EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
First Regular Session 
)
SENATE
S.B. No. 1405
Renats'
20 MAR -9 P 2 -46
Ko:
h
INTRODUCED BY: SENATOR EMMANUEL D. PACQUIAO
AN ACT
TO STRENGTHEN THE BIDDING STRUCTURE AND PROJECT 
IMPLEMENTATION LIABILITY PROVISIONS IN THE GOVERNMENT 
PROCUREMENT REFORM ACT, AMENDING FOR THAT PURPOSE 
REPUBLIC ACT NO. 9184, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Republic Act No. 9184 has declared it a policy of the State “to promote the ideals of 
good governance in all its branches, departments, agencies, subdivisions, and instrumentalities, 
including government-owned and/or -controlled corporations and local government units.” It 
is a good policy of the State, as inferred from the objectives of the said Act, to obtain only 
reasonable and viable bids for the Government’s procurement activities. The said Act further 
recognized among the guiding principles of government procurement the obtaining of a 
“System of accountability where both the public officials directly or indirectly involved in the 
procurement process as well as in the implementation of procurement contracts and the private 
parties that deal with government are, when warranted by circumstances, investigated and held 
liable for their actions relative thereto.”
Two things that negate the foregoing policies and principle, and that subvert the good 
objectives of the said Act are the practice by bidders to submit a bid that is commonly referred 
to as a “dive”, and the practice of public officials or government employees who instead of 
ensuring compliance by prospective bidders or contractors with the terms of reference for the 
project and/or the terms and conditions of its corresponding contract, negligently or 
fraudulently fail to do so. The “dive”, which is the practice of a prospective bidder of submitting 
a very low bid amount that questionably borders on or is below recognizable viability to ensure 
a winning bid, in the end contradicts the good objectives of the said Act, because in order to 
recover a profit from an award of the project, the contractor will cut its contract performance 
costs by using, provisioning, stocking for future delivery and/or supplying low quality, bargain 
obsolete or near-obsolete, or inappropriate although usable materials, supplies and equipment, 
or will extend repairs even when replacement is imperative, or will pass-off as brand new only 
reconditioned items, or will violate labor laws or tax laws, among other nefarious practices, all 
to the eventual disadvantage of government because of the substandard result and easy 
deterioration and diminution of value of the project. The aforesaid second negating thing, 
which is the negligence or fraudulent practice of public officials or government employees that 
result in failure to ensure compliance by prospective bidders or contractors with the terms of


reference for a project, especially the approval, confirmation, or passing-off to government 
superiors or the procuring entity of qualification or requirement documents submitted by 
prospective bidders that turn out, if there was proper inspection or confirmation by them, to be 
erroneous, inappropriate for the project or even fraudulent, and/or their failure to perform 
proper inspection during the contractor’s execution or implementation of the project resulting 
in violation(s) of terms and conditions of the contract for the project, in both cases whether or 
not done in connivance with the prospective bidder or contractor.
The above acts inevitably lead to the disadvantage of government because of the 
substandard result and easy deterioration and diminution of value of the project, including key 
resources and critical infrastructure that are essential to the economy and development of the 
country and to the performance by government of its public service. The alarming continuation 
of such acts, have now created a seriousness of situation that must be addressed by the State.
In view of the foregoing, approval of this bill is earnestly sought.
EMMANtrmTTTACQUIAO


EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
First Regular Session 
)
o’ tiic
SENATE
S.B. No. 1405
20
-9 P2-46
INTRODUCED BY: SENATOR EMMANUEL D. PACQUIAO
AN ACT
TO STRENGTHEN THE BIDDING STRUCTURE AND PROJECT 
IMPLEMENTATION LIABILITY PROVISIONS IN THE GOVERNMENT 
PROCUREMENT REFORM ACT, AMENDING FOR THAT PURPOSE 
REPUBLIC ACT NO. 9184, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled:
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Section 1. Declaration of Policy. - This act reiterates the stated policies and principles of 
Republic Act No. 9184, and further declares a policy of the State to obtain only reasonable and 
viable bids for the Government’s procurement activities.
Section 2. Section 5 of Article I of Republic Act No. 9184 is hereby amended to add a 
subparagraph (p) that will read as follows:
“(p) Projected Lowest Viable Bid (PLVB) - refers to that bid amount 
within the ABC that is projected and calculated by the procuring 
entity to be the minimum amount necessary for the viable 
execution and/or delivery by contractors of its project according to 
the procuring entity’s objectives, the requirements and purposes of 
the project, and other conditions that said procuring entity may 
deem proper to consider.
Section 3. Subparagraph (a) of Section 17 of Article VI of Republic Act No. 9184 is hereby 
amended to read as follows;
“(a) Approved Budget for the Contract AND, EXCEPT IN CASE OF 
PROJECTED LOWEST VIABLE BID; ”
Section 4. Subparagraph (d) of Section 21 of Article VII of Republic Act No. 9184 is hereby 
amended to read as follows;
(d) The Approved Budget for the Contract to be bid AND, EXCEPT 
IN THE CASES COVERED BY ARTICLE XVI OF 
REPUBLIC ACT NO. 9184, THE CORRESPONDING 
PROJECTED LOWEST VIABLE BID;


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Section 5. Section 31 of Article IX of Republic Act No. 9184 is hereby amended to read as 
follows:
“Section 31. Ceiling and Floor for Bid Prices. - The ABC shall be the 
upper limit or ceiling for the Bid prices. Bid prices that exceed this ceiling shall 
be disqualified outright from further participating in the bidding. [THERE 
SHALL BE NO LOWER LIMIT TO THE AMOUNT OF THE AWARD ]
THE PLVB SHALL BE THE LOWER LIMIT OR FLOOR FOR THE 
BID PRICES. BID PRICES BELOW THIS FLOOR SHALL BE 
DISQUALIFIED OUTRIGHT FROM FURTHER PARTICIPATING IN 
THE BIDDING.
Section 6. Section 48 of Article XVI of Republic Act. No. 9184 is hereby amended to read as 
follows.
“Section 48. Alternative Methods. - Subject to the prior approval of the Head 
of the Procuring Entity or his duly authorized representative, and whenever justified by 
the conditions provided in this Act, the Procuring Entity may, in order to promote 
economy and efficiency, resort to any of the following alternative methods of 
Procurement;
(a) Limited Source Bidding, otherwise known as Selective Bidding - a method of 
Procurement that involves direct invitation to bid by the Procuring Entity from a set of 
pre- selected suppliers or consultants with known experience and proven capability 
relative to the requirements of a particular contract;
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“xxx XXX XXX
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In all instances, the Procuring Entity shall ensure that the most advantageous price for
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the Government is obtained.”
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NO PROJECTED LOWEST VIABLE BID SHALL BE CALCULATED,
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REQUIRED OR DISCLOSED IN THE CASES COVERED BY ARTICLE XVI
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OF REPUBLIC ACT NO. 9184.
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Section 7. Subparagraphs (a) and (b) of Section 62 of Article XIX of Republic Act No. 9184
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is hereby amended to read as follows:
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“Section 62. Warranty. - (a) For the procurement of Goods AND OF
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INFRASTRUCTURE PROJECTS, in order to assure that manufacturing
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AND PERFORMANCE defects AS WELL AS HIDDEN DEFECTS
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SUBSEQUENTLY DISCOVERED shall be corrected by the supplier,
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manufacturer, [OR] distributor, OR CONTRACTOR, as the case maybe, for a
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specific time after performance of the contract, a warranty shall be required
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from the contract awardee for such period of time as may be provided in the
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IRR, the obligation for which shall be covered by either retention money in the
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amount equivalent to a percentage of every progress payment, or a special bank
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guarantee equivalent to a percentage of the total contract price, to be provided
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in the IRR. The said amounts shall only be released after the lapse of the


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warranty period AND AFTER PROPER RECONFIRMATION BY 
APPROPRIATE PUBLIC OFFICIALS OR QUALIFIED 
GOVERNMENT EMPLOYEES OF CONTINUING COMPLIANCE TO 
THE TERMS OF REFERENCE FOR THE PROJECT AND TO THE 
TERMS AND CONDITIONS OF ITS CORRESPONDING CONTRACT 
THAT IS CONDUCTED ACCORDING TO THE PROCEDURE AND 
REQUIREMENTS AS MAY BE STATED IN THE IRR, ESPECIALLY 
FOR MANUFACTURED OR MODIFIED GOODS [, PROVIDED THAT 
THE GOODS SUPPLIED ARE FREE FROM DEFECTS AND ALL THE 
CONDITIONS IMPOSED UNDER THE CONTRACT HAVE BEEN FULLY 
MET.]
“(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 or construction 
or 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 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 System bond, or callable surety bond.
“The contractor shall undertake the repair works, at his own expense, of 
any defect or damage to the infrastructure projects on account of 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 governments shall undertake such 
repair works and shall be entitle to full reimbursement of expenses incurred 
therein upon demand THE REPAIR OF DEFECT(S) BY THE 
CONTRACTOR SHALL IN NO CASE EXEMPT THE APPROPRIATE 
PUBLIC OFFICIAL(S) AND/OR GOVERNMENT EMPLOYEES FROM 
APPLICABLE CRIMINAL, CIVIL OR ADMINISTRATIVE LIABILITY 
UNDER ANY LAW OR REGULATION FOR HIS OR THEIR FAILURE 
TO PERFORM A TIMELY AND/OR PROPER INSPECTION DURING 
THE CONTRACTOR’S EXECUTION OR IMPLEMENTATION OF 
THE PROJECT RESULTING IN LATE RECOGNITION OF 
VIOLATION(S) OF THE TERMS OF REFERENCE FOR THE 
PROJECT OR THE TERMS AND CONDITIONS ITS 
CORRESPONDING CONTRACT.
“Any contractor who fails to comply with the preceding paragraphs shall 
suffer perpetual disqualification from participating in any public bidding and 
his property or properties shall be subject to attachment or garnishment 
proceedings to recover the costs. All payables of government in his favor shall 
be offset to recover the costs.
Section 8. The enumeration following subparagraph (a) of Section 65 of Article XXI of
Republic Act No. 9184 shall be retained, and further add numbers that will read as follows:


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“(a) Without prejudice to the provisions of Republic Act No. 3019, otherwise 
known as the "Anti-Graft and Corrupt Practice Act" and other penal laws, public 
officers who commit any of the following acts shall suffer the penalty of imprisonment 
of not less than six (6) years and one (1) day, but not more than fifteen (15) years:;
“XXX XXX XXX
“6. WHETHER OR NOT BY HIMSELF OR IN CONNIVANCE 
WITH OTHERS, HE NEGLIGENTLY OR BY FRAUD COMMITS A FAILURE 
TO ENSURE COMPLIANCE OF PROSPECTIVE BIDDERS OR 
CONTRACTORS WITH THE TERMS OF REFERENCE FORA PROJECT BY 
APPROVING OR CONFIRMING AT HIS LEVEL, AND/OR PASSING-OFF 
TO HIS GOVERNMENT SUPERIORS OR TO THE PROCURING ENTITY 
ANY QUALIFICATION OR REQUIREMENT DOCUMENT BY OR FOR 
PROSPECTIVE BIDDERS THAT TURN OUT, IF THERE WAS PROPER 
INSPECTION OR CONFIRMATION MADE BY HIM, TO BE ERRONEOUS, 
INAPPROPRIATE FOR THE PROJECT, NOT AUTHENTIC, OR 
FRAUDULENT;
“7. WHETHER OR NOT BY HIMSELF OR IN CONNIVANCE 
WITH OTHERS, HE NEGLIGENTLY OR BY FRAUD COMMITS A FAILURE 
TO PERFORM PROPER INSPECTION DURING THE CONTRACTOR’S 
EXECUTION OR IMPLEMENTATION OF THE PROJECT OR AT THE 
REQUIRED RECONFIRMATION PRIOR TO RELEASE OF WARRANTY, 
RESULTING IN VIOLATION(S) OF THE TERMS OF REFERENCE FOR THE 
PROJECT OR THE TERMS AND CONDITIONS OF ITS CORRESPONDING 
CONTRACT.
Section 9. The enumeration following subparagraph (b) of Section 65 of Article XXI of 
Republic Act No. 9184 shall be retained, and further add numbers that will read as follows:
“(b) Private individuals who commit any of the following acts, including any 
public officer, who conspires with them, shall suffer the penalty of imprisonment of not 
less than six (6) years and one (1) day but not more than fifteen (15) years:
“xXX XXX XXX
“5. WHEN A BIDDER, BY HIMSELF OR IN CONNIVANCE WITH 
OTHERS, AND IN THE CASES WHERE A PLVB APPLIES, KNOWINGLY 
SUBMITS A BID AMOUNT THAT IS BELOW THE PLVB AND SAID 
SUBMISSION RESULTS IN A FAILURE OF THE BIDDING;
“6. WHEN A BIDDER, BY HIMSELF OR IN CONNIVANCE WITH 
OTHERS, SUBMITS BY WAY OF SUPPOSED COMPLIANCE TO BIDDING 
TERMS OF REFERENCE OR OTHER BIDDING CONDITIONS, ANY 
QUALIFICATION OR REQUIREMENT DOCUMENT THAT TURN OUT, 
AFTER INSPECTION OR CONFIRMATION, TO BE ERRONEOUS, NOT


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AUTHENTIC OR FRAUDULENT, WITHOUT PREJUDICE TO LIABILITY 
FOR VIOLATIONS OF OTHER APPLICABLE LAWS;
“7. WHEN A BIDDER, BY HIMSELF OR IN CONNIVANCE WITH 
OTHERS, DELIVERS OR PASSES-OFF TO THE PROCURING ENTITY AS 
COMPLIANT TO THE TERMS OF REFERENCE OF THE PROJECT OR TO 
ITS CORRESPONDING CONTRACT THE PROCURED GOODS OR 
INFRASTRUCTURE PROJECT, OR STAGES THEREOF, THAT IS 
CONFIRMED OR RECONFIRMED TO BE DEFECTIVE OR WITH HIDDEN 
DEFECTS, OR IS OTHERWISE VIOLATIVE OR NON-COMPLIANT TO 
THE TERMS OF REFERENCE OF THE PROJECT OR TO ITS 
CORRESPONDING CONTRACT, WITHOUT PREJUDICE TO LIABILITY 
FOR VIOLATIONS OF OTHER APPLICABLE LAWS.
Section. 10. All other laws, presidential decrees and issuances, executive orders, rules and 
regulations or parts thereof inconsistent with the provisions of this Act are hereby repealed or 
modified accordingly.
Section 11. If, for any reason or reasons, any part of the provision of this Act shall be held to 
be unconstitutional or invalid, other parts or provisions hereof which are not affected thereby 
shall continue to be in full force and effect.
Section 12. This Act shall take effect fifteen (15) days after its publication in two (2) national 
newspapers of general circulation. The publication shall not be later than seven (7) days after 
the approval hereof
Approved,