NPM 049-2012

Requesting Entity: Department of Transportation and Communication (DOTC)

Issues Concern: On the Application of Warranty Security under Section 62



Whether the DOTC may continue to require its contractors to renew warranty securities for its completed projects which were implemented applying Section 62 under the Implementing Rules and Regulations (IRR)-A, or should the DOTC instead apply the Section 62 under the revised IRR of Republic Act 9184.

[T]he revised IRR took effect on 2 September 2009. Thus, its provisions shall apply to all procurement activities where the invitations to bid (ITB) were posted on or after this date. This reflects the prospective application of laws, which is a basic tenet that “Laws shall have no retroactive effect, unless the contrary is provided”.

[S]ince the IRR of RA 9184 does not provide for a retroactive effect, we are of the opinion that Section of the revised IRR should be applied prospectively to DOTC’s infrastructure contracts. Thus, for the numerous infrastructure projects implemented and completed using IRR-A, it can continue to require the renewal of the warranty based on Section 62.2, on the assumption that the ITBs were posted before 2 September 2009.