FIFTEENTH CONGRESS OF THE 
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, , ' 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
SENATE 
S. No. 1450 
Introduced by Senator JUAN MIGUEL F. ZUBIRI 
EXPLANATORY NOTE 
The government is obliged to protect and render basic services to its inhabitants, 
and the latter, in turn, are required to support their government in terms of enforced and 
mandatory contributions called taxes. 
However, it is also the duty of the government to alleviate the suffering of its 
inhabitants in view of the economic hardships they face. Such alleviation can come from 
various forms such as implementation of social ·Iegislations, implementation of finance-
generating programs or simply maximizing the taxes paid by the citizens and returning 
the same through efficient and adequate basic services. 
The objective of this Act is to curb, lessen and eventually rid the government off of 
corruption and red tape resulting from contracts awarded to persons or entities for 
procurement of goods and services. Various reports yield that a certain percentage of a 
government contract land on the hands of government officials and employees, the 
goods or services to be rendered subject of which is proportionately adjusted by the 
contractor thereby resulting in a lesser quality of goods and services delivered. With this 
practice, the government and the tax paying public are prejudiced. 
In view of the foregoing, it is strongly recommended that this bill be approved 
immediately, 


FIFTEENTH CONGRESS OF THE 
) 
, ' 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
SENATE 
S. No.1450 
Introduced by Senator JUAN MIGUEL F. ZUBIRI 
AN ACT 
IMPOSING CRIMINAL SANCTIONS AGAINST UNSCRUPULOUS CONTRACTORS 
AND AWARDEES OF GOVERNMENT CONTRACTS THEREBY AMENDING 
REPUBLIC ACT no. 9184 AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
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SECTION 1. This Act shall be known as the "Anti Unscrupulous Contracts Act" 
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SECTION 2, It is declared policies of the State to promote the ideals of good 
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governance in all its branches, rid the government procedures of corruption, and protect 
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the government and the tax paying public from any and all mediocre goods and services 
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rendered by contractors and awardees of procurement rights. 
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SE.CTION 3. 
As stated in Republic Act no. 9184, this Act shall apply to the 
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Procurement of Infrastructure Projects, Goods and Consulting' Services, regardless of 
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source of funds, whether local or foreign, by all branches and instrumentalities of 
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government, its departments, offices and agencies, including government-owned 
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and/or-controlled corporations and local government units, subject to the provisions of 
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Commonwealth Act No. 138. Any treaty or' international or executive agreement 
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affecting the subject matter of this Act to which the Philippine government is a signatory 
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shall be Observed. 
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SECTION. 4. Unscrupulous Contractors is hereby defined under this Act as those 
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persons or entities winning in established bidding procedures of the government and 
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those acquiring procurement rights who has committed and actually rendered the 
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services or delivered the goods as stated in the contract but is found to have been 
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fa,~lty, defective, and below internationally recognized standards which cost the 
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government and the tax payers additional financial burden on account of undertaking 
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repairs or rectifying such faulty or mediocre goods and services rendered. 


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SECTION 5. Any and all goods and services undertaken by a winning contractor 
or an awardee of a procurement right with the government which is found faulty, 
mediocre, or found to have prejudiced the government or the public shall suffer the 
penalty of imprisonment ranging from six (6) years and one (1) day to twelve (12) years 
at the discretion of the court taking cognizance of the case. If the contractor is a juridical 
entity, its officers shall be made primarily liable for the offense. 
The penalty of imprisonment imposed in this section shall be in addition to the 
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liabilities imposed in Section 62 of Republic Act no. 9184 which provides: 
. 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. 
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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 for construction 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 Syste(l1 bond, or callable surety bond. 
The contractor shall undertake the repair works, at his Qwn 
expense, of any defect or damage to the infrastructure projects on account of 
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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. 
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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 gamishment 
proceedings to recover the costs. All payables of govemment in his favor 
shall be offset to recover the costs. 
SECTION 6. Any tax payer, alone or with others, within the jurisdiction of the 
municipality, city, or province where a contractor has delivered goods or rendered 
services upon winning and/or acquiring procurement rights based on a contract with the 
government, who has knowledge or has suffered any damage on account of the faulty, 
mediocre or substandard goods, its delivery or the substandard rendition of services, 
may file an action against the contractor or the awardee of the procurement rights with 
the court for violation of this Act and against the public officer or employee involved, in 
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line with Article XXI of Republic Act 9184 .. 
SECTION 7. Any other law, presidential decree or issuance, executive order, 
letter of instruction, administrative order, proclamation order, rule or regulation and/or 
parts thereof contrary to or inconsistent with this Act, is hereby repealed, modified or 
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amended accordingly. 
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SECTION 8. If any provision of this Act is declared invalid or unconstitutional, the 
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other provisions not affected thereby shall remain valid and subsisting. 
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SECTION 9. This Act shall take effect immediately upon its approval. 
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Approved, 
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