Requesting Entity: Municipality of Siay
Issues Concern: Pecuniary Interest in Procurement Contracts of Local Government Units (LGU)
Legality of procurement contracts awarded to a local government department head or employee and/or to his relative within the fourth civil degree of consanguinity or affinity, where said official or employee is neither the Head of the Procuring Entity (HOPE) nor a member of the Bids and Awards Committee (BAC), Secretariat and Technical Working Group (TWG).
Section 89(a)(1) of Republic Act (RA) No. 7160, the Local Government Code (LGC) of 1991, explicitly provides for the prohibition against local officials and employees from having business and pecuniary interest with their LGUs, thus:
Sec. 89. Prohibited Business and Pecuniary Interest. (a) It shall be unlawful for any local government official or employee, directly or indirectly, to:
(1) Engage in any business transaction with the local government unit in which he is an official or employee or over which he has the power of supervision, or with any of its authorized boards, officials, agents, or attorneys, whereby money is to be paid, or property or any other thing of value is to be transferred, directly or indirectly, out of the resources of the local government unit to such person or firm. (Emphasis supplied.)
Verily, even though a local official or employee is neither the HOPE nor a member of the BAC, Secretariat or TWG, he or she is nonetheless prohibited under the LGC from engaging in any business transaction whereby money is to be paid, or property or any other thing of value is to be transferred, directly or indirectly, out of the resources of the LGU.
On the other hand, Section 47 of the revised Implementing Rules and Regulations (IRR) of RA 9184, the Government Procurement Reform Act, provides for the rule on Disclosure of Relations, thus:
All bids shall be accompanied by a sworn affidavit of the bidder that it is not related to the Head of the Procuring Entity, members of the BAC, the TWG, and the BAC Secretariat, the head of the PMO or the end-user unit, and the project consultants, by consanguinity or affinity up to the third civil degree. Failure to comply with the aforementioned provision shall be a ground for the automatic disqualification of the bid in consonance with Section 30 of this IRR… (Emphasis and underscoring supplied.)