NPM No. 020-2018

Requesting Entity: Philippine Deposit Insurance Corporation (PDIC)

Issues Concern: Adjacent or Contiguous Modality of Negotiated Procurement



1. Whether the Procuring Entity (PE) can resort to Adjacent or Contiguous Modality of Negotiated Procurement in engaging the services of a consultant for the construction of an additional floor of an office building, a project under which said consultant was initially engaged

Section 10 of Republic Act (RA) No. 9184 mandates that all procurement shall be done through Competitive Bidding, except as provided for in Article XVI thereof, which enumerates the allowable alternative methods of procurement. Accordingly, alternative methods of procurement may be resorted to only upon prior approval of the Head of the Procuring Entity, in order to promote economy and efficiency, and whenever justified by the conditions for each alternative method of procurement specified in Sections 49 to 53 of the Implementing Rules and Regulations (IRR) of RA No. 9184.

Under Section 53(d) of RA No. 9184 and Section 53.4 of its IRR, a PE may directly negotiate a contract for consulting services with a technically, legally and financially capable consultant, through Negotiated Procurement under the Adjacent or Contiguous modality, whenever the subject contract is adjacent or contiguous to an on-going consulting services where the consultants have unique experience and expertise to deliver the required service, provided that the following conditions are complied with:

1. the original contract is the result of a Competitive Bidding;

2. the subject contract to be negotiated has similar or related scopes of work;

3. it is within the contracting capacity of the consultant;

4. the consultant uses the same prices or lower unit prices as in the original contract less mobilization cost;

5. the amount of the contiguous or adjacent work involved does not exceed the amount of the ongoing project;

6. the consultant has no delay: and

7. the negotiations for the procurement are commenced before the expiry of the original contract.

2. Whether a delay of 0.6% of the contract price constitutes as sufficient basis for the procuring entity not to pursue the re-engagement of its consultant under the Adjacent or Contiguous Modality of Negotiated

[A]djacent or Contiguous modality of Negotiated Procurement may be resorted to only upon compliance with the requirements set forth under by Section 53(d) of RA No. 9184 and Section 53.4 of its 2016 IRR, including Annex “H” or the Consolidated Guidelines for the Alternative Methods of Procurement. Pointedly, this modality requires that the consultant shall have no delay, regardless of percentage, in the implementation of consulting services during the time of negotiation.