NPM 018-2014

Requesting Entity: Butuan City Water District (BCWD)

Issues Concern: Classification of procurement project; Negotiated Procurement under Section 53.4 of the revised Implementing Rules and Regulations of Republic Act No. 9184 (Adjacent/Contiguous); Warranty



Whether the project for extension/expansion of reservoir tank is classified as goods or infrastructure project.

It is the position of the GPPB-TSO that the nature of a mixed procurement, such as in the case at bar, shall be determined by BCWD as the procuring entity, based on the identified primary purpose of the contract.

Whether Negotiated Procurement under Section 53.4 (Adjacent/Contiguous) of the IRR of RA 9184 may be resorted even though the original contract has already been completed.

Resort to the alternative modality of Negotiated Procurement under Section 53.4 (Adjacent or Contiguous) of the IRR of RA 9184 is subject to the prior approval of the HOPE, upon favorable recommendation of the BAC, provided that the conditions set forth therein are present, one of which is that "the negotiations for the procurement are commenced before the expiry of the original contract"

What other modality of procurement may be resorted in order to ensure that the previous contractor's warranty will not be forfeited by the extension/expansion of the reservoir tank.

The reservoir's warranty by the previous contractor is not automatically nullified by the extension project that may be undertaken by another contractor. The procuring entity shall be entitled to full reimbursement by responsible parties upon demand, without prejudice to the filing of appropriate administrative, civil or criminal charges against responsible persons as well as the forfeiture of warranty securities posted in favor of the procuring entity, due to the faults attributed to improper construction, use of inferior quality/substandard materials, and any violation of the contract plans and specifications.