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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Under Section 89 of the New Government Procurement Act, all bid prices shall be considered as fixed prices, and therefore not subject to price escalation during contract implementation. In the event of an extraordinary increase in prices of specific components of the Infrastructure Project, price escalation may be considered, subject to prior approval of the Government Procurement Policy Board (GPPB). If the cost of construction components increases by more than ten percent (10%) of the unit price of work items, as determined against the prevailing price indices of the Philippine Statistics Authority (PSA), a price escalation may be authorized at a no loss, no-gain basis, using the appropriate formula prescribed by the GPPB. The PSA shall ensure that its price indices are region specific and updated on a monthly basis.
Warranty
- For the procurement of Goods, in order to assure that manufacturing defects shall be corrected by the supplier, manufacturer, or distributor, as the case may be, for a specific time after performance of the contract, a warranty shall be required from the contract awardee for such period of time as may be provided in the Implementing Rules and Regulations (IRR), the obligation for which shall be covered by either retention money in the amount equivalent to a percentage of every progress payment, or a special bank guarantee equivalent to a percentage of the total contract price, to be provided in the IRR. The said amounts shall only be released after the lapse of the warranty period: Provided, That the Goods supplied are free from defects and all the conditions imposed under the contract have been fully met.
- 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 of works except those occasioned by force majeure. The contractors shall be fully responsible for the safety, protection, security, and convenience of its personnel, third parties, and the public at large, as well as the works, equipment, installation and the like to be affected by its construction work and shall be required to put up a warranty 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 its own expense, of any defect or damage to the Infrastructure Projects on account of the use of materials of inferior quality, defects in the construction, or due to any violation of the terms of contract within ninety (90) calendar days from the time the Head of Procuring Entity (HoPE) has issued an order to undertake repair. In case of failure or refusal to comply with this mandate, the government shall undertake such repair works and shall be entitled to full reimbursement of expense incurred therein upon demand.
Administrative Sanctions
Without prejudice to the criminal and civil liabilities under Republic Act No. 3019, otherwise as the “Anti-Graft and Corrupt Practices Act” and other penal laws, any public officer found to have been committed any of the following acts shall be administratively liable with all the necessary penalties for government employees even if no criminal prosecution is instituted against him:
- Opening any sealed bid including, but not limited to, bids that may have been submitted through the electronic system and any all documents required to be sealed or divulging their contents to any prospective bidder, person, or any party having direct or indirect in the project to be procured, prior to the appointed time for the public opening of bids or other documents;
- Delaying, without justifiable cause, the screening for eligibility, opening of bids, evaluation and post evaluation and post evaluation of bids, and awarding of contracts beyond the prescribed periods of action provided for in the IRR;
- Unduly influencing or exerting undue pressure on any member of the BAC or any officer or employee of the Procuring Entity to take a particular bidder, or allowing oneself to be unduly influenced or pressured;
- Splitting of contracts which exceed procedural purchase limits and competitive bidding;
- Abusing the exercise of the power of the HoPE or his or duly authorized representative to reject any and all bids with manifest preference to any bidder;
- Simulating procurement eligibility requirements or strategic procurement planning activities; or
- All other acts or omissions with the intention of not complying with the mandatory provisions of this Act.
Jurisdiction
Jurisdiction over the offenses defined under this Article shall belong to the appropriate courts, according to laws existing at the time of the commission of the offenses.
Notwithstanding Article 22 of the Revised Penal Code or any law to the contrary, the administrative, civil, and/or criminal liability of any person, corporation, or any other entity for any person, corporation, or any other entity for any unlawful act committed prior to the effectivity of this Act shall not diminished, modified, or affected in any way by its enactment.
Preventive Suspension
The head of agency may preventively suspend any member of the Technical Working Group (TWG) or the Secretariat, or the Bids and Awards Committee (BAC), and other officials and employees involved if there are strong reason or prima facie evidence showing that the officials or employees concerned are found liable of the charges filed against them under this Act or for dishonesty as defined by civil service laws. In all cases, procedural and substantive due process as mandated by the Constitution and civil service laws, rules and regulations shall be strictly observed.
Lifting of Suspension and Removal of Administrative Disabilities
Lifting of preventive suspension pending administrative investigation, as well as removal of administrative penalties and disabilities shall be in accordance with the provisions of Section 52 and 53, Chapter 7, Book V of E.O. No. 292, otherwise known as the “Administrative Code of 1987.”
Civil Liability in Case of Conviction
Without prejudice to administrative sanctions that may be imposed in proper case, a conviction under R.A. No. 3019 and other penal shall carry with its civil liability, which may either consist of restitution for the damage done, or forfeiture in favor of the government of any unwanted benefit derived from the act or acts in question, or both, at the discretion of the courts.
Liquidated Damages
All contracts executed in accordance with this Act shall contain a provision on liquidated which shall be payable in case of breach thereof. The amount thereof shall be specified in the IRR.
Related Articles:
- Key Takeaways from the New Government Procurement Act (Part XI)
- Key Takeaways from the New Government Procurement Act (Part XII)
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
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