DIVISION: STRATEGY RESEARCH AND POLICY (SRP)
TITLE: INSTRUCTIONS ON THE USE OF PRICE GUIDE
PPRA DOCUMENT NO: GPG-WI- REVISION NO: 03 EFFECTIVE DATE: 20/03/2023
01 DATE OF NEXT REVIEW: 20/03/2026
ANNEXURE 1: INSTRUCTIONS ON THE USE OF THE PRICE GUIDES
1.0 INTRODUCTION
Section 83 of the Act places on the Authority a responsibility to issue Price Guides. The
Authority compiles the Price Guides on an annual basis. These are a presentation of
indicative unit prices for goods, services, and works; their specifications as well as units of
measure for commonly procured goods and services. The Price Guides are used as a
reference point by Procuring Entities (PEs) throughout the procurement cycle, as well as
Bidders in preparing their bids. The main goal of compiling the Price Guides is to
strengthen the public procurement system to achieve high levels of rationality, by
establishing reasonableness of quoted prices. As stipulated under Section 83 of the Act,
PEs are mandated to make reference to the Price Guides in developing Procurement Plans,
estimating contract value, and measuring the reasonableness of prices when evaluating
tenders.
2.0 HOW TO USE THE PRICE GUIDES
2.1 Identify the lowest price of interest from the bidders who have passed the technical
and financial assessments (depending on the method of evaluation employed);
2.2 Compare the price of interest identified in 2.1 above, with the Reference Price (the
average price, as reflected in the Price Guide); for the specific item and/or service
and locality. In instances where the exact location is not determined, the price of
the nearest locality indicated in the Price Guide should be used;
2.3 Calculate the deviation of the price from the Reference Price using the limit of +
(plus) or – (minus) 15% as illustrated in Table 1.1 below. Prices that fall within the
margin of deviation are considered reasonable.
2.4 Should the bid price fall outside the +/- 15% bracket of the reference price, without
any justification for this discrepancy, the bidder is disqualified, irrespective of the
extent of derogation from the 15%; and the next lowest price is considered. This
process should be followed until a suitable Contractor that falls within the margin
is identified.
Note 1: It is imperative to highlight that although careful consideration has been made to ensure
that the Price Guides are up to date; there may be instances where reference prices are
exceptionally low or high, due to various (justifiable) reasons such as discounts and exchange
rate fluctuations. If such occurrences exist, they ought to be interrogated further; with PEs
carrying out due diligence and taking into cognizance market dynamics. Upon embarking on
such; and noting the discrepancies, the PEs are to duly notify the PPRA on these.
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DIVISION: STRATEGY RESEARCH AND POLICY (SRP)
TITLE: INSTRUCTIONS ON THE USE OF PRICE GUIDE
PPRA DOCUMENT NO: GPG-WI- REVISION NO: 03 EFFECTIVE DATE: 20/03/2023
01 DATE OF NEXT REVIEW: 20/03/2026
Note 2: In some instances, the Price Guide includes brand names for the respective items, these
would solely be mentioned to emphasize the specificity of the item. Therefore, the stated brand
names are not an exclusive recommendation or prescription by PPRA, but merely mentionedfor
the purpose of information.
Note 3: The use of the Price Guides in assessing reasonableness is not applicable to Works
Construction projects, unless where there is procurement of items that constitute building
materials (as per the specific Price Guide), which would in such instances be a supplies
function. Furthermore, the specified +/- 15% deviation threshold, indicated above, is not to be
confused with the Engineers’ estimate, which has been abolished.
Note 4: The published reference prices should be used as they are, and not be altered in any
way, particularly the application of Price Guides which have reference prices that are inclusive
of VAT when bidders comprise of companies that are both VAT registered and VAT exempt
entities. If bidders being evaluated comprise of companies that are a combination of both VAT
registered and VAT exempt entities, the bidders’ prices should be evaluated without VAT for
them to be comparable.
Note 5: In the use/application of the Price Guides, PEs are expected NOT to make any
amendments or alterations to the published Price Guides, but instead, they are to engage PPRA
to offer guidance when in doubt.
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DIVISION: STRATEGY RESEARCH AND POLICY (SRP)
TITLE: INSTRUCTIONS ON THE USE OF PRICE GUIDE
PPRA DOCUMENT NO: GPG-WI-01 REVISION NO: 03 EFFECTIVE DATE: 20/03/2023
DATE OF NEXT REVIEW: 20/03/2026
Table 1.1 Illustration: Use of the limit of Deviation
Price range +/-15%
Item Item Price +15%
No. Description/Specification Unit
Code Name (BWP) -15% +15%
BMW 5 SERIES SEDAN
520d, Gear Paddles for 578,509 86,776.35 491,732.65 665,285.35
1 VL00101 BMW Each
Automatic Transmission
520i, Gear Paddles for 546,930 82,039.50 464,890.50 628,969.50
2 VL00102 BMW Each
Automatic Transmission
528i, Sport Automatic 657,895 98,684.25 559,210.75 756,579.25
3 VL00103 BMW Each
Transmission
530d, Sport Automatic 744,737 111,710.55 633,026.45 856,447.55
4 VL00104 BMW Each
Transmission
535d, Sport Automatic 859, 211 128,881.65 730,329.35 988,092.65
5 VL00105 BMW Each
Transmission
Therefore, in evaluating the price of a BMW 520d, Gear Paddles for Automatic Transmission, in the above instance, any price quoted by the
bidder that ranges between P491,732.65 and P665,285.35 is considered reasonable. However, should the bidder’s price fall outside the specified
range, without any justifiable cause, irrespective of the extent to which it varies, the bid should be disqualified from further evaluation.
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