NPM 130-2004

Requesting Entity: Department of Public Works and Highways

Issues Concern: Procurement for the BIIPs-CO2c, Supply/Installation/Service of Automatic Traffic Classifiers under the First National Roads Improvement and Management Project



Whether or not the Department of Public Works and Highways (DPWH) may pursue with the implementation of the contract for the winning bidder for the Project despite the findings of the DPWH-Legal Service of several irregularities in the bid of the latter.

Section 4 of Republic Act 9184 (R.A. 9184) requires all government procurements to be conducted in accordance with the provisions of R.A. 9184 and its Implementing Rules and Regulations.

Even procurements funded out of loan agreements with International Funding Institutions (IFIs) should follow the provisions of R.A. 9184 and its IRR-A. However, until the availability of the IRR Part B of R.A. 9184, which will govern foreign-funded procurement activities, projects financed by IFIs will be procured using the guidelines specified in the loan agreement. Accordingly, the determination of and the resolution on the validity or propriety of proceedings, issues, and other matters relative to the implementation of the guidelines for the foreign-funded procurement activity rests upon the IFI concerned.

In this regard, even if the procuring entity and the IFI arrive at conflicting findings, the findings of the latter will be given more weight than that of the procuring entity; and unless the IFI recognizes and adopts the observations or findings of the procuring entity, the latter is constrained to acknowledge the decision of the IFI. Otherwise, the IFI may resolve to cancel the loan proceeds and refuse to fund the project.

In view of the foregoing, since the World Bank upheld the legitimacy of the procurement activity in finding no substantive ground to rescind the award of the contract for the Project to TIS, we are of the opinion that the DPWH may validly pursue the implementation of the said contract despite the findings of the DPWH-Legal Service.