NPM No. 143-2015

Requesting Entity: Government Service Insurance System (GSIS)

Issues Concern: Contract Approval by Higher Authority



Inquiry on the determination of the higher authority that can approve the contract in case of Government Owned and Controlled Corporations (GOCCs).

[T]he contract approval process embodied in Sections 7 and 8 of Executive Order No. 109, Series of 2002 (EO 109), in so far as GOCCs are concerned, which conjunctively requires approval of the Department Secretary, have been implicitly repealed by RA No. 9184, which grants the governing boards of GOCCs or its duly authorized representative the full authority to approve and sign all contracts. In view of the passage of RA 9184, the governing boards or its duly authorized representative now has full responsibility and accountability for all their contracts, regardless of the amount.

The wordings of RA 9184 and its revised IRR clearly changed the contract approval process for GOCCs such that the intent is to grant the approval of contracts only to the governing board or its duly authorized representative.

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In this regard, while the General Manager or any other official is designated as the HOPE, his authority as such can be limited by the Governing Board, in which case, any procurement above and beyond the limit imposed must be endorsed to the higher authority, which under Section 37.3 is the Governing Board or its duly authorized representative, for approval.