Republic Act No.

9184
January 10, 2003

Republic of the Philippines

Congress of the Philippines

Metro Manila

Twelfth Congress

Second Regular Session

Begun and held in Metro Manila, on Monday, the twenty-second day of July, two thousand two.

[REPUBLIC ACT NO. 9184]

AN ACT PROVIDING FOR THE MODERNIZATION, STANDARDIZATION AND

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

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

ARTICLE I

General Provisions

SECTION 1. Short Title. This Act shall be known as the Government Procurement Reform
Act.

SEC. 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.

SEC. 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.

SEC. 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 a
signatory shall be observed.

SEC. 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 case of 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-Owned and/or Controlled Corporations, 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 a 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 consists of the following processes: advertisement, pre-bid
conference, eligibility screening of prospective bidders, receipt and opening of bids, evaluation
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 expertise
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. SEIDAC

(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 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 for such
services.

(i) GPPB refers to the Government Procurement Policy Board established in accordance with
Article XX 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, hospital 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 for 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.

SEC. 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. SEIDAC

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

SEC. 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

SEC. 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 a 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 the 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.

SEC. 9. Security, Integrity and Confidentiality. The G-EPS shall ensure the security, integrity
and confidentiality of documents submitted through the system. It shall include a 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. SEIDAC

ARTICLE IV

Competitive Bidding

SEC. 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

SEC. 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 members 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 a 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.

SEC. 12. Functions of the BAC. 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 or
his duly authorized representative: Provided, That in the event the Head of the Procuring Entity
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 be 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.

SEC. 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.

SEC. 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.

SEC. 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. SEIDAC

SEC. 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
BACs, BAC Secretariats and Technical Working Groups of Procuring Entities, and
professionalize the same.

ARTICLE VI

Preparation of Bidding Documents

SEC. 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.

SEC. 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.

SEC. 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 to any prospective bidder or person
having direct or indirect interest in the project to be procured. SEIDAC

ARTICLE VII

Invitation to Bid

SEC. 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
in relation to their adherence to law. This shall be attended by the BAC, the unit or officials who
prepared the bidding documents and the draft Invitation to Bid, as well as consultants hired by
the agency concerned and the representative of the end-user.

SEC. 21. Advertising and Contents of the Invitation to Bid. In line with the principle of
transparency and competitiveness, all Invitations to Bid for 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 Entitys 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 deadline 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;

(g) The contract duration; and,

(h) Such other necessary information deemed relevant by the Procuring Entity.

SEC. 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.
SEIDAC

The pre-bid conference(s) shall be held within a reasonable period before the deadline for receipt
of bids to allow prospective bidders to adequately prepare their bids, which shall be specified in
the IRR.

ARTICLE VIII

Receipt and Opening of Bids

SEC. 23. Eligibility Requirements for the Procurement of Goods and Infrastructure Projects.
The BAC or, under special circumstances specified in the 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 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.

SEC. 24. Eligibility Requirements and Short Listing for Consulting Services. The eligibility of
prospective bidders for the Procurement of Consulting Services shall be determined 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.

SEC. 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 it sufficient time to complete the bidding process and 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 procedures for the submission, receipt and opening of bids through the G-
EPS.
SEC. 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 for the same contract either directly or indirectly.

SEC. 27. Bid Security. All Bids shall be accompanied by a Bid security, which shall serve as a
guarantee that, after receipt of the Notice of Award, the winning bidder 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.

SEC. 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.

SEC. 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

SEC. 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.

SEC. 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.

SEC. 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 prices. The bid with the lowest calculated price shall be
referred to as the Lowest Calculated Bid.

SEC. 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 of
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 approval 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 items: financial proposal submitted by the bidder, terms of reference, scope of
services, methodology and work program, personnel to be assigned to the job,
services/facilities/data to be provided by the Procuring Entity concerned, and provisions of the
contract. When negotiations with the first-in-rank bidder fails, the financial proposal of the
second rank bidder shall be 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 is awarded to the winning bidder.

ARTICLE X

Post-Qualification

SEC. 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 Calculated 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.

SEC. 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 Highest Rated 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.

SEC. 36. Single Calculated/Rated and Responsive Bid Submission. A single calculated/rated
and responsive bid shall be considered for award if it falls under any 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 it 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

SEC. 37. Notice and Execution 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. SEIDAC

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 contract 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.

SEC. 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.

SEC. 39. Performance Security. Prior to the signing of the contract, the winning bidder shall,
as a measure of guarantee for the faithful performance of and 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.

SEC. 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.

SEC. 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.

SEC. 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

SEC. 43. Procurement of Domestic and Foreign Goods. Consistent with the countrys
obligations under international treaties or agreements, Goods may be obtained from 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
manufactured goods, supplies and materials that meet the specified or desired quality.

ARTICLE XIII

Bidding of Provincial Projects

SEC. 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.

SEC. 45. Provincial Bidders. Within five (5) years from the effectivity of this Act, a 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

SEC. 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
SEC. 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 is 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 Section 30 of this Act.

ARTICLE XVI

Alternative Methods of Procurement

SEC. 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 invoice 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.

SEC. 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.

SEC. 50. Direct Contracting. Direct Contracting may be resorted to only in any of the
following conditions:

(a) Procurement of Goods of proprietary nature, which can be obtained only from the proprietary
source, i.e. when patents, trade secrets and copyrights prohibit others from manufacturing the
same item;

(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 of 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.

SEC. 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.

SEC. 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 periodic 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.

SEC. 53. Negotiated Procurement. Negotiated Procurement shall be allowed only in the
following instances:

(a) In cases of two (2) failed biddings, 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.
Whenever applicable, this principle shall also govern consultancy contracts, 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 Letter of
Instruction No. 755 and Executive Order No. 359, series of 1989.

SEC. 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
SEC. 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.

SEC. 56. Resolution of Protests. The protests 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.

SEC. 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.

SEC. 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 decisions 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

SEC. 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.

SEC. 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 Rules of Court.
SEIDAC

ARTICLE XIX

Contract Prices and Warranties

SEC. 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.

SEC. 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 may be, 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 of
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 at
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 government shall undertake such
repair works and shall be entitled to full reimbursement of expenses incurred therein upon
demand.

Any contractor who fails to comply with the preceding paragraph 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

SEC. 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 countrys 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 to 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, functions
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.

SEC. 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

SEC. 65. Offenses and Penalties. (a) Without prejudice to the provisions of Republic Act No.
3019, otherwise known as the Anti-Graft and Corrupt Practices 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 action
provided for in the IRR.
(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 action which favors, or tends to favor 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 an 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 not 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 that 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 ones 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 refuse to accept an 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 within the
prescribed time, or delaying the 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.

SEC. 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

SEC. 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.

SEC. 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

SEC. 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) year for the first offense, and suspension 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.

SEIDAC

(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 ones 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 required 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 or 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.

SEC. 70. Preventive Suspension. The head of the procuring entity may preventively suspend
any member of the Technical Working Group or the Secretariat, or the BAC if there are strong
reasons or prima facie evidence showing that the officials or employees concerned are guilty of
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.

SEC. 71. Lifting of Suspension and Removal of Administrative Disabilities. Lifting of

preventive suspension pending 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

SEC. 72. Private Legal Assistance. All the members of the BAC are hereby authorized to
engage the services 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 lawyers fee
shall be part of the indemnification package for the BAC members, subject to the provisions of
Section 73 hereof.

SEC. 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 costs and expenses reasonably incurred by such persons in connection
with any civil or criminal action, 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 a settlement or compromise, indemnification shall be confined only on matters

covered by the settlement, as to which the Procuring Entity had been advised by counsel 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

SEC. 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) members thereof to be appointed by the Speaker of the House of
Representatives.

SEC. 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.

SEC. 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 in 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, Rules 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 Providing Additional Guidelines in the Processing and Approval of Contracts of the
National 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 for 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 is hereby repealed, modified or
amended accordingly.

SEC. 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.

SEC. 78. Effectivity Clause. This Act shall take effect fifteen (15) days following its
publication in the Official Gazette or in two (2) newspapers of general circulation.

Approved,

(Sgd.) FRANKLIN M. DRILON (Sgd.) 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.

(Sgd.) OSCAR G. YABES (Sgd.) ROBERTO P. NAZARENO

Secretary of the Senate Secretary General
House of Representatives

Approved: JAN 10 2003

 (Sgd.) GLORIA MACAPAGAL-ARROYO
President of the Philippines

Source: CDAsia