NPM 094-2004

Requesting Entity: Manila International Airport Authority

Issues Concern: Contracts for Telecommunications Services



1. Whether or not Republic Act 9184 (R.A. 9184) and its Implementing Rules and Regulations Part A (IRR-A) cover procurement of service contracts for utilities, particularly those that are related to telecommunications services covered by subscription and service agreements.

It should be noted that the term “Goods” as defined in Section 5(k) of the IRR-A of R.A. 9184 includes general support services which may be needed in the transaction of public businesses or in the pursuit of any government undertaking. As such, contracts for telecommunications services aptly falls within the term “Goods,” and should therefore be procured following the rules for the procurement of goods under the IRR-A.

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In this regard, it is our opinion that service contracts for utilities such as telephone lines, cellular phones, internet connection, and two-way radio communications should be procured by the MIAA through public bidding in accordance with the provisions for the procurement of goods provided under R.A. 9184 and its IRR-A.

2. Whether or not service contracts for utilities may be renewed by the head of the agency considering that no other service provider can supply such requirements.

Upon the expiration of the service contracts for utilities, the head of the procuring entity cannot categorically renew the contracts; rather, the MIAA should conduct a public bidding for the contracts. This is buttressed by the rule that all procurement should be made through public bidding. However, if justified, such as when only few service providers of highly specialized type of goods or major plant components are known to be available, procurement may be done through Limited Source Bidding under Section 49 of R.A. 9184 and its IRR-A.

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Prudence dictates that service contracts be bid out prior to its expiration taking into consideration the duration of the bidding process as provided under R.A. 9184 and its IRR-A. In the event that the service contracts expire before an award is made, we are of the opinion that only then may the head of the procuring entity extend the services of its incumbent service provider on a periodic basis until such time that an award is made.