NPM 112-2013

Requesting Entity: Philippine International Trading Corporation (PITC)

Issues Concern: Negotiated Procurement (Adjacent or Contiguous)



1. Clarification on the condition that “the contractor uses the same prices or lower unit prices as in the original contract less mobilization cost” in using Negotiated Procurement (Adjacent or Contiguous) under Section 53.4 (d) of the revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184.

Section 53.4 (d) should be read with Section 53.4 (b) of the IRR of RA 9184, which requires that the projects should have similar or related scopes of work. Based on these provisions, the condition that the same or lower unit prices shall be used as in the original contract applies only to the scopes of work that are present in both projects, and should not be interpreted as a qualification that only adjacent or contiguous projects that have the exact same scopes of work shall be acceptable. Therefore, Section 53.4 (d) must be complied with insofar as the same scopes of work of the ongoing and adjacent/contiguous projects are concerned. It follows then that if there is no similar scope of work between the two projects, compliance with such condition is not necessary. The procuring entity, however, should ensure that the unit prices are lower than or equal to the prevailing market prices.

2. Whether it is necessary for PITC to get a formal offer for the new lot from the contractor.

Although the rules are silent as to the submission by the contractor of a formal offer for the adjacent/contiguous project, it is imperative that the original contractor submits an offer that is acceptable to the procuring entity as compliant with the terms and conditions the latter has adopted for the adjacent/contiguous project, in order to establish the basis for the new contract.