2017-10-19

NPM No. 012-2017

Requesting Entity: Department of Transportation (DOTr)

Issues Concern: Variation Order; Adjacent or Contiguous Modality of Negotiated Procurement

 

Details

Variation Order for Consulting Services-


Variation order is in the nature of amendment or modification of an existing contract either through the introduction of new items or change of existing items. It necessarily entails changes in the terms and conditions of the contract, and oftentimes includes additional cost.


We wish to clarify that under General Conditions of the Contract (GCC) Clause 10 of the Philippine Bidding Documents for the Procurement of Consulting Services (PBDs for Consulting Services), no modification of the terms and conditions of a Consulting Services Contract, including any modification of the scope of the services, shall be allowed, subject to GCC Clause 14 thereof. Accordingly, if there are no modification in the contract, payments for a consultancy project shall not exceed the prescribed ceiling or contract amount of the project. It bears stressing that Section 2, Annex “F” of the 2016 revised IRR of RA 9184 or the Contract Implementation Guidelines for the Procurement of Consulting Services provides that all consultancy contracts shall be fixed price contracts and that any extension of contract time shall not involve any additional cost. On the other hand, for Lump Sum Consultancy Contracts, GCC Clause 55.3, PBDs for Consulting Services, states that no additional payment for variation order, if any, shall be allowed for the Contract.


Negotiated Procurement; Adjacent or Contiguous Modality-


[R]esort to any alternative method of procurement, such as Negotiated Procurement through Adjacent or Contiguous modality, requires prior approval of the Head of the Procuring Entity (HoPE) pursuant to Section 48 of RA 9184 and its 2016 revised IRR, which mandates, among others, that resort to any of the alternative methods of procurement is subject to the prior approval of the HoPE or the duly authorized representative.


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The requirement for prior approval of the HoPE to resort to any alternative method of procurement under Section 48 of RA 9184 is not a meaningless rule that can be discarded and be applied as an afterthought. It is a safeguard that resort to any of the alternative methods of procurement, as exception to the general rule that all procurement shall be done through Competitive Bidding, is strictly in accordance with the provisions of RA 9184 and its associated IRR, specifically Article XVI thereof.