific buying stations.
Before releasing them from their responsibility, two (2) samples each per file variety/
quality of stocks they have classified shall be taken by the PSQAO and analyzed
at the Provincial Office. The initial finding of the PSQAO shall be the basis for the
relief/retention, reassignment of PSQAO or QAO pool. The relieved member of
the QAO pool shall be required to sign in an appropriate space in the sample label.
If the regional laboratory classifies the samples as inferior to that originally
given to the stocks, the case shall immediately be investigated by the Regional
Office.
e. The team leader shall establish the authenticity of the passbooks presented prior
to procurement of grains.
f. Upon dellivery of grain stocks at the NFA buying station, the SQAO shall check
and classify the grain to be purchased as to purity, moisture content and
variety code. Stocks found to be with large foreign materials (e.g. rock,
slippers, wood, steel, etc.) shall be automatically rejected and the subject
Coop shall be blacklisted.
g. Palay/corn delivery should be rebagged to NFA empty sacks for determination
of the total gross weight. In cases of acute shortage of NFA MTS, the PO may
be authorized by the Administrator upon recommendation of DMO Director
to buy the farmer's sacks containing the grain.
h. Weighing shall be strictly undertaken with the use of a truckscale if available
and operational. Only in instances where a truckscale is non-operational or
not available, the use of a platform scale shall be allowed.
i. The TL shall prepare the WSR based on the classification of the SQAO/QAO and
result of actual weighing of the stocks. The farmer-seller shall be required to sign
the WSR in a space stamped for the purpose. A copy of WSR duly signed by all
concerned personnel shall be given to the FO representative for payment purposes.
j. The Security Guard on duty shalll maintain a separate logbook for outgoing and
incoming stocks and record all document numnbers and figures pertinent thereto.
k. Based on the WSR presented by the FO, the SDO shall make the corresponding
entries on the PR seeing to it that all items and boxes are properly filled-up.
l. The SDO shall determine the grain's ENW based on the existing Table of ENWF
and shall compute the peso equivalent of the purchased grains.
m. If the farmer/FO has loans payable to the agency, the amount of loan for
repayment shall be specified in the PR and collection shall be effected in
accordance with collection procedure.
1. If the total basic cost is more than the amount of loan payable,
the PR shall specify the amount in excess under the direct
purchase.
n. The SDO shall double check if the WSR is properly accomplished and duly
signed by all concerned personnel. He shall counter-check the signature of
the farmer-seller on the WSR and compare same with that on the PR,
Masterlist and Statement of Individual Deliveries before payment is made.
o. A maximum of three (3) variety codes/MC/purity can be entered for every
individual PR.
p. The WS II/Team Leader shall enter the procurement data on index card
while the SDO shall indicate the same in the Passbook/Master Passbook
for purposes of monitoring deliveries and balances.
q. Erasures on the PRs as to the amount shall be avoided. In unavoidable
cases, however, any change on the stated amount on the PR shall be
duly signed and noted by the Team Leader and the SDO.
r. Payment procedures for the procured grains shall follow the existing SOP
on Cash with Procurement Disbrusing Officers and the Guidelines on the
Institutionalized Procurement Program.
s. Accountable officers handlling procurement fund shall not be given a
Certificate of Clearance upon termination of procurement operations
until after all accountabilities has been fully liquidated. Immediate
liquidation of all SDOs should be undertaken giving priority to Central
Office employees detailed as SDOs in the provinces who are recalled
shall be effected. Concerned C.O. directorates/P.O. should be informed
of the result of liquidation.
H. Monitoring and Reporting System
1. The security guard shall maintain a separate logbook solely for procurement. The date, name of farmer/FO, passbook number, quantity in bags, signature of farmer, and remarks shall be indicated in the logbook. The remarks portion shall also indicate among others, the type of vehicle used, the driver's name, and plate number of the vehicle, if any, which delivered the stocks to the warehouse/buying stations. Same shall be subject for periodic counter-checking by Provincial Evaluation Team (PET)/PM vis-a-vis volume procured.
2. A Grains Procurement Status Report (PORO-PROC-01.1-187 and PORO-PROC-01.2-187)
shall be prepared by the Provoincial Office. It shall indicate the quantity procured and
disbursements per commodity per variety.
3. A Monthly Procurement Performance Report (ROCP-OPER-05.1-92) shall be prepared by
the Regional Office to monitor the percentage accomplishment of actual procurement against
the targets set. The DMO shall be furnished a copy of the report.
4. For monitoring daily procurement, an Operations Report OPREP (PORO-OPER-02-C93)
shall be submitted to DMO daily.
5. The PM or his designated representative shall conduct periodic evaluation of procurement
operations in such areas but not limited to:
a. Quantity
b. Quallity
c. Documentation
d. Payments
e. Others
I. All guidelines, memoranda, reports and other issuances not inconsistent with the herein
guidelines shall still be in force and effect.
III. RESPONSIBILITIES
IV. FLOW CHART
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