NPM 058-2009

Requesting Entity: Jacinto Magtanong Wui Jacinto Esguerra & Uy Law Offices

Issues Concern: ODA-funded Procurement/Direct Contracting



Propriety of resorting to direct contracting for a procurement that will be partly funded through a tied-commercial loan agreement.

The applicability of RA 9184 and its IRR to the subject procurement is anchored on [the] representation that government/public funds will be used [(GOP funds and GOP loan)]. Hence, resort to public, competitive bidding, as the default mode of procurement espoused by RA 9184, should be observed as a general rule.

Corollary, the fact that ODA is being negotiated to fund the project does not, per se, take it from the ambit of RA 9184. We note that Section 4 of R.A. 9184, in relation to recent Supreme Court rulings, mandates due deference to treaties, international or executive agreements, which prescribe a different set of procurement guidelines, under the principle of pacta sunt servanda. However, in the absence of any clear, categorical basis that the proposed commercial loan between the GOP (thru the DOF) and CALYON Germany partakes of the nature of an international or executive agreement, and that such agreement specifically and expressly provides the use of foreign government or foreign or international financing institution procurement procedures and guidelines, the IRR of RA 9184 should still apply.