SIXTEENTH CONGRESS OF TlU: 
) 
REPUBLIC OF THE PHILIPPINES ) 
Second Reglliar Se.~.~ilJtl 
) 
S.B. N:'~~~~~8 9 
INTRODUCED BY Senatol' n:OFISTO "TG" GlJINGONA III 
AN ACT 
1'1'1:7 
(£;j1<1')' elf 
7"1)C(f1;:n~ 
JAN 28 P 3 :05 
AMENJ)lNG REPUBLIC ACT NO, 9184, OTHE:RWISE KNOWN AS "AN ACT 
PROVIDING FOR THE MODERNIZATION, STANDARI>IZATION, AND 
REGULATION OFTHE PROClJIU:Mf:NTACTlVITlES OF'I'lU:GOVERNMF:NT 
AND .... OR OTHER PURPOSES" 
EXPLANATORY NOTE 
Considering the existence of big-ticket infrastructure projects of the government, which 
may require more than one year to finish, there is a need to amend the "Govemment 
Procurement Reform Act," to allow the funding of such projects across several years. Under the 
current set-up, the Approved Budget for the Contract (ABC) for a project in the Geoeral 
Appropriations Act (GAA), covers only one (I) year. Because of this limitation, a massive 
infrastructure project is at times, split into several one-year contracts, which in the long run, is 
inefficient, uneconomical, and time-consuming. Creating sub-contracts to implement just one 
infrastructure project may also lead to opportunities for graft and corruption. 
Allowing a single "multi-year contract" under the Goverument Procurement Reform Act, 
would promote better management of the infrastructure project. The progress of such projects 
would then be easily monitored. Accountability for defects and deficiencies will, as a result of 
this kind of contract, will also be easily identified. 
[n line with the need for budget efficiency in the construction of government projects, is 
the promotion of "value engineering," a system by which, essentially, the value of the project is 
enhanced by rationalizing its design, thercby making the project also more cost-efficient 
Multi-year contracts and Value Engineering should therefore be institutionalized, in order 
to ensure that government funds shall not be subject of wastage, fraud, or corruption. 
[n view of the foregoing, the immediate enactment of this measure' 
Iy sought. 


SIXTEENTII CONGRESS OF TIlE 
) 
REPlJULIC OF THE PlHLlPPINES 
) 
Second Recultlr SessuJII 
) 
JAN 28 P3 :05 
S.13. No. 
2589 
Introduced by Senator TEOFISTO "TG" GUINGONA III 
AN ACT 
, 
" 
AMENDING Rt;PlJlJLlC ACT NO. 9184, OTIlf:RWISE KNOWN AS AN ACT 
PROVIDING FOR THI!: MODI!:RNIZATION, STANDARDIZATION, AND 
REGULATION OF TIlE PROClJREMENT ACTlVITmS OF THE (;OVERNMENT 
AND FOR OTHER PURPOSES 
lie it enacted by the Senate and the HOllse 
(~l Representatives of the Philippines in 
Congress assembled: 
1 
SECTION 1. SECTION 5 (A) OF REPUBLIC ACT NO. 9184 [S HEREBY 
2 
AMENDED TO READ AS FOLLOWS 
3 
4 
"(a) Approved Budget for the Contract (ABC) ... refers to the budget for the contract duly 
5 
approved by the Head of the Procuring Entity. as provided for in the General Appropriations Act, 
6 
and/of 
continuing 
appropriations, 
AND/OR 
[N 
MULTI-YEAR 
OBLIGATIONAL 
7 
AUTHORITIES ISSUED BY THE DEPARTMENT OF BUDGET AND MANAGEMENT, 
8 
BASED ON THE MEDIUM-TERM PUBLIC INVESTMENT PROGRAM OF THE 
9 
GOVERNMENT APPROVED BY THE NATIONAL ECONOMIC AND DEVELOPMENT 
10 
AUTHORITY. in the CASE OF National Government Agencies; the Corporate Budget for the 
11 
contract approved by the govcming Boards, pursuant to E.O. No. 518, series of 1979, in the case 
12 
of Government Financial Institutions and State Universities and Colleges; and the Budget for the 
13 
contract approved by the respective Sanggunian, in the case of Local Government Units." 
14 
15 
SECTION 2. A NEW "SECTION 7" IS HEREBY PROVIDED AS FOLLOWS: 
16 
17 
"SEC1'ION 7. MULTI-YEAR CONTRACTS, IN THE CASE OF A 
18 
MAJOR PROJECT OF A NATIONAL GOVERNMENT AGENCY, 
19 
WHICH WILL TAKE MORE THAN ONE YEAR TO IMPLEMENT, 
20 
THE PROCURING ENTlTY MAY PROCURE. IN ACCORDANCE 
21 
WITH THE PROVISIONS OF THIS ACT, A SINGLE MULTI-YEAR 
22 
CONTRACT COVERING THE ENTIRE SCOPE OF WORK OF THE 
23 
PROJECT OR A USABLE PORTION THEREOF UP TO ITS 
24 
COMPLETION, UNDER TilE FOLLOWING CONDITIONS: 


25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
39 
40 
41 
42 
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(A) 
THE ABC SHALL COVER THE TOTAL COST OF THE 
ENTIRE MULTI-YEAR CONTRACT UP TO THE COMPLETION OF 
THE PROJECT OR A USABLE PORTION THEREOF. 
(B) 
AS A PREREQUISITE TO THE AWARD OF THE CONTRACT, 
THE 
PROCURING ENTITY 
MUST 
HAVE 
A MULTI-YEAR 
OBLIGATIONAL AUTHORTITY, ISSUED BY THE DEPARTMENT 
OF BUDGET AND MANAGEMENT, WHICH SHALL AUTHORIZE 
THE PROCURING ENTITY TO ENTER INTO A MULTI· YEAR 
CONTRACT FOR THE PROJECT OR A USABLE PORTION 
THEREOF, AND WHICH SHALL CERTIFY THAT THE FUNDS TO 
COVER THE TOTAL MULTI-YEAR CONTRACT COST SHALL BE 
INCLUDED IN THE ANNUAL BUDGET PROPOSALS OF THE END-
USER AGENCY OR PROCURING ENTITY, WITHIN ITS BUDGET 
CEILINGS, SUBJECT TO APPROVAL BY CONGRESS OF THE 
APPROPRIATION OF THE FUNDS FOR Tim PROJECT THROUGH 
THE GENERAL APPROPRIATIONS ACT" 
44 
SECTION 3. A NEW "SECTION 8" IS HEREBY PROVIDED AS FOLLOWS· 
45 
46 
"SfX'TION 8. 
VAI,UE 
E'NGINE'E1UNa. 
FOR 
MAJOR 
47 
INFRASTRUCTURE 
PROJECTS, 
IN 
TERMS 
OF 
SIZE 
AND 
48 
COMPLEXITY, 
AS 
SPECIFIED 
BY 
THE 
HEAD 
OF 
THE 
49 
PROCURING 
ENTITY, 
VALUE 
ENGINEERING 
SHALL 
BE 
50 
CONDUCTED ACCORDING TO ACCEPTED STANDARDS AND 
51 
PRACTICES. VALUE ENGINEERING IS A SYSTEMATIC PROCESS 
52 
OF REVIEWING AND ASSESSING A PROJECT, DURING THE 
53 
PLANNING, DEVELOPMENT, AND DESIGN PHASES, IN ORDER 
54 
TO: 
55 
56 
57 
58 
59 
60 
61 
62 
63 
64 
65 
(A) 
ANAL YZE ALTERNATIVE SCHEMES OF ACHIEVING THE 
PROJECT OBJECTIVES IN ORDER TO DELETE OR REDUCE NON-
ESSENTIAL FEATURES, AND TO LESSEN THE LIFE CYCLE 
COSTS OF THE PROJECT; 
(13) 
IMPROVE THE VALUE AND QUALITY OF THE PROJECT; 
AND 
(C) 
REDUCE THE TIME TO COMPLETE THE PROJECT." 
66 
SECTION 4. SECTIONS 7 TO 78 OF TilE ACT ARE HEREBY RENUMBERED TO 
67 
SECTIONS 9 TO 80, RESPECTIVELY 


68 
SECTION 5. SF2PARABILITY CLAUSF:. IF ANY PROVISION OF THIS ACT IS 
69 
DECLARED UNCONSITUTIONAL OR INVALlD, OTHER PARTS OR PROVISIONS 
70 
HEREOF SHALL CONTINUE TO BE IN FUL FORCE AND EFFECT. 
71 
SECTION 6. REPE:ALlNG CLAlJSE:. ALL LAWS, DECREES, EXECUTIVE 
72 
ORDERS, RULES AND REGULATIONS, OR PARTS THEREOF, INCONSISTENT WITH 
73 
THE PROVISIONS OF TIllS ACT ARE HEREBY REPEALED OR MODIFIED 
74 
ACCORDINGLY. 
75 
SECTION 7. EFFECI'IVITY CIJAUSE. THIS ACT SHALL TAKE EFFECT 
76 
IMMEDIATELY AFTER ITS PUBLICATION IN THE OFFICIAL GAZETTE OR IN AT 
77 
LEAST TWO (2) NEWSPAPERS OF GENERAL CIRCULATION. 
Approved,