PM 012-2003

Requesting Entity: Philippine Ports Authority

Issues Concern: Effectivity of the draft IRR of R.A. 9184 and Applicability of the Phrase "Adjacent or Contiguous"



Effectivity of the IRR of R.A. 9184

Although R.A. 9184 has already been signed by her Excellency President Gloria Macapagal Arroyo on January 10, 2003 and became effective on January 26, 2003, the said legislative enactment cannot be applied in its totality without its IRR. In consonance with this, we wish to inform your office that even though the proposed IRR of R.A. 9184 has already been finalized by the Government Procurement Policy Board (“GPPB”) and the Joint Congressional Oversight Committee (“JCOC”) on July 11, 2003, the same has not yet been approved by the President. Hence, even if there are self-executing provisions in R.A. 9184, the same cannot be fully implemented unless and until the IRR therefor has been finally approved by the President and published for dissemination. In other words, legally speaking, as of this writing there is no IRR yet for R.A. 9184 to be observed by procuring entities.

It is for the above reason that we apprise your office that during the 3rd Meeting of the GPPB on May 26, 2003, the members unanimously agreed that Government agencies are justified in applying Executive Order No. 40, series of 2001 (“E.O. 40”), and its IRR, pending the approval of the IRR of R.A. 9184, and that a provision should be included in the Transitory Clause of the draft IRR of R.A. 9184 that in cases where the invitations for bids were issued after the effectivity of R.A 9184 but before the effectivity of its IRR, procuring entities may continue adopting the procurement procedures embodied in E.O. 40 and its IRR, or other applicable procurement laws, rules and regulations.

Applicability of the Phrase “Adjacent or Contiguous”

As regards the applicability of the phrase “adjacent or contiguous,” considering that the IRR of R.A. 9184 has not yet been issued, it should be noted that Section 53 (d) of the draft IRR of R.A. 9184 referred to in your letter is similar to Section 35.2 (c) of the IRR of E.O. 40, in that it allows negotiation for the procurement of civil works if subject project is “[a]djacent or contiguous to an ongoing project and it could be economically prosecuted by the same contractor.” However, it should be noted further that Section 35.2 (c) of the IRR of E.O. 40 sets forth the following conditions:

a) That subject property has similar or related scopes of work;
b) That it is within the contracting capacity of the contractor;
c) That direct negotiation be undertaken with the contractor at the same unit prices adjusted to price levels prevailing at the time of negotiation using the parametric formulae prescribed in the IRR of Presidential Decree No. 1594 on Contract Implementation without the five percent (5%) deduction and contract conditions, less mobilization cost; and
d) That the contractor has no negative slippage and has demonstrated a satisfactory performance.

Considering that the above conditions do not seem to have a direct conflict with the conditions set forth in Section 53 of R.A. 9184, it may also be prudent for PPA to consider the requirements in the latter provision, to wit:

a) The original contract is the result of a Competitive Bidding;
b) The subject contract to be negotiated has similar or related scopes of work;
c) It is within the contracting capacity of the contractor;
d) The contractor uses the same prices or lower unit prices as in the original contract less mobilization cost;
e) The amount involved does not exceed the amount of the ongoing projects; and
f) The contractor has no negative slippage.