NPM No. 086-2016
Requesting Entity: Light Rail Transit Authority (LRTA)
Issues Concern: Contract and Purchase Order
Whether a Contract document or a Purchase Order (PO) is necessary after the issuance of a Notice of Award (NOA) for the procurement of the Supply and Delivery of Foreign Goods with a contract amount of PhP 100 Million under the Rehabilitation Project
The receipt by the winning bidder of the NOA is the initial step that leads to the execution of the contract and the issuance of the Notice to Proceed (NTP.) Hence, the issuance of the NOA and its receipt by the winning bidder must be accompanied by the actual execution and signing of the Contract, including the posting of the performance security, among others, for the contract to be perfected and legally enforceable in accordance with Republic Act (RA) No. 9184 and its associated Implementing Rules and Regulations (IRR.)
A PO, by itself, is an offer to buy, and a meeting of minds thereon "takes place when the vendor receive[s] the PO, agree[s] to its terms and act[s] upon it." Thus, a PO will constitute an accepted offer that will give rise to a perfected contract of sale when the winning bidder received the same and agreed to its terms and conditions.
As a rule, the winning bidder shall formally enter into contract with the Procuring Entity (PE) within ten (10) calendar days from receipt of the NOA. In the case of government-owned and/or controlled corporations, the concerned Board shall take action on the said recommendation within thirty (30) calendar days from receipt thereof. Moreover, the PE shall issue the NTP to the winning bidder not later than seven (7) calendar days from the date of approval of the contract by the appropriate authority. Further, the different periods provided by RA 9184 within which certain stages of the procurement process must be completed is not merely directory but mandatory.