NPM 037-2005

Requesting Entity: Office of the President

Issues Concern: Contract Price Adjustment



Whether or not the Office of the President may grant the request for contract price escalation raised by its incumbent security service provider on the basis of the effect of the issuance of Wage Order NCR-11.

The provision above-cited (Section 17.7.4, IRR-A, R.A. 9184) sufficiently provides remedy to the contracting parties in addressing the need for price adjustment because of the issuance or promulgation of a new law, ordinance, regulation, or other Governmental act. The provision is self-executing and does not require elaborate process for its accomplishment; provided, that in the grant of relief or allowing price adjustment shall be on a "no loss-no gain" basis, i.e., the relief or adjustment shall only be to the extent of the actual adjustment or change caused by the supervening issuance or governmental act.

In sum, the Office of the President may allow price adjustment relative to its contract for security services with its incumbent service provider, in accordance with the new Wage Order No. NCR-11 and on a "no loss-no gain" basis as stated above.