NPM 135-2004

Requesting Entity: National Power Corporation - SPUG

Issues Concern: Applicability of Republic Act No. 9184 to lease or sale of NPC-SPUG’s existing assets



Whether the lease or sale of existing NPC-SPUG assets is covered by R.A. 9184 and its IRR-A

RA 9184 specifically governs procurement activities of the government, excluding from its reach and coverage other government activities not contemplated within the definition of procurement.

Perceivable from the aforementioned provision (Section 5(n), IRR-A) is the intent to limit the application of the law, generally, to acquisition activities of the government, with the single exception in case of lease of goods and real estate. Acquisition contemplates expenditure of public funds the regulation of which is the primary consideration for the creation of the law.

In the case of NPC-SPUG selling or leasing its existing assets, the activity does not involve expenditure of government funds, inasmuch as the same is not in the nature of procurement. Sale and lease of assets, where the government is the vendor or the lessor, are income-generating activities and is well beyond the contemplation of R.A. 9184. Needlessly, the provisions of the law prescribing for the bidding procedures and the requisites for its exercise concern only procurement matters and policies.