2016-12-06

NPM No. 117-2016

Requesting Entity: Clark International Airport Corporation (CIAC)

Issues Concern: Department of Labor and Employment (DOLE) Department Order (DO) No. 150-16

 

Details

Clarification on the application of Section 4 of DOLE DO No. 150-16, which imposes a minimum of administrative fee of 20% of the total contract cost for the Service Agreement, in relation to Section 31 of Republic Act (RA) No. 9184 and its revised Implementing Rules and Regulations.

 

Similar to the 10% administrative fee imposed under Section 9(b)(ii) of DOLE DO No. 18-A, the 20% administrative fee provided for under Section 4 of DOLE DO No. 150-16 is also a percentage rate that has for its effect the fixing of a floor price on Service Agreements. In this regard, and following the position of the GPPB as stated and explained in the above-mentioned various issuances, as well as the case of Philippine Sports Commission, et. al. v. Dear John Services, Inc., we are of the opinion that Section 4 of DOLE DO No. 150-16, insofar as it imposes a minimum administrative fee of 20% of the total contract cost for Service Agreement for security services, likewise runs counter to the provision of Section 31 of RA 9184 and its IRR.