NPM No. 039-2016
Requesting Entity: Microdata
Issues Concern: Failure of Bidding due to Lack of Funds
Whether a Procuring Entity may declare failure of bidding due to lack of funds.
A careful perusal of Section 41(c)(iii) of the IRR indicates that the HOPE is allowed to reject any and all bids, declare a failure of bidding, or not award the contract for any justifiable and reasonable ground where the award of contract will not redound to the benefit of the government such that the source of funds for the project has been withheld or reduced through no fault of the Procuring Entity. As earlier mentioned, it is incumbent upon the HOPE, and his sole responsibility, to determine and establish the existence of any ground to support a declaration of a failure of bidding under Section 41 of the procurement law and its associated IRR.
In view of the foregoing, a failure of bidding may be declared by the HOPE pursuant to the “reservation clause”, when it has proven that the source of funds for the project is no longer available through no fault of the Procuring Entity, and that the award of contract will not be beneficial for the government.