Requesting Entity: Department of Education (DepEd)

Issues Concern: School Building Construction by NGOs


Whether DepEd can enter into a contract with the Federation of Filipino Chinese Chambers of Commerce and Industry, Inc. (FFCCCII) for the construction of school buildings without the conduct of public bidding under Republic Act (R.A.) No. 9358.

[P]rior to the enactment of R.A. No. 9358, entering into a partnership with NGOs for the implementation of a government project is likewise legally sanctioned under Commission on Audit (COA) Circular No. 96-003 dated 27 February 1996. Under this circular, it is the responsibility of the government agency to ensure that the selected NGO has the appropriate legal standing, is financially stable, and has the necessary track record before it enters into a Memorandum of Agreement (MOA) with said NGO.

However, said COA Circular was issued prior to the passage of R.A. No. 9184, or the Government Procurement Reform Act. Thus, to ensure consistency in policy implementation and adherence with procurement practices espoused by R.A. No. 9184, the President, in her veto message dated 17 October 2006, conditioned the implementation of the abovementioned provision in the FY 2006 Supplemental Budget to the issuance of guidelines.

Pending finalization of the guidelines, it is the considered opinion of the GPPB that DepEd is legally authorized under COA Circular No. 96-003 to enter into a Memorandum of Agreement with the FFCCCII for the construction of school buildings under its “Operation Barrio School Program”. Prior to issuance of the guidelines by the GPPB, COA Circular No. 96-003 continues to be the relevant guidelines which shall govern NGO participation in government projects.