NPM 007-2005

Requesting Entity: Commission on Audit Local Government Sector-Mindanao

Issues Concern: Warranty for the Procurement of Reconditioned Equipment



Whether or not the requirement for a warranty under Section 62 (a) of Republic Act 9184 (R.A. 9184) and 62.1 of its Implementing Rules and Regulations Part-A (IRR-A) may be set aside in the procurement of reconditioned heavy equipment.

The warranty requirement provided under R.A. 9184 and its IRR-A is mandatory. By clear dictate of the aforequoted provision (Section 62.1, IRR-A), procuring entities are mandated to retain a part of the contract price, or require a bank guarantee from its suppliers, manufacturers or distributors in the procurement of goods. This provision provides for no exception and is applicable notwithstanding that the item/equipment sought to be procured is merely reconditioned or second-hand.