NPM 133-2004

Requesting Entity: National Power Corporation

Issues Concern: Fixed Price Requirement on Fuel Supply Contract



Whether the fixed price requirement may be waived.

It is an established rule in R.A. 9184 under Article XIX, on Contract Prices and Warranties that bid prices shall be considered as fixed prices and not subject to adjustment or modification during the contract implementation stage.

R.A. 9184 (Section 61) and its IRR-A (Section 61.1) establish the general rule that bid prices are not subject to change. This means that the contract price to be paid to the winning bidder should not vary from the price quoted as financial component of their bid. Thus, price escalation is not allowed except under extraordinary circumstances and only upon prior approval of the GPPB.