Administrative Code of 1987/Book IV/Chapter 13

by Corazon Aquino

Layout 2

Chapter 13—Contracts

Sec. 57. Conveyances and Contracts to which the Government is a Party.—Any deed, instrument or contract conveying the title to real estate or to any other property the value of which does not exceed fifty million pesos (₱50,000,000) awarded through public bidding, and five million pesos (₱5,000,000) awarded through negotiation, shall be executed and signed by the respective Secretary on behalf of the Government of the Philippines. Where the value of the property exceeds the aforesaid ceilings, such deed, instrument or contract shall be executed and signed by the President of the Philippines on behalf of the Government.

Sec. 58. Ceiling for Infrastructure Contracts.—The following shall be the ceilings for all civil works, construction and other contracts for infrastructure projects, including supply contracts for said projects, awarded through public bidding or through negotiation, which may be approved by the Secretaries of Public Works and Highways, Transportation and Communications, Local Government with respect to Rural Road Improvement Project, and governing boards of government-owned or controlled corporations:

	Awarded through Public Bidding	Awarded through Negotiation
a. Secretary of Public Works and Highways	₱100 Mil.	₱10 Mil.
b. Secretary of Transportation and Communications	100 Mil.	10 Mil.
c. Secretary of Local Government with respect to the Rural Road Improvement Project	100 Mil.	2 Mil.
d. Governing Boards of Infrastructure Corporations (National Power Corporation, National Irrigation Administration, Metropolitan Waterworks and Sewage System, National Housing Authority, Philippine Port Authority, National Electrification Administration, Export Processing Zone Authority, Philippine National Railways, Local Water Utilities Administration, Light Rail Transit Authority and Philippine National Oil Company)	100 Mil.	2 Mil.
e. Governing Boards of Non-Infrastructure Corporations	7.5 Mil.	1 Mil.

Save as provided for above, the approval ceilings assigned to the departments/agencies involved in human infrastructure and construction projects shall remain at the levels provided in existing laws, rules and regulations.

Sec. 59. Contracts for Approval by the President.—Contracts for infrastructure projects, including contracts for the supply of materials and equipment to be used in said projects, which involve amounts above the ceilings provided in the preceding section shall be approved by the President: Provided, That the President may, when conditions so warrant, and upon recommendation of the National Economic and Development Authority, revise the aforesaid ceilings of approving authority.

Sec. 60. Approval of Consultancy Contracts.—All purely consultancy contracts relating to infrastructure projects, regardless of amount, shall be approved by the Secretaries concerned, in accordance with the Guidelines on the Hiring of Consultants to be promulgated by the National Economic and Development Authority: Provided, That the National Economic and Development Authority shall be furnished by the departments, agencies or government corporations concerned, copies of all consultancy contracts entered into by them involving an amount in excess of ₱1 million for monitoring purposes.

Sec. 61. Delegation of Authority to Governing Boards of Government Corporations.—The Secretaries are authorized to delegate to the governing boards of government-owned or controlled corporations which are attached to or are under the administrative supervision of their respective departments, the authority to approve contracts for infrastructure projects entered into by said corporations involving amounts which are beyond the ceiling provided for government corporations under Section 57 hereof but which are within the approving authority of the Secretaries under the said Section. In the case of government corporations which are attached to or under the Office of the President, the delegation shall be made by the Executive Secretary.

Sec. 62. Public Bidding of Contracts; Exceptions.—As a general rule, contracts for infrastructure projects shall be awarded after open public bidding to bidders who submit the lowest responsive evaluated bids. Open Public Bidding shall be conducted among prequalified contractors in accordance with laws, rules and regulations not inconsistent with the provisions of this Chapter. The award of such contracts through negotiation shall only be allowed by the Secretary or Governing Board of the Corporation concerned within the limits as stated in Section 57 hereof in the following cases:

a. In times of emergencies arising from natural calamities where immediate action is necessary to prevent imminent loss of life or property, in which case, direct negotiation or simplified bidding may be undertaken;

b. Failure to award the contract after competitive public bidding for valid cause or causes, in which case, simplified bidding may be undertaken; and

c. Where the construction project covered by the contract is adjacent or contiguous to an on-going project and it could be economically prosecuted by the same contractor, in which case, direct negotiation may be undertaken with the said contractor at the same unit prices and contract conditions, less mobilization costs, provided that he has no negative slippage and has demonstrated a satisfactory performance. Otherwise, the contract shall be awarded through public bidding.

Sec. 63. Contracts for Community Employment and Development Program Projects.—Contracts covering projects under the Community Employment and Development Program of the government shall be awarded through open public bidding: Provided, That the invitation to bid for the said projects shall be advertised at least once within one week in a newspaper of local circulation within the province where the project is situated, through posting of notices in the premises of the municipal/provincial office, and through other forms of media, such as radio and television: Provided, further, That the deadline for submission of bids for projects costing not more than ₱1 million each may be shortened to one week after the date of such invitation, posting of notices or advertisement through other forms of media.

Sec. 64. Constitution of the Prequalification, Bids, and Awards Committee.—Each department, office or agency shall have in its head office or in its implementing offices a Prequalification, Bids and Awards Committee which shall be responsible for the conduct of prequalification of contractors, biddings, evaluation of bids and recommending awards of contracts. Each Prequalification, Bids and Awards Committee shall be composed of the following:

a. A Chairman (regular) who should at least be a third ranking official of the department/agency/implementing Office;

b. An Executive Officer and Secretary (regular) who is a Legal Officer of the department/office/implementing office;

c. A Technical Member (regular) to be designated by the Secretary or the head of the office/agency/implementing office;

d. Two members (provisional) with experience in the type of project to be bidded and in project management, duly designated by the Secretary or the head of the office/implementing office on a project-to-project basis; and

e. A representative from at least one of the following organizations who shall be a non-voting member:

1. Philippine Institute of Civil Engineers
2. Philippine Contractors Association
3. National Confederation of Contractors Associations of the Philippines, Inc.
4. Philippine Institute of Certified Public Accountants

The representation in the Prequalification, Bids and Awards Committee of the above-mentioned private organizations shall be made as follows:

1. During the prequalification stage, the representative to be invited shall come from the Philippine Institute of Certified Public Accountants; and
2. In the bidding, bid evaluation and award stages, a representative each from the Philippine Institute of Certified Public Accountants and from the Philippine Contractors Association or the National Confederation of Contractors Associations of the Philippines, Inc. shall be invited as non-voting members of the Prequalification, Bids and Awards Committee without prejudice to inviting another representative/s from any of the other organizations mentioned above.

Sec. 65. Approval of other types of Government Contracts.—All other types of government contracts which are not within the coverage of this Chapter shall, in the absence of a special provision, be executed with the approval of the Secretary or by the head of the bureau or office having control of the appropriation against which the contract would create a charge. Such contracts shall be processed and approved in accordance with existing laws, rules and regulations.