Atty. Anthony Raymond M.

Velicaria
GPPB Recognized Trainer

1
 PROTEST MECHANISM

Document Where When

to file to file to file
1. Request for BAC 3 days from receipt
Reconsideration of notice from the
BAC
2. Protest (verified HOPE 7 days from receipt
position paper, and of notice from the
payment of protest fee) BAC
3. Petition for Certiorari, RTC 60 days from
Prohibition, and receipt of notice
Mandamus from the HOPE
2
 PROTEST FEES
ABC RANGE
50 million pesos and below
More than 50 million pesos
to 100 million pesos
More than 100 million pesos
to 500 million pesos
More than 500 million pesos
to 1 billion pesos
More than 1 billion pesos
to 2 billion pesos
More than 2 billion pesos
to 5 billion pesos
More than 5 billion pesos
PROTEST FEE
0.75% of the ABC
PhP 500,000.00
0.5% of the ABC
PhP 2,500,000.00
0.25% of the ABC
PhP 5,000,000.00
0.1% of the ABC
3
 REQUEST FOR RECONSIDERATION

 Decisions of the BAC at any stage of the procurement

process may be questioned by filing a request for
reconsideration within the three (3) calendar days
upon receipt of written notice or upon verbal
notification.

 The BAC shall decide on the request for

reconsideration within seven (7) calendar days from
receipt thereof.

4
 PROTEST

If request for reconsideration denied, decisions of the BAC

may be protested in writing to the Head of the Procuring
Entity.

Provided:
1. That a prior request for reconsideration should have
been filed by the party concerned in accordance with
the preceding Section, and

2. Request for reconsideration has been resolved.

5
 REQUISITES OF A VALID PROTEST

1. Must be in writing (Verified Position Paper);

2. Addressed to the HOPE;

3. Filed within seven (7) cd from receipt by the party

concerned of the resolution of the BAC denying its
request for reconsideration; and

4. Accompanied by the payment of a non-refundable

protest fee within the reglementary period.

6
 POSITION PAPER

The verified position paper shall contain the following

information:

1. The name of bidder;

2. The office address of the bidder;
3. The name of project/contract;
4. The implementing office/agency or procuring entity;
5. A brief statement of facts;
6. The issue to be resolved;
7. Such other matters and information pertinent and
relevant to the proper resolution of the protest; and
8. Certification against forum shopping

7
 VERIFICATION

To be considered verified, the position paper shall

contain an affidavit stating that the:

1. Affiant/bidder has read and understood the contents

thereof, and

2. Allegations therein are true and correct based on

authentic records and/or bidder’s personal
knowledge.

8
 CERTIFICATION VS FORUM SHOPPING
In addition, the bidder shall likewise execute under oath a
certification against forum shopping stating that:

1. The bidder has not commenced any similar action or

filed any similar claim involving the same issue in any
court, tribunal, quasi-judicial or administrative agency;
2. There is no other pending similar action or claim
therein to the best of his/her personal knowledge;
3. He/she shall include a complete statement of the
present status if there is any other pending similar
claim or action; and
4. He shall report to the PE within 5 days from knowledge
of any fact of similar action or claim filed or pending in
another forum
9
 NON-COMPLIANCE WITH THE
REQUISITES

 An unverified position paper shall be considered

unsigned, produces no legal effect, and results to the
outright dismissal of the protest.

 Failure to comply with the requirements shall not be

curable by mere amendment of the verified position
paper.

10
 RESOLUTION OF PROTEST

 The protests shall be resolved strictly on the basis of

records of the BAC. The Head of the Procuring Entity
shall resolve the protest within seven (7) calendar days
from receipt thereof.

 The head of the BAC Secretariat shall furnish the GPPB

a copy of the decision resolving the protest within seven
(7) calendar days from receipt thereof.

11
 NON-INTERRUPTION OF
BIDDING PROCESS
 In no case shall any protest taken from any decision
treated in this Rule stay or delay the bidding process:
Provided, however, That protests must first be resolved
before any award is made.

 Court action may be resorted to only after the protests

contemplated in this Rule shall have been completed.

 The head of the BAC Secretariat of the procuring entity

concerned shall ensure that the GPPB shall be furnished
a copy of the cases filed in accordance with this Section

12
 RESORT TO REGULAR COURTS

 Court Action may be resorted to only after the protest

shall have been resolved with finality. (Doctrine of
Exhaustion of Administrative Remedies)
Land Bank of the Philippines v Atlanta Industries, Inc., G.R. No. 193796 , July
2, 2014

 Non-compliance with this statutory requirement, under

Section 58 of R.A. No. 9184, constitutes a ground for the
dismissal of the action for lack of jurisdiction.
Dimson (Manila), Inc. and Phesco, Inc. v Local Water Utilities Administration,
G.R. No. 168656, September 22, 2010.

 Regional Trial Court under Certiorari (Rule 65)

13
 NON-POLICY MATTER OPINION
REQUEST TO HOLD THE AWARDING OF CONTRACT IN
ABEYANCE UNTIL THE BIDDER HAS SECURED A COPY OF
THE MINUTES OF THE POST-QUALIFICATION
PROCEEDINGS
 [A] protest filed with the HOPE preceded by a request for
reconsideration filed with the BAC are the proper steps to take in
order to prevent the awarding of the contract until such time that
the protest has been resolved. Hence, a mere request to hold the
proceedings in abeyance which is filed after bid opening will not
suffice. Otherwise, the bidding process would be unnecessarily
hampered if each bidder may simply request to hold the
proceedings in abeyance without following the correct process
within the proper periods laid out by the rules

NPM 084-2012
14
 NON-POLICY MATTER OPINION

PAYMENT OF NON-REFUNDABLE FEE A CONDITION

SINE QUA NON FOR FILING A WRITTEN PROTEST

 [B]eing one of the indispensable requirements for filing a

protest, the non-payment of the protest fee does not toll the
prescriptive period for filing a protest and it becomes a
justifiable basis for the HOPE not to entertain a protest.
Simply stated, a bidder whose request for reconsideration
was denied must pay the required protest fee to avail of the
protest mechanism under the procurement law and its
associated rules.

NPM 145-2012
15
 NON-POLICY MATTER OPINION

NON-REFUNDABILITY OF PROTEST FEE FOR FOREIGN-

FUNDED PROJECTS

 In the case of DBM-PS IABAC vs. Kolonwel Trading (G.R. No.

175616, 08 June 2007), the Supreme Court upheld the
applicability of the protest mechanism prescribed under
Section 55 of Republic Act No. 9184 and its IRR-A to both
fully-domestically funded and foreign-funded procurement
activities. It is to be stressed that the protest mechanism
adverted to is a built-in administrative remedy embodied in
the law itself. Ignoring thus this administrative remedy
would be to defy the law itself.

NPM 067-2007
16
 NON-POLICY MATTER OPINION

EFFECT OF DELAY BY THE BAC IN RESOLVING THE

REQUEST FOR RECONSIDERATION BY A DISQUALIFIED
BIDDER

 Failure to decide on the protest within the prescribed seven

(7) calendar day period, does not result in the automatic
qualification of an ineligible bidder nor in the curing of any
defect found in its bid. The post-disqualified bidder cannot be
awarded the contract by mere failure of the BAC/HOPE to
resolve or rule on the MR or protest, without prejudice to
whatever sanctions that may be imposed upon the
BAC/HOPE if there is delay without justifiable cause.

NPM 078-2007
17
 NON-POLICY MATTER OPINION

APPLICABILITY OF ‘NO CONTACT RULE’ TO

DISQUALIFIED BIDDERS

 Bidders who waived their right to utilize the protest

mechanism or those whose request for reconsideration and/or
protest were subsequently denied are not covered by the
prohibition under Section 32.1 of the IRR. Since their bids are
no longer part of the evaluation, the “no contact rule” need
not be applied to them. Hence, disqualified bidders may
convey to the BAC any valid, reasonable and lawful
information or observation they have pertaining to the bids
submitted by qualified bidders.

NPM 007-2013
18
19
CONSTITUTIONAL AND LEGAL
BASIS FOR REGULATION OF
GOVERNMENT PROCUREMENT

20
 CONSTITUTIONAL BASIS

 Art 11, Sec. 1. “Public office is a public trust. Public

officers and employees must, at all times, be
accountable to the people, serve them with utmost
responsibility, integrity, loyalty, and efficiency x x x.”
 Art 2, Sec 27. “The State shall maintain honesty and
integrity in the public service and take positive and
effective measures against graft and corruption.”
 Art 2, Sec. 28. “Subject to reasonable conditions
prescribed by law, the State adopts and implements a
policy of full public disclosure of all its transactions
involving public interest.”

21
CONSTITUTIONAL AND LEGAL BASIS
 Art 3, Sec. 7. “The right of the people to information
on matters of public concern shall be recognized.
Access to official records, and to documents, and
papers pertaining to official acts, transactions, or
decisions x x x shall be afforded the citizen, subject to
such limitations as may be provided by law.”
 Sec 2 of RA 9184. “It is the declared policy of the
State to promote 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 10 of RA 9184. “All procurement shall be done
through Competitive bidding x x x.”
22
 LEGAL BASIS

 Art 3 of the Civil Code- “Ignorance of the law

excuses no one from compliance therewith.”

 US vs Sornito, 4 Phil 357- A person is criminally

responsible or liable for the consequences of
his/her wrongful act.

23
 APPLICABLE PENALTY

 Imprisonment for not less than six (6) years and one (1)
day but not more than fifteen (15) years.

 Penalty of temporary or perpetual disqualification from

public office (Public Official)

 Permanent disqualification from transacting business

with the government (Private Individual)

24
 JURISDICTION

Jurisdiction over the offenses defined under this Rule shall

belong to the appropriate courts, according to laws
existing at the time of the commission of the offenses.

25
 OFFENSES COMMITTED BY
PUBLIC OFFICERS
Section 65(a) of RA 9184

1. Opening of sealed bid/document or divulging their

contents
2. Delaying without justifiable cause the procurement
process
3. Unduly influencing or exerting undue pressure
4. Splitting of contracts
5. Abuse of power by the Head of Agency

26
 OFFENSES COMMITTED BY
PUBLIC OFFICERS

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.

27
 OFFENSES COMMITTED BY
PUBLIC OFFICERS
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 tend 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.

28
 OFFENSES COMMITTED BY PRIVATE
INDIVIDUALS
Section 65(b) of RA 9184

1. Agreement and submission to submit bids with pre-

arranged lowest bid
2. Malicious submission of different bids through two or
more persons
3. Agreement to secure undue advantage
4. Employment of scheme disadvantageous to the public

*Public officers conspiring with the private individuals are also

liable under the provision.

29
 OFFENSES COMMITTED BY PRIVATE
INDIVIDUALS
1. When two or more bidders agree and submit different
bids as if they were bona fide, when they know 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.
30
 OFFENSES COMMITTED BY PRIVATE
INDIVIDUALS
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, employs 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.

31
 OFFENSES COMMITTED BY PRIVATE
INDIVIDUALS
Section 65(c) of RA 9184
1. Submission of eligibility requirements containing false
information of falsified documents or concealment of
such information
2. Submission of bidding documents containing false
information of falsified documents or concealment of
such information
3. Using name of another or allowing another to use
one’s name
4. Withdrawal of bid

* Public officers conspiring with the private individuals are also

liable under the provision.
32
 OFFENSES COMMITTED BY PRIVATE
INDIVIDUALS
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.
33
 OFFENSES COMMITTED BY PRIVATE
INDIVIDUALS
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 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.

34
CIVIL LIABILITY

40
 CIVIL LIABILITY

Without prejudice to administrative sanctions that may be

imposed in proper cases, a conviction under the Act and
this IRR or R.A. 3019 shall carry with it civil liability, which
may either consist of:

 Restitution for the damage done; or

 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.

41
ADMINISTRATIVE
SANCTIONS

43
 ADMINISTRATIVE SANCTIONS

In addition to the penal and civil sanctions, the HOPE,

subject to the authority delegated to the BAC, if any, shall
impose on bidders or prospective bidders, the
administrative penalty of:

 Suspension for 1 year (first offense); for 2 years (second

offense) from participating in the public bidding
process, and disqualification from further participating
in the public bidding being undertaken by the PE
 Forfeiture of Bid Security or the Performance Security

44
 ADMINISTRATIVE SANCTIONS

 The procedures for the blacklisting of manufacturers,

suppliers, distributors, contractors, or consultants for
Government projects shall be undertaken in accordance
with the guidelines to be issued by the GPPB. (GPPB
Resolution No. 09-2004 pursuant to 69.4 of the Revised
IRR)

45
46
 BLACKLISTING AND SUSPENSION

BLACKLISTING
 An administrative penalty disqualifying a person or an
entity from participating in any government
procurement for a given period.

SUSPENSION
 The administrative penalty imposed for infractions
committed by a contractor during competitive bidding
stage, whereby such contractor is prohibited from
further participation in the bidding process of an
agency.

47
 SANCTIONS
I. FIRST OFFENSE:
 Suspension for one (1) year

II. SECOND OFFENSE:

 Suspension for two (2) years

III. Bid Security or Performance Security is also forfeited

- without prejudice to the imposition of additional

administrative sanctions as the internal rules of the
agency may provide and/or further criminal prosecution.

48
 COMPETITIVE
BIDDING STAGE

49
 GROUNDS FOR BLACKLISTING

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
the name of another for purpose of public bidding.

50
 GROUNDS FOR BLACKLISTING

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.

51
 GROUNDS FOR BLACKLISTING

6. 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.
7. Any documented unsolicited attempt by a bidder to
unduly influence the outcome of the bidding in his
favor.
8. All other acts that tend to defeat the purpose of the
competitive bidding, such as habitually withdrawing
from bidding or submitting late bids or patently
insufficient bids, for at least three (3) times within a
year, except for valid reasons.

52
 PROCEDURE FOR BLACKLISTING

Contractor shall
Initiation of BAC notifies submit its written
Action Contractor in answer to BAC
writing upon with documentary
verification of evidence and
existence of request for
grounds hearing, if he so
Who may initiate? desires, within 5
• Any bidder/prospective cd from receipt of
bidder • That a complaint has notification
• Duly authorized observer been filed
• BAC • That he has opportunity
to show cause NO TIME
• That a hearing shall be EXTENSION
conducted, upon SHALL BE
request ALLOWED
• The consequence of
being blacklisted
53
 PROCEDURE FOR BLACKLISTING

IF CONTRACTOR DOES NOT SUBMIT ANSWER

C DISMISS
O THE
BAC Within 15 cd NO
N CASE
Does recommends to from receipt of
T BAC resolution
R NOT the HOPE the
suspension of and records of
A Submit BAC Proceeding,
answer the Contractor
C and the HOPE
T forfeiture of bid determines
O security. existence of YES HOPE
R reasonable issues a
cause Suspension
Order and
forfeiture
Within 5 cd from of bid
receipt of security
notification from
BAC
54
 PROCEDURE FOR BLACKLISTING

BAC immediately
IF CONTRACTOR SUBMITS ANSWER sets the date and
time for hearing

C YES BAC conducts hearing

O
N
T Request
Submits BAC determines
R for NO
answer hearing existence of fault
A
C YES NO
T
O HOPE DISMISS
R Base on the issues a THE
complaint, answer Suspension CASE
Within 5 cd from and documentary Order and
receipt of evidence and facts forfeiture
notification from verified of bid
BAC security
55
 PROCEDURE FOR BLACKLISTING

EFFECT OF DECISION:

1. Contractor is suspended upon receipt of the notice of

decision.
2. The suspension shall remain in effect during the period
of motion for reconsideration and protest and shall
terminate only upon a reversal of the decision by HOPE
or appellate authority.
3. If no motion for reconsideration or protest is filed, the
decision shall become final and executory after the
lapse of 7 calendar days from the receipt of the notice of
decision.

56
 PROCEDURE FOR BLACKLISTING
IF CONTRACTOR FILES MOTION FOR
C
RECONSIDERATION NO HOPE issues
O Blacklisting Order
HOPE
N resolves
T Files MR motion YES
Protest Appellate
R within 7 cd Authority
A from receipt resolves
C protest
T Within 3 cd from
within 7cd
O Filed with the
receipt of notice of
R appellate authority
decision, base on
within 7 cd from
the ff:
receipt of notice If protest is NOT
1. Decision does
not conform granted, HOPE
with the issues Blacklisting
evidence/facts Order.
2. Newly
discovered
evidence 57
 PROCEDURE FOR BLACKLISTING

C
O
N Does HOPE issues Agency GPPB posts
T NOT file Blacklisting submits copy the
R MR Order of Blacklisting
A Blacklisting Order in the
C Order to GPPB
T GPPB within Website
O 7 cd after its
R issuance
Within 3 cd from
receipt of notice of
decision,

IF CONTRACTOR DOES NOT FILE MOTION

FOR RECONSIDERATION
58
 STATUS OF BLACKLISTED
PERSON/ENTITY
When does Blacklisting Order become final and executory?
1. If the bidder did not file a MR on the Decision to Suspend,
said Decision becomes final and executory after the lapse of
7 days counted from receipt of the Notice of the Decision;
or,

2. If the bidder did not file a Protest after his MR has been
denied, the Decision becomes final and executory after the
lapse of 7 days counted from receipt of the resolution on the
motion for reconsideration; or,

3. If a Protest was filed and the same was denied, the Decision
becomes final and executory upon receipt by the agency and
person/entity concerned of the Decision on the protest.
59
CONTRACT IMPLEMENTATION
STAGE

61
 GROUNDS FOR BLACKLISTING

1. Failure of the contractor, due solely to his fault or

negligence, to mobilize and start work or performance
within the specified period in the Notice to Proceed
(“NTP”);

2. Failure by the contractor to fully and faithfully comply

with its contractual obligations without valid cause, or
failure by the contractor to comply with any written
lawful instruction of the procuring entity or its
representative(s) pursuant to the implementation of the
Contract;

62
 GROUNDS FOR BLACKLISTING

3. Assignment and subcontracting of the contract or any

part thereof or substitution of key personnel named in
the proposal without prior written approval by the
procuring entity;

4. For the procurement of goods, unsatisfactory progress

in the delivery of the goods by the manufacturer,
supplier or distributor arising from his fault or
negligence and/or unsatisfactory or inferior quality of
goods, as may be provided in the contract;

63
 GROUNDS FOR BLACKLISTING

5. For the procurement of consulting services, poor

performance by the consultant of his services arising
from his fault or negligence;

6. For the procurement of infrastructure projects, poor

performance by the contractor or unsatisfactory quality
and/or progress of work arising from his fault or
negligence as reflected in the Constructor's
Performance Evaluation;

64
 GROUNDS FOR BLACKLISTING

7. Willful or deliberate abandonment or non-performance

of the project or contract by the contractor resulting to
substantial breach thereof without lawful and/or just
cause;

In addition to the penalty of suspension, the

performance security shall also be forfeited.

65
 PROCEDURE FOR BLACKLISTING

1. Undertake Contract Termination Proceedings: Refer to

Guidelines on Termination of Contracts under GPPB
Resolution No. 18-2004 dated 22 December 2004

2. HOPE shall immediately issue a Blacklisting Order

disqualifying the erring contractor from participating
in the bidding of all government projects upon
termination of the contract due to default of
contractor.

3. Forfeiture of performance security

66
 BLACKLISTING UNDER ALTERNATIVE
METHODS OF PROCUREMENT

Suspension or blacklisting of suppliers, contractors, or

consultants shall be made in accordance with the Uniform
Guidelines for Blacklisting of Manufacturers, Suppliers,
Distributors, Contractors, and Consultants. A suspended or
blacklisted supplier, contractor or consultant shall not be
allowed to participate in all procurement opportunities of
the government for the duration of the suspension or
blacklisting, regardless of the modality of procurement
employed by the Procuring Entity.

67
 DELISTING

 Removal of a person/entity from the Consolidated

Blacklisting Report.

 Automatically delisted after the period of the penalty

shall have elapsed, unless blacklisting agency requests
the GPPB to maintain the blacklisted person/entity in the
list for justifiable reasons. Delisting shall be made after
the issuance of the agency of a Delisting Order.

68
(Annex “I” of 2016 IRR of RA 9184)

72
 GROUNDS FOR TERMINATION

1. Termination for Default;

2. Termination for Convenience;
3. Termination for Insolvency;
4. Termination for Unlawful Acts; and
5. Termination by Contractor / Consultant.

73
 TERMINATION FOR DEFAULT
The PE shall terminate a contract when any of the following
conditions attend its implementation:

1. In contracts for Goods

a. outside force majeure, the Supplier fails to perform or
deliver any or all of the Goods, wherein such failure
amounts to at least 10% of the contract price;
b. As a result of force majeure, the Supplier is unable to
deliver or perform any or all of the Goods, wherein such
failure amounts to at least 10% of the contract price, for a
period of not less than 60 cd after receipt of notice from
the PE that the force majeure is deemed to have ceased;
c. The Supplier fails to perform any other obligation
under the Contract.
74
 TERMINATION FOR DEFAULT

2. In contracts for Infrastructure Projects

a. Due to Contractor’s fault and while the project is

on-going, it has incurred a negative slippage of 15%
or more;
b. After the expiration of the contract time, the
Contractor incurred negative slippage of 10% or
more, due to its own fault; or

75
 TERMINATION FOR DEFAULT

2. In contracts for Infrastructure Projects

c. The Contractor commits any or all of the

following:
i. Abandons the contract works, refuses or fails
to comply with a valid instruction of the PE or
fails to proceed expeditiously and without
delay despite a written notice by the PE;
ii. Does not have the listed minimum essential
equipment in the project site in accordance
with the approved work plan and equipment
deployment schedule;

76
 TERMINATION FOR DEFAULT

2. In contracts for Infrastructure Projects

c.The Contractor commits any or all of the

following:
iii. Does not execute the works in accordance with
the contract or neglects to carry out its
contractual obligations;
iv. Neglects or refuses to remove materials or
perform a new work that has been rejected as
defective or unsuitable; or
v. sub-lets any part of the works without approval
of the PE.
77
 TERMINATION FOR DEFAULT

3. In contracts for Consulting Services

a. outside force majeure, the Consultant fails to

deliver or perform the Outputs and Deliverables
within the period specified in the contract, or
within any granted extension;
b. As a result of force majeure, the Consultant is
unable to deliver or perform a material portion of
Outputs and Deliverables for a period of not less
than 60 cd after receipt of notice from the PE that
the force majeure is deemed to have ceased;
c. The Consultant fails to perform any other
obligation under the Contract.
78
 TERMINATION FOR CONVENIENCE

 The PE may terminate the contract at any time for its

convenience.

 The HOPE shall determine the existence of conditions

that would make the project implementation
economically, financially or technically impractical
and/or unnecessary.

79
 TERMINATION FOR INSOLVENCY

 The PE shall terminate the contract if the

Supplier/Contractor/Consultant is declared bankrupt or
insolvent.

 The bankruptcy/insolvency of the Supplier/Contractor/

Consultant must be that as determined by a court of
competent jurisdiction.

80
TERMINATION FOR UNLAWFUL ACTS

 The PE may terminate the contract in case it is

determined prima facie that the Supplier/ Contractor/
Consultant has engaged, before or during the
implementation of the contract in unlawful deeds and
behaviors relative to the contract acquisition and
implementation.

81
TERMINATION FOR UNLAWFUL ACTS

 Unlawful acts include, but not limited to, the following:

i. Corrupt, fraudulent, collusive and coercive

practices;
ii. Drawing up or using forged documents;
iii. Using adulterated materials, means or
methods, or engaging in production contrary to
rules of science or the trade;
iv. Any other act/s analogous to the foregoing.

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 TERMINATION BY
CONTRACTOR/CONSULTANT
1. In contracts for Infrastructure Projects

 The Contractor may terminate his contract with the PE

if the works are completely stopped for a continuous
period of at least 60 cd, through no fault of its own
for the following reasons:
i. Failure of PE to deliver supplies, materials, right-of-
way, or other items under the terms of the
contract; or
ii. Works is disrupted by adverse peace and order
situation, certified by the AFP Provincial
Commander and approved by the Secretary of
National Defense.
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 TERMINATION BY
CONTRACTOR/CONSULTANT

2. In contracts for Consulting Services

 The Consultant may terminate its agreement with the

PE if the latter is in material breach of its contractual
obligations and has not remedied the same within 60
cd from receipt of the Consultant’s notice specifying
such breach.

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PROCEDURES FOR TERMINATION OF
CONTRACTS

1. Verification

 The implementing unit shall, within 7cd from receipt

of written report of acts or causes which may
constitute ground/s for termination, verify the
existence of such grounds, and shall execute a
Verified Report, with all relevant evidence attached.

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PROCEDURES FOR TERMINATION OF
CONTRACTS
2. Notice to Terminate

 The HOPE shall terminate contract only by written

notice to the Contractor/Supplier stating therein the
following:
i. the grounds and the statement of the acts that
constitute the grounds for which the contract is being
terminated;
ii. extent of termination;
iii. an instruction to the Supplier/ Contractor/Consultant
to show cause why the contract should not be
terminated; and
iv. special instruction of the PE, if any.
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PROCEDURES FOR TERMINATION OF
CONTRACTS
2. Notice to Terminate

 The PE may withdraw the Notice to Terminate, at

any time before the receipt of the Supplier’s/
Contractor’s/ Consultant’s position paper.

 Withdrawal of Notice to Terminate shall be based on

PE’s determination that items or works, subject of
the notice, had been completed, delivered, or
performed.

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PROCEDURES FOR TERMINATION OF
CONTRACTS
3. Show Cause

 A Verified position paper shall be submitted by the

Supplier/ Contractor/ Consultant to the HOPE
within 7cd from receipt of the Notice of
Termination.

 Failure by the Supplier/ Contractor/ Consultant to

submit the verified position paper within the
reglementary period shall cause the HOPE to issue
an Order of termination.

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PROCEDURES FOR TERMINATION OF
CONTRACTS
4. Decision

 Within a non-extendible period of 10 cd upon

receipt of the verified position paper, the HOPE
shall decide, whether or not to terminate the
contract.

 Failure by the Supplier/ Contractor/ Consultant to

submit the verified position paper within the
reglementary period shall cause the HOPE to issue
an Order of termination.

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PROCEDURES FOR TERMINATION OF
CONTRACTS
4. Decision

 Termination shall be based only on the ground/s

stated in the Notice to Terminate.
 HOPE may create Contract Termination Review
Committee (CTRC) to assist him in the discharge of
his function.
 All findings or decisions of the CTRC are subject to
the approval of the HOPE.

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PROCEDURES FOR TERMINATION OF
CONTRACTS
5. Take-over of Contracts

 If a PE terminates a contract due to default,

insolvency, or for a cause, it may enter into a
Negotiated Procurement pursuant to Section 53(c) of
RA 9184 and 53.3 of its IRR.

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PROCEDURES FOR TERMINATION OF
CONTRACTS

 Sections 53.3.1 to 53.3.3 of the IRR of RA 9184

provides for the procedures in conducting the
negotiation, thus:
1. The contract may be negotiated starting with the second lowest
calculated/highest rated bidder for the project under
consideration at the bidder’s original bid price.

2. If negotiation fails, then negotiation shall be done with the

third lowest calculated/highest rated bidder at his original
price. If the negotiation fails again, a short list of at least three
(3) eligible contractors shall be invited to submit their bids, and
negotiation shall be made starting with the lowest
calculated/highest rated bidder.

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PROCEDURES FOR TERMINATION OF
CONTRACTS

 Sections 53.3.1 to 53.3.3 of the IRR of RA 9184

provides for the procedures in conducting the
negotiation, thus:
3. Authority to negotiate contracts for projects under
these exceptional cases shall be subject to prior
approval by the Heads of the Procuring Entities
concerned, within their respective limits of
approving authority.

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PROCEDURES FOR TERMINATION OF
CONTRACTS
6. PE’s options in Termination for Convenience
 Applies only to contract for Goods
 Goods shall be accepted if performed or are ready for
delivery within 30 cd after receipt of Supplier’s Notice to
Terminate at the contract terms and prices.
 Goods not yet performed or ready for delivery, PE may
elect:
i. to have any portion delivered or performed and paid at
the contract terms and prices; and/or
ii. to cancel the remaining and pay to the Supplier an
agreed amount for partially completed or performed
goods and for materials and parts previously procured
by the Supplier
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PROCEDURES FOR TERMINATION OF
CONTRACTS
7. Notice by Contractor/Consultant

 Written notice must be served to the PE at least 30 cd

before its intended termination.

 Contract is deemed terminated if it is not resumed in

30 cd after receipt of such notice by the PE.

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 THANK YOU!!

Contact us at:

Unit 2506 Raffles Corporate Center

F. Ortigas Road, Ortigas Center
Pasig City, Philippines 1605

TeleFax: (632)900-6741 to 44
Email Address: gppb@gppb.gov.ph

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