NPM 039-2005

Requesting Entity: AFP Retirement and Separation Benefits System

Issues Concern: AFP-RSBS Relocation Survey Contract



Can AFP-RSBS, on the basis of the provisions in the Relocation Survey Contract allowing changes or additional works to be carried out, execute a supplemental contract to cover unfinished portions of the original contract without undergoing procurement process per RA 9184?

[W]hile this office is wanting of authority to interpret or adjudicate on the meaning and import of contractual provisions, it may be well to consider whether the Relocation Survey Contract supposedly to cover all twenty-two (22) parcels of land remained effective even after the expiration of the agreed period within which to complete the original scope of work. Thus, if the effectivity of the contract expires with the said period, the supplemental contract, as suggested, will not have any basis in law or contract to be entered into; much less any basis to be entered into outside of the provisions of R.A. 9184.

On the other hand, if the original contract subsists, and therefore makes viable the argument for the supplemental contract, it may be prudent and wise to determine whether Section 6.1 of the contract sufficiently contemplates allowance for supplemental contract. Incidentally, it appears that the stipulation merely allows equitable adjustment in the event that an increase or decrease in the original work takes place, upon mutual agreement by the parties and by way of a written a variation order.

It may also be that the contemplated scope of work under the suggested supplemental contract is neither an increase nor decrease of the original work; neither is the supplemental contract the variation order contemplated under the contract stipulation. Whether the supplemental contract finds support in law or the provisions of the contract, the same issue shall be determined mainly by giving its supposed basis an honest construction according to the intent of the parties.