NPM 136-2014

Requesting Entity: TKC Heavy Industries Corporation

Issues Concern: Similar Contracts and Splitting of Contracts



Clarification on the interpretation of what could be considered as similar contract under the revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184.

It is the responsibility of the Procuring Entity (PE) to clarify in the Bidding Documents what projects can be considered similar to the contract being bid out, for purposes of determining compliance with the SLCC requirement. Thus, it is entirely within the discretion of the PE whether to consider a project as being similar or not similar in nature and complexity to the project being bid out. [A] contract shall be considered "similar" to the contract to be bid if it involves goods or services of the same nature and complexity as the subject matter of the project being procured. This requirement should not be interpreted strictly as to unreasonably limit competition and inequitably bar participation of capable suppliers, manufacturers, distributors and service providers; much more, to constrain PEs in the performance of their constituent and ministrant functions. Hence, similarity of contract should be interpreted liberally in the sense that it should not refer to an exact parallel, but only to an analogous one of similar category.

Clarification on the interpretation the term splitting of contracts under Section 53.1 of the IRR of RA 9184.

[I]t does not follow that once a contract is divided into smaller quantities or phases, there is splitting of contract. In order to determine whether the division of the procurement project into two (2) packages amounts to splitting of contract, it must be clearly shown that the act must have been done for the purpose of circumventing or evading legal and procedural requirements, i.e., there should be a determination that, despite resorting to public bidding for both packages, the division into two (2) packages was done to circumvent or evade the legal and procedural requirements under RA 9184 and its IRR.