NPM 148-2004

Requesting Entity: Baguio City

Issues Concern: Submission and Acceptance of Bids Lower than the Philippine Association of Detective and Protective Agency Operators Inc. (PADPAO) Rate



Whether or not the city Government of Baguio should only accept bids that follow the prescribed rates of the Philippine Association of Detective and Protective Agency Operators Inc. (PADPAO) in its procurement of security services.
Procurement of security services, which is considered as goods procurement under our jurisdiction, the submission of a certificate of compliance with labor laws and standards is not only a technical bid requirement but is also a fundamental condition for the bidder to be declared as technically complying.

Republic Act No. 5487 (R.A. 5487), otherwise known as the “Private Security Agency Law,” (PSAL) by its very nature can be aptly considered as a labor regulation as it governs the relationship between the private security agencies and their security guards, an association akin to the concept of employer-employee relationship contemplated under the Labor Code of the Philippines. Stressing the obligatory force of R.A. 5487 as a labor regulation, Wage Order No. RB-CAR-09 for Baguio City was issued to guide security agencies as to the appropriate rates for security services.

Having discussed the foregoing, security agencies should observe the provisions of R.A. 5487 and the Wage Order by giving the right amount of compensation due to the security guards, and to ultimately comply with the technical requirement of submitting a certificate of compliance with labor laws and standards. In accordance therewith, the procuring entity may also require from the bidders the submission of a salary schedule of their respective guards to ensure their compliance with the mandate of the law by giving the guards their due.

Henceforth, a certification to this effect shall form part of the technical bid requirements that the procuring entity shall require the bidders to submit.

In fine, the compliance of security agencies with the PADPAO rate mandated by R.A. 5487, reinforced further by the corresponding Wage Orders issued by the Regional Tripartite Wages and Productivity Board (RTWPB), are contemplated by R.A. 9184 and its IRR-A as part of the gamut of labor laws to which every bidder must comply. Similarly, the inclusion of variables other than those included in the PADPAO standards encourages competition that will ultimately redound to the benefit of the government.