2012-01-18

NPM 011-2012

Requesting Entity: Philippine Health Insurance Corporation

Issues Concern: Warranty Security for Consulting Services

 

Details

Whether warranty security under Section 62.2 of the Implementing Rules and Regulations (IRR) of Republic Act (RA) 9184 is applicable to consulting services.

For your guidance, Section 62 of RA 9184 and its IRR requires the issuance of warranty security only for goods and infrastructure projects procured, and does not include consulting services.

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The warranty contemplated in the Manual does not involve an amount similar to the warranty security provided in the IRR. It refers to a mere statement that emphasizes the liability of the consultant in line with Section 62.2.3.1 (b) of the IRR. This is akin to the warranty mentioned in the PBDs for the Procurement of Consulting Services, particularly, Clause 16 of its General Conditions of the Contract, where the consultant warrants its eligibility and the fulfillment if its obligations by using knowledge according to the best accepted professional standards.

Based on the foregoing, we wish to clarify that Section 62.2 of the IRR, insofar as it requires the posting of warranty security, does not apply to procurement of consulting services. However, this does not preclude procuring entities from requiring in consultancy contracts that the consultants warrant or ensure that they shall be liable in case of Structural Defects/Failures as provided in Section 62.2.3.1 of the IRR and/or pecuniary civil liability and damages.