NPM No. 081-2015

Requesting Entity: Philippine Health Insurance Corporation

Issues Concern: Performance Fee



Whether a government-procured Fund manager may be entitled to a Performance Fee.

[T]he procurement at issue, which is in the nature of consulting services, is subject to the established principle that all consultancy contracts shall be fixed price contracts, and therefore, not subject to price adjustment. The adjustment in the annual management fee in question, which is intended to reward the good performance of the engaged fund manager, is a form of incentive bonus prohibited under Section 42.4 of the IRR of RA 9184. Thus, a provision for performance fee or any form of price adjustment in contracts for consulting services is not allowed.