NPM 037-2013

Requesting Entity: PITC Pharma, Inc. (PPI)

Issues Concern: Posting of Performance Security



Whether PPI is exempt from posting a Performance Security provided for under Section 39 of Republic Act No. 9184 when it enters into any procurement contract with other government agencies and instrumentalities.

[T]he Implementing Guidelines on Agency-to-Agency Agreements (Guidelines), which describes the conditions when a government agency may procure from another agency without need of public bidding pursuant to Section 53.5 of the IRR of RA 9184, provides under Section 5(c) thereof that the Procuring Agency may require the Servicing Agency to post a Performance Security under Section 39 of RA 9184. This suggests that the posting of a Performance Security is an option which the procuring agency may impose upon the servicing agency subject to the former's discretion. Accordingly, PPI may be required to post Performance Security for contracts where the procuring entity has elected to require the same from PPI.