NPM 059-2014

Requesting Entity: Municipality of Lantapan

Issues Concern: Sanctions and Remedies for Defaulting Supplier



1. What sanctions or penalties can an Local Government Unit impose to a supplier of goods who failed to deliver all the items indicated in the Purchase Order

In case of default of a supplier in the performance of its contractual obligations, the following may be undertaken: (1) imposition of liquidated damages in the amount equal to one-tenth of one percent (0.1%) of the cost of the unperformed portion for every day of delay; (2) termination of contract based on the grounds and following the procedures stated in the Guidelines on Termination of Contracts; and (3) issuance of blacklisting order and forfeiture of performance security in accordance with the provisions of the Uniform Guidelines on Blacklisting.

2. Whether the contract for the delivery of the remaining or undelivered goods may be awarded to the bidder with the second lowest quotation

The supply and delivery of the remaining goods after the contract has been terminated may be procured through Negotiated Procurement under Take-over of Contracts modality provided that all the conditions and requirements under Section 53.3 of the revised Implementing Rules and Regulations of Republic Act No. 9184 will be observed.