NPM 027-2014

Requesting Entity: 911 Alarm Inc.

Issues Concern: Factor "K" in the NFCC Computation



Whether the factor "K" in the NFCC Computation refers to the duration of the contract to be bid or the duration of on-going contracts.

We have clarified this matter in NPM No. 96-2012 dated 8 August 2012, to wit:

"Section 23(a)(vi) of the revised IRR of RA 9184 was lifted from Sections 16.2.1 and 16.2.2 of the IRR of Executive Order (EO) 40 , the executive issuance predecessor of RA 9184. As clarified in Policy Matter No. 002-2002 , the value of "K" mentioned in Sections 16.2.1 and 16.2.2 of the IRR of EO 40 shall be based on the duration of the contract under consideration, or the would be contract subject of the bidding opportunity. Relative to the issue at hand, the same interpretation may be adopted for the present formula under Section 23(a)(vi) of the revised IRR, particularly in determining the value of "K", i.e., the "contract duration" of the contract subject of the public bidding."