NPM 008-2012

Requesting Entity: National Kidney and Transplant Institute

Issues Concern: Service Contracts Entered into a Multi-Year Basis



Exemption from the one-year limitation for certain service contracts that will allow the National Kidney and Transplant Institute (NKTI) to enter into multi-year contracts.

At the outset, we wish to inform you that it is beyond the power of the Government Procurement Policy Board (GPPB) to grant exemptions from Republic Act (RA) 9184 and its Implementing Rules and Regulations (IRR) as it does not have the power to legislate nor determine the coverage of the law. At most, the GPPB may only render contemporaneous interpretation and construction of the provisions of the law pursuant to its quasi-legislative fiat, and issue rules and regulations pursuant to its rule-making power.

Please be advised that RA 9184 and its IRR are silent on the issue of multi-year contracts. The Guidelines on the Procurement of Security and Janitorial Services, does not make any categorical pronouncement that multi-year contracts may be availed of only in the case of janitorial and security services contracts; rather, said Guidelines simply state that it shall be applicable to the procurement of janitorial and security services.

Likewise, the Revised Guidelines on Extension of Contracts for General Support Services does not prohibit procuring entities from entering into contracts on a multi-year basis. It simply provides that contracts for general support services can be extended, but not to exceed one (1) year for the purpose of averting hiatus in support services essential, indispensable, or necessary in the operations of a procuring entity.

In this regard, an approval from the GPPB or this office is not necessary in order that NKTI may enter into multi-year contracts. xxx

Notwithstanding all the foregoing, please be guided by the provisions of Department of Budget and Management (DBM) Circular Letter 2004-12 prescribing the guidelines and procedures for the implementation of multi-year contracts for all national government agencies. Thus, it is suggested that your office validate with DBM if said Circular applies to NKTI and determine if there is no additional budgetary authority required for the purpose. If the Board of NKTI is prohibited from engaging in multi-year contracts then we suggest to procure the other services on a yearly basis.