2005-07-26

NPM 033-2005

Requesting Entity: Department of Budget and Management-Regional Office X

Issues Concern: Splitting of Procurement Contracts

Details

Whether or not the listing of six (6) different projects – advertised with separate and different programs of work and with individual Approved Budget for the Contracts (ABCs) – in a single SARO constitute Splitting of Contracts.

The concept of splitting of government (procurement) contracts as defined [in Section 54.1 of the IRR-A] pre-supposes singularity of a procurement project but which, by any act of the procuring entity or its personnel, was divided or broken into smaller quantities and/or amount, or was divided into artificial implementation phases or stages. To be within the legal contemplation of the concept, said act must have been done for the purpose of circumventing or evading legal and procedural requirements.

The project by its nature must have been considered as one project and therefore must have been captured in a single Procurement Project Management Plan so that to divide it into smaller quantities or phases would be unreasonable. In this case, the splitting is practically reduced to an artificial scheme to make multiple awards without clear advantage for the government and to side-step existing rules and provisions of law.

Contrary to this concept, in the instant case, where multiple projects with different and separate programs of work and individual ABCs are, perhaps by force of events or chance, contained in a single SARO, the same is not automatically a case of splitting of contracts. By fact alone of all six (6) projects embodied in one SARO does not translate the implementation of said projects to a splitting of government contracts as prohibited under the law.