Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 4788

Introduced by HON. ROZZANO RUFINO B. BIAZON

EXPLANATORY NOTE

This bill seeks to capacitate the defense establishment to properly pursue the
moderniza.ion of our armed forces especially in the acquisition of defense materiel. systems,
military fecilities and installations and services.

‘The procurement needs of the defense establishment is so peculiar that current
procurement laws, rules and regulations are not able to address these. This proposed measure
seeks to remedy this situation through:

‘a. an expeditious and specialized acquisition process;

b. quality, reliable and sustainable detense equipment, facilities, services. systems,
critical components, and other ¢ requirements through the adopiion of
appropriate criteria in determining the best rated offer;

c. confidentiality in the acquisition process and integrated military systers that has
significant impact to national interest and security;

d. self-reliant defense posture to support defense requirements and promote the

development of local defense industry, reduce foreign exchange outflow, generate

local employment, and enhance technology transfer; and

Accountability and integrity through special monitoring of defense acquisition

procedures and implementation of awarded contracts.

Our armed forces has long been lagging behind our neighbors not only here in South
East Asia but in the whole of Asia. Ours is a case of brave men and women willing to die an¥
fight for our country but lacking the wherewithal to do so. It is incumbent upon Congress not
to allow this unfortunate situation to contisvue.

In view of the foregoing, the early passe of this bill is earnestly sought.

ROZAINO be B. on

Represehtative
Lone District, Muntinlupa City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

House Bill No. 4788

Introduced by HON. ROZZANO RUFINO B. BIAZON

AN ACT
PROVIDING FOR THE ACQUISITION OF MATERIEL, SYSTEMS, FACILITIES,
INTEGRATED MILITARY SYSTEMS AND SERVICES BY THE DEPARTMENT OF
NATIONAL DEFENSE AND ITS BUREAUS AND FOR OTHER PURPOSES

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

ARTICLE I
GENERAL PROVISIONS.

SECTION 1. Short Title. — This act shall be known as the “Defense Acquisition Act of
2019.”

Sec. 2. Declaration of Policy. - It is the policy of the State to secure its sovereignty and
the integrity of its national territory. Towards this end, the acquisition of defense equipment,
facilities, materiel, ordnance, services and integrated military systems shall be given utmost
priority.

Sec. 3. Governing Principles. ~ The Defense Acquisition Act shall be governed by the
following principles:

a.
military

Expeditious and specialized process in the acquisition of defense materiel, systems,
cilities and installations, and services;

b. Quality, reliability and sustainability of defense equipment, facilities, services,
systems, critical components, and other critical requirements through the adoption of
appropriate criteria in determining the best rated offer;

c. Confidentiality in the acquisition process of defense equipment, facilities, materiel,
ordnance, services and integrated military systems that has significant impact to national
interest and security;


d.  Self- reliant defense posture to support defense requirements of the Department of
National Defense (DND) and its bureaus and promote the development of local defense
industry, reduce foreign exchange outflow, generate local employment, and enhance
technology transfer; and

e. Accountability and integrity through special monitoring of defense acquisition
procedures and implementation of awarded contracts.

Sec. 4.'Seope and Application. - This Act shall apply to the acquisition of defense
materiel, services, ordnance, systems, and facilities of the Department of National Defense and
its bureaus. In so far as practicable, the Defense System of Management (DSOM) process, as
prescribed by the Secretary of National Defense (SND), shall be used in the determination of
requirements to be procured under this Act.

When acquisition is done pursuant to a treaty or International or Executive or Defense
Cooperation Agreements, said agreements shall prevail.

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

‘
a. Acquisition — refers to the acquisition of defense equipment, materiel, ordnance,

services, facilities and integrated military systems, inclusive of computer applications and e-

solutions. It is synonymous with “procurement” if pertaining to items not covered by this Act.

b. Facilities/Infrastructure - includes the construction, improvement, rehabilitation,
demolition, repair, restoration or maintenance of naval vessels or station and aircraft and bases,
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 defense construction projects of the government.

c. Materiel — refers to all items with military specifications that are necessary for the
equipment, maintenance, services, operation and support of governmental and military
activities.

d. Services — refers to all defense related services.

e. Systems — refers to the organization of hardware, software, materiel, facilities
personnel, data, and services needed to perform a designated function with specified results,
such as the gathering of specified data, its processing, and delivery to users. A combination of
two (2) or more interrelated equipment’s (set) arranged in a functional package to perform an
operational function or to satisfy a requirement.

f. Military specifications — refers to the project/product standard based on
local/international publication recognized and/or made by the AFP.

2. Ordnance — refers to all items needed by the Navy, Air Force and Army defense
requirements,


h. Head of Acquisition Entity (HAE) — refers to the Head of the agency or body, or
his duly authorized official in the acquisition of defense materiel, ordnance, facilities, services
and integrated military systems. It is synonymous with “Head of Procuring Entity (HoPE)” if
pertaining to procurement of items not covered by this Act.

i, Best Rated Offer — is the offer with the best calculated rating based on
criteria/parameters including, but not limited to financial capacity, technical capabilities,
additional technical capabilities of appropriate upgrade, and others such as life-cycle cost,
afier-sales support, willingness to transfer technology, warranty, perquisites and price as
determined by the end user.

j. Previous Supplier — refers to a juridical entity that has supplied the same defense
equipment, critical components, services and other critical requirements being procured. The
surviving or consolidated juridical entity resulting from a merger, consolidation and acquisition
shall be considered a previous supplier.

k. Request for Expression of Interest (REI) — refers to a letter inviting the pre-selected
suppliers identified by the Procuring Entity to be technically, legally and financially capable to
render services or to supply the requirements and construction of facilities of the DND and its
bureaus.

1. Resource Manager (RM) - is a designated senior executive official appointed by the
SND who is directly accountable to the SND for developing financially realistic program,
budget, and spending plan proposals that comply with the centralized policy and planning
direction provided by the SND; accomplishing established programmatic and financial
management objectives established by the SND; and, reporting performance against the
established objectives;

ARTICLE II
ACQUISITION, PLANNING, BUDGETING AND EXECUTION

See. 6. Defense Acquisition Planning and Budgeting (DAPB). ~ The DAPB is
collaboratively developed acquisition plan with realistic financial programs that meet identified
capability requirements in a timely manner. Only those priority needs and/or crucial to the
efficient discharge of functions shall be included in the DAPB.

a. Preparation of Acquisition Plan and Budget (APB). ~ The APB must be consistent
with the duly approved budget of the Department of National Defense and shall bear the
approval of the concerned HAE.

b. Short Term Acquisition Plan and Budget (SAPB). — It is a 3-year defense
procurement program to be funded through General Appropriations.

c. For the AFP, the approving authority shall be the Chief of Staff, Armed Forces of
the Philippines.

d. For DND Civilian Bureaus, the approving authority shall be the Head Bureaus.


e. Midterm Acquisition Plan and Budget (MAPB). ~ A 5-year defense procurement
program to be funded through general appropriations and/or other sources as enumerated in
Republic Act No. 7898, otherwise known as the “AFP Modernization Act,” as amended. The
MAPB shall be approved by the Secretary of National Defense.

f. Modes of Payment. ~ In order to have a uniform and standard modes of payment,
the same shall be limited to the following:

i. For Foreign Suppliers. — The modes of payment shall be limited to Letters af
Credit and Electronic Wire Transfer.

ii. For Local Suppliers. — The modes of payment shall be limited to Local Letters
of Credit or Direct Payment.

iii. Budgetary Requirements. — The Secretary of National Defense shall submit
to the President, Congress and Secretary of Budget and Management the
required budgets for defense procurement.

iv. Release of Funds by the Department of Budget and Management (DBM). —
‘The DBM shall release the amounts to support the funding requirements for
the acquisition of materiel, systems, facilities and services of the DND proper
and its bureaus in accordance with the guidelines set forth by the DBM:

g. Execution, ~ The DND proper and its bureaus shall execute the allocated amount
for the acquisition of materiel, systems, ordnance, facilities and services in accordance with the
existing government accounting and auditing rules and regulations.

h. Review. ~ The Office of the Assistant Secretary for Financial Manageme
(OASEM) shall be responsible in the conduct of quarterly review and assessment of tht
financial performance of the DND proper and its bureaus for the acquisition of the materiel,
systems. facilities and services based on the guidelines set forth in the Implementing Rules and
Regulations (IRR).

ARTICLE Il
MODES OF ACQUISITION

See. 7. Modes of Acquisition. ~ Subject to objective evaluation and approval of SND
and whenever justified by the conditions provided in this Act, the DND may, in order to
promote economy and efficiency, and in case of national emergency and calamity resort to any
of the following modes of acquisition:

a. Procurement. ~ The procurement of defense equipment maybe in any of the
following mode

1. Open Competition - refers to a method of procurement which is open to participation
by any interested party or entity who can meet the specified requirements. The
procuring entity may enter into a framework agreement as necessary. ;

Limited/Selective Competition ~ is a method of procurement that limits the participants
in the procurement process to known legitimate manufacturers/suppliers. This mode is

4


used mainly for security reasons, often where the requirements have been deemed |
classified such that the same may not be disclosed freely through an open competition.
It involves direct invitation to at least two (2) manufacturers by the Procuring Entity |
from the list of pre-selected suppliers with known experience and proven capability.
‘The pre-selection shall be based upon the capability and resources of the manufacturers
to perform the contract taking into account their experience and past performance on
similar contracts, capabilities with respect to personnel equipment or manufacturing
facilities, and financial position.

. Single-sourced — refers to the mode of procurement where the Procuring Entity?
negotiates with one (1) manufacturer/supplier in view of national security and|
emergency and or other urgent strategic considerations. The following are the types of|
single-sourced procurements:

3.1. Government-to-Goverament ~ refers to an arrangement involving negotiation
with a State with which the Philippines has a Treaty or International or Executive
Agreements.

3.2. Emergency Procurement — refers to the type of single-sourced procurement of
defense materiel and other defense requirements necessary to support and sustain
defense operations, in any of the following situations:

i. During a state of calamity or emergency;

ii, Where immediate acquisition is necessary either to prevent loss of life or
damage to property; or, to rehabilitate, rebuild and develop an area which has
been damaged by an armed conflict.

3.3. Anticipated Emergency Procurement — refers to the type of single-sourced®
procurement of defense materiel necessary in anticipation of a disaster that poses
an imminent danger to life or damage to property.

3.4. Direct Purchase - refers to the type of single-sourced method/mode that allows
procurement directly from pre-selected supplier, manufacturer, and/or contractor.
It may be resorted to under any of the following circumstances:

i. For procurement of readily available and off-the-shelf goods not available to
the Procurement Service of the Department of Budget and Management,
subject to the threshold prescribed in the IRR.

ii, In order to obtain and maintain the desired standardization and interoperability
of defense materiel based on the defense inventory of the DND and/or its
Bureaus.

iii, 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.

3.5 Assumption of Contracts. —- Assumption of contract by a specific
supplier/manufacturer whenever a contract under any of the methods of

5


procurement of this Act is terminated or rescinded for causes provided for in the
contract and existing laws. In the case of Open and Limited Competition, all the
ranked offerors shall be considered prior to the sending of REIs.

b. Donation - refers to an act of liberality whereby private companies, institutions, |
local government units (LGUs), government agencies and other foreign governments or
institutions disposes gratuitously of assorted items/equipment to the DND and its attached
bureaus.

c. Barter ~ refers to the mode of acquisition by the exchange of goods or services for
other goods or services without the use of money which may be made with foreign
governments, local government agencies and foreign and local private entities.

See. 8. Acquisition for the Development of Self-Reliant Defense Posture (SRDP). ~
refers to the negotiation for acquisition of defense projects services, system and facilities that
may also be undertaken if the SND has determined that the security interest of (the) country is
protected by entering into in-country production with any foreign or local manufacturer.

Sec. 9. Terms and Conditions for the Use of Acquisition Methods. ~The specific terms
and conditions including the limitations and restrictions, for the application of each of the
acquisition methods in this article shall be specified in the IRR.

ARTICLE IV ry
ORGANIZATIONAL STRUCTURE

Sec. 10. Head of Acquisition Entity (HAE). ~The SND and the Bureau Heads shall be
the Head of the Acquisition Entity for the DND and their respective bureaus.

Sec. 11. Office of the Defense Acquisitions (ODA). ~The ODA shall be created to assist
the Secretary of the National Defense in the implementation of this Act. The ODA shall be
headed by the Assistant Secretary for Defense Acquisitions who shall be assisted by at least
two (2) Directors under the Department of National Defense (DND).

Sec. 12. Defense Acquisition Secretariat (DAS). — There shall be a DAS, whose
organization and personnel plantilla positions shell be determined by the SND.

Sec. 13. Defense Acquisitions Division (DAD). ~The DAD shall be a permanent body
composed of five (5) permanent members, with at least one (1) lawyer. The members of DAD
shall occupy plantilla positions with salary grades to be determined by the SND. There shall
also be two (2) alternate regular members and two (2) provisional members from the end-user.
‘The SND may create additional ad hoc Defense Acquisitions Committees (DACs) as he deems
appropriate and necessary in accordance with this Act. Bureaus of the DND shall create their,
own permanent and ad hoc DACs in accordance with this Act. All members of the DAC shall
have appropriate competencies to be determined by the HAE, and shall undergo a
comprehensive training program.

See. 14. Defense Acquisition Technical Assistance Office (DATAO). ~ The DATAO
shall provide support to the Department in the performance of its duties and responsibilities
specified in this Act and its IRR. The DND shall determine the DATAO’s organizational
structure anc staffing. The DATAO shalll be headed by a senior official of the Department of


good moral character, unquestionable integrity, and known probity, to be designated by the
SND. All other officials and employees of the DATAO shall be appointed by the SND, upon
favorable recommendation of the Chief, DATAO

‘The DATAO shall provide research, technical and administrative support to ite?
Department, including:

a. Research-based acquisition policy recommendations and rule-drafting;

b. Development and updating of generic acquisition manuals and standard bidding |
forms;

c. Management and conduct of training on acquisition systems and procedures;

d. Evaluation of the effectiveness of the government acquisition system and
recommendation of improvements in systems and procedures;

9

Monitoring the compliance to this Act and assisting Acquisitioning Entities
improve their compliance; and

f. Secretariat support.

See. 15. Professionalization of Acquisition Personnel. ~ The ODA shall establish a§
sustained training program to develop the capability of the Defense Acquisition Division

(DAD), Defense Acquisition Secretariats, Project Management Teams (PMTs), and the

Acquisition Units of Acquisitioning Entities, and professionalize the same. The HAE shall

ensure that the DAD, it’s Secretariat and PMT members, including other relevant

acquisitioning personnel are sent to attend acquisition training or capacity development

program, Within six (6) months upon designation, the DAD, its Secretariat and PMT members

should have satisfactorily completed such training or program conducted, authorized or

accredited by the DATAO. The HAE is encouraged to attend similar acquisition training and

capacity development activities.

Sec. 16. Project Management Team (PMT). ~ There shall be PMTs created to support
the DAD which shall be composed of financia!, legal and technical experts to assist in the
acquisition process.

ARTICLE V
ACQUISITION PROCEDURES

Sec. 17. Acquisition Requirements. ~ The acquisition requirements shall be determined
in accordance with the DSOM process prescribed by the SND. \

a. Determination of the Mode of Acquisition. — The end user shall recommend the
mode of acquisition for approval of the HAE.

b. Best Rated Offer (BRO). — The offer with the best calculated rating based on
criteria/parameters including, but not limited to financial capacity, technical capabilities,

ej


additional technical capabilities of appropriate upgrade, and others such as life-cycle cost,
after-sales support, willingness to transfer technology, warranty, perquisites and price. t

Sec. 18. Awarding of Contract. ~ The DAC shall recommend award of contract to the
supplier with the Best Rated Offer. The HAE shall be the signing authority to enter into a
contract with the supplier with the Best Rated Offer.

Sec. 19. Contract Implementation. ~ The rules and guidelines for the implementation
of contracts which includes but not limited to the delivery, acceptance test, extension of
contract, variation of contract and payment shall be prescribed in the IRR. The rules and
guidelines shall include standard general and special conditions for contracts.

Sec. 20. Contract Termination. —- The rules and guidelines for the 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.

Sec, 21. Warranties. —In order to ensure the integrity of the materiel acquired and th
supplier's obligation to repair or replace the same when warranted, a warranty security shall be
required from the supplier for a period as specified in the contract.

Sec. 22. Review and Assessment. ~ The HAE may create an Acquisition Review
Committee to assess the acquisition activities of the Department and its bureaus on a quarterly
basis in accordance with the guidelines and procedures provided for in the IRR.

Sec. 23. Security and Confidentiality. — Whenever necessary, an offeror or bidder may
be required to sign a Non-Disclosure Agreement.

ARTICLE VI
SANCTIONS FOR DEFAULT

Sec. 24. Liguidated Damages. - All contracts executed in accordance with this Act and
its IRR shall contain a provision on liquidated damages which shall be payable by the
contractor or supplier in case of breach as specified in the contract.

Sec. 25. Blacklisting. — Corporations, companies, board members, single
proprietorships, their principals, and duly authorized representatives or agents shall bq
blacklisted in accordance with the grounds and procedures as provided for in the IRR. The
Period of Blacklisting shall be as follows:

a. Ist Blacklisting — five (5) years;

b. 2nd Blacklisting — Perpetual disqualification from participating in the acquisition
process of the DND

Non-performance of obligation under warranty shall be a ground for blacklisting.


ARTICLE VII
SETTLEMENT OF DISPUTES

Sec. 26. Protests on Decisions of the DAC. — Decisions of the DAC in all stages of
acquisition may be protested to the HAE and shail be in writing. Decisions of the DAC 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. 27. Resolution of Protests. — The protests shall be resolved strictly on the basis of
records of the DAC. The decisions of the HAE shall be final.

Sec. 28. Non-interruption of the Acquisition Process. — In no case shall any protest
taken from any decision treated in this Article stay or delay the acquisition process.

Sec. 29. Resort 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 Act shall be dismissed for lack of jurisdiction. The
Regional Trial Court shall have jurisdiction over final decisions of the HAE. Court actions shall
be governed by Rule 65 of the 1997 Rules of Civil Procedure or its amendment as the case
maybe and as applicable.

Sec. 30. 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. 31. 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 VII
PENAL CLAUSE

Sec. 32. Offenses and Penalties. ~ The provisions of Republic Act No. 3019, otherwise
known as the “Anti-Graft and Corrupt Practices Act”, and other pertinent penal laws shall be
strictly applied against erring public officers or any person for action or inaction in violation
of the provision or intent of this Act as the competent body or court may determine.


ARTICLE1X
CIVIL LIABILITY

Sec. 33. 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. 34. 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 shalll be specified in the IRR.

ARTICLE X
LEGAL ASSISTANCE

Sec. 35. Legal Assistance. ~ The legal office of the DND or its equivalent for DND
bureaus, is authorized to represent in all stages of the case for the members of DAS, DAD,
PMT and TWG or any or all persons involved in the procurement or acquisition process
immediately upon receipt of Court Notice that a civil, criminal, or Ombudsman case, suit or
proceeding is filed against them.

Sec. 36. Private Legal Assistance. — In case of inability of the legal office of the DND,
or its equivatent for DND bureaus, the Acquisitioning Entity shall provide for the lawyer's fee’
subject to guidelines as provided for under the IRR.

ARTICLE XI
MISCELLANEOUS PROVISIONS

Sec. 37. Multi-Year Contracts and Other Contractual Arrangements. — For the purpose
of acquisitions under this Act, notwithstanding existing laws to the contrary, the DND and its
bureaus shall be authorized to enter into multi-year contracts and other multi-year contractual
arrangements; Congress shall, upon issuance of a multi-year obligation authority by the DBM,
make the corresponding appropriation for the ensuing fiscal years.

Sec. 38. Issuance of Import Licenses and Other Licenses. — All acquisition under this
Act shall be exempt from import and other licenses imposed by other agencies of the
government. In lieu thereof, the SND shall issue an Authority to Import and other certification
that the goods, services, systems and equipment being imported are acquired pursuant to this
Act.

Sec. 39. Exemption from Custom Duties and other Taxes for Donated Goods. ~ Th
donation of defense equipment or items to the Department of National Defense, which are
directly and exclusively used for its projects, undertakings, activities, services and programs
under this Act, shall be exempted from custom duties and other taxes.

Sec. 40. Acquisition of Units Deployed Overseas. ~— Units deployed overseas such as
the DAFA, U.N. Peace-Keepers and such other similar units are authorized to acquire certain

10


reasonable requirements in connection with the discharge of their functions within the country
where they are deployed, subject to the guidelines provided for in the IRR.

Sec. 41. Administration of the Revised AFP Modernization Act Trust Fund, ~ Section
11 of Republic Act No. 7898, otherwise known as the “AFP Modernization Act”, as amended
by Republic Act No. 10349, is hereby further amended to read as follows:

“Sec. 11. The Revised AFP Modernization Act Trust Fund. ~ x x x:

(a) xxx

(b) xxx ‘1

(©) xxx

(@) xxx

(©) xxx

() xxx

(g) xxx

(hb) xxx

(i) xxx

G@) @xxx

Funds from the foregoing sources, regardless of income source, shail be
directly deposited to a special account in the general fund created specifically
for the Revised AFP Modernization Program. The corresponding allotment and
cash allocation shall be released to the [AFP] DND subject to the submission
ofa special budget and subject to submission of periodic report to the Oversight

Committee. Thereafter, the cash allocation shall be transferred to the Revised

AFP Modernization Trust Fund which shall be administered by the Secretary

of National Defense in accordance with existing government budgeting and

auditing rules and regulations. The DND shall conduct periodic studies on how

to maximize the utilization of the trust fund and how additional revenues can
be generated to fund the Revised AFP Modernization Program.”

Sec. 42, Exemption from Value-Added Tax, Customs Duties and other Taxes. ~ The sale
and/or importation of weapons, equipment and ammunitions to and by the AFP, which are
directly and exclusively used for its projects, undertakings and activities and programs under
the Revised AFP Modernization Act, shall be exempt from the value added tax, customs duties
and other taxes.

un


ARTICLE XII
FINAL PROVISIONS

Sec. 43. Joint Congressional Oversight Committee on Defense Acquisition. — For
purposes of transparency and accountability, there shall be a Joint Congressional Oversight
Committee on Defense Acquisition.

Sec. 44. Implementing Rules and Regulations: Supplementary Regulations. — Within
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 DND. The said rules and
regulations shall be approved by the President of the Philippines. The President thru the
Secretary of National Defense is authorized to implement this Act, formulate and amend,
whenever necessary, the implementing rules and regulations and standard forms necessary for
the implementation of this Act, and issue supplemental regulations to hasten and facilitate the
implementation of this Act.

Sec. 45. Rule of Interpretation. — Rights and obligations existing on the date of
effectivity of this Act and arising out of contracts shall be governed by the original terms and
conditions of said contract or the law in force at that time such rights were vested.

Sec. 46. Repealing Clause. — All provisions of existing laws, orders and regulations
contrary to or inconsistent with this Act are hereby repealed or modified accordingly.

Sec. 47, 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. 48. Effectivity. — This Act shall take effect fifteen (15) days following its
publication in the Official Gazette or in two (2) newspapers of general circulation.

Approved.

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