 REPUBLIC ACT NO.

9184
 PRESIDENTIAL DECREE
No. 1594
ANTERO, LOUIE MAE O.
BUNGALSO, MICAH JEREMEA B.
CAÑO, RUTH D.
MARZAN, GINO R.
MENDOZA, HARVEY ROSS
 REPUBLIC ACT NO. 9184
AN ACT PROVIDING FOR THE
MODERNIZATION, STANDARDIZATION AND
REGULATION OF THE PROCUREMENT
ACTIVITIES OF THE GOVERNMENT AND FOR
OTHER PURPOSES
 ARTICLE 1
GENERAL PROVISIONS

 Section 1. Short Title and Purpose

An act shall be known as the “Government
Procurement Reform Act.”

 Section 2. Declaration of Policy

It is the policy of the GOP that procurement of
Goods, Infrastructure Projects and Consulting Services
shall be competitive and transparent, and therefore
shall undergo competitive bidding, except as provided
in Rule XVI of this IRR.
 Section 3. Governing Principles on Government Procurement

The procurement of the GOP shall be governed by these principles:

a) Transparency in the procurement process and in the implementation of
procurement contracts through wide dissemination of bid opportunities and participation
of pertinent non-government organizations.
b) Competitiveness by extending equal opportunity to enable private contracting
parties who are eligible and qualified to participate in competitive 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 GOP 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 the Act and this IRR, and that all these contracts are
performed strictly according to specifications.
 Section 4. Scope and Application

An act shall apply to the procurement of the

infrastructure projects, goods, and consulting services,
regardless pf source of funds, whether local or foreign, by
all branches of 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.
 Section 5. Definition of Terms
Refers to R.A. 9184, entitled “An Act Providing for the
Modernization, Standardization and Regulation of the Procurement
Activities of the Government and for other Purposes,” otherwise known as
the Government Procurement Reform Act.

1. Approved Budget for the Contract 11. Infrastructure Project

2. BAC 12. IRR
3. Bidding documents 13.Portal
4. Bid 14. Procurement
5. Competitive Bidding 15.Procuring Entity
6. Consulting Services
7. Government-Electronic Procurement System
8. Goods
9. Government Procurement Policy Board
10. Head of the Procuring Entity
 Section 6. Standardization of Procurement Process
and Forms

To systematize the procurement process, avoid

confusion and ensure transparency, the GPPB shall
pursue the development and approval of generic
procurement manuals, standard Bidding Documents,
and forms, including those to be used for major
procurement like drugs and textbooks.
 ARTICLE 2
PROCUREMENT PLANNING

 Section 7. Procurement Planning and Budgeting

Linkage

All procurement shall be within the approved

budget of the Procuring Entity and should be
meticulously and judiciously planned by the Procuring
Entity. 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 (APP).
 ARTICLE 3
PROCUREMENT BY ELECTRONIC MEANS

 Section 8. Procurement by Electronic Means

To promote transparency and efficiency, information and
communications technology shall be utilized in the conduct of
procurement procedures.

Section 9. Security, Integrity and Confidentiality

The G-EPS shall ensure the security, integrity and
confidentiality of documents submitted through the system.
 ARTICLE 4
COMPETITIVE BIDDING
 Section 10. Competitive Bidding

All procurement shall be done

through competitive bidding, except as
provided in Rule XVI of this IRR.
 ARTICLE 5
BIDS AND AWARDS COMMITTEE
 Section 11. The BAC and its Composition
The BAC shall have at least five (5) but not more than
seven (7) members.

Section 12. Functions of the BAC

The BAC shall have the following functions:
(a) advertise and/or post the invitation to bid/request for expressions
of interest; (b) conduct pre-procurement and pre-bid conferences;
(c) determine the eligibility of prospective bidders;
(d) receive and open bids;
(e) conduct the evaluation of bids;
(f) undertake post-qualification proceedings;
(h) recommend award of contracts to the HoPE or his duly authorized
representative:
 Section 13. Observers
To enhance the transparency of the process, the BAC
shall, during the eligibility checking, shortlisting, pre-bid
conference, preliminary examination of bids, bid evaluation, and
post-qualification, invite, in addition to the representative of the
COA.

 Section 14. BAC Secretariat / Procurement Unit

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 BAC.
 Section 15. Honoraria of BAC Members
The Procuring Entity may grant payment of honoraria to
the BAC members in an amount not to exceed twenty five
percent (25%) of their respective basic monthly salary subject to
availability of funds.

 Section 16. Professionalization of BAC, TWG

Members and Procurement Units
The GPPB shall establish a sustained training program to
develop the capability of the BACs, BAC Secretariats, TWGs, and
the Procurement Units of Procuring Entities, and professionalize
the same.
 ARTICLE 6
PREPARATION OF BIDDING DOCUMENTS

Section 17. Form and Contents of Bidding Documents

The Bidding Documents shall be prepared by the Procuring Entity following the
standard forms and manuals prescribed by the GPPB. The Bidding Documents shall
include the following:

a.) ABC;
b) Invitation to Bid/Request for Expression of Interest;
c) Eligibility Requirements;
d) Instructions to Bidders
e) Terms of Reference, for Consulting Services;
f) Scope of work, where applicable;
g) Plans/Drawings and Technical Specifications;
h) Form of Bid, Price Form, and List of Goods or Bill of Quantities;
i) Delivery Time or Completion Schedule;
j) Form, Amount, and Validity Period of Bid Security;
k) Form, Amount, and Validity of Performance Security and Warranty; and
L) Form of Contract and General and Special Conditions of Contract.
 Section 18. Reference to Brand Names
Specifications for the procurement of Goods shall be based on
relevant characteristics, functionality and/or performance
requirements. Reference to brand names shall not be allowed.
 Section 19. Access to Information
In all stages of the preparation of the Bidding Documents,
the Procuring Entity shall ensure equal access to information.
Prior to their official release to prospective bidders, no aspect
or part 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.
 ARTICLE 7
INVITATION TO BID
 Section 20. Pre-procurement Conference
Prior to the advertisement or the issuance of the Invitation to
Bid/Request for Expression of Interest for each procurement
undertaken through a competitive bidding, the BAC, through its
Secretariat, shall call for a pre-procurement conference.
 Section 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 Procuring Entity in such manner and for such necessary
under the circumstances, in order to ensure the widest possible
dissemination .
Section 22. Pre-bid Conference
At least one pre-bid conference shall be conducted for each
procurement, unless otherwise provided in the IRR.
 ARTICLE 8
RECEIPT AND OPENING OF BIDS

 Section 23. Eligibility Requirements for the Procurement of Goods

and Infrastructure Projects
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.

 Section 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.
 Section 25. Submission and Receipt of Bids
Bidders shall submit their bids through their duly authorized
representative using the forms specified in the Bidding Documents in two
(2) separate sealed bid envelopes, and which shall be submitted
simultaneously. The first shall contain the technical component of the
bid, including the eligibility requirements under Section 23.1 of this IRR
for the procurement of Goods and Infrastructure Projects, and the
second shall contain the financial component of the bid.
Section 26. Modification and Withdrawal of Bids
A bidder may modify its bid, provided that this is done before the
deadline for the submission and 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.
 Section 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.
 Section 28. Bid Validity
Bids and bid securities shall be valid for a reasonable period as
determined by the HoPE concerned, which shall be indicated in the Bidding
Documents, but in no case shall the period exceed one hundred twenty
(120) calendar days from the date of the opening of bids.
 Section 29. Bid Opening
The BAC shall open the bids immediately after the deadline for the
submission and receipt of bids. The time, date, and place of the opening of
bids shall be specified in the Bidding Documents.
 ARTICLE 9
BID EVALUATION
 Section 30. Preliminary Examination of Bids
The BAC shall open the first bid envelopes in public to determine
each bidder’s compliance with the documents required to be submitted for
eligibility and for the technical requirements, as prescribed in this IRR. For
this purpose, the BAC shall check the submitted documents of each bidder
against a checklist of required documents to ascertain if they are all
present, using a non-discretionary “pass/fail” criterion, as stated in the
Instructions to Bidders.
 Section 31. Ceiling for Bid Prices
The ABC shall be the upper limit or ceiling for acceptable bid
prices. If a bid price, as evaluated and calculated in accordance with this
IRR, is higher than the ABC, the bidder submitting the same shall be
automatically disqualified. There shall be no lower limit or floor on the
amount of the award.
 Section 32. Bid Evaluation 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. Bid prices that exceed this ceiling
shall be disqualified outright from further participating in the bidding. Their shall
be no lower limit to the amount of the award.

 Section 33. Bid Evaluation of Short Listed Bidders for Consulting

Services
From submission and receipt of bids until the approval by the
HoPE of the ranking of short listed bidders, those that have submitted their
bids are prohibited from making any communication with any BAC
member, including its staff and personnel, as well as its Secretariat and
TWG, regarding matters connected to their bids. However, the BAC,
through its Secretariat, may ask in writing the bidder for a clarification of
its bid. All responses to requests for clarification shall be in writing.
 ARTICLE 10
POST-QUALIFICATION
 Section 34. Objective and Process of Post-Qualification
This stage where the bidder with the Lowest Calculated
Bid/Highest Calculated Bid, in the case of Goods and Infrastructure
Projects, or the Highest Calculated 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.

 Section 35. Failure of Bidding

The BAC shall declare the bidding a failure when:
a) No bids are received;
b) No bids qualifies as the Lowest Calculated Bid/Highest Calculated Bid
c) The bidder with the LCRB, HRRB, SCRB or SRRB refuses, without
justifiable cause, to accept the award of contract, as the case may be.
Section 36. Single Calculated/Rated and Responsive Bid Submission

A Single Calculated and Responsive Bid (SCRB) or a Single Rated and Responsive Bid
(SRRB) shall be considered for award if it falls under any of the following circumstances:

a) If after advertisement, only one prospective bidder applies for eligibility check, in
accordance with the provisions of this IRR, and it 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 advertisement, more than one prospective bidder applies for eligibility check, in
accordance with the provisions of this IRR, 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.
 ARTICLE 11
AWARD, IMPLEMENTATION AND
TERMINATION OF THE CONTRACT
 Section 37. Notice and Execution of Award
Within a period not exceeding fifteen (15) calendar days from the
determination by the BAC of the bidder with the LCRB, HRRB, SCRB, or SRRB, and the
recommendation to award the contract, the HoPE or his duly authorized
representative shall approve or disapprove the said recommendation.
Within ten (10) calendar days from receipt of the Notice of award, the
winning bidder shall formally enter into a contract with Procuring Entity. When higher
approval or 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 sad 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
appropriate authority.
 Section 38. Period of Action on Procurement Activities
The procurement process from the opening of bids up to the award of
contract shall not exceed three (3) months, or a shorter period to be determined
by the Procuring Entity concerned.

 Section 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.
 Section 40. Failure to Enter into Contract and Post Performance
Security
If the bidder with the LCRB and HRRB fails, refuses or is
unable to enter into contract with the Procuring Entity or if the
bidder post the required Performance Security within the period
stipulated in this Bidding Documents, the BAC shall disqualify the
said bidder and shall undertake post-qualification for the next ranked
LCRB and HRRB . This procedure shall be repeated until and award is
made. However if no award is possible, the contract shall be
subjected to a new bidding.
 Section 41. Reservation Clause
The head of 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
 c) For any justifiable and reasonable ground where the award of the contract will not
redound to the benefit of the government defined in the IRR.

 Section 42. Contract Implementation and Termination – the rules and

guidelines for the implementation and termination of contracts awarded
pursuant to the provisions of this act shall be prescribed in the IRR. The rules
and guidelines shall include standard general and special conditions for
contracts.
 ARTICLE 12
DOMESTIC AND FOREIGN PROCUREMENT

 Section 43. Procurement of Domestic and Foreign Goods

Consistent with the country’s obligations under

international treaties or agreements, goods may be obtained from
domestic or foreign sources and the procurement thereof shall be
open only to 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 13
BIDDING OF PROVINCIAL PROJECTS

 Section 44. Bidding of Provincial Projects

Priority programs and infrastructure projects funded out of the

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

Within five (5) years from the effectivity of this act, a

contractor who participate in the bidding of provincial priority of
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 privilege to match the bid made by the latter. Provided,
however, that the release of funds for the 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 14
LEASE OF COMPUTERS, COMMUNICATIONS,
INFORMATION AND OTHER EQUIPMENT

 Section 46. Lease Contracts

The lease of construction and office equipment,

including computers, communication and information
technology equipment, are subject to the same
competitive bidding and to the processes prescribed
under the Act and this IRR. Lease may also cover lease
purchases or lease-to-own and similar variations.
 ARTICLE 15
DISCLOSURE OF RELATIONS

 Section 47. Disclosure of Relations

All bids shall be accompanied by a sworn affidavit of the

bidder that it is not related to the HoPE, members of the BAC,
the TWG, and the BAC Secretariat, the head of the PMO or the
end-user or implementing unit, and the project consultants, 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 IRR. For this reason, shall automatically
disqualify the bidder from participating in the procurement of
contracts of the Procuring Entity notwithstanding the act of such
persons inhibiting themselves from the procurement process.
 ARTICLE 16
ALTERNATIVE METHODS OF PROCUREMENT

 Section 48. Alternative Methods

The Procuring Entity may, in order to promote
economy and efficiency, resort to any of the alternative
methods of procurement provided in this Rule and In all
instances shall ensure that the most advantageous
price for the Government is obtained.
As a general rule, the Procuring Entities shall
adopt competitive bidding as the general method of
procurement and shall see to it that the procurement
program allows sufficient lead time for such
competitive bidding.
 Section 49. Limited Source Bidding
Limited Source Bidding, otherwise known as selective bidding, is a
method of procurement of Goods and Consulting Services that involves
direct invitation to bid by the Procuring Entity from the list of pre-selected
suppliers or consultants with known experience and proven capability on
the requirements of the particular contract. This alternative method of
procurement may be employed under any of the following conditions:
• a) Procurement of highly specialized types of goods (e.g.,
sophisticated defense equipment, complex air navigation systems,
coal) and consulting services where only a few suppliers or consultants
are known to be available.
• b) Procurement of major plant components where it is deemed
advantageous to limit the bidding to known qualified bidders in order
to maintain uniform quality and performance of the plant as a whole.
• Section 50. Direct Contracting
Direct Contracting or single source procurement is a method of
procurement of Goods that does not require elaborate Bidding Documents.
The supplier is simply asked to submit a price quotation or a pro-forma
invoice together with the conditions of sale. The offer may be accepted
immediately or after some negotiations. Direct contracting may be resorted
to by concerned Procuring Entities under 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
supplier is a condition precedent to hold a contractor to guarantee its
project performance, in accordance with the provisions of its contract;
• 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 GoP.
 Section 51. Repeat Order
Repeat Order, when provided for in the APP, is a method of 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. Repeat
orders shall likewise be subject to the following conditions:
a) Unit prices of the repeat order must be the same as or lower than those in the
original contract.
b) The repeat order will not result in splitting of contracts, requisitions, or purchase
orders.
c) Except in cases duly approved by the GPPB, the repeat orders shall be availed of
only within six (6) months from the date of the Notice to Proceed arising from
the original contract.
d) Repeat orders shall not exceed twenty-five percent (25%) of the quantity of each
item in the original contract. In order not to exceed the 25% threshold, the goods
under the original contract must be:
i. Quantifiable
ii. Divisible; and
iii. Consisting of at least four (4) units per item.
 Section 52. Shopping
Shopping is a method of procurement of Goods
whereby the Procuring Entity simply requests for the
submission of price quotations for readily available or
ordinary/regular equipment to be procured directly from
suppliers of known qualifications. This method of
procurement shall be employed in any of the following
cases:
a) When there is an unforeseen contingency requiring
immediate purchase.
b) Procurement of ordinary or regular office supplies and
equipment not available in the Procurement Service
involving an amount not exceeding the thresholds
prescribed in Annex H of this IRR.
 Section 53. Negotiated Procurement
Negotiated Procurement is a method of procurement of Goods, Infrastructure
Projects and Consulting services, whereby the Procuring Entity directly
negotiates a contract with a technically, legally and financially capable
supplier, contractor or consultant in any of the following cases:

a. Two Failed Biddings . Where there has been failure of competitive bidding
or Limited Source Bidding for the second time as provided in Section 35 of
the Act and this IRR.
b. Emergency Cases. 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. In
the case of Infrastructure Projects, the Procuring Entity has the option to
undertake the project through negotiated procurement or by
administration or, in high security risk areas, through the AFP21.
c. Take-Over of Contracts. Which have been 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.
d. Adjacent or Contiguous. Where the subject contract is
adjacent or contiguous to an ongoing Infrastructure Project
or Consulting Service where the consultants have unique
experience and expertise to deliver the required service.
e. Agency-to-Agency. Procurement of Goods, Infrastructure
Projects and Consulting Services from another agency of the
GoP, such as the DBM-PS, which is tasked with a centralized
procurement of Common-Use Supplies for the GoP in
accordance with Letters of Instruction No. 755 and E.O. 359,
s. 1989.
 Section 54. Terms and Conditions for the use of
Alternative Methods

The specific terms and conditions, including the

limitations and restrictions for the application of each
of the alternative methods mentioned in this Article
shall be specified in the IRR.
 ARTICLE 17
PROTEST MECHANISM
• Section 55. Protests on Decisions of the BAC

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. The bidder shall not be allowed to submit additional
documents to correct any defects in the bid submitted.

If a failed bidder signifies his intent to file a request for

reconsideration, the BAC shall keep the bid envelopes of the said
failed bidder unopened and/or duly sealed until such time that
the request for reconsideration has been resolved.
• Section 56. Resolution of Protests

The protests shall be resolved strictly on the basis of records

of the BAC. The HoPE shall resolve the protest within seven
(7) calendar days from receipt thereof. Subject to the
provisions of existing laws on the authority of Department
Secretaries and the heads of agencies, branches,
constitutional commissions, or instrumentalities of the GoP
to approve contracts, the decisions of the HoPE concerned
shall be final up to the limit of his contract approving
authority. With respect to LGUs, the decision of the local
chief executive shall be final.
• Section 57. Non-interruption of the 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.
• Section 58. Resort to Regular Courts; Certiorari

Court action may be resorted to only after the protests

contemplated in this Rule shall have been completed, i.e. ,
resolved by the HoPE with finality. The regional trial court shall
have jurisdiction over final decisions of the HoPE. 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 the GoP.
 ARTICLE 18
SETTLEMENT OF DISPUTES
• Section 59. Arbitration
If any dispute or difference of any kind whatsoever shall arise between
the parties in connection with the implementation of the contract
covered by the Act and this IRR, the parties shall make every effort to
resolve amicably such dispute or difference by mutual consultation.

Any and all disputes arising from the implementation of a contract

covered by the Act and this IRR shall be submitted to arbitration in the
Philippines according to the provisions of R.A. 876, otherwise known as
the "Arbitration Law" and R.A. 9285, otherwise known as the
“Alternative Dispute Resolution Act of 2004”: 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 the Act and
this IRR:
• Section 60. Appeals

The arbitral award and any decision rendered in

accordance with the foregoing Section shall be
appealable by way of a petition for review to the Court
of Appeals. The petition shall raise pure questions of
law and shall be governed by the Rules of Court.
 ARTICLE 19
CONTRACT PRICES AND WARRANTIES
• Section 61. Contract Prices

For the given scope of work in the contract as awarded,

all bid prices shall be considered as fixed prices, and
therefore not subject to price adjustment and
escalation during contract implementation, except
under extraordinary circumstances and upon prior
approval of the GPPB23, or when a Treaty or
International or Executive Agreement expressly allows
it pursuant to Section 4 of this IRR.
 ARTICLE 20
THE GOVERNMENT PROCURMENT POLICY BOARD

 Section 63. Organization and Function

The Government Procurement Policy Board (GPPB), as established in

section 63 of the Act, shall have the following duties and responsibilities:
a. To protect national interest in all matters affecting public
procurement, having due regard to the country’s regional and
international obligations.
b. To formulate and amend public procurement policies, rules and
regulations, and amend, whenever necessary.
c. To prepare a generic procurement manual and the standard bidding
forms for procurement.
d. To ensure the proper implementation by Procuring Entities of the Act,
this IRR and all other relevant rules and regulations pertaining to public
procurement.
e. To establish a sustainable training program to develop the capacity of
Government procurement officers and employees, and to ensure the
conduct of regular procurement training programs by and for Procuring
Entities.
 Section 64. Membership
The GPPB shall be composed of the Secretary of the
Department of Budget and Management, as Chairperson, the
Director-General of NEDA, as Alternate Chairperson, 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,
Information and Communications Technology, 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
representatives from the COA or from relevant Government
agencies and private sectors to serve as resource persons.
 ARTICLE 21
PENAL CLAUSE

 Section 65. Offenses and Penalties

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

a. Opening 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.
b. 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 this IRR.
c. 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.
d. Splitting of contracts which exceed procedural purchase limits to avoid
competitive bidding or to circumvent the limits of approving or procurement
authority.
 Section 66. 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.
 ARTICLE 22
CIVIL LIABILITY

 Section 67. Civil Liability in Case of Conviction

Shall carry with it civil liability, which may either

consist of restitution for the damage done or the
forfeiture in favor of the government of any
unwarranted benefit derived from the act or acts in
question, or both, at the discretion of the courts.
 Section 68. Liquidated Damages
Shall be payable by the contractor in case of breach
thereof. For the procurement of Goods, Infrastructure
Projects and Consulting Services, the amount of the
liquidated damages shall be at least equal to one-tenth of
one percent (0.001) of the cost of the unperformed portion
for every day of delay. Once the cumulative amount of
liquidated damages reaches ten percent (10%) of the
amount of the contract, the Procuring Entity may rescind or
terminate the contract, without prejudice to other courses
of action and remedies available under the circumstances.
 ARTICLE 23
ADMINISTRATIVE SANCTIONS

 Section 69. Imposition of Administrative Penalties

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 competitive
bidding process, as well as disqualification from further participating in the
competitive bidding being undertaken by the Procuring Entity concerned,
where applicable, for the following violations:
a. Submission of eligibility requirements containing false information
or falsified documents.
b. 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 competitive bidding.
c. Allowing the use of one’s name, or using the name of another for
purposes of competitive bidding.
d. 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.
e. Refusal or failure to post the required
performance security within the prescribed time.
 Section 70. Preventive Suspension
The head of 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
Rules XXI and XXII of this IRR, or for dishonesty as defined
by the Civil Service Laws. For uniformed personnel of the
AFP, the substantive and procedural due process under its
justice system shall be applied. In all cases, due process as
mandated by the Constitution and Civil Service laws, rules
and regulations, shall be strictly observed.
 Section 71. Lifting of Suspension and Removal
of Administrative Disabilities

Removal of administrative penalties and

disabilities shall be in accordance with the provisions of
Sections 52 and 53, Chapter 6, Subtitle A (Civil Service
Commission), Title I, Book V of E.O. 292, otherwise
known as the Administrative Code of 1987.
 ARTICLE 24
LEGAL ASSISTANCE AND INDEMNIFICATION OF BAC MEMBERS

 Section 72. Private Legal Assistance

All the members of the BAC are hereby

authorized to engage the services of private lawyers or
external counsel immediately upon receipt of Court
Notice that a civil or criminal action, suit or proceeding
is filed against them in connection with the lawful
performance of their official functions and duties as
BAC members. The lawyer's fee shall be part of the
indemnification package for the BAC members, subject
to the provisions of Section 73 hereof.
 Section 73. Indemnification of BAC Members

The GPPB shall establish an equitable indemnification

package26 for public officials providing services in and for the
BAC, which may be in the form of free legal assistance, liability
insurance, and other forms of protection and indemnification for
all reasonable fees, costs, and expenses incurred by such persons
in connection with any administrative, civil or criminal action,
suit or proceeding to which they may be, or have been made, a
party, by reason of the lawful performance of their official
functions and duties, unless they are finally adjudged in such
action or proceeding to be liable for gross negligence or
misconduct or grave abuse of discretion, or otherwise held liable
or guilty of the complaints or charges.
 ARTICLE 25
FINAL PROVISIONS

 Section 74. Amendment

a. As the need arises, this IRR may be amended by
the GPPB.

b. Any amendment to this IRR shall be applicable to

all procurement activities, the advertisement or
invitation of which were issued after the date of
effectivity of the said amendment.
 Section 75. Repealing Clause
The Act repeals E.O. 40, 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;” E.O. 262, s. 2000, entitled "Amending
E.O. 302, s. 1996, entitled "Providing Polices, Guidelines, Rules and
Regulations for the Procurement of Goods/ Supplies by the National
Government" and Sec. Three (3) of E.O. 201, s. 2000, entitled
"Providing Additional Policies and Guidelines in the Procurement of
Goods/Supplies by the National Government;" E.O. 302, s. 1996,
entitled "Providing Policies, Guidelines, Rules and Regulations for the
Procurement of Goods/Supplies by the National Government" and
Presidential Decree No. 1594 (P.D. 1594), dated June 11, 1978, entitled
“Prescribing Policies, Guidelines, Rules and Regulations for
Government Infrastructure Contracts;"
 Section 75. Repealing Clause
and the relevant provisions of R.A. 7898 dated February
23, 1995, entitled “An Act Providing for the Modernization of the
Armed Forces of the Philippines and for Other Purposes.” This
law amends Title Six, Book Two of R.A. 7160, otherwise known as
the “Local Government Code of 1991," and, in furtherance
thereto, Chapter Five, Title One, Book One of the same law; the
relevant provisions of E.O. 164, s. 1987, entitled "Providing
Additional Guidelines in the Processing and Approval of
Contracts of the National Government." 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 the Act is hereby repealed, modified or
amended accordingly.
 Section 76. Separability Clause

If any provision in this IRR, or application of

such provision to any circumstance, is declared invalid
or unconstitutional, the other provisions not affected
thereby shall remain valid and subsisting.
 Section 77. Transitory Clause
a. In all procurement activities, if the advertisement or
invitation for bids was issued prior to the effectivity
of the Act, the provisions of E.O. 40 and its IRR, P.D.
1594 and its IRR, R.A. 7160 and its IRR, or other
applicable laws, as the case may be, shall govern.
b. In cases where the advertisements or invitations for
bids were issued before the effectivity of this IRR,
Procuring Entities may continue adopting the
procurement procedures, rules, and regulations
provided in the Revised IRR of 2009 or other
applicable laws, as the case may be.
 Section 78. Effectivity Clause

This IRR shall take effect sixty (60) calendar days

after its publication in the Official Gazette or in a
newspaper of general nationwide circulation and upon
filing with the University of the Philippines Law Center
of three (3) certified copies of this IRR.
PRESIDENTIAL DECREE No. 1594
PRESCRIBING POLICIES, GUIDELINES,
RULES AND REGULATIONS FOR
GOVERNMENT INFRASTRUCTURE
CONTRACTS
 PD NO. 1594
 Section 1. Policy Objectives
It is the policy of the government to adopt a set rules and
regulations covering government contracts for
infrastructure and other construction projects which shall:
(a) bring about maximum efficiency in project
implementation and minimize project costs and contract variations
through sound practices in contract management;
(b) promote a healthy partnership between the
government and the private sector in furthering national
development; and
(c) enhance the growth of the local construction industry
and optimize the use of indigenous manpower, materials and other
sources.
 PD NO. 1594

 Section 2. Detailed Engineering

No bidding and/or award of contract for a

construction project shall be made unless the
detailed engineering investigations, surveys, and
designs for the project have been sufficiently
carried out in accordance with the standards
and specifications
 PD NO. 1594
 Section 3. Prequalification of Prospective Contractors.

A prospective contractor may prequalified to offer his bid

or tender for a construction project only if he meets the
following requirements.

1. Legal Requirements
2. Technical Requirements
3. Financial Requirements
4. Filipino Participation.
 PD NO. 1594
 Section 4. Bidding

Construction projects shall generally be

undertaken by contract after competitive
public bidding.
 PD NO. 1594

 Section 5. Award and Contract

The contract may be awarded to the lowest

prequalified bidder whose bid as evaluated
complies with all the terms and conditions in the
call for bid and is the most advantageous to the
Government.
 PD NO. 1594
 Section 6. Assignment and Subcontract

The contractor shall not assign, transfer, pledge,

subcontract or make any other disposition of the
contract or any part of interest therein except
with the approval of the Minister of Public
Works, Transportation and Communications, the
Minister of Public Highways, or the Minister of
Energy.
 PD NO. 1594
 Section 7. Responsibility of the Contractor

The contractor shall assume full

responsibility for the contract work until its
final acceptance by the Government and
shall be held responsible for any damage or
destruction of works except those
occasioned by force majeure.
 PD NO. 1594

 Section 8. Adjustment Contract Price

Adjustment of contract price for construction
projects may be authorized by the Minister of
Public Works, Transportation and
Communications, the Minister of Public
Highways, or the Minister of Energy, upon
recommendation of the National Economic
and Development Authority.
 PD NO. 1594
 Section 9. Change Order and Extra Work Order

A change order or extra work order may be

issued only for works necessary for the
completion of the project and, therefore, shall
be within the general scope of the contract as
bidded and awarded.
 PD NO. 1594
 Section 10. Inspection and Construction of Contract Work

Inspection of the contract work shall be made by the

Government while such contract work is in progress to
ascertain that the completed works comply in all respects
with the standards and requirements set forth in the
contract documents.
 PD NO. 1594
 Section 11. Government's Right to Take Over Contract Work

The Government may take over the contract work should the
contractor abandon the contract work, or unduly delay the
prosecution of the contract work, or become insolvent, or assign
his assets for the benefit of his creditors, or be adjudged
bankrupt, or assign the contract work without written approval
by the Government, or violate any condition or term of the
contract.
 PD NO. 1594
 Section 12. Implementing Rules and Regulations

Once approved by the President of the

Philippines, these implementing rules and
regulations shall be applicable to all contracts
for infrastructure and other construction
projects of all government agencies including
government-owned or controlled corporations
and other instrumentalities.
 PD NO. 1594

 Section 13. Separability Clause

If any provision of this Decree is held

unconstitutional, the other provisions shall
remain valid.
 PD NO. 1594
 Section 14. Repealing Clause

All Acts, Charters, Decrees, Letters of

Instructions, Executive Orders, Proclamations,
rules and regulations or parts thereof in conflict
with the provisions of this Decree are hereby
repealed or modified accordingly.
 PD NO. 1594

 Section 15. Effectivity.

This Decree shall take effect immediately.