The Framework Agreement which superseded the Ordering Agreement under Republic Act No. 9184 and issued through the GPPB Resolution No. 27-2019 dated 10 December 2019 was introduced as a strategic modality under the New Government Procurement Act (NGPA) or Republic Act No. 12009 allowing for long-term relationships with suppliers, leading to more efficient procurement processes and better pricing.
Section 16 of the NGPA provides that Procuring Entities may use a framework agreement as a procurement strategy to expand the pool of prospective bidders, take advantage of economies of scale, minimize the administrative burden of conducting separate procurement activities, and generate time and money savings. It shall be in the nature of an option contract between the Procuring Entity and the bidder that stipulates the terms and conditions that would be applied in subsequent contracts for the procurement of Goods, Infrastructure Projects, and Consulting Services with a single or multiple contractor, manufacturer, supplier, distributor, consultant, and service provider.
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