Requesting Entity: Office of the ACoFAS for Logistics, A-4

Issues Concern: Contract Delivery Extension

Details

Clarification on the following:

1) May the procuring entity grant several extensions in the delivery of goods upon determination that the grounds cited by the supplier are meritorious?

The procuring entity may grant several extensions in the delivery period as long as these extensions are based on meritorious grounds.

2) If yes, what is the maximum period for every extension?

Based on the relevant provisions of the Generic Procurement Manual, each extension should not exceed the initial delivery period as stated in the original contract (Please see Volume 2, page 108). It bears stressing, however, that in every grant of extension, the procuring entity must validate the reasons cited by the supplier and determine that extension is based on meritorious grounds.

3) When will the computation of liquidated damages commence if several extensions were granted?

If several extensions were granted, the supplier becomes liable for liquidated damages once it incurs in delay from the last extension approved by the procuring entity.

4) What is the maximum amount of liquidated damages to be collected in case of default by the supplier based on repeated extensions granted?

Under Section 58 of the Implementing Rules and Regulations of Republic Act No. 9184, once the cumulative amount of liquidated damages reaches ten percent (10%) of the contract amount, the procuring entity is mandated to rescind the contract