NPM 108-2014

Requesting Entity: JROG Marketing (JROG)

Issues Concern: Warranty Security for the Procurement of Goods



Whether winning bidders, in the procurement of goods, may use surety bonds as a warranty security.

Section 62 of Republic Act (RA) 9184 and its revised Implementing Rules and Regulations (IRR) clearly state that there are only two (2) types of warranty securities allowed for the procurement of goods. The obligation for the warranty shall be covered by either retention money in an amount equivalent to at least ten percent (10%) of every progress payment, or a Special Bank Guarantee equivalent to at least ten percent (10%) of the total contract price. Thus, under the present state of the rules, we are confined with the requirements provided for under the procurement law and its associated rules.