Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS

First Regular Sessi

House Bil! No,

Introduced by HON. ROZZANO RUFINO B. BIAZON

EXPLANATORY NOTE

This bill basically seeks to amend Republic Act No. 9184, otherwise known as the Govemment
Procurement Reform Act of 2003, The amendments being proposed take into consideration national
security a8 a major factor in the procurement of defense articles, services and infrastructures by the
Department of National Defense (DND) and the Armed Forces of the Philippines (AFP) pursuant to
Republic Act No, 7898, as amended, otherwise known as the AFP Modemization Act,

Republic Act No. 9184 was enacted to promote the ideals of good governance in all units and
instrumentalities of the government, Its passage was hailed as a milestone that marked the government's
commitment to reform the country's procurement system, There are however certain provisions of RA No.
9184, with all sheir noble intentions, which adversely affect, or even compromise, national security interest
and the national defense program.

‘The principles of procurement as expressed in RA 9184 unwittingly expose the country’s defense
plans and arms-acquisition strategies, and laid bare the country's defenses against those who may wish to
sow harm and illewill. The resurgence of terrorism and non-state and state-sponsored terrorist groups
resulted in the unabated proliferation of illicit trades in arms and munitions, making the country's defense
acquisition sysiem vulnerable to unscrupulous arms dealers and suppliers, and the country as a patriarch
nation (0 its defense allies and other peace-loving nations which provide enough legislative protection
against such practice. Procurement of badly needed defense articles, services and infrastructure projects
are likewise unnecessarily delayed by the vagaries of procurement procedures under the present provisions
of RA 9184.

It is therefore proposed that certain provisions of RA 9184 be amended to balance the imperatives
of national security with the noble intentions of sound procurement enshrined in the said law, without
sacrificing the ideals of good governance.

'

For these reasons, immediate approval of this bill is earnestly sought.

wd © RUFINO B. HXZON

Representative
Lone District, Muntinlupa City


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS

First Regular Session '

753

House Bill No.

Introduced by HON, ROZZANO RUFINO B. BIAZON

AN ACT
TO PURSUE THE ARMED FORCES OF THE PHILIPPINES MODERNIZATION
PROGRAM, AMENDING FOR THIS PURPOSE REPUBLIC ACT NO. 9184,
OTHERWISE KNOWN AS THE GOVERNMENT PROCUREMENT REFORM ACT

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

SECTION 1. Section 4 (Scope and Application), Article I of Republic Act No, 9184,
otherwise known as the Government Procurement Reform Act, is hereby amended to read as
follows:

"SEC. 4, Scope and Application. — This Act shall apply to the Procurement
of Infrastructure Projects, Goods, and Consulting Services, regardless of source of
funds whether local or foreign, by all branches and instrumentalities of government,
its department, offices and agencies, including government-owned and/or controlled
corporations and local government units, subject to the provisions of Commonwealth
Act No, 138. IN THE INTEREST OF NATIONAL SECURITY, THE
SECRETARY OF NATIONAL DEFENSE MAY PRESCRIBE RULES AND
STANDARDS IN ACCORDANCE WITH THE PERTINE PROVISIONS OF
THIS ACT TO GOVERN THE PROCUREMENT OF DEFENSE ARTICLES,
SERVICES, AND INFRASTRUCTURES, AND TO ‘NHANCE THE
NATIONAL DEFENSE PROGRAM OF THE GOVERNMENT. Any treaty or
international or executive agreement affecting the subject matter of this Act to which
the Philippine government is a signatory shall LIKEWISE be observed. "

Sec. 2. Section 5 (Definition of Terms), Article { of the same Act is hereby amended to
read as follows:

"SEC. 5(k). Infrastructure Projects include the construction, improvement,
rehabilitation, demolition, repair, restoration or maintenance of roads and bridges,


railways, airports, seaports, communication facilities, civil works components of
information technology AND SHIP-BUILDING PROJECTS AND THE REPAIR,
RESTORATION AND MAINTENANCE OF MILITARY SHIPS, AIRCRAFT
AND OTHER MAJOR MILITARY EQUIPMENT, 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 construction projects. of the
government."

See. 3, Section 10 (Competitive Bidding), Article IV of the same Act is hereby amended to
read as follows:

>. 10. Competitive Bidding. — All procurement shall be done through
Competitive Bidding, except as provided for in Article XVI of this Act. HOWEVER,
IN FURTHERANCE OF THE AFP MODERNIZATION PROGRAM
PURSUANT TO RA 7898 AS AMENDED AND WHEN THE PROCUREMENT '
INVOLVES NATIONAL SECURITY INTEREST, THE SECRETARY OF
NATIONAL DEFENSE, UPON APPROVAL OF THE PRESIDENT, MAY
PRESCRIBE ANY OF THE METHODS OF PROCUREMENT PROVIDED
FOR IN ARTICL XVI, AS MAY BE APPLICABLE, FOR THE
PROCUREMENT OR DEVELOPMENT OF DEFENSE ARTICLES,
SERVICES, AND INFRASTRUCTURES, WITHOUT RESORTING TO
COMPETITIVE BIDDING.”

Sec. 4. Section 18 (Reference to Brand Names), Article VI of the same Act is hereby
amended to read as follows:

"SEC. 18. Reference to Brand Names. - Specifications for the Procurement of
Goods shall be based on relevant characte s and/or performance requirements.
Reference to brand names shall not be allowed [,] EXCEPT AS MAY BE
OTHERWISE PROVIDED FOR IN THIS ACT."

Sec. 5. Section 43 (Procurement of Domestic and Foreign Goods), Article XII of the same
Act is hereby amended to read as follows:

"SEC. 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
to all eligible suppliers, manufacturers and distributors. HOWEVER, IN THE
INTEREST OF NATIONAL SECURITY AND TO ENSURE HIGH-QUALITY
DEFENSE ITEMS, THE SECRETARY OF NATIONAL DEFENSE, UPON
APPROVAL OF THE PRESIDENT, MAY LIMIT THE PROCUREMENT OF
DEFENSE ARTICLES FROM KNOWN DIRECT MANUFACTURERS OF
THE ITEMS. [However] FURTHER, 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. "



Sec. 6. The last paragraph of Section 48 (Alternative Methods), Article XVI of the same
Act is hereby amended to read as follows:

"In all instances NOT INVOLVING THE PROCUREMENT OF DEFENSE.
ARTICLES, SERVICES AND INFRASTRUCTURES, the Procuring Entity shall
ensure that the most advantageous price for the government is obtained, IN THE.
PROCUREMENT OF DEFENSE ARTICLES, SERVICES AND '
INFRASTRUCTURES, THE SECRETARY OF NATIONAL DEFENSE
SHALL ENSURE THAT THE NATIONAL SECURITY INTEREST IS
PROTECTED IN TERMS OF EFFI INCY, ECONOMY AND QUALITY OF
THE DEFENSE ITEMS TO BE PROCURED."

Sec. 7. Section 49 (Limited Source Bidding), Article XVI of the same Act is hereby
amended, by adding new provisions which shall read as follows:

“(C). PROCUREMENT OF DEFENSE Al

EEMED OF NATIONAL SECURITY INTER!
TARY OF NATIONAL DEF!

WHERE IT IS
‘ST AS DETERMINED BY
f AND APPROVED BY THE
E 'T, TO LIMIT THE BIDDING TO KNOWN LEGITIMATE
BIDDERS AND SUPPLIERS OF DEFENSE ARTI IN ORDER TO
OBTAIN AND MAINTAIN THE DESIRED STANDARDIZATION AND
VTEROPERABILITY OF MILITARY ARTICLES INVENTORY, AND TO
PROTECT THE PROCUREMENT OF DEFENSE ARTICLES AGAINST
UNSCRUPULOUS SUPPLIERS,

(D). THE GOVERNMENT PROCUREMENT POLICY BOARD SHALL
DESIGNATE THE RELEVANT GOVERNMENT AUTHORITY THAT
SHALL FORMULATE AND MAINTAIN THE LIST OF PRE-SELECTED '
SUPPLIERS OR CONSULTANTS WITH KNOWN EXPERIENCE AND
PROVEN CAPABILITY IN THE REQUIREMENT FOR A PARTICULAR
PROCUREMENT CONTRACT.”

Sec. 8, Section 50 (Direct Contracting), Article XVI of the same Act is hereby amended,
by adding a new provision which shall read as follows:

“(D). SUBSEQUENT PROCUREMENT OF THE SAME TYPE OR MODEL OF

DEFENSE ARTICLES, SUBJECT TO THE FOLLOWING CONDITIONS:

1) THE DEFENSE ITEMS SHALL BE OF UNIFORM, INTER-
OPERABLE AND COMPATIBLE, AND HAVE THE SAME OR
BETTER PERFORMANCE CHARACTERISTICS WITH THE
SIMILAR TYPES OR MODELS OF DEFENSE ITEMS CURRENTLY
JN USE BY THE ARMED FORCES OF ) PHILIPPINES;

2) THE SUBSEQUENT PROCUREMENT WAS PREVIOUSLY
PROGRAMMED OR PLANNED FOR BUT NOT EFFECTED DUE
TO RESOURCE CONSTRAINTS AND OTHER
CAUSES; AND



3) THE ORIGINAL PROCUREMENT OF THE SAME TYPE OR
MODEL OF THE DEFENSE ITEM WAS UNDERTAKEN
THROUGH THE LEGITIMATE PROCESS PRESCRIBED UNDER '
THIS ACT, AND THAT SIMILAR TERMS AND CONDITIONS, OR
BETTER, ARE OBTAINED, EXCEPT FOR CHANGES THEREOF
FOR REASONS OF IMPROVEMENT OR UPGRADE, “FORCE
MAJEURE” OR SUCH OTHER CAUSES AS THE SECRETARY OF
NATIONAL DEFENSE MAY DEEM ACCEPTABLE.”

9, Section $1(c) (Repeat Order), Article XVI of the same Act is hereby amended to
read as follows:

“SEC. 51 (¢). Except in special circumstances defined in the IRR, the repeat order shall
be availed of only within six (6) months from the date of the Notice to Proceed arising
from the original contract. IN THE CASE OF PROCUREMENT OF DEFENSE
ARTICLES, SERVICES AND INFRASTRUCTURES, A REPEAT ORDER
NOT EXCEEDING FIFTY PERCENTUM (50%) OF THE ORIGINAL
CONTRACT VALUE MAY BE AVAILED OF WITHIN ONE (1) YEAR FROM
‘THE DATE OF THE LAST DELIVERY OF THE DEFENSE ARTICLES,
ERVICES AND INFRASTRUCTURES ARISING FROM THE SAID
PRACT.”

See, 10, Section 53 (Negotiated Procurement), Article XVI of the same Act is hereby
amended, by adding a new provision which shall read as follows:

“(F) WHEN THE PRESIDENT, AS COMMANDER-IN-CHIEF, CALLS
UPON THE ARMED FORCES OF THE PHILIPPINES TO SUPPRE
LAWLESS VIOLENCE, INVASION OR REBELLION, OR THE IMMINENT
DANGER THEREOF, OR IN TIME OF EMERGENCY AS MAY BE
DECLARED BY THE PRESIDENT OR CONGRESS, AND FOR THE
DURATION OF SUCH LAWLESS VIOLENCE, INVASION, REBELLION OR
EMERGENCY, OR TO ATTAIN OR UNDERTAKE PROJECTS FOR
SPECIFIC NATIONAL SECURITY OBJECTIVES.”

Sec. 11. Separability Clause. ~ If for any reason, any provision of this Act is declared
invalid or unconstitutional, the remaining provisions not affected thereby shall continue to be in
full force and effect.

Sec. 12. Repealing Clause. — All laws, decrees, executive orders, proclamations, rules and
regulations, and other issuances, or parts thereof, which are inconsistent with the provisions of this
Act are hereby repealed or modified accordingly.

Sec. 13. Effectivity. This Act shall take effect after fifteen (15) days following its complete
publication in the Official Gazette or in any two (2) newspapers of general circulation. ‘

Approved,