REPUBLIC ACT No.

9184
January 10, 2003

AN ACT PROVIDING FOR THE MODERNIZATION, STANDARIZATION AND

REGULATION OF THE PROCUREMENT ACTIVITIES OF THE GOVERNMENT AND
FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in

Congress assembled:

ARTICLE 1
GENERAL PROVISIONS

Section 1. Short Title. – This act shall be known as the "Government Procurement
Reform Act".

Section 2. Declaration of Policy. – It is the declared policy of the State to promote the
ideals of good governance in all its branches, departments, agencies, subdivisions, and
instrumentalities, including government-owned and/or -controlled corporations and local
government units.

Section 3. Governing Principles on Government Procurement.

All procurement of the national government, its departments, bureaus, offices and
agencies, including state universities and colleges, government -owned and/or-
controlled corporations, government financial institutions and local government units,
shall, in all cases, be governed by these principles:

(a) Transparency in the procurement process and in the implementation of

procurement contracts.
(b) Competitiveness by extending equal opportunity to enable private
contracting parties who are eligible and qualified to participate in public bidding.
(c) Streamlined procurement process that will uniformly apply to all government
procurement. The procurement process shall be simple and made adaptable to
advances in modern technology in order to ensure an effective and efficient
method.
(d) System of accountability where both the public officials directly or indirectly
involved in the procurement process as well as in the implementation of
procurement contracts and the private parties that deal with government are,
when warranted by circumstances, investigated and held liable for their actions
relative thereto.
(e) Public monitoring of the procurement process and the implementation of
awarded contracts with the end in view of guaranteeing that these contracts are
awarded pursuant to the provisions of this Act and its implementing rules and
regulations, and that all these contracts are performed strictly according to
specifications.
Section 4. Scope and Application. – This act shall apply to the Procurement of
Infrastructure Projects, Goods and Consulting Services, regardless of source of
funds, whether local or foreign, by all branches and instrumentalities of government, its
departments, offices and agencies, including government-owned and/or-controlled
corporations and local government units, subject to the provisions of Commonwealth
Act No. 138. Any treaty or international or executive agreement affecting the subject
matter of this Act to which the Philippine government is signatory shall be observed.

Section 5. Definition of Terms. – For purposes of this Act, the following terms or words
and phrases shall mean or be understood as follows:

(a) Approved Budget for the Contract (ABC) – refers to the budget for the
contract duly approved by the Head of the Procuring Entity, as provided for in the
General Appropriations Act and/or continuing appropriations, in the National
Government Agencies; the Corporate Budget for the contract approved by the
governing Boards, pursuant to E.O.No.518, series of 1979, in the case of
Government Financial Institutions and State Universities and Colleges; and the
Budget for the contract approved by the respective Sanggunian, in the case of
Local Government Units.

(b) BAC – refers to the Bids and Awards Committee established in accordance with
Article V of this Act.

(c) Bidding Documents – refer to documents issued by the Procuring Entity as the
basis for Bids, furnishing all information necessary for a prospective bidder to
prepare a bid for the Goods, Infrastructure Projects, and Consulting Services to
be provided.

(d) Bid – refers to signed offer or proposal submitted by a supplier, manufacturer,

distributor, contractor or consultant in response to the Bidding Documents.

(e) Competitive Bidding – refers to a method of procurement which is open to

participation by any interested party and which consist of the following
processes:

 advertisement,
 pre-bid conference,
 eligibility screening of bids,
 evaluations of bids,
 post - qualification, and
 award of contract,

the specific requirements and mechanics of which shall be defined in the IRR to
be promulgated under this Act.
(f) Consulting Services – refer to services for Infrastructure Projects and other
types of projects or activities of the Government requiring adequate external
technical and professional experts that are beyond the capability and/or capacity
of the government to undertake such as, but not limited to: (I) advisory and
review services; (ii) pre investment or feasibility studies; (iii) design; (iv)
construction supervision; (v) management and related services; and (vi) other
technical services or special studies.

(g) G - EPS – refers to the Government Electronic Procurement System as provided

in Section 8 of this Act.

(h) Goods – refer to all items, supplies, materials and general support services,
except consulting services and infrastructure projects, which may be needed in
the transaction of the public businesses or in the pursuit of any government
undertaking, project or activity, whether in the nature of equipment, furniture,
stationery, materials for construction, or personal property of any kind, including
non - personal or contractual services such as the repair and maintenance of
equipment and furniture, as well as trucking, hauling, janitorial, security, and
related or analogous services, as well as procurement of materials and supplies
provided by the procuring entity or such services.

(i) GPPB – refers to the Government Procurement Policy Board established in

accordance with Article X of this Act.

(j) Head of the Procuring Entity – refers to: (I) the head of the agency or his duly
authorized official, for national government agencies; (ii) the governing board or
its duly authorized official, for government-owned and/or-controlled corporations;
or (iii) the local chief executive, for local government units. Provided, That in a
department, office or agency where the procurement is decentralized, the Head
of each decentralized unit shall be considered as the Head of the Procuring
Entity subject to the limitations and authority delegated by the head of the
department, office or agency.

(k) Infrastructure Projects – include the construction, improvement, rehabilitation,

demolition, repair, restoration or maintenance of roads and bridges, railways,
airports, seaports, communication facilities, civil works components of
information technology projects, irrigation, flood control and drainage, water
supply, sanitation, sewerage and solid waste management systems, shore
protection, energy/power and electrification facilities, national buildings, school
buildings and other related construction projects of the government.

(l) IRR – refer to the implementing rules and regulations to be promulgated in

accordance with Section 75 of this Act.

(m)Portal – refers to a website that aggregates a wide variety of content for the
purpose of attracting a large number of users.
 (n) Procurement – refers to the acquisition of Goods, Consulting Services, and the
contracting for Infrastructure Projects by the Procuring Entity. Procurement shall
also include the lease of goods and real estate. With respect to real property, its
procurement shall be governed by the provisions of Republic Act No.8974,
entitled "An Act to Facilitate the Acquisition of Right-of-Way Site or Location of
National Government Infrastructure Projects and for Other Purposes" and other
applicable laws, rules and regulations.

(o) Procuring Entity – refers to any branch, department, office, agency, or

instrumentality of the government, including state universities and colleges,
government-owned and/or - controlled corporations, government financial
institutions, and local government units procuring Goods, Consulting Services
and Infrastructure Projects.

Section 6. Standardization of Procurement Process and Forms. – To systematize the

procurement process, avoid confusion and ensure transparency, the procurement
process, including the forms to be used, shall be standardized insofar as practicable.

For this purpose, the GPPB shall pursue the development of generic procurement
manuals and standard bidding forms, the use of which once issued shall be mandatory
upon all Procuring Entities.

ARTICLE II
PROCUREMENT PLANNING

Section 7. Procurement Planning and Budgeting Linkage – All procurement should be

within the approved budget of the Procuring Entity and should be meticulously and
judiciously planned by the Procuring Entity concerned. Consistent with government
fiscal discipline measures, only those considered crucial to the efficient discharge of
governmental functions shall be included in the Annual Procurement Plan to be
specified in the IRR.

No government Procurement shall be undertaken unless it is in accordance with the

approved Annual Procurement Plan of the Procuring Entity. The Annual Procurement
Plan shall be approved by the Head of the Procuring Entity and must be consistent with
its duly approved yearly budget. The Annual Procurement Plan shall be formulated and
revised only in accordance with the guidelines set forth in the IRR. In the case of
Infrastructure Projects, the Plan shall include engineering design and acquisition of
right-of-way.

ARTICLE III
PROCUREMENT BY ELECTRONIC MEANS

Section 8. Procurement By Electronic Means. – To promote transparency and

efficiency, information and communications technology shall be utilized in the conduct of
procurement procedures. Accordingly, there shall be single portal that shall serve as the
primary source of information on all government procurement. The G-EPS shall serve
as the primary and definitive source of information on government procurement.
Further, the GPPB is authorized to approve changes in the procurement process to
adapt to improvements in modern technology, provided that such modifications are
consistent with provisions of Section 3 of this Act.

To take advantage of the significant built-in-efficiencies of the G-EPS and the volume
discounts inherent in bulk purchasing, all Procuring Entities shall utilize the G-EPS for
the procurement of common supplies in accordance with the rules and procedures to be
established by the GPPB. With regard to the procurement of non-common use items,
infrastructure projects and consulting services, agencies may hire service providers to
undertake their electronic procurement provided these service providers meet the
minimum requirements set by the GPPB.

Section 9. Security, Integrity and Confidentiality. – The G-EPS shall ensure the
security, integrity and confidentiality of documents submitted through the system. It shall
include feature that provides for an audit trail for on-line transactions and allow the
Commission on Audit to verify the security and integrity of the systems at any time.

ARTICLE IV
COMPETITIVE BIDDING

Section 10. Competitive Bidding. – All Procurement shall be done through Competitive

Bidding, except as provided for in Article XVI of this Act.

ARTICLE V
BIDS AND AWARDS COMMITTEE

Section 11. The BAC and its Composition. – Each procuring entity shall establish a
single BAC for its procurement. The BAC shall have at least five (5) members, but not
more than seven (7) members. It shall be chaired by at least a third ranking
permanent official of the procuring entity other than its head, and its composition shall
be specified in the IRR. Alternatively, as may be deemed fit by the head of the procuring
entity, there may be separate BACs where the number and complexity of the items to
be procured shall so warrant. Similar BACs for decentralized and lower level offices
may be formed when deemed necessary by the head of the procuring entity. The
numbers of the BAC shall be designated by the Head of Procuring Entity. However, in
no case shall the approving authority be a member of the BAC.

Unless sooner removed for cause, the members of the BAC shall have a fixed term of
one (1) year reckoned from the date of appointment, renewable at the discretion of the
Head of the Procuring Entity. In case of resignation, retirement, separation, transfer, re-
assignment, removal, the replacement shall serve only for the unexpired term: Provided,
That in case of leave or suspension, the replacement shall serve only for the duration of
the leave or suspension. For justifiable causes, a member shall be suspended or
removed by the Head of the Procuring Entity.

Section 12. Functions of the BAC. – shall have the following functions:

 advertise and/or post the invitation to bid,

 conduct pre-procurement and pre-bid conferences,
 determine the eligibility of prospective bidders,
 receive bids,
 conduct the evaluation of bids,
 undertake post-qualification proceedings,
 recommend award of contracts to the Head of the Procuring Entity of his duly
authorized representative:

Provided, That in the event the Head of the Procuring shall disapprove such
recommendation, such disapproval shall be based only on valid, reasonable and
justifiable grounds to be expressed in writing, copy furnished the BAC; recommend the
imposition of sanctions in accordance with Article XXIII, and perform such other related
functions as may necessary, including the creation of a Technical Working Group from a
pool of technical, financial and/or legal experts to assist in the procurement process.

In proper cases, the BAC shall also recommend to the Head of the Procuring Entity the
use of Alternative Methods of Procurement as provided for in Article XVI hereof.

The BAC shall be responsible for ensuring that the Procuring Entity abides by the
standards set forth by this Act and the IRR, and it shall prepare a procurement
monitoring report that shall be approved and submitted by the Head of the Procuring
Entity to the GPPB on a semestral basis. The contents and coverage of this report shall
be provided in the IRR.

Section 13. Observers. – To enhance the transparency of the process, the BAC shall,
in all stages of the procurement process, invite, in addition to the representative of the
Commission on Audit, at least two (2) observers to sit in its proceedings, one (1) from a
duly recognized private group in a sector or discipline relevant to the procurement at
hand, and the other from a non-government organization: Provided, however, That they
do not have any direct or indirect interest in the contract to be bid out. The observers
should be duly registered with the Securities and Exchange Commission and should
meet the criteria for observers as set forth in the IRR.

Section 14. BAC Secretariat. – To assist the BAC in the conduct of its functions, the
Head of the Procuring Entity shall create a Secretariat that will serve as the main
support unit of the BAC. The Head of the Procuring Entity may also designate an
existing organic office within the agency to serve as the Secretariat.

Section 15. Honoraria of BAC Members. – The Procuring Entity may grant payment
of honoraria to the BAC members in an amount not to exceed twenty five percent (25%)
of their respective basic monthly salary subject to availability of funds. For this purpose,
the Department of Budget and Management (DBM) shall promulgate the necessary
guidelines.

Section 16. Professionalization of BAC, BAC Secretariat and Technical Working Group

Members.- The GPPB shall establish a sustained training program for developing the
capacity of the BAC's, BAC Secretariats and technical Working Groups of Procuring
Entities, and professionalize the same.

ARTICLE VI
PREPARATION OF BIDDING DOCUMENTS

Section 17. Form and Contents of Bidding Documents. – The Bidding Documents shall
be prepared by the Procuring Entity following the standard forms and manuals
prescribed by the GPPB. The Bidding Documents shall include the following:

(a) Approved Budget for the Contract;

(b) Instructions to Bidders, including criteria for eligibility, bid evaluation and post-
qualification, as well as the date, time and place of the pre-bid Conference
(where applicable), submission of bids and opening of bids;
(c) Terms of Reference;
(d) Eligibility Requirements;
(e) Plans and Technical Specifications;
(f) Form of Bid, Price Form, and List of Goods or Bill of Quantities;
(g) Delivery Time or Completion Schedule;
(h) Form and Amount of Bid Security;
(i) Form and Amount of Performance Security and Warranty; and,
(j) Form of Contract, and General and special Conditions of Contract.

The Procuring Entity may require additional document requirements or specifications

necessary to complete the information required for the bidders to prepare and submit
their respective bids.

Section 18. Reference to Brand Names. – Specifications for the Procurement of Goods

shall be based on relevant characteristics and/or performance requirements. Reference
to brand names shall not be allowed.

Section 19. Access to Information. – In all stages of the preparation of the Bidding
Documents, the Procuring entity shall ensure equal access to information. Prior to their
official release, no aspect of the Bidding Documents shall be divulged or released on
any prospective bidder or having direct or indirect interest in the project to be procured.

ARTICLE VII
INVITATION TO BID
Section 20. Pre-Procurement Conference. – Prior to the issuance of the Invitation to
Bid, the BAC is mandated to hold a pre-procurement conference on each and every
procurement, except those contracts below a certain level or amount specified in the
IRR, in which case, the holding of the same is optional.

The pre-procurement conference shall assess the readiness of the procurement in

terms of confirming the certification of availability of funds, as well as reviewing all
relevant documents and the draft Invitation to Bid, as well as consultants hired by the
agency concerned and the representative of the end -user.

Section 21. Advertising and Contents of the Invitation to Bid. – In line with the principle
of transparency and competitiveness, all Invitations to Bid contracts under competitive
bidding shall be advertised by the Procuring Entity in such manner and for such length
of time as may be necessary under the circumstances, in order to ensure the widest
possible dissemination thereof, such as, but not limited to, posting in the Procuring
Entity's premises, in newspapers of general circulation, the G-EPS and the website of
the Procuring Entity, if available. The details and mechanics of implementation shall be
provided in the IRR to be promulgated under this Act.

The Invitation to Bid shall contain, among others:

(a) A brief description of the subject matter of the Procurement;

(b) A general statement on the criteria to be used by the Procuring entity for the
eligibility check, the short listing of prospective bidders, in the case of the
Procurement of Consulting Services the examination and evaluation of Bids, and
post-qualification;
(c) The date, time and place of the deadlines for the submission and receipt of the
eligibility requirements, the pre-bid conference if any, the submission and receipt
of bids, and the opening of bids;
(d) The Approved Budget for the Contract to be bid;
(e) The source of funds;
(f) The period of availability of the Bidding Documents, and the place where these
may be secured and;
(g) The contract duration; and
(h) Such other necessary information deemed relevant by the Procuring Entity.

Section 22. Pre-bid Conference. - At least one pre-bid conference shall be conducted
for each procurement, unless otherwise provided in the IRR. Subject to the approval of
the BAC, a pre-bid conference may also be conducted upon the written request of any
prospective bidder.

The Pre-bid conference(s) shall be held within a reasonable period before the deadline
for receipt of the bids to allow prospective bidders to adequately prepare their bids,
which shall be specified in the IRR.
 ARTICLE VIII
RECEIPT AND OPENING OF BIDS

Section 23. Eligibility Requirements for the Procurement of Goods and

Infrastructure Projects. – The BAC or, under special circumstances specified in IRR,
its duly designated organic office shall determine the eligibility of prospective bidders for
the procurement of Goods and Infrastructure Projects, based on the bidders'
compliance with the eligibility requirements within the period set forth in the Invitation to
Bid. The eligibility requirements shall provide for fair and equal access to all prospective
bidders. The documents submitted in satisfaction of the eligibility requirements shall be
made under oath by the prospective bidder or by his duly authorized representative
certifying to the correctness of the statements made and the completeness and
authenticity of the documents submitted.

A prospective bidder may be allowed to summit his eligibility requirements

electronically. However, said bidder shall later on certify under oath as to correctness of
the statements made and the completeness and authenticity of the documents
submitted.

Section 24. Eligibility requirements and Short Listing for Consulting Services. – The
Eligibility of prospective bidders for the Procurement of Consulting Services shall be
determine by their compliance with the eligibility requirements prescribed for the
competitive Bidding concerned, within the period stated in the Invitation to bid. The
eligibility requirements shall provide for fair and equal access to all prospective bidders.
The prospective bidder shall certify under oath as to the correctness of the statements
made, and the completeness and authenticity of the documents submitted.

A prospective bidder may be allowed to submit his eligibility requirements electronically.

However, said bidder shall later on certify under oath as to correctness of the
statements made and the completeness and authenticity of the documents submitted.

The eligible prospective bidders shall then be evaluated using numerical ratings on the
basis of the short-listing requirements prescribed for the Competitive Bidding
concerned, within the period stated in the Invitation to Bid to determine the short list of
bidders who shall be allowed to submit their respective bids.

Section 25. Submission and Receipt of Bids. – A bid shall have two (2) components,
namely the technical and financial components which should be in separate sealed
envelopes, and which shall be submitted simultaneously. The bids shall be received by
the BAC on such date, time and place specified in the invitation to bid. The deadline for
the receipt of bids shall be fixed by the BAC, giving the prospective bidders sufficient
time to study and prepare their bids. The deadline shall also consider the urgency of the
procurement involved.

Bids submitted after the deadline shall not be accepted.

Notwithstanding the provisions of this Section and Section 26 of this Act, the GPPB may
prescribe innovative procedure for the submission, receipt and opening of bids through
the G-EPS.

Section 26. Modification and Withdrawal of Bids. – A bidder may modify his bid,
provided that this is done before the deadline for the receipt of bids. The modification
shall be submitted in a sealed envelope duly identified as a modification of the original
bid and stamped received by the BAC.

A bidder may, through a letter, withdraw his bid or express his intention not to
participate in the bidding before the deadline for the receipt of bids. In such case, he
shall no longer be allowed to submit another Bid or the same contract either directly or
indirectly.

Section 27. Bid Security. – All Bids shall be accompanied by a Bid security, which
shall serve as guarantee that, after receipt of the Notice of Award, the winning bidders
shall enter into contract with the Procuring Entity within the stipulated time and furnish
the required performance security. The specific amounts and allowable forms of the Bid
security shall be prescribed in the IRR.

Section 28. Bid Validity. - Bids and Bid securities shall be valid for such reasonable
period of time indicated in the Bidding Documents. The duration for each undertaking
shall take into account the time involved in the process of Bid evaluation and award of
contract.

Section 29. Bid Opening. - the BAC shall publicly open all bids at the time, date, and
place specified in the bidding documents. The minutes of the bid opening shall be made
available to the public upon written request and payment of a specified fee.

ARTICLE IX
BID EVALUATION

Section 30. Preliminary Examination of Bids. – Prior to Bid evaluation, the BAC shall
examine first the technical components of the bids using "pass/fail" criteria to determine
whether all required documents are present. Only bids that are determined to contain all
the bid requirements of the technical component shall be considered for opening and
evaluation of their financial component.

Section 31. Ceiling for Bid Prices. – The ABC shall be the upper limit or ceiling for the
Bid prices. Bid prices that exceed this ceiling shall be disqualified outright from further
participating in the bidding. There shall be no lower limit to the amount of the award.

Section 32. Bid for the Procurement of Goods and Infrastructure Projects. – For the
procurement of Goods and Infrastructure Projects, the BAC shall evaluate the financial
component of the bids. The bids that passed the preliminary examination shall be
ranked from lowest to highest in terms of their corresponding calculated price shall be
referred to as the "Lowest Calculated Bid".
Section 33. Bid Evaluation of Short-Listed Bidders for Consulting Services. – For the
Procurement of Consulting Services, the Bids of the short listed bidders shall be
evaluated and ranked using numerical ratings in accordance with the evaluation criteria
stated in the Bidding Documents, which shall include factors such as, but not limited to,
experience, performance, quality or personnel, price and methodology. The Bids shall
be ranked from highest to lowest in terms of their corresponding calculated ratings. The
Bid with the highest calculated rating shall be the "Highest Rated Bid." After approved
by the Head of the Procuring Entity of the Highest Rated Bid, the BAC shall invite the
bidder concerned for negotiation and/or clarification on the following item: financial
proposal submitted by the bidder, terms of reference, scope of services, methodology
and work program, personnel to be assigned to job, services/facilities/data to be
provided by the Procuring Entity concerned, and provisions of the contract. When
negotiations with first-in-rank bidder fails, the financial proposal of the second rank
bidder shall opened for negotiations: Provided, that the amount indicated in the financial
envelope shall be made as the basis for negotiations and the total contract amount shall
not exceed the amount indicated in the envelope and the ABC. Whenever necessary,
the same process shall be repeated until the bid awarded to the winning bidder.

ARTICLE X
POST-QUALIFICATION

Section 34. Objective and Process of Post-qualification. – Post-qualification is the stage

where the bidder with the Lowest Calculated Bid, in the case of Goods and
Infrastructure Projects, or the Highest Rated Bid, in the case of Consulting Services,
undergoes verification and validation whether he has passed all the requirements and
conditions as specified in the Bidding Documents.

If the bidder with the Lowest Calculated Bid or Highest Rated Bid passes all the criteria
for post-qualification, his Bid shall be considered the "Lowest Calculated Responsive
Bid," in the case of Goods and Infrastructure or the "Highest Rated Responsive Bid,"
in the case of Consulting Services. However, if a bidder fails to meet any of the
requirements or conditions, he shall be "post-disqualified" and the BAC shall conduct
the post-qualification on the bidder with the second Lowest Calculate Bid or Highest
Rated Bid. If the bidder with the second Lowest Calculated Bid or Highest Rated Bid is
post-disqualified, the same procedure shall be repeated until the Lowest Calculated
Responsive Bid or Highest Rated Responsive Bid is finally determined.

In all cases, the contract shall be awarded only to the bidder with the Lowest Calculated
Responsive Bid or Highest Rated Responsive Bid.

Section 35. Failure of Bidding. – there shall be a failure of bidding if:

a. No bids are received;

b. No bid qualifies as the Lowest Calculated Responsive Bid; or,
 c. Whenever the bidder with the highest rated/lowest calculated responsive bid
refuses, without justifiable cause to accept the award of contract, as the case
may be.

Under any of the above instances, the contract shall be re-advertised and re-bid. The
BAC shall observe the same process and set the new periods according to the same
rules followed during the first bidding. After the second failed bidding, however, the BAC
may resort to negotiated procurement as provided for in Section 53 of this Act.

Section 36. Single Calculate/Rated and Responsive Bid Submission. – A single

calculated/rated and responsive bid shall be considered for award if it falls under of the
following circumstances:

a. If after advertisement, only one prospective bidder submits a Letter of Intent

and/or applies for eligibility check, and meets the eligibility requirements or
criteria, after which it submits a bid, which is found to be responsive to the
bidding requirements;
b. If after the advertisement, more than one prospective bidder applies for eligibility
check, but only one bidder meets the eligibility requirements or criteria, after
which in submits a bid which is found to be responsive to the bidding
requirements; or
c. If after the eligibility check, more than one bidder meets the eligibility
requirements, but only one bidder submits a bid, and its bid is found to be
responsive to the bidding requirements.

In all instances, the Procuring Entity shall ensure that the ABC reflects the most
advantageous prevailing price for the government.

ARTICLE XI
AWARD, IMPLEMENTATION AND TERMINATION OF THE CONTRACT

Section 37. Notice and Executive of Award. – Within a period not exceeding fifteen (15)
calendar days from the determination and declaration by the BAC of the Lowest
Calculated Responsive Bid or Highest Rated Responsive Bid, and the recommendation
of the award, the Head of the Procuring Entity or his duly authorized representative shall
approve or disapprove the said recommendation. In case of approval, the Head of the
Procuring Entity or his duly authorized representative shall immediately issue the Notice
of Award to the bidder with the Lowest Calculated Responsive Bid or Highest Rated
Responsive Bid.

Within ten (10) calendar days from receipt of the Notice of Award, the Winning bidder
shall formally enter into contract with the Procuring Entity. When further approval of
higher authority is required, the approving authority for the contracts shall be given a
maximum of twenty (20) calendar days to approve or disapprove it.
In the case of government-owned and/or -controlled corporations, the concerned board
shall take action on the said recommendation within thirty (30) calendar days from
receipt thereof.
The Procuring Entity shall issue the Notice to Proceed to the winning bidder not later
than seven (7) calendar days from the date of approval of the contract by the
appropriate authority. All notices called for by the terms of the contract shall be effective
only at the time of receipt thereof by the contractor.

Section 38. Period of Action on Procurement Activities. – The procurement process

from the opening of bids up to the award of contract shall not exceed three (3) months,
or a shorter period to be determined by the procuring entity concerned. Without
prejudice to the provisions of the preceding section, the different procurement activities
shall be completed within reasonable periods to be specified in the IRR.

If no action on the contract is taken by the head of the procuring entity or by his duly
authorized representative, or by the concerned board, in the case of government-owned
and/or -controlled corporations, within the periods specified in the preceding paragraph,
the contract concerned shall be deemed approved.

Section 39. Performing Security. - Prior to the signing of the contract, the winning
bidder shall, as a measure of guarantee for the faithful performance of an compliance
with his obligations under the contract prepared in accordance with the Bidding
Documents, be required to post a performance security in such form and amount as
specified in the Bidding Documents.

Section 40. Failure to Enter into Contract and Post Performance Security. – If, for
justifiable causes, the bidder with the Lowest Calculated Responsive Bid or Highest
Rated Responsive Bid fails, refuses or is otherwise unable to enter into contract with the
Procuring Entity, or if the bidder fails to post the required performance security within
the period stipulated in the Bidding Documents, the BAC shall disqualify the said bidder
and shall undertake post-qualification for the next-ranked Lowest Calculated Bid or
Highest Rated Bid. This procedure shall be repeated until an award is made. However,
if no award is possible, the contract shall be subjected to a new bidding.

In the case of a failure to post the required performance security, the bid security shall
be forfeited without prejudice to the imposition of sanctions prescribed under Article
XXIII.

Section 41. Reservation Clause. - The Head of the Agency reserves the right to reject
any and all Bids, declare a failure of bidding, or not award the contract in the
following situations:

a. If there is prima facie evidence of collusion between appropriate public officers or

employees of the Procuring Entity, or between the BAC and any of the bidders,
or if the collusion is between or among the bidders themselves, or between a
 bidder and a third party, including any act which restricts, suppresses or nullifies
or tends to restrict, suppress or nullify competition;
b. If the BAC is found to have failed in following the prescribed bidding procedures;
or
c. For any justifiable and reasonable ground where the award of the contract will
not redound to the benefit of the government as defined in the IRR.

Section 42. Contract Implementation and Termination. – The rules and guidelines for
the implementation and termination of contracts awarded pursuant to the provisions of
this Act shall be prescribed in the IRR. The rules and guidelines shall include standard
general and special conditions for contracts.

ARTICLE XII
DOMESTIC AND FOREIGN PROCUREMENT

Section 43. Procurement of Domestic and Foreign Goods. – Consistent with the

country's obligations under international treaties or agreements, Goods may be
obtained for domestic or foreign sources and the procurement thereof shall be open to
all eligible suppliers, manufacturers and distributors. However, in the interest of
availability, efficiency and timely delivery of Goods, the Procuring Entity may give
preference to the purchase of domestically-produced and manufacturer goods, supplies
and materials that meet the specified or desired quality.

ARTICLE XIII
BIDDING OF PROVINCIAL PROJECTS

Section 44. Bidding of Provincial Projects. – Priority programs and infrastructure

projects funded out of the annual General Appropriations Act which are intended for
implementation within the province shall be subject to the same public bidding and to
the procurement processes prescribed under this Act. For purposes of this Article,
Engineering District civil works projects, subject to consultation with the concerned
Members of Congress, are included and subsumed in the term "provincial projects" and
shall be governed by this Section and Section 45 hereof.

Section 45. Provincial Bidders. – Within five (5) years from the effectivity of this Act,
contractor who participates in the bidding of provincial priority programs and
infrastructure projects, whose principal office is within the same province, and who
submits the lowest bid among the provincial bidders which is higher than the lowest bid
made by a contractor with principal office outside the said province shall be granted the
privilege to match the bid made by the latter: Provided, however, That the release of
funds for said projects shall be published in a local newspaper with the widest
circulation and the website of the DBM, the mechanisms of which shall be spelled-out in
the IRR.
 ARTICLE XIV
LEASE OF COMPUTERS, COMMUNICATIONS, INFORMATION AND OTHER
EQUIPMENT

Section 46. Lease Contracts. - Lease of construction and office equipment, including

computers, communication and information technology equipment are subject to the
same public bidding and to the processes prescribed under this Act.
ARTICLE XV
DISCLOSURE OF RELATIONS

Section 47. Disclosure of Relations. - In addition to the proposed contents of the

Invitation to Bid as mentioned under Section 21 of this Act, all bidding documents shall
be accompanied by a sworn affidavit of the bidder that he or she or any officer of their
corporation in not related to the Head of the Procuring Entity by consanguinity or affinity
up to the third civil degree. Failure to comply with the aforementioned provision shall be
a ground for the automatic disqualification of the bid in consonance with Section30 of
this Act.

ARTICLE XVI
ALTERNATIVE METHODS OF PROCUREMENT

Section 48. Alternative Methods. - Subject to the prior approval of the Head of the
Procuring Entity or his duly authorized representative, and whenever justified by the
conditions provided in this Act, the Procuring Entity may, in order to promote economy
and efficiency, resort to any of the following alternative methods of Procurement:

a. Limited Source Bidding, otherwise known as Selective Bidding – a method of

Procurement that involves direct invitation to bid by the Procuring Entity from a
set of pre-selected suppliers or consultants with known experience and proven
capability relative to the requirements of a particular contract;
b. Direct Contracting, otherwise known as Single Source Procurement – a
method of Procurement that does not require elaborate Bidding Documents
because the supplier is simply asked to submit a price quotation or a pro-forma
voice together with the conditions of sale, which offer may be accepted
immediately or after some negotiations;
c. Repeat Order. – a method of Procurement that involves a direct Procurement of
Goods from the previous winning bidder, whenever there is a need to replenish
Goods procured under a contract previously awarded through Competitive
Bidding;
d. Shopping – a method of Procurement whereby the Procuring Entity simply
requests for the submission of price quotations for readily available off-the-shelf
Goods or ordinary/regular equipment to be procured directly from suppliers of
known qualification; or
e. Negotiated Procurement - a method of Procurement that may be resorted
under the extraordinary circumstances provided for in Section 53 of this Act and
other instances that shall be specified in the IRR, whereby the Procuring Entity
 directly negotiates a contract with a technically, legally and financially capable
supplier, contractor or consultant.

In all instances, the Procuring Entity shall ensure that the most advantageous price for
the government is obtained.

Section 49. Limited Source Bidding. – Limited Source Bidding may be resorted to

only in any of the following conditions:

a. Procurement of highly specialized types of Goods and Consulting Services which

are known to be obtainable only from a limited number of sources; or
b. Procurement of major plant components where it is deemed advantageous to
limit the bidding to known eligible bidders in order to maintain an optimum and
uniform level of quality and performance of the plant as a whole.

Section 50. Direct Contracting. – Direct Contracting may be resorted to only in any of

the following conditions:

a. Procurement of Goods of propriety nature, which can be obtained only from the
propriety source, i.e. when patents, trade secrets and copyrights prohibit others
from manufacturing the same items;
b. When the Procurement of critical components from a specific manufacturer,
supplier, or distributor is a condition precedent to hold a contractor to guarantee
its project performance, in accordance with the provisions his contract; or,
c. Those sold by an exclusive dealer or manufacturer, which does not have sub-
dealers selling at lower prices and for which no suitable substitute can be
obtained at more advantageous terms to the government.

Section 51. Repeat Order. - When provided for in the Annual Procurement Plan,
Repeat Order may be allowed wherein the Procuring Entity directly procures Goods
from the previous winning bidder whenever there arises a need to replenish goods
procured under a contract previously awarded through Competitive Bidding, subject to
post-qualification process prescribed in the Bidding Documents and provided all the
following conditions are present:

a. The unit price must be equal to or lower than that provided in the original
contract;
b. The repeat order does not result in splitting of requisitions or purchase orders;
c. Except in special circumstances defined in the IRR the repeat order shall be
availed of only within six (6) months from the date of the Notice to Proceed
arising from the original contract; and,
d. The repeat order shall not exceed twenty-five percent (25%) of the quantity of
each item of the original contract.

Section 52. Shopping. - shopping may be resorted to under any of the following

instances:
 a. When there is an unforeseen contingency requiring immediate purchase:
Provided, however, That the amount shall not exceed Fifty thousand pesos
(P50,000); or
b. Procurement of ordinary or regular office supplies and equipment not available in
the Procurement Service involving an amount not exceeding Two hundred fifty
thousand pesos (P250,000): Provided, however, That the Procurement does not
result in Splitting of Contracts: Provided, further, That at least three (3) price
quotations from bona fide suppliers shall be obtained.

The above amounts shall be subject to a period review by the GPPB. For this purpose,
the GPPB shall be authorized to increase or decrease the said amount in order to
reflect changes in economic conditions and for other justifiable reasons.

Section 53. Negotiated Procurement. - Negotiated Procurement shall be allowed only

in the following instances:

a. In case of two (2) failed bidding as provided in Section 35 hereof;

b. In case of imminent danger to life or property during a state of calamity, or when
time is of the essence arising from natural or man-made calamities or other
causes where immediate action is necessary to prevent damage to or loss of life
or property, or to restore vital public services, infrastructure facilities and other
public utilities;
c. Take-over of contracts, which have been rescinded or terminated for causes
provided for in the contract and existing laws, where immediate action is
necessary to prevent damage to or loss of life or property, or to restore vital
public services, infrastructure facilities and other public utilities;
d. Where the subject contract is adjacent or contiguous to an on-going
infrastructure project, as defined in the IRR: Provided, however, That the original
contract is the result of a Competitive Bidding; the subject contract to be
negotiated has similar or related scopes of work; it is within the contracting
capacity of the contractor; the contractor uses the same prices or lower unit
prices as in the original contract less mobilization cost; the amount involved does
not exceed the amount of the ongoing project; and, the contractor has no
negative slippage: Provided, further, That negotiations for the procurement are
commenced before the expiry of the original contract. Wherever applicable, the
principle shall also govern consultancy contract, where the consultants have
unique experience and expertise to deliver the required service; or,
e. Subject to the guidelines specified in the IRR, purchases of Goods from another
agency of the government, such as the Procurement Service of the DBM, which
is tasked with a centralized procurement of commonly used Goods for the
government in accordance with Letters of Instruction No. 755 and Executive
Order No. 359, series of 1989.
Section 54. Terms and Conditions for the use of Alternative Methods. - The specific
terms and conditions, including the limitations and restrictions, for the application of
each of the alternative methods mentioned in this Article shall be specified in the IRR.

ARTICLE XVII
PROTEST MECHANISM

Section 55. Protests on Decisions of the BAC. – Decisions of the BAC in all stages of
procurement may be protested to the head of the procuring entity and shall be in writing.
Decisions of the BAC may be protested by filing a verified position paper and paying a
non-refundable protest fee. The amount of the protest fee and the periods during which
the protests may be filed and resolved shall be specified in the IRR.

Section 56. Resolution of Protests. – The protest shall be resolved strictly on the basis
of records of the BAC. Up to a certain amount to be specified in the IRR, the decisions
of the Head of the Procuring Entity shall be final.

Section 57. Non-interruption of the Bidding Process. – In no case shall any protest
taken from any decision treated in this Article stay or delay the bidding process.
Protests must first be resolved before any award is made.

Section 58. Report to Regular Courts; Certiorari. – Court action may be resorted to only
after the protests contemplated in this Article shall have been completed. Cases that are
filed in violation of the process specified in this Article shall be dismissed for lack of
jurisdiction. The regional trial court shall have jurisdiction over final decision of the head
of the procuring entity. Court actions shall be governed by Rule 65 of the 1997 Rules of
Civil Procedure.

This provision is without prejudice to any law conferring on the Supreme court the sole
jurisdiction to issue temporary restraining orders and injunctions relating to
Infrastructure Projects of Government.

ARTICLE XVIII
SETTLEMENT OF DISPUTES

Section 59. Arbitration. – Any and all disputes arising from the implementation of a
contract covered by this Act shall be submitted to arbitration in the Philippines according
to the provisions of Republic Act No. 876, otherwise known as the "Arbitration Law":
Provided, however, That, disputes that are within the competence of the Construction
Industry Arbitration Commission to resolve shall be referred thereto. The process of
arbitration shall be incorporated as a provision in the contract that will be executed
pursuant to the provisions of this Act: Provided, That by mutual agreement, the parties
may agree in writing to resort to alternative modes of dispute resolution.

Section 60. Appeals. - The arbitral award and any decision rendered in accordance
with the foregoing Section shall be appealable by way of a petition for review to the
Court of Appeals. The petition shall raise pure questions of law and shall be governed
by the Rule of Court.

ARTICLE XIX
CONTRACT PRICES AND WARRANTIES

Section 61. Contract Prices. - For the given scope of work in the contract as awarded,
all bid prices shall be considered as fixed prices, and therefore not subject to price
escalation during contract implementation, except under extraordinary circumstances
and upon prior approval of the GPPB.

For purposes of this Section, "extraordinary circumstances" shall refer to events that
may be determined by the National Economic and Development Authority in
accordance with the Civil Code of the Philippines, and upon the recommendation of the
procuring entity concerned.

Section 62. Warranty. – 

(a) For the procurement of Goods, in order to assure that manufacturing defects
shall be corrected by the supplier, manufacturer, or distributor, as the case
maybe, for a specific time after performance of the contract, a warranty shall be
required from the contract awardee for such period of time as may be provided in
the IRR, the obligation for which shall be covered by either retention money in
the amount equivalent to a percentage of every progress payment, or a special
bank guarantee equivalent to a percentage of the total contract price, to be
provided in the IRR. The said amounts shall only be released after the lapse of
the warranty period, provided that the Goods supplied are free from defects and
all the conditions imposed under the contract have been fully met.

(b) For the procurement of infrastructure projects, the contractor shall assume full
responsibility for the contract work from the time project construction commenced
up to a reasonable period as defined in the IRR taking into consideration the
scale and coverage of the project from its final acceptance by the government
and shall be held responsible for any damage or construction or works except
those occasioned by force majeure.

The contractor shall be fully responsible for the safety, protection, security, and
convenience of his personnel, third parties, and the public large, as well as the
works, equipment, installation and the like to be affected by his construction work
and shall be required to put up a warranty security in the form of cash, bank
guarantee, letter of credit, Government Service Insurance System bond, or
callable surety bond. The contractor shall undertake the repair works, at his own
expense, of any defect or damage to the infrastructure projects on account of the
use of materials of inferior quality within ninety (90) days from the time the Head
of the Procuring Entity has issued an order to undertake repair. In case of failure
or refusal to comply with this mandate, the governments shall undertake such
 repair works and shall be entitle to full reimbursement of expenses incurred
therein upon demand.

Any contractor who fails to comply with the preceding paragraphs shall suffer
perpetual disqualification from participating in any public bidding and his property
or properties shall be subject to attachment or garnishment proceedings to
recover the costs. All payables of government in his favor shall be offset to
recover the costs.

ARTICLE XX
THE GOVERNMENT PROCUREMENT POLICY BOARD

Section 63. Organization and Functions. – A Government Procurement Policy Board

(GPPB) is hereby established to:

(a) protect national interest in all matters affecting public Procurement, having due
regard to the country's regional and international obligations;
(b) formulate and amend, whenever necessary, the IRR and the corresponding
standard forms for Procurement;
(c) ensure that Procuring Entities regularly conduct Procurement training programs
and prepare a Procurement Operations Manual for all offices and agencies of
government; and
(d) conduct an annual review of the effectiveness of this Act and recommend any
amendments thereto, as may be necessary.

The GPPB shall convene within fifteen (15) days from the effectivity of this Act formulate
the IRR and for other related purposes. The GPPB shall be supported by a technical
support office.

In addition to the powers granted under this Act, the GPPB shall absorb all the powers,
function and responsibilities of the Procurement Policy Board created under Executive
Order No. 359, series of 1989. All affected functions of the Infrastructure Committee of
the National Economic and Development Authority Board are hereby transferred to the
GPPB.

Section 64. Membership. – The GPPB shall be composed of the Secretary of the

Department of Budget and Management, as Chairman, the Director-General of the
National Economic and Development Authority, as Alternate Chairman, with the
following as Members; the Secretaries of the Departments of Public Works and
Highways, Finance, Trade and Industry, Health, National Defense, Education, Interior
and Local Government, Science and Technology, Transportation and Communications,
and Energy, or their duly authorized representatives and a representative from the
private sector to be appointed by the President upon the recommendation of the GPPB.
The GPPB may invite a representative from the Commission on Audit to serve as a
resource person.
 ARTICLE XXI
PENAL CLAUSE

Section 65. Offenses and Penalties. – 

(a) Without prejudice to the provisions of Republic Act No. 3019, otherwise known as
the "Anti-Graft and Corrupt Practice Act" and other penal laws, public officers
who commit any of the following acts shall suffer the penalty of imprisonment of
not less than six (6) years and one (1) day, but not more than fifteen (15) years:

1. Open any sealed Bid including but not limited to Bids that may have been
submitted through the electronic system and any and all documents required
to be sealed or divulging their contents, prior to the appointed time for the
public opening of Bids or other documents.
2. Delaying, without justifiable cause, the screening for eligibility, opening of
bids, evaluation and post evaluation of bids, and awarding of contracts
beyond the prescribed periods of Bids or other documents.
3. Unduly influencing or exerting undue pressure on any member of the BAC or
any officer or employee of the procuring entity to take a particular bidder.
4. Splitting of contracts which exceed procedural purchase limits and
competitive bidding.
5. When the head of the agency abuses the exercise of his power to reject any
and all bids as mentioned under Section 41 of this Act with manifest
preference to any bidder who is closely related to him in accordance with
Section 47 of this Act.

When any of the foregoing acts is done in collusion with private individuals, the private
individuals shall likewise be liable for the offense.

In addition, the public officer involved shall also suffer the penalty of temporary
disqualification from public office, while the private individual shall be permanently
disqualified from transacting business with the government.

(b) Private individuals who commit any of the following acts, including any public
officer, who conspires with them, shall suffer the penalty of imprisonment of not
less than six (6) years and one (1) day but not more than fifteen (15) years:

1. When two or more bidders agree and submit different Bids as if they were
bona fide, when they knew that one or more of them was so much higher than
the other that it could not be honestly accepted and that the contract will
surely be awarded to the pre-arranged lowest Bid.
2. When a bidder maliciously submits different Bids through two or more
persons, corporations, partnerships or any other business entity in which he
has interest to create the appearance of competition that does not in fact exist
so as to be adjudged as the winning bidder.
 3. When two or more bidders enter into an agreement which call upon one to
refrain from bidding for Procurement contracts, or which call for withdrawal of
bids already submitted, or which are otherwise intended to secure as undue
advantage to any one of them.
4. When a bidder, by himself or in connivance with others, employ schemes
which tend to restrain the natural rivalry of the parties or operates to stifle or
suppress competition and thus produce a result disadvantageous to the
public.

In addition, the persons involved shall also suffer the penalty of temporary or perpetual
disqualification from public office and be permanently disqualified from transacting
business with the government.

(c) Private individuals who commit any of the following acts, and any public officer
conspiring with them, shall suffer the penalty of imprisonment of not less than six
(6) years and one (1) day but more than fifteen (15) years:

1. Submit eligibility requirements of whatever kind and nature that contain false
information or falsified documents calculated to influence the outcome of the
eligibility screening process or conceal such information in the eligibility
requirements when the information will lead to a declaration of ineligibility
from participating in public bidding.
2. Submit Bidding Documents of whatever kind and nature than contain false
information or falsified documents or conceal such information in the Bidding
Documents, in order to influence the outcome of the public bidding.
3. Participate in a public bidding using the name of another or allow another to
use one's name for the purpose of participating in a public bidding.
4. Withdraw a Bid, after it shall have qualified as the Lowest Calculated
Bid/Highest Rated Bid, or to accept and award, without just cause or for the
purpose of forcing the Procuring Entity to award the contract to another
bidder. This shall include the non-submission of requirements such as, but
not limited to, performance security, preparatory to the final award of the
contract.

(d) When the bidder is a juridical entity, criminal liability and the accessory penalties
shall be imposed on its directors, officers or employees who actually commit any
of the foregoing acts.

Section 66. Jurisdiction. – Jurisdiction over the offenses defined under this Article shall
belong to the appropriate courts, according to laws existing at the time of the
commission of the offenses.

ARTICLE XXII
CIVIL LIABILITY
Section 67. Civil Liability in Case of Conviction. - Without prejudice to administrative
sanctions that may be imposed in proper cases, a conviction under this Act or Republic
Act No. 3019 shall carry with it civil liability, which may either consist of restitution for the
damage done or the forfeiture in favor of the government of any unwarranted benefit
derived from the act or acts in question or both, at the discretion of the courts.

Section 68. Liquidated Damages. - All contracts executed in accordance with this Act
shall contain a provision on liquidated damages which shall be payable in case of
breach thereof. The amount thereof shall be specified in the IRR.

ARTICLE XXIII
ADMINISTRATIVE SANCTIONS

Section 69. Imposition of Administrative Penalties. – (a) In addition to the provisions of

Articles XXI and XXII of this Act, the Head of the Procuring Entity, subject to the
authority delegated to the BAC, if any, shall impose on bidders or prospective bidders,
the administrative penalty of suspension for one (1) years for the first offense, and
suspensions of two (2) years for the second offense from participating in the public
bidding process, for the following violations:

1. Submission of eligibility requirements containing false information or falsified

documents.
2. Submission of bids that contain false information or falsified documents, or the
concealment of such information in the Bids in order to influence the outcome of
eligibility screening or any other stage of the public bidding.
3. Allowing the use of one's name, or using the name of another for purposes of
public bidding.
4. Withdrawal of a Bid, or refusal to accept an award, or enter into contract with the
government without justifiable cause, after he had been adjudged as having
submitted the Lowest Calculated Responsive Bid or Highest Rated Responsive
Bid.
5. Refusal or failure to post the require performance security within the prescribed
time.
6. Termination of the contract due to the default of the bidder.

Refusal to clarify or validate in writing its Bid during post-qualification within a period of
seven (7) calendar days from receipt of the request for clarification.

Any documented unsolicited attempt by a bidder to unduly influence the outcome of the
bidding in his favor.

All other acts that tend to defeat the purpose of the Competitive bidding.

(b) In addition to the penalty of suspension, the Bid security of the performance security
posted by the concerned bidder or prospective bidder shall also be forfeited.
(c) the Head of the Procuring Entity may delegate to the BAC the authority to impose
the aforementioned administrative penalties.

Section 70. Preventive Suspension. – The head of the procuring entity may

preventively suspend any member of the Technical Working Group of the Secretariat, or
the BAC if there are strong reasons or prima facie evidence showing that the officials or
employees concerned are guilty or the charges filed against them under Articles XXI
and XXII of this Act or for dishonesty as defined by the Civil Service Laws. In all cases,
procedural and substantive due process as mandated by the Constitution and Civil
Service Laws, rules and regulations, shall be strictly observed.
Section 71. Lifting of Suspension and Removal of Administrative Disabilities. – Lifting of
preventive suspension pending administrative investigation, as well as removal of
administrative investigation, as well as removal of administrative penalties and
disabilities shall be in accordance with the provisions of Sections 52 and 53, Chapter 6
(Civil Service Commission), Book V of Executive Order No. 292, the Administrative
Code of 1987.

ARTICLE XXIV
LEGAL ASSISTANCE AND INDEMNIFICATION OF BAC MEMBERS

Section 72. Private Legal Assistance. - All the members of the BAC are hereby
authorized to engage the service of private lawyers or extend counsel immediately upon
receipt of Court Notice that a civil or criminal action, suit or proceeding is filed against
them. The lawyer's fee shall be part of the indemnification package for the BAC
members, subject to the provisions of Section 73 hereof.

Section 73. Indemnification of BAC Members. - The GPPB shall establish an equitable

indemnification package for public officials providing services in the BAC, which may be
in the form of free legal assistance, liability insurance, and other forms of protection and
indemnification for all cost and expenses reasonably incurred by such persons in
connection with any civil or criminal actions, suit or proceeding to which they may be, or
have been made, a party by reason of the performance of their functions or duties,
unless they are finally adjudged in such action or proceeding to be liable for gross
negligence or misconduct or grave abuse of discretion.

In the event of settlement or compromise, indemnification shall be confined only on

matters covered by the settlement, as to which the Procuring Entity had been advised
by count set that the public officials to be indemnified have not committed gross
negligence or misconduct in the performance of their functions and duties.

The members of the BAC and the BAC Secretariat shall also be entitled to medical
assistance for injuries incurred in the performance of their functions.

ARTICLE XXV
FINAL PROVISIONS
Section 74. Oversight Committee. - There is hereby created a Joint Congressional
Oversight Committee to oversee the implementation of this Act for a period not
exceeding five (5) years from the effectivity of this Act. The Committee shall be
composed of the Chairman of the Senate Committee on Constitutional Amendments
and Revision of Laws and two (2) members thereof appointed by the Senate President,
and the Chairman of the House Committee on Appropriations, and two(2) thereof to be
appointed by the Speaker of the House of Representatives.

Section 75. Implementing Rules and Regulations and Standard Forms. - Within sixty
(60) days from the promulgation of this Act, the necessary rules and regulations for the
proper implementation of its provisions shall be formulated by the GPPB, jointly with the
members of the Oversight Committee created under Section 74 hereof. The said rules
and regulations shall be approved by the President of the Philippines. For a period not
later than thirty (30) days upon the approval of the implementing rules and regulations
the standard forms for Procurement shall be formulated and approved.
Section 76. Repealing Clause. - This law repeals Executive Order No. 40, series of
2001, entitled "Consolidating Procurement Rules and Procedures for all National
Government Agencies, Government-Owned-or-Controlled Corporations and/or
Government Financial Institutions, and requiring the Use of the Government Electronic
Procurement System"; Executive Order No.262, series of 2000, entitled "Amending
Executive Order No.302, series of 1996, entitled "Providing Policies, Guidelines, Rules
and Regulations for the Procurement of Goods/Supplies by the National Government'
and Section 3 of Executive Order No.201, series of 2000, entitled "Providing Additional
Policies and Guidelines and the Procurement of Goods/Supplies by the National
Government"; Executive Order No. 302, series of 1996, entitled "Providing Policies,
Guidelines, Rules and Regulations for the Procurement of Goods/Supplies by the
National Government" and Presidential Decree No. 1594 dated June 11,1978, entitled
"Prescribing Policies, Guidelines, Rule and regulations for Government Infrastructure
Contracts." This law amends Title Six, Book Two of Republic Act No. 7160, otherwise
known as the "Local Government Code of 1991"; the relevant provisions of Executive
Order No.164, series of 1987, entitled " An Act Providing Additional Guidelines in the
processing and Approval of Contracts of the Government"; and the relevant provisions
of Republic Act No. 7898 dated February 23, 1995, entitled "An Act Providing for the
Modernization of the Armed Forces of the Philippines and other Purposes." Any other
law, presidential decree or issuance, executive order, letter of instruction, administrative
order, proclamation, charter, rule or regulation and/or parts thereof contrary to or
inconsistent with the provisions of this Act, hereby repealed, modified or amended
accordingly.
Section 77. Separability Clause. - If any provision of this Act is declared invalid or
unconstitutional, the other provisions not affected thereby shall remain valid and
subsisting.
Section 78. Effectivity Clause. - This Act shall take effect fifteen (150) days following its
publication in the Officials Gazette or in two (2) newspapers of general circulation.

Approved,
FRANKLIN DRILON JOSE DE VENECIA JR.
President of the Senate Speaker of the House of
Representatives

This Act, which is a consolidation of House Bill No.4809 and Senate Bill No. 2248 was
finally passed by the House of Representatives and the Senate on December 18, 2002.

ROBERTO P. NAZARENO
OSCAR G. YABES Secretary General
Secretary of Senate House of Representatives

Approved: January 10, 2003

GLORIA MACAPAGAL-ARROYO
President of the Philippines