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NINETEENTH CONGRESS
First Regular Session
HOUSEBiLLNo.    7944
Introduced by REPRESENTATIVE AURELro -'DONG" D. GONZALES, JR.
AN-Act pREscRIB4i\IG pOLlciEs, GuiDELiNEs, RULEs ^ve REGULATroNs Fort
GOVERNMENT CONTRACTS TO BE KNOwl\l AS "ANG BAGONG PILIPINAS
GOVERNMENT PROCUREMENT REFORM ACT", REPEALING FOR THIS PURPOSE
REpuBLlc ACT NO. 9184 OR THE GOvERNNENT pFrocuREMENT FtEFORM ACT
EXPLANATORY NOTE
"lf justice delayed is justice denied, then by analogy, government procurement delay is
inefficiency to the max (maximum).-
This bill seeks to introduce a new, innovative and simplified government procurement process
to be known as "Ang Bagong Pilipinas Government Procurement Reform Act."
It's been two decades since Republic Act No. 9184 or the Government Procurement Reform
Act (GPRA) was passed into law to modemke, standardize and streamline the procurement
process across government agencies.  It was envisioned to be a  powerful tool to promote
transparency and competiton, eradicate graft and comuption, and lessen the delays in the
procurement process. However, despite legislative reform jnterventions in the GPRA, several
issues still beset the implementation of the law, especially on delays on project implementation
and underspending by government agencies.
The  volume  Of  public  expenditure  passing  through  the  public  procurement  system  has
jnoreased rapidly jn the last few years. Procurement expenditure jumped to P824 billiont when
the former administration's Build,  Build,  Build  Program kicked off in 2016.  It was  inoreased
further to P1.311 trillion2 in 2023 to achieve the Maroos administration's Agenda for Prosperity.
The  increased  budgetary allocation for proourement expenditure  is focused  on  extending
infrastructure networks and providing more services to the public.
Public funds must be spent in a timely and predictable manner in orderto bring greater benefit
to  the  people.   However,  the  perennial  problem  of  weak  absorptive  capacfty  of  some
government agencies  causes delays  jn  carrying  out crucial  projects.  In  a  2014  and  2015
reports3 by tlie Department Of Bndgct and Management. procurement is cifed as a reason for
underspending.  Likewise,  government agencies with  major underspending concerns  noted
"public procurement issues-as a recLirring reason for the low disbursement outtum.
1 https ://www. d bin.gov. ph/wp-content/u ploa d s/BESF/B Esf2016/B 1. pdf
2 https://www.dbm.gov.ph/wp-content/uploads/BESF/BESF2023/B 1.pdf
3 https://pidswebs.pids.gov.ph/CON/PU BLICATIONS/pidsdpsl716.pdf


While the GPRA did  much to push the govemment's antLeomiption agenda forward,   big
challenges remain in the implementation and monitoring of compliance with the law. Cleariy,
the objective Of GPRA have not been fully achieved. Likewise, it is no longer adequate to keep
up with the rate of the projects being undertaken by the government.
This representation sees that it is now the right time to Create a new government procurement
law that is both effective and timely to keep up wth the global standards and further pave the
way for economic growth and prosperity of the country.
The proposed "Ang Bagong Pilipinas Government Ffrocurement Fteform Act. (ABPGPRA) is
structured around the principles of economic efficiency, transparency, competitiveness and
fairness.  At  the  core  of this  bill  is  the  simplified  process  Of  procurement:  to  avoid  delay,
streamline the process, and facilitate remarkable improvement in project delivery/completion
timeline.
Salient provisions Of the ABPGPRA include:
1.   Shorten the conduct of bidding to twenty seven (27) calendar days starting from the
first day of the publication of the invitation to prospective bidders up to the posting Of
the Notice of Award and Notice to Proceed with approved contract; Removed the post-
qual ification requirements
2.   Creation of a  full-time, five (5) member Prequalffication, Bids and Awards Committee
(PBAC);
3.   Permit the PBAC Seoretariat to receive bids and other procurement documents;
4.   Lone bid may be considered for award Of contract provided the bidder's bid price is
below the allotted funds for the contract;
5.   Invitation of select number of contractors possessing adequate financial resouroes and
technjcaJ experience during fchujtous events;
6.   Reference to brand names in special cases;
7.    Exemption  from  competitive  bidding  piioourement  involving  defense  materials  and
related purchases;
8.   Exemption of all proourement from public bidding during Pandemic as declared by the
President of the Republic of the Philippines
9.   Creation of Ang Bagong Pilipinas Procurement Bureau under the direct supervision
and control of the Secretary Of the Department of Budget and Management.
When approved, the foregoing measures will have a huge impact in addressing the delays in
the  entire  procurement  process.  Most  importantly,  it will  further  improve the timeliness of
project delivery Of the entire government.
In view of the foregoing, the immediate approval of this bill is earnestly sought.
I D. GORALES, jR.
rd District, Pampanga


CONGRESS OF THE PHILIPPINES
NINETEENTH CONGRESS
First Regular Session
HoUSEBILLNo.    7944
Introduced by REPRESENTATIVE AURELIO "DONG" D. GONZALES, JR.
AN ACT PRESCRIBING POLICIES, GUIDELINES, RULES AND REGULATIONS FOR
GOVERNMENT CONTRACTS TO BE KNOWN AS "ANG BAGONG PILIP]NAS
GOVERNIVIENT PROCUREMENT REFORM ACT", REPEIALING FOR THIS PURPOSE
REPUBLIC ACT NO. 9184 0R ThE GOVERNMENT PROCUREMENT REFORM ACT
Be it enacted  by the Senate and House Of Representatwes Of the Philippines in Congress
assembled:
Section  1.  Short 77r/e. -This Act shall  be known as "Ang  Bagong  Pilipinas Government
Procurement Reform Act."
Section 2. Dec/arafron of po/i.cy. -lt is the declared policy of the State to maintain honesty
and  integrity in  public service and take positive and effective measures against graft and
corruption.  Towards this end, the State shall adopt and  prescribe policies and guidelines
covering  government contracts  for infrastructure,  goods  and  services,  and  consultancy
service which shall:
a.   bring about maximum efficiency in project implementation and minimize project cost
and contract variations through sound practices incontract management;
b.   promote  a  healthy  partnership  between  the  government and  theprivate sector in
furthering national development;
c.   enhance  the  gro\^th  of  the  local  construction  industry  and  optimizethe  use  Of
indigenous manpower, materials and other resources;
d.   ensure economic efficiency, transpareney, competitiveness andfaimess; and
e.   promote the highest ethical standards among government officials jn the proourement
and jmplemenfation of government contracts whichare intended to provide the basic
services to the people
Section 3. Scope OfAppfr.cat'ow and Coverage. -Tliis Act shall apply to the proourementand
implementation  of  all  government     infrastructure  contracts,  consultancy  services,  lease
contract of privatelyowned building or space for a period exceeding six (6) months, and goods
funded with entirely local funds, by all branches, departments, agencies and offices of the
national government,  including  local government units,  State universities and colleges and
government owned and controlled corporations.
Foreign funded  procurements,  unless otherwise expressly provided or allowed  jn the loan
agreement or the lending  institution's  procurement guidelines,   shall  be exempt   from the
scope of operation and application Of this Act.


Provided, during Pandemie, as declared by the President Of the Republic Of the  Phjfippines,
all procurement in response to such pandemic shall be exempt from this Act.
Sed\®n 4. General Rule on Procurement Of Government Contracts. -  To ensHre that the
government  secures    contracts  which  are    not  only  financially  but  technically  the  most
beneficial  and  advantageous  as  well  to  the  government,    government  contracts  shall  be
procured  through  competitive  bidding  wherein  prospective  bidders  are  invited  in  writing
published   in   a   newspaper  Of  general   ciroulation,   the   Philippine   Government   Electronic
Procurement  System  (PhilGEPS)  and  the  websife  of the  implementing  office,  agency  or
instrumentality,  and  to  submit  bids  based  on  common    terms  and  conditions which  shall
reference  in the preparation of the technical and financial components of  bids.
In    case    Of   infrastructure    contracts    not    exceeding    One    Hundred    Mavfon    Pesos
(P100,000,000.00), the invitation to bid may be disseminated to prospective bidder through
the posting thereof in the Philippine Government Electronic Procurement System (PhilGEPS)
and the website Of the implementing office, agency or instrumentalfty.
Section 5. Reference fo Brand Ivames. - Specifications for the proourement of goods projects
shall be based on relevant characteristics and/or performance requirements.  Reference to
brand names shall not be allowed.
Prov7.ded,  That  if  such  relevant  characteristics  and/or  performance     requirements  are
exclusively and notoriously known to belong with a certain brand name, reference to a brand
name maybe permitted.
Section 6. Defi»ff7.on of /nrrastrz/cture Pro/.ects. -Shalt 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
projects, irrigation, flood control and drainage, dams, water supply, sanitation, sewerage, and
solid waste management systems, shore protection, landslide or soil erosion protection works,
energy/power and electrification facilities, buildings and other related or similar structures.
Section  7.  Deffnffl.on  Of Cons«#anf.  - A person  or group of person who  have organized
themselves into a juridical entity and who possess a high degree of professional competence
and expertise in a particular field which are not possessed by the regular officials of an office
or  ageney,  such  as  detailed  arohifectural  and  engineering  designs,  preinvestment  and
feasibility  studies,  researoh,  advisory  and  review  services.  construction  supervision  and
management and other related or similar services.
Section  8.  Oefinjz/-on Of Goods.  - Shall  refer to  all  items,  supplies,  materials and  general
support services which are necessary in the transaction Of public businesses or the pursuit of
any  government  undertaking,  project  or  activity,  including  lease  of  real    and  tangible  or
intangible  personal  properties,  whether  in  the  natLne  Of  equipment,  fumrfure,  stationery,
materials for construction,  repair or restoration of damaged government property,  including
trucking, hauling, or similar transport services as well as janitorial and security services.
Secaom 9.  Exemptions  from  the  Requfroment  Of   Competitive  Bidding.  - Proounemfehis
involving infrastructures and goods for defense, as they involve national secLirity and advance
technology, therefore in utmost confidentialfty, are hereby declared exempt from compettive
publie bidding and are left to the sound discretion Of the responsible and compctent officials
of  the   national   defense  and   public  order  and   security  agencies.   ProvT.ded,   That  the
lmplementing Rules and Regulations (lRR) pursuant to this provision shall be formulated and
promulgated in consultation with the Department of National Defense (DND, Deparfroent of
Interior and Local Government (DILG), Department Of Justice (DOJ), National Seourity Council
(NSC),  Armed  Forces of the  Philippines  (AFP),  Philippine  National  Police  (PNP),  National


lntdiigence  Coordinating  Agency  (NICA),   and  National  Bureau  Of  Investigation  (NBl).
Provt.ded, further, that the Commission on Audit (COA) shall conduct periodic audits on these
procurements.
Likewise, exempt from the oequirements of puhic bidding are contracts which are absolutely
and reasonably  necessary to prevent imminent loss of lives or properties;  or to prevent further
aggravation of damage to vital inffastructure facilities  which are  damaged by reason of foroe
majeur or fortuitous events.
Under these circumstances, the concerned office or agency shall invite in witing  not less than
three (3) but not more than five (5) contractors which have been determined as possessing
adequate financial resources, technical experience of the company and technical personnel
as well as equipment which are suited and readily available for the purpose.
Section 10. Detailed Arohitectural and Engineering Design. - No bidding alndlor alwa[nd Of
contracts for government infrastructure projects shall be made unless the detailed engineering
investigation,  surveys,  and  design  for  the  project  have  been  sufficiently  carried  out  in
accordance with the rules and regulations to be promulgated in accordance with this Act to
minimize quantify and cost ovemins and underTuns, change orders and extra work orders.
S®ca®m   11.   Prohibition   on   Advertisement   and  Ehidding   Of  GCIvemment   lnfrastructlne
Conhacts.  - AII  offices and  agencies  are  strictly prohibited from  including  in their annual
request for operating expenses Of their office funds for procurement of infrastructure contracts
unless pcesession Of the Site for the  contracts had been fully acquired.
Site is defined as the piece of land  designated in the plans  where all the activities related to
the works for the implementation Of the prqiect shall be undertaken.
Section   12.      Prequalification   Of   Prospective   Bidders/Contractors.   -   A   prcyspectwe
bidder:/contractor for government infrastructure projects shall be anowed to participate in the
bidding and implementation thereof of if prospective bidder/contractor meets the following:
a.   Legal Fdequirements -
1.   Must  have  a  license  issued  by  the  Philippine  Contractors Accreditation  Board
(PCAB) pursuant to Republic Act No. 4566 as amended by Republic Act No.11711
otherwise known as the Contractors' License Law;
2.   Must be registered   with the Bureau of lntemal  Revenue (BIR),  Soc.ial Security
System   (SSS),    Philippine   Health   Corporation   (Philhcalth)   and   the   Home
Development Mutual Fund (HDMF);
3.   Filipino citizen in case of sole proprietorship and one person Corporations;
4.   In case of corporations and partnerships, at least seventy five percent (75%) of
their author.ized and paid up capital must be owned by Filipino citizens; and
5.   Mayor's Pemit in the place or localfty where the head office is located.
b.   rechni.ca/ Requ7.cements - Must have completed a similar contract wherein the major
scope of work thereof is similar in complexity to the scope of work of the contract to
be bid and the cost of which is at least equal to fifty percent (50%) Of the cost estimate
of the contract to be bid adjusted to current Cost using the available price indices of
the Philippine Statistics Authority.


ln addition prospective bidders must satisfactorily establish their capability to fully and
faithfully fulfill their obligations their obligations called for in the contracts  in terms Of:
1.   Competence and experience Of the bidder in  managing  and  implementing  a
proi.ect similar in scope to the contract to be bid;
2.   Competence and skill Of the bidder's key technical personnel to be assigned to
the project; and
3.   Availability and commitment of the bidders equipment to be used jn the project
until full completion
c.   Fi.nanci.a/ Requi.rements - Must have a  net worth  based on the bidder's Audited
Financial Statements for the last two (2) preceding years submitted to the Bureau of
Internal  Revenue  (BIR) equal  to the estimated  cost of the  contract to  be  bid  as
established by the concerned project implementing office, agency or instrumentalfty.
In  case  of  deficient  net  worth,  the  bidder  shall  supplement  said  deficient  net
worthffinancial  resources  committed  for  the  contract  to  be  bid  by  a  credit  line
commitment    issued    by    a    reputable    commercial    bank    or    other    lending
institutionlfinancial intemediaries.
Section 13. Prequalification  Of Bidders for Consultancy Service  Contracts. - Prospective
bidders   for   procurement   of  consultancy   services   contracts   must   meet   the   following
requirements:
a.   Must be Filipino cit.Ken in case of sole propn.etorship or one person corporation;
b.   In case of corporations and   partnership, must be registered with the Securities and
Exchange Commission (SEC) and at least seventy five percent (75%) of the authorized
and paid up capital must be owned by Filipino citizens;
c.   In case of sole proprietorshfty, must be registered with the Bureau Of Domesde Trade;
d.   Must be registered with the Bureau Of lnternal Revenue, the Social Security System,
Philippine Health Insurance Corporation and the llome Development Mutual Fund;
e.   Must have a mayor's permit in the locality where its head office is located;
f.    In case Of Corporations or parfuerships, must have the required technical experience
for the scope  or nature of services  called for in  the contract to  be  procured.  The
nominated or pledged key technical services and support staff must likewise possess
the required  formal education, professional license, competence, proficieney and skill
required for the position; and
9.   Must have the financial capabilities to finance the operating and other activities for
required for the consultancy services for  at least two (2) months based on the   net
worth  declared in  the audited financial statement for the preceding year.
Sectiron 14. Prequalification Requirements for Bidders for Procurement Of Contract for Goods.
- To be qualified to participate in the procurement of contracts for goods, the bidders must:
a.   In case of sole proprietorship, must be Filipino citizen, registered with the Bureau of
Domestic Trade;


b.   For  corporations  and  partnershipe,  must  be  registered  with  the  Seourities  and
Exchange  Commission  (SEC)  and  at  least  seventy  five  percent  (75%)  of    the
authorized and paid up capital must be owned by Filipino citizens;
c.    Must  be  registered  with  the  Bureau  of  lntemal  Revenue,  Social  Security  System,
Philippine Health Insurance Corporation and Home Development Mutual Fund;
d.   Must have a Mayors permit in the place or local.rty where the head office is located
Seedion  15.  Prequalification,  Bids  and Awards  Committee  (PBAC).  - Ealc;h  deparfumerit,
office, agency or instrumentalfty Of the national and local government units, State universities
and   colleges,   government  owned  and  controlled  corporations  shall  each   establish  a
prequalification, bids and awards committee composed of at least five (5) officials with a rank
not louver than a division chief, firowided, that the assistant division chjof or section chief, or
its equivalent position, may be designated to the PBAC as either chairman, vice chairman
and members, as the case may require.
The members of the PBAC shall be entitled to honoraria not exceeding 30 percent (30%) Of
their annual salary.
The  PBAC  shall come  from  the  legal,  financial  and  technical  professions  with  proven
competence, proficiency and  integrty.  The  chairman,  vice  chairman  and  members of the
committee shall  be designated for said  position for a period not exceeding five (5) years
unless sooner removed for cause.
During  said  period,  they  shall  not  be  assigned  to  any  duty  or  responsibility  except  as
chairman, vice chairman and members of the PBAC, respectively, to enable them to strictly
adhere to the jury duty principle in the performance of their functions.
S®ctiron 16.  Functions Of the  Prequalification,  Bids and Awards  Committee  (PBAC). The
PBAC shall be charged solely and exclusively \^th the performance of the folcwiig fundions:
a.   Preparation of bidding documents
b.   Post or advertisement of the invitation to bid
c.   Conduct the pro-procurement and pre+bid conference, as may be necessary
d.   Issuance of bidding documents
e.   Conduct of prerqualification evaluation of prospective bidders
f.    Receive and open bids
9.   Conduct detailed bid evaluation of the lowest bid as read
h.   Recommend award Of the contract to the head Of the ageney
S®diom 11. Prequalification,  Bids and Awards Committee  (lngAC)  Secretariat -A PBAIC
Secretariat,  with  its  coITesponding  plantilla  position,  shall  be  established  and  created  to
provide support and assistance to the PBAC jn the performance of its functions.
The PBAC Secretariat shall be authorized to receive bids and other procurement documents.
Sect\i®n 18. Maximum Number Of Days Allowed for Conduct Of Bidding. - The hiidding process
shatl not exceed twentyLseven (27) calendar days stafting from the first day Of the pudication
of the invitation to prospective bidders up to the posting of the Notice Of Award and Notice to
Proceed with approved contract.
The Notice of Award shall be issued by the PBAC on the same day as the award of contract
by the head Of office or agency.


The Heed Of Agency, through the PBAC, shall post a copy of the Notice of Award together
with  the  Notice  to  Proceed  with  corresponding  executed  written  contract  and   related
documents,  respectively,   in  the  Philippine  Government  Electronic  Procurement  System
(PhilGEPS) and the website of the implementing office, agency or instrumentalfty.
Section 19. Subm/.ss/.on and Recei.pf of B/.ds. -Bids shall have two (2) components, namely
the technical and financial components which shall be submitted simultaneously. The bids
shall be submitted to the PBAC on the date, time and place specified in the invitation to bid.
Late bids or those bids submitted after the deadline regardless of the cause or reason thereof
shall not be accepted. No request for reconsideration of the nan-acceptance of bids submitted
late shall be allowed. Instead the bidder shall be required to explain its late submission and
why it should be sanctioned administratively.
Section 20.   Lone Bi.doer. - Lone bid may be considered for award Of contract provided the
bidders bid price is below the allotted funds for the contract and the bidder satisfies all the
technical, legal and financial requirements provided under existing law, rules and regulations
and the bidding documents.
Sectlon 21.  ftoBi'd Conference. - Pro bidroorference shah be mandatory for bidding Of
contracts involving new construction projects as well as improvement, widening, repair and
maintenance projects costing more than Three Hundred Million  Pesos (P300,000,000) and
with a contract  duration Of at least one year.
Any issue or question raised by the prospective bidders in the pro-bid conference must be
addressed by the PBAC in the said prabid conference furnishing prospecthfe bidders copy Of
the  minutes  of the  pre-bid  conference  and  posting  copies  thereof  in  the  website  of the
procun'ng office or agency.
Section 22. Bfdders ReaponsENfty. - lt is the sole and exclusive nesponsihility Of the bidder
to determine and satisfy himself as to all matters pertaining to the contract to be bid, including
the location and nature of the work, climatic conditions,  nature and condition of the terrain,
geoJogjcal conditions at the site, transportation and communication facilities,  availabjlfty Of
materials, labor, water, electric power, access to the site and other factors that may affect the
cost and duration of the works.
Section 23. Fa/-/ure fo a B/.dder fo Quote a a/.d Pn-ce. - Failure of a bidder to quote in its bid a
bid price in an item or scope of work or deleting an item of work in the bidding documents
whether for infrastructure, consultaney, goods or lease contract shall  mean that the bidder
shall provide or execute the item or scope Of worit for free.
Sediron 2A. Failure to Declare an Ongoing or Completed Contract. - Falifure Of a bidder to
disclose  in  its bid docLlments an ongoing  contract or completed which  is within the actual
knowledge of the office or agency because the office or agency is the implementor of the
contract,  conducting  the  procurement process shall  not disqualfty the  bidder for award  of
contract.
Section 25. Bi.d Seourty. -To guarantee that the bidder which has been awarded the contract
shall  enter into  contract with  the  concerned  office,  agency or instrumentality.  prospective
bidders shall acoompany their bid with a bid seourity either in the form Of cash, surety bond or
any instrLJment issued by a bank in an amount equal to or at least two and a half percent
(2.5%) of the bidder's bid price.
Section 26. Avrard of contract. -The contract shall be awarded to the bidder which submitted
the  lowest  bid  price  and  whose  bid  complies  in  all  aspects with  the    legal,  technical  and


financial  requirements  Of the  contract.  I-.to`^rever,  in  case  Of procurement  for consultancy
contracts, the awarding of contract shall take into primary consideration the technical capability
Of the bidder in terms of qualfty Of personnel, experience and capabilfty of the firm and plan of
approach and mcthodology.
The  ceiling  of  contract  shall   not  exceed  the  amount  appropriated  under  the  General
Appropriations Act.
Section 27. Confracfor fo Sfarf Work af Hi.s Owri Ri.sk. - The bidder shall have the option to
start works on the project on the day following the bidder's receipt and acceptance of the
notice of award without necessarily waiting for the perfection of the contract and notice to
commence work. Prow.bed, said winning bidder shall communicate his intention in writing to
the authorized official of the project implementing agency, office or instrumentality.
Section 28. Perforrr7ance Seourty. - To guarantee the full and faithful performance of the
winning bidders obligations under the contract. the winning bidder shall submit a performance
security in the form and amount prescribed herein:
a.   Surety bond -thirty percent (30%) of the total contract cost;
b.   Cash, manager's check, cashier's check -ten peroent (10%) Of the total contract cost;
and
c.    Bank guarantee -fifteen percent (15%) of the total contract.
The performance bond sliall be callable on demand and shall be valid and effective up to the
issuance of the certificate of acceptance of the  project and shall  likewise answer for any
obligation  of the  bidder/contractor for any monetary claim  Of third  parties arising from the
implementation Of the prQject-
Section 29. Assi.grmenf and Stibconfract7.ng. -The contractor shall not assign , sublet, transfer
or subcontract any por(ion Of the prQject without prior writ(en approval Of the head of the office,
agency or instrumentality implementing the project. Those classified as specialty works may
be  assigned  or subcontracted  to contractors who likewise satisfy the legal,  technical  and
financial requirements Of the portion Of the contract to be subcontracted
Section 30. Aifemaf7.ve Methods. - Subject to the prior approval Of the head of the office or
ageney  or his  duly  authorized  representative,  and  whenever justified  dy  the  conditions
provided in this Act, the office or agency may, in order to promote economy and efficiency,
resort to any Of the following altemative methods of Procurement Of consultaney services and
gcods:
a.   Limited  Source  Bidding,  cthervise  known  as  Selective  Bidding  -  a  rneNhod  Of
procurement that involves direct invitation to bid by the office or ageney from a set of
pre- selected suppliers or consultants, not less than three (3) but not more than five
(5),  with  known  experience and  proven capability relative to the requirements of a
partioul ar contract ;
b.   Direct Contracting, cthervise known as Single Source Procurement ~ a method Of
procurement that does not require elaborate bidding documents because the supplier
is simply asked to submit a price quotation or a proforma invoice together with the
conditions Of sale based on the specification of office or ageney


c.   Rapeat Order-a method Of procuiernent that involves a direct procurement Of goods
from  the  previous  winning  bidder,  whenever  there  is  a  need  to  replenish  goods
prooured under a contract previously awarded through competitive bidding;
d.   Shappi'ng -a method Of procurement whereby the office or ageney simply requests for
the  submission   of  price  quotations  for  readily  available  off-the-shelf  goods  or
ordinary/regular   equipment   to   be   procured   directly   from   suppliers   of   known
qualification.
In all instances, the office or ageney shall ensure that the most advantageous price for the
governrrmt js Chained.
Section 31. Li.mi-fed Sodroe Bi.ddi.ng. - Limited Souroe Bidding may be resorted to only in any
of the following conditions:
a.  Procurement of highly specialized types of goods and consulting services which are
known to be obtainable only from a linfted number Of sources; or
b.  Procurement Of major plant components where jt js deemed advantageous to limit the
bidding to known eligible bidders in order to maintain an optimum and uniform level of
quality and performance of the plant as a whole.
Section 32. Di.reef Confrach.r}g. - Direct Contracting may be resorted to only in any of the
following conditions:
a.  Procurement of goods of proprfetary nature,  which can  be obtained  only from the
proprietary source, i.e. when patents, trade seorets and copyrights prohibit others from
manufacturing the same item;
b.  When the procurement of critical components from a specific manufacture+, supplier
or distributor is  a  condition  precedent to  hold  a  contractor to guarantee  its  project
performance, jn acoordance with the provisions Of his contract; or,
c.  Those sold by an exclusive dealer or manufacturer, which does not have sub- dealers
selling at lower prices and for which no suitable substitute can be obtained at more
advantageous terms to the government.
Section 33. Repeat Order. -Wtien provided for in the annual pmeurement plan, Repeat Chder
may  be  allowed  wherein  the  office  or agency  directly  procures  goods  from  the  previous
winning bidder whenever there arises a need to replenish goods procured under a contract
previously  awarded  through   competitive  bidding,   subject  to  postiualification   process
prescribed in the bidding documents and provided all the following conditions are present:
a.  The unit price must be equal to or lower than that provided in the original contract; and
b.  The repeat order does not result in splitting Of requisitions or purohase orders;
Sectlon 34. SAappi.ng. - Shopping may be resorfed to under any Of the following instances:
a.  When there is an  unforeseen contingeney requiring immediate purchase:  Provided,
however,   That  the   amount   shall   not   exceed   Five   Hundred   Thousand   Pesos
(P500,000.00); Or
b.  Procurement of ordinary or regular office supplies and equipment not available in the
procurement   service   involving   an   amount   not   exceeding   One   Million   Pesos


(P1,000,000.00): Provided, however, That the procurement does nct result in splitting
of contracts: Provided, further, That at least three (3) price quotations from bona fide
suppliers shall be obtained.
S®ctl®n 35. Negotiated Procurement for lnfrasrfucture Contracts. - Negohiiated Procurement
for infrastructure contracts shall be allowed only in the following instances:
a.  Jn cases of two failed biddings;
b.  In case of imminent danger to life or property during a state Of calamfty, or when time
is of tlie essence an.sing from natural or man-made calamilles or other causes where
immediate action is necessary to prevent damage to or loss of life or property, or to
restore vital public services, inhastructure facilities and other public utilities;
c.  Takei}ver of contracts, which llave been rescinded or terminated for causes provided
for in the contract and existing laws, where immediate action is necessary to prevent
damage to or loss of life or property, or to restore vital public services, infrastructure
facilities and other pubife uffities;
d.  Where the  subject contract  is  adjacent or contiguous to  an  oni7oing  infrastructure
project.  ProiAided,  hov`rever,  That the original contact is the result Of a competitive
bidding; the subject contract to be negotiated has similar or related scopes of work; it
is within the contractjng capacfty of the contractor; the contractor uses the same prices
or lower unit prices  as  in  the original  contract less  mobi«zation cost;  the  amount
involved does not exceed the amount of the ongoing project; and, the contractor has
no negative slippage.
Section 36. Reaponsr.bftyofthe Conzracfor. - The contractor shall be fully responsible for the
entire works under the contract until the final acceptance of the project for any defect arising
from the use of inferior or substandard construction materials or failure to comply with the
technical specifications for any of the item or scope of word( under the contract
Except likewise for force  majeur,  the contractor shall  be fully responsible  for  the  safety,
protection, security, and convenience Of his personnel as well as the general public including
the works, tcols and equipment which are brought to the project site and ncoessary for the
implementation Of the works under the contract.
Section  st.  Insurance  of  the  Works  Against  all   Risks.  -  The  coritractor,  prior  to
commencement of the works which shall be turned over to the government after completion,
shall insure or cause to be insured in the name Of the contractor and the project owner against
all perils or risks which are allowed under existing laws to be insured against said risk in such
amount as to afford  protection to the contractor and the project arising from any loss or
damage from the risks insured against.
Section 38. Advance Pa)wr7enf, - As and by way of financial assistance to the contractor, the
contractor shall be entitled to an advance payment not exceeding fifteen percent (15%) Of the
total contract cost to be used by the contractor for the implementatien of the contracted works
upon  perfedion  Of the contract and submission Of the relevant security to answer for trie
recoupment Of the said amount in case Of default or breach  of the  contractor.  Should  the
contractor use the said advance payment for any pufpose other than that which is related to or
connected with ttie project implementation, such diversion in use sha« subject the contractor
for the Crime of Estafa (swindling) as defined and penalized under the Revised Penal Code,
Section 39. Change Order and Erdra Work Order. -To afford the project implementing office,
agency or instnJmentalfty sufficient elbow room to address any defect, deficiency or error in


the pr¢ect detailed engineering design which are not due to the fault or negligence Of the
designer, the implementing office, agency or instrumentalfty of a government infrastructure
project shall issue any amendment to the contract as bid out in the form Of a change order or
e>de work order as they are commonly practiced and understood in the construction industry.
Section 40. /nspectfon of the Contract lvowhs. -To ensure that the contracted works are being
done in strict, full and faithful compl.lance to the project plans and specifications, the concerned
officials of the project implementing office, agency or insthJmentalfty shall create a team of
technical   personnel  of  proven  competence  and  integrity,  with  representative  from  the
Commission  on  Audit  and  a  duly  accredited  noni7ovemmental  organization,  to  conduct
periodic inspection, audit and validation of the works while in progress.
Section 41. Atoffraffon. -Any and all disputes arising from the implementatfon 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 know/n as the "ATbitration Law., Executive Order
No.1008 otherwise known as the "Construction Industry Arbitration Law", and Republic Act
No. 9285 otherwise known as the "Alternative Dispute Resolution Act of 2004."
Section 42.   Additional  Functions Of the  Department Of Budget and  Management  (DBM)
Secretary. - The Government Procurement Poliey Board (GPPB) and its Technical Support
Office (TSO) are hereby abolished.
In addition to the mandate of the Secretary of Budget and Management, all affected functions,
duties and responsibilities Of the GPPB are hereby transfened to the DBM Secretary:
a.   protect natfomal interest in all maifers affecting procurement, having due regard to the
country's regional and intemational obligations;
b.   prepare   a   generic   procurement   manual   and   the   standard   bidding   foms   for
prcrmemeul;
c.    ensure  that  heads  of  office,  agency  or  institution  regularly  conduct  procurement
training programs; and
d.   conduct an annual review of the effectiveness of this Act and recommend to the rRR
Committee any amendments as may be necessary
Section 43. Ang Bagong Pffl'pi.nas frocdremeut B(/reau. - Ang Bagong Pftipinas Procurement
Bureau  (ABPPB) is  hereby established and created  under the  Department Of Budget and
Management (DBM), and under the direct supervision and control of the DBM Secretary.
The ABPPB shall assist and  provide support to the Secretary Of Budget and  Management
including:
a.   recommendation of research-based procurement policies, rules and regulations, and
modification, whenever necessary, the IRR;
b.   development and updating generic procurement manuals and standard bidding forms;
c.    management, conduct and evaluation Of procurement training programs; and
d.   Seoretariat support.
The ofricials and employees of the GPPB shall be absorbed by the ABPPB under the DBM
with  equal  rank,  pay  grade,  without  loss  of  seniority  rights  and  same  entitlements  and
privileges.


TheABPPBmayproposeamendmentstothelRRthn+theDBMSecretarypursuanttoSection
47 of this Act.
Prow.ded, That any recommendation by the ABfapB, upon approval the Secretary of Budget
and  Management,  may cause the Committee on the  lRR to reconvene and consider such
amendments.
Sect!tom &4. Offenses and Penalties. -
a.   Without prejudice to the provisions of Republic Act No. 3019, otherwise known as the
"AntiGraft and Comipt Pradices Act" and other penal Jaws, 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:
1.   Open any sealed bid including but not limited to bids that may have been
submitted through the electronic system and any and all documents required
to be sealed or divulging their contents, prior to the appointed time for the public
opening Of bids or other documents.
2.    Delaying, withoutjustifiable cause, the screening for eligibility, opening of bids,
evaluation and post evaluation Of bids, and awarding of contracts beyond the
prescribed periods Of action under this Act.
3.   Unduly influencing or exerting undue pressure on any member of the PBAC or
any officer or employee of the office or ageney to take a particular action which
favors, or tends to favor a particular bidder.
4.   Splitting of contracts which exceed procedural purchase limits and competitive
bidding.
When any of the foregoing acts is done in collusion with private individuals, the private
individuals shall likewise be liable for the offense.
In addition,   the private individual shall  be permanentry disqualified from transacting
business with the government.
b.   Private indMduals who commit any Of the following acts, including any public ofheer,
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 fit(een (15) years:
1 .   When t\ro or more bidders agree and submit different bids as if they \hrere bona
fide, when they knew that one or more of them was so much higher than the
other that it could not be honestly accepted and that the contract will surely be
awarded to the prle+arranged lowrest bid.
2.   When   a   bidder   submits   different   bids   through   two   or   more   persons,
corporations, partnerships or any other btisiness entfty ifi whieh he has interest
to create the appearance of competition that does not in fact exist so as to be
adjudged as the winning bidder .
3.   Vvhen two or more bidders enter into an agreement which call upon one to
refrain from bidding for procurement contracts, or which call for withdrawal of
bids already submitted, or which are otherwise intended to secure an undue
advantage to any one of them.


4.   When a bidder, by himself or in connivance with others, employ schemes which
tend to restrain the natural rivalry Of the parties or operates to stifle or suppress
competition and thus produce a result disadvantageous to the public.
In   addition,   the   persons   involved   shall   also   suffer   the   penalty   of   perpetual
disqualification  from  public  office  and  be  permanently disqualified  from  transacting
business with the government.
c.    Private  individuals  who  commit  any  Of  the  following  acts,  and  any  public  officer
conspiring 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:
1.   Submit erigibflity requirements of whatever kind and nature that contain false
information or falsified documents caloulated to influence the outcome of the
eligibility  soreening  process  or conceal  such  information  in  the  eligibility
requirements
2.   Participate in a public bidding using the name of another or allow another to
use one's name for the purpose of partieipating in a pubtie bidding.
3.   Withdraw  a  bid,  after  it  shall  have  qualified  as  the  lowest  calculated
bid/highest rated bid, or refuse to accept an award, without just cause or for
the purpose of forcing the office or ageney to award the contract to another
bidder. this shall include the non-submission within the prescribed time of
the requirements or contract execution.
d.   When the bidder is a juridical entity, criminal liabilfty and the accessory penalties shall
be imposed on  its directors,  officers or employees who actually commit any of the
foregoing acts.
Section q5. Imposition Of Administrative Penalties. -
a.  The  administrative  penalty  of  suspension  for  one  (1)  year  for  the  first  offense,
suspens.lou of two (2) years for the second offense, and perpetual suspension for the
third offense from participating in the public bidding process for the following violations,
shall be imposed by the head of ageney, as recommended by PBAC:
1.     Submission   of  eligibilfty   requirements  containing   false   information   or
falsified documents,
2.    Submission of bids that Contain false information or falsified documents, or
the concealment Of such information in the bids in order to influence the
outcome of eligibilfty screening or any other stage of the public bidding.
3.    AIlowing the use ofone's name, or using the name ofanotherfor purposes
of public bidding.
4.    Wthdrawal Of a bid, or refusal to accept an award, or enter into contract
with the government without justifiable cause, after he had been adjudged
as having submitted the lowest caloulated responsive bid or highest rated
responsive bid .
5.     Refusal  or failure  to  post the  required  performance  security  within  the
presoribed time.


6.    Termination of the Contract due to the default of the bidder.
Any documented unsolicited attempt by a bidder to unduly influence the outcome of
the hidding in his favor.
b.  In addition to the penalty of suspension, the bid security or the performance security
posted by the concerned bidder or prospective bidder shall also be forfeited.
Section 46. Overs/.ghf Comm/.#ee. - A Joint Congressional Oversight Committee is hereby
created to oversee the implementation of this Act. The Committee shall be composed of the
Chairperson of the Senate Committee on Finance and two members thereof appointed by the
Senate President, and the Chairperson of the House Committee on Appropriations, and two
members thereof to be appointed by the Speaker of the House of Representatives.
Sechion 4] . Implementing Rules and Regulations. -A comThi"ee composed Of the Searefany
of  the   Department  of  Public  Works  and   Hishways  as  Chairman,   the  Secretary  of
Transportation, Secretary of Interior and Local Government, Seoretary of Finance, Secretary
of Budget and Management, Seoretary of Housing and Urban Development, and Secretary
of Energy as members is hereby created to issue and promulgate the rules and regulations
of this of this Act, proforma bidding documents and conditions of contract for infrastnlcture,
consultancy and goods within sixty (60) days from effec(ivfty of this Act.
Prov7.bed, That said Committee may reconvene to amend the tRR as the need arises.
Section 48.  77ansffory Provi/s/.on. -  Pending  promulgation of the  implementing  rules  and
regulations Of this Act and the Bidding Documents for Procurement Of IThastructure Projects,
all  procurement Of government infrastructure,  goods and  consultaney contracts and  their
implementation shall continue to be governed by Republic Act No. 9184 and its [mplementing
Rules  and  Regulatons,  its  Annexes  and  Appendices  as  \Arell  as  the  Phjtippine Bidding
Documents for ProcLlrement of Contract for lnhastructure Projects, Consultancy and goods.
Section 49. Repealfng C/ause. -Republic Ac( No. 9184, including its fmplementing Rules and
Regulations, is hereby repealed.
Section  50.  Separab/.utfty CJause.  -  lf,  for any reason,  any  part or provision  of this Act is
declared  invalid  or unconstitutional,  the remaining  parts or provisions  not affected  thereby
shall remain in full forice and effect.
Section 51. Effect.w.fy. -This Act shall take effect fifteen (15) days after its publication in the
Official Gazette or in any newspaper Of general ciroulation.
Approved,