Procurement 101: What is meant by Approved Budget for the Contract (ABC)?

What is an Approved Budget for the Contract?

According to the 2016 Revised Implementing Rules and Regulations (IRR) of Republic Act No. 9184:

An Approved Budget for the Contract (ABC) refers to the following:

For National Government Agencies (NGAs) – ABC refers to the budget for the contract duly approved by the Head of Procuring Entity (HoPE), as provided for in the General Appropriations Act (GAA), continuing, and automatic appropriations.

For Government-owned and Controlled Corporations (GOCCs), Government Financial Institutions (GFIs) and State Universities and Colleges (SUCs) – ABC refers to the corporate budget for the contract approved by the governing board, pursuant to Executive Order (E.O). No. 518, s. 1979, in the case of GOCCs and GFIs, and R.A. 8292 in the case of SUCs.

For Local Government Unit (LGUs) – ABC refers to the budget approved by the Sanggunian through an appropriations ordinance.

In the case of multi-year contracts for which a Multi-Year Obligatiobal Authority (MYOA) or equivalent is required, the ABC shall be that incorporated in the project cost reflected in the MYOA or equivalent document.

Source: Section 5b, 2016 Revised IRR, RA 9184

What is Multi-Year Obligational Authority (MYOA)?

A MYOA is a document issued by the Department of Budget and Management (DBM) either for locally funded projects or foreign assisted projects implemented by agencies in order to authorize the latter to enter into multi-year contracts for the full project cost.

A MYOA, which contains an annual breakdown of the full project cost, obligates agencies to include in their budget proposal for the ensuring years the amount programmed for the said year(s).

Source: Commission on Audit