DBM-prescribed Guidelines on the Issuance of Multi-Year Contractual Authority (MYCA)

What is a Multi-year Contractual Authority (MYCA)?

• Formerly known as Multi-Year Obligational Authority (MYOA)
• A document issued by the Department of Budget and Management (DBM)
• Covers Locally-Funded Projects (LFPs) or regular and recurring projects
• Authorizes the agency to enter into multi-year contracts
• It contains an annual breakdown of the full project cost of the multi-year programs/projects
• Serves as guide for the agency concerned in the preparation of its budget proposal

Who can request for a Multi-Year Contractual Authority (MYCA)?

The following government offices undertaking multi-year contracts for LFPs and regular and recurring procurement services may request MYCA from DBM:

• National Government Agencies (NGAs)
• State Universities and Colleges (SUCs)
• Commissions/offices under the Constitutional Fiscal Autonomy Group (CFAG)

Sample Copy/Template for MYCA

Note: This form is issued by the DBM to agencies that have complied all the required supporting documents and conditions.

What are Locally-Funded Projects (LFPs)

• projects financed out of revenue collections (taxes) and domestic borrowings

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What are regular and recurring procurement services?

• Services that are essential, indispensable or necessary to support the operations of the agency and enhances the welfare of its personnel, which include but not limited to the following:
  • Janitorial and security services
  • Supply of drinking water
  • Telecommunication requirements
  • Rental of office and equipment and others.

Conditions on the Issuance of MYCA for Regular and Recurring Services

The DBM shall issue MYCA for regular and recurring services only under the following instances:

• Savings will be generated in a contract that would exceed one (1) year

• Locked-in contracts for specific cases which would make it more advantageous for the agency to undergo the same

• Delivery of timely services would be hampered if annual bidding will be conducted

Remember:

• Agencies have the option to renew ongoing contracts under regular and recurring services to not more than one year

• Renewal is subject to favorable assessment or evaluation of contractor’s performance

• Total contract renewal shall not exceed two years 

What are the required documents to support requests for MYCA?

The following shall be submitted to the DBM to request for MYCA, viz:

• Agency request (usually in the form of a written request)
• Request for MYCA (Annex B of Circular Letter No. 2023-7 dated May 17, 2023)
• Duly accomplished Funding Strategy Form (Annex C of Circular Letter No. 2023-7 dated May 17, 2023)

In addition to the above, the following documents are also required.

Additional requirements for capital and non-capital outlay, as applicable:

For major capital projects costing P2.5 billion and above

Approving Authority: NEDA Board – Investment Coordination Committee, pursuant to ICC Memorandum dated June 27, 1017

For projects costing below P2.5 billion (supported by other documents, as may be required) — Supported with summary of project benefits including economic viability, if applicable, details of expected output/outcome, work and financial plan showing implementation schedule and the corresponding activities, and cost-benefit analysis for the project

Approving Authority: Agency Head

For administrative building/space costing at least P1 billion

Approving Authority: Office of the President (OP), pursuant to ICC Memorandum dated July 14, 2014

Other clearances required under existing laws, policies, rules and regulations when applicable (for LFPs)

• DICT endorsed ISSP for ICT projects
• NTC clearance for acquisition of communication equipment
• DENR geo-hazard certification; or Project Location with geo-tagged mapping or electronic photograph of the project location with certification
• DPWH certification relative to project’s conceptual plan
  • certifying that the project’s conceptual plan has passed the review of the DPWH and is compliant with the standards of the National Building Code of the Philippines and other pertinent laws
• Approved Land Use Development and Infrastructure Plan of SUCs as evaluated and recommended by CHED

For Revised AFP Modernization Program, OP approval is required.

Guidelines on the Issuance of Certificate of Availability of Funds (CAF)

What is a Certificate of Availability of Funds (CAF)?

• certification made by proper accounting official of the agency

• required for purposes of entering into contracts for certain types of expenditures

• integral part of the contract

• it certifies that: 1) funds have been duly appropriated/alloted for the purpose of entering into a contract involving expenditure of public funds; and 2) the amount necessary to cover the proposed contract for the current fiscal year is available for expenditure on account thereof, as verified by the Auditor concerned, pursuant to Section 86 of PD No. 1445

For purposes of MYCA, the following shall be observed when it comes to the issuance of CAF:

• The annual breakdown indicated in the MYCA shall be the basis for the CAF.
• For Multi-Year Projects (MYPs), the CAF shall be issued annually based on the budget for the year
• For MYPs with no funding requirement on any given year, instead of CAF, the Chief Accountant shall issue a certification that no fund is needed for the year, as indicated in the approved MYCA.

What is a Multi-Year Project (MYP)?

A program or project which will take more than one fiscal year to complete that requires multi-year appropriations.

What is a Program?

• group of activities and projects that contributr to a common particular outcome

• a program should have the following:

1. unique expected results or outcomes

2. a clear target population or client group external to the agency

3. a defined method or intervention to achieve the desired result

4. A clear management structure that defines accountabilities

What is a Project?

• a special undertaking carried out within a definite time frame

• intended to result in some predetermined measure of goods and service

Important Conditions on Procurement Activities covered by a MYCA

• A MYCA is required prior to commencement of any procurement activity relative to multi-year contracts for MYPs

• The total project cost reflected in the MYCA shall be the basis/reference for the Approved Budget for the Contract (ABC)

• Procurement of MYPs shall be subject to the provisions of R.A No. 9184 and its IRR, as amended and GPPB guidelines and/or the DBM.

Budget Preparation and Execution Guidelines concerning MYCA

• Succeeding funding requirements of the MYP covering MYCA shall be included in the expenditure program for the corresponding year as reflected in the forward estimates or in the Medium-Term Expenditure Program (MTEF)

• Agencies shall ensure that the annual funding requirements for their MYPs shall be included in their budget proposals

• Disbursements to be incurred in any given year shall in no case exceed the cash program for the purpose during the year.

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Reference

DBM Circular Letter No. 2023-7 dated May 17, 2023 re: Prescribed Guidelines on the Issuance of Multi Year Contractual Authority (MYCA)