NPM 005-2014

Requesting Entity: Home Development Mutual Fund (HDMF) PAG-IBIG FUND

Issues Concern: Extension and Amendment of Contracts



Whether the contract for additional guards procured through Small Value Procurement (SVP) may be extended on a monthly basis until the approval of the 2014 budget. If not, what would be the proper recourse considering that the presence of the guards is vital to the operations of HDMF?

Pursuant to the Revised Guidelines on the Extension of Contracts for General Support Services (Guidelines), the Head of the Procuring Entity (HOPE) of HDMF may extend the duration or effectivity of its ongoing security services contract about to expire, provided it complies with the conditions enumerated. The Guidelines do not require that the original contract to be extended was awarded as a result of competitive bidding. The only requirement under Section 4.2 is that the original contract was awarded in accordance with the provisions of R.A. 9184 and its IRR. Hence, the procurement of security services through Small Value Procurement may be extended subject to the other conditions provided in the Guidelines.

Whether HDMF is allowed to amend the existing multi-year contract for security services so that it would not have to conduct a public bidding in case the approved budget for 2014 would be sufficient to cover the costs of the additional guards for the two newly opened offices. If so, what are the requirements to effect the same?

[A]s a general rule, bid prices for a duration of three (3) years shall be fixed and shall not be adjusted during contract implementation. One of the exceptions is when there is a need for an increase in the number of the security guards as in this case. The necessary adjustment in the bid price to accommodate the said increase may be made, provided that the resulting cost does not exceed the ABC for the relevant year.