COMMISSION ON AUDIT CIRCULAR NO. 86-264 October 16, 1986
TO            :  The presiding officers of Governing Boards and the Managing Heads of Government-Owned and/or Controlled Corporation,subsidiaries.
Including their Subsidiaries; COA Managers/ Regional Directors/Heads of Corporation Auditing Units; and others concerned.
SUBJECT :  General guidelines on the divestment or disposal of assets of government-owned and/or controlled corporations, and their
1.0     Rationale and Scope
These guidelines shall govern the general procedures on the divestment or disposal of assets of government-owned and/or controlled
corporations and their subsidiaries, which shall be supplemented by specific procedures as may be adopted by the corporation concerned, provided they do not contravene existing laws and the provisions of this Circular.
3.0     Modes of Disposal
The divestment or disposal of assets shall be duly authorized by the Governing Body or the Managing Head of the corporation concerned, as the case may be, in accordance with the properly adopted delegation of authority within the corporation.
3.1      Public Auction
3.2      Sale Thru Negotiation
As a rule, public auction or bidding shall be the primary mode of disposal of assets. The established mechanics and procedures in public auction shall be observed, which shall invariably include: (a) adequate publicity and notification, so as to attract as much number of interested parties; (b) sufficient time frame between publication and date of auction; (c) opportunity to inspect assets to be disposed of by interested parties; (d) confidentiality of sealed bids or proposals; (e) bond and other prequalification requirement to guarantee performance; and (f) fair evaluation of tenders, and proper notification of award.
Disposal thru this mode, which is a sale without public bidding, shall be resorted to only in case of failure of public auction.