NPM 006-2006

Requesting Entity: Department of Agriculture

Issues Concern: Renewal of Contract for Lease of Office Space



Whether or not the lease of office space may be exempted from public bidding.

[T]he evident intent of the law is to include the lease of office space within the ambit of R.A. 9184, specifically following the rules on the procurement of goods. This is specifically provided under Section 5 (k) of Republic Act No. 9184 (R.A. 9184) x x x.

[I]t undoubtedly follows that the applicable procurement method for the lease of office space is competitive bidding.

Notably, the lease of office space depends entirely on the needs and requirements of the agency such as, but is not limited to, location, the width and dimension of the area, floor shape and size, accessibility, amount of lease, structural aptness, architectural design, interior set-up, floor to ceiling clearance, communication readiness, electricity load, access to light, view and air, and the like.

The restrictive and customized technical specifications involved in the lease of office space calls for elaborate specifications which may indicate more detailed and need-specific requirements. As such, although competitive bidding is the primary recourse, the peculiarity of the object to be bid significantly limits the number of bidders qualified to deliver an agency's requirements.

x x x

Anent the foregoing, we opine that the applicable method of procuring leased office space is through competitive bidding among lessors. Thus, procuring entities are discouraged from merely renewing their existing lease contract to ensure that the government gets the most advantageous price.