4

i‘ EPRE SES
Republic of the Philippines

HOUSE OF REPRESENTATIVES "fee 7 REIMER E ivED eo
Quezon City

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EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 6490

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

EXPLANATORY NOTE

In pursuit of the State policy to secure its sovereignty and the integrity of its national
territory, acquiring defense equipment, facilities, materiel, ordnance, services, and
integrated military systems is necessarily considered a government priority.

Capacitating the Philippine defense establishment involves modernizing our armed
forces through a procurement system that expeditious and specialized. This requires
the adoption of the appropriate criteria in determining the best rated offer governed by
confidentiality in the acquisition process.

Through this Defense Acquisition Act, the Philippine government recognizes the
specialized needs of the defense establishment in the procurement of goods and
services as well as the construction, improvement, rehabilitation, demolition, repair,
restoration or maintenance of naval vessels or station and aircraft bases, roads and
bridges, railways, airports, seaports, communication facilities, civil works components
of information technology projects, water supply, sewerage and solid waste
management systems, and other related defense construction projects.

By streamlining the procurement process for the defense establishment through this
Act, the government will be able to bring our defense systems at par with our
Southeast Asian neighbors.

Most importantly, this Act completes the government's commitment to the capacity-
building and morale-boosting of the country's brave men and women of the Navy, Air
Force, and Armed Forces.

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

LUIS



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. _6490

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

AN ACT PROVIDING FOR THE ACQUISITION OF MATERIEL, SYSTEMS,
FACILITIES, INTERGRATED 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 |
GENERAL PROVISIONS

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

Section 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.

Section 3. Governing Principles, - The Defense Acquisition Act shall be
governed by the following principles:

a. Expeditious and specialized process in the acquisition of
defense materiel, systems, military facilities 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;


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

Section 4. Scope 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 Agreement, said agreements shalll prevail

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

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, schoo! buildings, hospital
buildings, and other related defense constructions projects of the
government.

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

. Services — refers to all defense related services.

Systems — refer 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.

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

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



=

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 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, after 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.

|. Resource Manager (RM) — is a designated senior executive official
appointed by the SND who is directly accountable to 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 I
ACQUISITION, PLANNING, BUDGETING AND EXECUTION

Section 6. Defense Acquisition Planning and Budgeting (DAPB). - The
DAPB is collaboratively developed acquisition plan with a 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.

6.1. 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.

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

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

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


6.1.2. Midterm Acquisition Plan and Budget (MAPB). — A
5-year defense procurement program to be funded thru General Appropriation and/or
other sources as enumerated in the AFP Modernization Program Act (RA 7898, as
amended by RA 10349). The MAPB shall be approved by Secretary of National
Defense

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

6.2.1. For Foreign Suppliers. - The modes of payment shall be
limited to Local Letters of Credit and Electronic Wire Transfer.

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

6.3. 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 .

6.4. 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:

6.5. 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.

6.6. Review. — The Office of the Assistant Secretary for Financial
Management (OASFM) shall be responsible in the conduct of quarterly review and
assessment of the 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 Ill
MODES OF ACQUISITON

Section 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, in case of national
emergency and calamity resort to any of the following modes of acquisition:

7.1. Procurement. - The procurement of defense equipment maybe in
any of the following mode:

7.1.1. 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.



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

7.1.3. Single-sourced- refers to the mode of procurement where
the procuring Entity negotiated with one (1) manufacturer/supplier in view of national
security and emergency and or other urgent strategic considerations.

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

7.1.3.2. Emergency Procurement — refers to the type of
single-sourced procurement of defense materiel and other defense requirements
necessary to support and sustain defense operations during a state of calamity or
emergency where immediate acquisition is necessary to prevent loss of life or damage

to property.

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

7.1.3.4. 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:

7.1.3.4.1. 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.

7.1,3.4.2. 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.

7.1.3.4.3. 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.

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


7.2 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.

7.3 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.

Section 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.

Section 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
ORGANIZATIONAL STRUCTURE

Section 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.

Section 11. Office of the Defense Acquisitions (ODA). — The ODA shall be
created to assist the Secretary of the National Defense Acquisitions who shall be
assisted by at least two (2) Directors under the Department of National Defense
(DND).

Section 12. Defense Acq ion Secretariat (DAS). - 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 DND shall create their own permanent and ad
hoc DACs 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.

Section 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 and staffing. The DATAO shall be headed by a
senior official of the Department of good moral character, unquestionable integrity,
and known probity, to be designated by the SND, upon favorable recommendation of
the Chief, DATAO.


14.1. The DATAO shall provide research, technical and administrative
support to the 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. E) Monitoring the compliance to this Act and assisting Acquisitioning
Entities improve their compliance; and f) Secretariat support.

Section 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 Acquisition Entities, and professionalize
the same. The HAE shall ensure that the DAD, its 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.

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

ARTICLE V
ACQUISITION PROCEDURES

Section 17. Acquisition Requirements. — The acquisition requirements
shall be determined in accordance with the DSOM process prescribed by the SND.

17. 1. Determination of the Mode of Acquisition. - The end user
shall recommend the mode of acquisition for approval of the HAE.

17.2. Best Rated Offer (BRO). — 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 other such as life-cycle cost, after-sales support, willingness to
transfer technology, warranty, perquisites, and price.

Section 18. Awarding of Contract. —- The DAC shall recommend award of
contract to the supplier with the Best Rated Offer.

18.1. Contract Signing. —- The HAE shall be the signing authority to
enter into a contract with the supplier with the Best Rated Offer.

Section 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.

Section 20. Contract of 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.

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

Section 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

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

ARTICLE VI
SANCTIONS FOR DEFAULT
SECTION 24. Liquidated 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.

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

a. 1* Blacklisting — five (5) years

b. 2° 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

Section 26. _ Protests on Decisions of the DAC — Decisions of the
DAC in all stages of acquisition may be protested to the HAE and shall be in
writing. Decisions of the DAC may be protested by filling 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 files ad resolved shall be specified in the
IRR

Section 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.

Section 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.

Section 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.

Section 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 the 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 thr 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.

Section 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 VIII
PENAL CLAUSE

Section 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.

ARTICLE IX
CIVIL LIABLITY

Section 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.

Section 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 shall be specified in the IRR

ARTICLE X
LEGAL ASSISTANCE

Section 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 in filed against them.

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

ARTICLE XI
MISCELLANEOUS PROVISIONS

Section 37. Multi-Year contracts and Other Contractual Arrangement. —
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 multiyear contractual arrangements; Congress shall, upon
issuance of a multi-year obligation authority by the DBM, make the corresponding
appropriation for the ensuing fiscal years.

Section 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.

Section 39. Exemption from Custom Duties and other Taxes for
Donated Goods. The 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.

Section 40. Acquisition of Units Deployed Overseas. - Units deployed

overseas such as the DAFA, U.N. Peace-Keepers and the likes are authorized to
acquire certain reasonable requirements in connection with the discharge of their

coe


functions within the country where they are deployed, subject to the guidelines
provided for in the IRR.

Section 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) xx x (b) x x x (C) xx x (d) xx x (€) xx x (F) XXX (g) xX x (h) x
Xx (I) Xxx (j) XXX
Funds from the foregoing sources, regardless of income
source, shall 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 DND subject to the
submission of a 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 the
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.”

Section 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 Revised AFP Modernization Act, shall be exempt from
the value added tax, customs duties and other taxes.

ARTICLE Xil
FINAL PROVISIONS

Section 43. Join Congressional Oversight Committee on Defense
Acquisition. - For the purposes of transparency and accountability, there shall be a
Joint Congressional Oversight Committee on Defense Acquisition.

Section 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 DBD. 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

12


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.

Section 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 od said contract or the law in force at that time such
rights were vested.

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

Section 47. Separability Clause. - In any provision of this Act is declared
invalid or unconstitutional, the other provisions not affected thereby shall remain

valid and subsisting.
Section 48. - Effectivity Clause. - This Act shall take effect fifteen (15) days

following its publication in the Official Gazette or in two (2) newspapers of general
circulation.

Approved.

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