Case Study: Obligation Request (Part 5)

12 Mar

[This will be the last one for this series.]

Going back to the issue when to accomplish the ObR, after following thoroughly the reason behind its purpose thru logical thinking and common sense, the author is of the opinion and position that the Obligation Request is only but proper to be issued after the determination of obligee (i.e. the awarded supplier/ contractor/ consultant) and that the amount to be reflected is consistent with the awarded amount. (Note 2012-07-18: a more exacting term is when Notice of Award was already issued)

With this statement, the author is appealing to the following agencies to give a clear-cut answer in the form of Joint Memorandum Circular or severally as appropriate, if deemed necessary:

Commission on Audit (COA);

Department of Budget and Management (DBM);

Government Procurement Policy Board (GPPB);

Department of Interior and Local Government (DILG)

The author believes that this issue is of national importance and significance, considering the number of LGUs in as far as government procurement is concerned. What are the risks of leaving this issue unresolved? Issuance of ObR prior to procurement:

  1. involves the practice of certifying blindly to the obligee as to payee and amount;
  2. is dangerous as disbursement is assured even in the absence of a procurement process;
  3. is problematic in the case of starting a procurement process whose funding shall come from next years’ annual budget
  4. ensures payment on ‘midnight deals’ (those to be procured at the verge of closing the book of accounts every year end) thus, catering the non-compliance to judicious and meticulous planning of procurement as stated under Sec.7 of RA 9184.

On the other hand, the practice of issuing an ObR after award has been approved:

  1. completely satisfies the form in letter and substance as there is a payee (as a result of the award) and the amount does not need any adjustment as to obligation;
  2. ensures that a procurement process was conducted as evidenced by the presence of bidding documents, abstracts, reports, and approval of award (check and balance);
  3. does not pose a problem on disbursements whose procurement process may be completed within the current year but funding is to be taken from following year’s annual budget;
  4. safeguards payment on ‘midnight deals’ (those to be procured at the verge of closing the book of accounts every year end) and promotes strict adherence to procurement planning as stated under Sec.7 of RA 9184.

For the purpose of efficiency, transparency, and accountability, the manner and timing of ObR’s issuance and guidelines of use is now wanting to be resolved. 


Posted by on March 12, 2012 in Government Procurement


Tags: ,

3 responses to “Case Study: Obligation Request (Part 5)

  1. Bonita Cardenas

    December 13, 2013 at 4:12 pm

    APP…PR….CAnvass/Bidding…….PO….then OBR

    • engrjhez

      January 14, 2014 at 8:57 am

      Purchase Order (PO) before Obligation Request (ObR)? Isn’t that ObR is a pre-requisite before entering into contract (PO)?

  2. Jezreen

    February 18, 2015 at 1:31 pm

    This is our problem right now. Accounting could not recognize transactions still under bidding because we don’t know yet the payee. But transaction was already obligated.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: