Spe:
the Bocictacp

SEVENTEENTH CONGRESS OF THE REPUBLIC)
OF THE PHILIPPINES )
)

Third Regular Session 18 AUG 14 P3334

Introduced by Senator Maria Lourdes Nancy S. Binay

AN ACT
PRESCRIBING THE RULES AND PROCEDURES FOR THE LEASE OF
GOVERNMENT ASSETS, AND FOR OTHER PURPOSES

EXPLANATORY NOTE

Republic Act No. 9184, otherwise known as the "Government Procurement
Reform Act”, was enacted to govern procurement activities of the government in
order to promote the ideals of good governance, with a view to transparency,
competitiveness, streamlining, accountability and public monitoring in the
procurement process.

The Government Procurement Reform Act specifically governs procurement
activities of the government activities not contemplated within the definition of
the law. The law does not contemplate lease of government assets. Section 4 of
the Government Procurement Reform Act is clear in its scope and application,
which states that:

“Section 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." Xxx



Section 5 of the Implementing Rules and Regulations Part A (IRR-A) of the
Government Procurement Reform Act defines procurement as follows:

“Procurement refers to the acquisition of Goods, consulting Services,
and the contracting of Infrastructure Projects by the Procuring Entity.
Procurement shall also include the lease of goods and real estate. With
respect to real property, its procurement shall be governed by the
provisions of Republic Act 8974, entitled “An Act to Facilitate the
Acquisition of Right-of-Way Site or Location for National Government
Infrastructure Projects and for Other Purposes,” and other applicable
laws, rules, and regulations.”

Lease of assets, where the government is the vendor or lessor, are income-
generating activities and is well beyond the ambit of the Government
Procurement Act. Thus, in view of the peculiar nature of government contracts,
involving lease of government owned properties, it has been opined by the
Government Procurement Policy Board that such transactions are governed by
Executive Order No. 301, entitled “Decentralizing Action on Government
Negotiated Contracts, lease Contracts and Records Disposal.”

Executive Order No. 301 however only provides which agencies have jurisdiction
over lease contracts, but is unclear in the procedure that should be followed by

government entities in entering into such transactions.

The proposed bill seeks to clarify the rules of procedure in entering into lease
arrangements of government assets, with a view in encouraging legitimate
commercial transactions that will promote the ideals of good governance.



In view of the foregoing, the passage of this bill is earnestly recommended

MARIA LOURDES they S. BINAY

Senator



SEVENTEENTH CONGRESS OF THE REPUBLIC )
OF THE PHILIPPINES
Third Regular Session

18 AUG 14 P3:34

SENATE

s.B.NO._ 1931 ee Le
U

Introduced by Senator Maria Lourdes Nancy S. Binay

AN ACT
PRESCRIBING THE RULES AND PROCEDURES FOR THE LEASE OF
GOVERNMENT ASSETS, AND FOR OTHER PURPOSES

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

1 Section 1. Title. - This Act shall be known as “Lease of Government
2 Assets Act of 2018."

Sec. 2. Declaration of Policy. - The disposition of government assets must
be simplified in order that all branches, departments, agencies, subdivisions, and

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6 instrumentalities of the government, including government-owned and controlled
7 corporations, and local government units are guided by a mechanism that would
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ensure proper disposition of government assets.

10 Sec. 3. Definition of Terms. - As used in this Act, the term:

rT

12 a) “Government agency” shall refer to various units of the national
13 and local government, including a department, office, bureau,
4 instrumentality, government-owned and/or controlled corporation
15 or its subsidiary, state or college university; and

16 b) “Asset” shall mean any real or personal property, whether tangible
17 or intangible, which shall include lands, buildings and building

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Sec. 4. Jurisdiction over Lease Contracts. - The heads of the Government
agency intending to lease out government-owned assets for use by a private
individual, corporation, association or any other juridical entity shall have the
authority to determine the reasonableness of the terms of the lease and the
rental rates.

Sec. 5. Guidelines for Lease Contracts. - Consistent with existing laws, the
Department of Public Works and Highways (DPWH) shall formulate uniform
standards or guidelines for determining the reasonableness of the terms of lease
contracts and of the rental rates of the lease of Government assets for use by
private individual, corporation, association, or other juridical entity. The uniform
standards or guidelines shall promote ideals of good governance, and shall adopt

reasonable terms responsive to present commercial conditions.

Sec. 6. Negotiated Contracts. - Contracts, agreements or arrangements
for the lease of Government assets may be entered into by the Government
agency concerned, without need of undergoing open and competitive bidding,

provided that the following are observed:

(a) The contract, agreement, or arrangement shall comply with
uniform standards and guidelines established by the DPWH;
and

(b) The contract, agreement, or arrangement shall be subject to
the audit jurisdiction of the Commission on Audit or its duly
authorized representative in accordance with existing rules

and regulations.



Sec. 7. Exemption. - This Act shall not apply to lease contracts entered
into by the Government with another Government agency, which shall continue
to be governed by existing laws applicable thereto.

Sec. 8. Separability Clause. - If any portion or provision of this Act is
declared void and unconstitutional, the remaining portions or provisions hereof
shall not be affected by such declaration.

Sec. 9. Repealing Clause. - The provisions of Executive Order No. 301
inconsistent herewith are expressly repealed. All other laws, decrees, orders,
rules and regulations, other issuances, or parts thereof inconsistent with the
provisions of this Act are hereby repealed or modified accordingly.

Sec. 10. Effectivity Clause. - This Act shall take effect fifteen (15) days
after its complete publication in at least two (2) national newspapers of general
circulation.

Approved,