NPM 043-2004

Requesting Entity: Department of Labor and Employment

Issues Concern: Request for Clarification on the Concession of a Service Provider for the Operation of the Department of Labor and Employment (DOLE) – Central Office Canteen for Calendar Year 2004



Whether or not the concession of a service provider for the operation of the DOLE – Central Office’ Canteen for Calendar Year 2004 is covered by R.A. 9184 and its IRR-A.

Leasing out of government-owned properties does not involve the acquisition of any particular equipment, material, or personal property or a contractual service such as janitorial, security and related services. Moreover, this kind of transaction does not involve any construction, improvement, rehabilitation or other activity which would fall under the definition of the term “civil works,” nor a contract for the performance of services such as advisory, review, design, management, or other service which would fall under the concept of “consulting services.”

Accordingly, by the nature and peculiarity of this government contract, leasing out of government building remains to be governed by Executive Order No. 301, Series of 1987 (E.O. 301) particularly Section 7 thereof.

It is clear that lease contracts do not undergo competitive bidding which has to pass through the BAC. As such, the DPWH guidelines (Guidelines Implementing E.O. 301) provide that it is the official duly authorized by law to enter into contracts, having custody and administration of the building/space to be rented out that enters into contract as lessor thereof, subject to the approval of the head of agency concerned. Moreover, this transaction is in the category of lease of things and hence, suppletorily governed by the provisions on lease found in the Civil Code.