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Rules on Government Procurement

A presentation on the Government Procurement Reform Act (RA 9184) and its IRR, including updates
by Renato De Vera on 23 January 2013

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Transcript of Rules on Government Procurement

Rules and Procedures in Public Bidding R.A. No. 9184 and its IRR General
Provisions I 2 8 Timeline R.A. No.
9184 Revised
IRR Jan
2003 Sep.
2009 Jan.
2013 Government Procurement Reform Act 10 years Now NGAs, LGUs, GOCCs & GFIs Procurement of
Goods & Services,
Civil Works and
Consulting Services All Fund Sources Scope/
Coverage Contract
Implementation/
Termination Procurement
Process Procurement
Planning Governing Principles on Government Procurement Transparency Competitiveness Streamlined procurement process Accountability Public Monitoring Procurement
Planning "All procurement shall be within the approved budget of the procuring entity..." "No procurement shall be undertaken unless it is in accordance with the approved APP of the procuring entity." "The APP shall include provisions for foreseeable emergencies based on historical records." "The APP shall bear the approval of the HOPE or second-ranking official designated by the HOPE to act on his behalf, and must be consistent with its duly approved yearly budget." Acquisition of
Real Property Public-Private
Partnership (PPP)
projects Foreign Grants
(ODA) Finalizes modes of procurement in APP
upon approval of
the budget Forwards copy of HOPE-approved
budget proposal & PPMP to
BAC Sec. Evaluates PPMPs and includes
procurement in the budget
proposal, if warranted During budget preparation
stage, prepare PPMPs in
support of budget
proposals End-Users Budget Office BAC/
BAC Secretariat PREPARING THE APP Updating of individual PPMPs and consolidated APP shall be undertaken every six (6) months or as often as may be required by the HOPE;

Updating of PPMPs shall be the responsibility of respective end-user units;

Consolidation of PPMPs into an APP shall be lodged with BAC Secretariat, subject to HOPE approval. The ABC as reflected in the APP or PPMP shall be at all times consistent with the appropriations for the project as authorized in the GAA, continuing, and automatic appropriations. For NGAs, to facilitate the immediate implementation of projects even pending approval of the GAA, the ABC shall be based on the budget levels under the proposed national budget submitted by the President to Congress 3 Bids and
Awards
Committee "An Act Providing for the Modernization, Standardization
and Regulation of the Procurement Activities of the
Government and for Other Purposes" At least five (5) but not more than seven (7) members of unquestionable integrity and procurement proficiency Regular Members: Chairman who is at least 3rd ranking permanent official At least 5th ranking permanent official representing the legal or administrative area (to the extent possible) At least 5th ranking permanent official representing the finance area (to the extent possible), except the Accountant or whose from the accounting department Provisional Members An officer who has technical expertise relevant to the procurement at hand A representative of the end-user unit who has knowledge of procurement laws and procedures Alternate Members (optional) Shall have the same qualifications as their principals (to the extent possible) Shall attend BAC meetings and receive corresponding honoraria when principals are absent Shall have same term as their principals Accountability limited to respective acts and decisions Functions of the BAC: Advertise and/or post invitation to bid/REI; Conduct pre-procurement and pre-bid conferences; Determine the eligibility of prospective bidders; Receive bids; Conduct evaluation of bids; Undertake post-qualification proceedings; Resolve motions for reconsideration; Recommend award of contract to the HOPE; Recommend to the HOPE use of Alternative Methods
of Procurement. Observers (COA representative and at least 2 private observers from organizations registered with SEC or CDA) Does not have the right to vote; Absence of actual or potential conflict of interest in the contract to be bid; Access to documents (minutes of BAC meeting, abstract of bids, post-qualification summary report, APP/PPMP, and opened proposals) upon request and subject to signing of confidentiality agreement "Jury Duty" Honoraria Funding Source (as amended):

Collections from successfully completed procurement projects limited to activities prior to awarding of contracts to winning bidders:

a) Proceeds from sale of bid documents;
b) Fees from contractor/supplier registry;
c) Fees charged for copies of minutes of bid
openings,
d) BAC resolutions and other BAC documents;
e) Protest fees; and
f) Proceeds from bid security forfeiture.

Savings realized from DBM-approved budget.
Payment of honoraria limited to procurement activities involving competitive bidding;

Honorarium Rates (Maximum per procurement project):
BAC Chair - P 3,000
BAC Members - 2,500
TWG/BAC Sec. Chairs and Members - 2,000

Limitation: Average amount of honoraria per month over one year shall not exceed 25% of the basic monthly salary;

Overtime Pay may be allowed for administrative staff for procurement activities rendered in excess of official working hours; (Budget Circular 2004-5A dated October 7, 2004 as amended by B.C. No . 2007-3 dated November 29, 2007)

Guidelines:

BAC and TWG chairs and members, and BAC Secretariat performing the attendant function in addition to their regular duties in other non-procurement units of the agency, may be paid honoraria only for successfully completed procurement projects;

Procurement project is successfully completed once contract is awarded to winning bidder; Sec. 15, RA 9184:

“The procuring entity may grant payment of honoraria to the BAC members in an amount not to exceed twenty five percent (25%) of their respective basic monthly salary subject to availability of funds. For this purpose, the DBM shall promulgate the necessary guidelines. The procuring entity may also grant payment of honoraria to the TWG members, subject to the relevant rules of the DBM.” (BAC members, BAC Secretariat, TWG members) 4 Preparation
of Bidding Documents Bidding documents shall be prepared following the standard forms and manuals prescribed by the GPPB; Specifications and other terms in the bid docs shall reflect minimum requirements or specifications required to meet the needs of the procuring entity; Bidding documents shall be available from the time the Invitation to Bid is first advertised/posted until the deadline for submission and receipt of bids; Bidding documents shall be posted in procuring entity's website and at the PhilGEPS website. GPPB Resolution No. 04-2012 – Guidelines on
Sale of Bidding Documents Advertisement at least once in a newspaper of general nationwide circulation required for contracts to be bid with an ABC of: More than 2 Million - Procurement of goods More than 5 Million - Procurement of infrastructure projects More than 1 Million or duration of more than 4 months - Procurement of consulting services Pre-procurement Conference Conducted prior to advertisement/ posting of Invitation to Bid/REI Mandatory for those with ABC of more than 2M (Goods), more than 5M (Infra), and more than 1M (Consulting Services) At least one (1) pre-bid conference is required for projects with ABC of P1M or more;

Held at least 12 c.d. before deadline for submission and receipt of Bids;

At the option of the P.E., only those who have purchased bidding documents shall be allowed to participate in the pre-bid conference and raise or submit written queries or clarifications. Pre-Bid Conference Statements made in pre-bid shall not modify the terms of bidding documents unless issued as a supplemental/bid bulletin;

Issued to answer written requests for clarification or interpretation submitted by prospective bidders at least 10 c.d. before deadline for bids; or

Issued also upon BAC’s initiative to clarify or modify any provision of Bidding Docs;

Issued by BAC at least 7 c.d. before deadline for submission of bids; Posted in PhilGEPS and agency’s website, if any; Supplemental/Bid Bulletins 5 Receipt
and Opening
of Bids Class “B” Documents:

Valid JVA, in case a joint venture is already in existence;

In the absence of a JVA, duly notarized statements from all the potential joint venture partners stating that they will enter into and abide by the provisions of the JVA in the instance the bid is successful, shall be included in the bid; Eligibility Requirements Technical Documents:

Statement of the prospective bidder of all its ongoing and completed government and private contracts, including contracts awarded but not yet started, if any, whether similar or not similar in nature and complexity to the contract to be bid, within the relevant period as provided in the Bidding Documents (Goods and Infra);

A valid Philippine Contractors Accreditation Board (PCAB) license and registration for the type and cost of the contract to be bid (for Infra); Eligibility Requirements

Class “A” Documents:

Legal Documents:

Registration certificate from SEC, DTI for sole proprietorship, CDA for cooperatives, or any proof of such registration as stated in the Bidding Documents;

Mayor’s Permit issued by the city or municipality where the principal place of business of the prospective bidder is located; Eligibility Requirements Financial Documents:

The prospective bidder’s audited financial statements, showing, among others, the prospective bidder’s total and current assets and liabilities, stamped “received” by the BIR or its duly accredited and authorized institutions, for the preceding calendar year which should not be earlier than 2 years from the date of bid submission;

Computation of NFCC, or CLC from a Universal or Commercial Bank. Eligibility Requirements For purposes of determining eligibility of bidders, only a number of documents shall be required by the BAC using the forms prescribed in the Bidding Documents. In case of foreign bidders, the eligibility requirements under Class "A" documents may be substituted by the appropriate equivalent documents, if any, issued by the country of the foreign bidder concerned.

The eligibility requirements or statements, the bids, and all other documents to be submitted to the BAC must be in English.

A translation of the documents in English certified by the appropriate embassy or consulate in the Philippines must accompany the eligibility requirements under Class "A" and "B" Documents if they are in other foreign language. For procurement of Goods:

The prospective bidder must have completed, within the period specified in the Invitation to Bid, a single contract that is similar to the contract to be bid, and whose value, adjusted to current prices using the NSO consumer price indices, must be at least 50% of the ABC. In the case of Expendable Supplies, said contract must be at least 25% of the ABC. For procurement of Infra:

The prospective bidder must have an experience of having completed at least one (1) contract that is similar to the contract to be bid, and whose value, adjusted to current prices using the NSO consumer price indices, must be at least 50% of the ABC to be bid.

Contractors under Small A and Small B categories without similar experience on the contract to be bid may be allowed to bid if the cost of such contract is not more than 50% of the Allowable Range of Contract Cost (ARCC) of their registration based on the guidelines prescribed by the PCAB. Notwithstanding the eligibility of a prospective bidder, the procuring entity concerned reserves the right to review the qualifications of the bidder at any stage of the procurement process if the procuring entity has reasonable grounds to believe that a misrepresentation has been made or there has been a change in the prospective bidder's capacity to undertake the project... Bidders shall submit their bids through their duly authorized representative using the forms specified in the Bidding Documents in two (2) separate sealed bid envelopes, and which shall be submitted simultaneously.

The first shall contain the technical component of the bid, including the eligibility requirements and the second shall contain the financial component of the bid. All bids shall be accompanied by a bid security, payable to the procuring entity concerned as a guarantee that the successful bidder shall within ten (10) calendar days from receipt of Notice of Award enter into contract with the procuring entity and furnish the Performance Security. Bid Securities shall be returned only after the bidder with the LCRB or HRRB, as the case may be, has signed the contract and furnished the Performance Security, except those declared by the BAC as failed or post-disqualified upon submission of a written waiver of their right to file a motion or reconsideration and/or protest. In no case shall be bid security be returned later than the expiration of the bid validity period indicated in the Bidding Documents, unless it has been extended in accordance with Section 28.2 of the IRR. Eligibility Requirements Submission and
Receipt of Bids Bid Security Bid Validity Bids and bid securities shall be valid for a reasonable period to be determined by the HOPE, but in no case to exceed 120 c.d. from bid opening date. Should it become necessary to extend the validity of bids and bid security beyond 120 c.d. , the procuring entity concerned shall request in writing those who submitted bids for such extension before the expiration date.

Bidders shall have the right to refuse to grant such extension without forfeiting their bid security Bid Opening The BAC shall open the bids immediately after the deadline for the submission and receipt of bids.

The bidders or their duly authorized representatives may attend the opening of bids.

The minutes of the bid opening shall be made available to the public upon written request and payment of a specified fee to recover cost of materials 6 Bid
Evaluation Preliminary Examination of Bids The BAC shall check the submitted documents of each bidder against a checklist of required documents to ascertain if they are all present, using a non-discretionary "pass-fail" criteria. If a bidder submits the required document, it shall be rated "passed" for that particular requirement. Bids that fail to include any requirement or are incomplete or patently insufficient shall be considered as "failed." Ceiling for Bid Prices The ABC shall be the upper limit or ceiling for acceptable bid prices.

If a bid price, as evaluated and calculated is higher than the ABC, the bidder shall be automatically disqualified.

There shall be no lower limit or floor on the amount of the award. Bid Evaluation for the Procurement
of Goods and Infrastructure Projects Members of the BAC, including its staff and personnel, as well as its Secretariat and TWG are prohibited from making or accepting any communication with any bidder regarding the evaluation of its bids until the issuance of the Notice of Award.

However, the BAC, through its Secretariat, may ask in writing the bidder for the clarification of its bid. All responses to requests for clarification shall be in writing. The purpose of bid evaluation is to determine the Lowest Calculated Bid using non-discretionary criteria in considering:

a) Completeness of the bid

b) Arithmetical corrections

c) Equal footing of all bids to ensure fair and competitive comparison In case of discrepancies:
a) bid prices in words prevail over bid prices in figures;
b) unit price for an item prevail over total price per
item;
c) actual sum of prices of component items prevail
over stated total price;
d) unit cost is the bill of quantities prevail over unit
cost in the detailed estimate. 7 Post-
qualification Objective of Post-qualification The LCB/HRB shall undergo post-qualification in order to determine whether the bidder concerned complies with and is responsive to all the requirements and conditions as specified in the Bidding Documents. Post-qualification shall verify, validate, and ascertain all statements made and documents submitted by the bidder with the LCB/HRB, using non-discretionary criteria, as stated in the Bidding Documents.

The criteria shall consider, but not limited to: Process of Post-qualification If the BAC determines that the bidder with the LCB passes all the criteria for post-qualification, it shall declare the said bid as the LCRB and recommend to the HOPE the award of contract to the said bidder at its submitted price or its calculated bid price, whichever is lower. If the BAC determines that the bidder with the LCB fails the criteria for post-qualification, it shall immediately notify the said bidder in writing of its post-disqualification and the grounds for it.

Immediately after the BAC has notified the first bidder of its post-disqualification, and notwithstanding any pending request for reconsideration, the BAC shall initiate and complete the same post-qualification process on the bidder with the second LCB, and so on. Award of
Contract a) Legal Requirements b) Technical Requirements c) Financial Requirements registration, licenses, certificates, permits, clearances, and agreements submitted by the bidder; Bid price proposal, NFCC computation or credit line commitment (CLC) to ensure that bidder can sustain the operating cash flow of the transaction Bid security, stated competence and experience, key personnel to be assigned to project, after-sales or maintenance capabilities, plant/factory of a manufacturer, availability of equipment to be used, negative slippages 15% or more GPPB Circular 03-2012 dated 17 August 2012 – Issuance of Notice of Post-disqualification

If the BAC determines that the bidder with the LCB or HRB fails to comply with the criteria for post-qualification, it shall immediately notify the bidder of its post-disqualification;

The notice shall clearly state all the bases of the post-disqualification pursuant to the requirements or conditions in the Bidding Documents that the bidder failed to comply with. "The function of post-qualification is to verify, inspect and test whether the technical specifications of the goods offered comply with the requirements of the contract and the bidding documents. It does not give occasion for the procuring entity to arbitrarily exercise its discretion and brush aside the very requirements it specified as vital components of the goods it bids out." COA vs. Link Worth International, Inc.,
G.R. No. 182559, March 13, 2009 The BAC shall recommend to the HOPE the award of contract to the bidder with the LCRB after the post- qualification process is completed;

Contract shall be awarded to the bidder with the LCRB at its submitted bid price or calculated bid price, whichever is lower;

Contract award must be made within ninety (90) c.d. from the date of bid opening but not to exceed the bid validity period;

If award cannot be made within the said period, the bid validity period should be extended. BAC shall notify all losing bidders of its decision within the 7 c.d. period after its recommendation for award;

Notwithstanding the issuance of NOA, award of contract shall be subject to the following:
Posting of Performance Security;
Signing of the contract;
Approval by higher authority, if required.

BAC, through the Secretariat, shall post the NOA within 3 c.d. from issuance in the:
PhilGEPS;
Website of the P.E., if any; and
Conspicuous bulletin boards. NTP must be issued, together with a copy or copies of the approved contract, to the successful bidder within 3 c.d. from date of approval of the contract by the HOPE or by the appropriate government approving authority;

The contract effectivity shall be provided in the NTP by the procuring entity, which shall not be later than 7 c.d. from its issuance;

The procuring entity, thru the BAC Secretariat, shall post a copy of the NTP and the approved contract in the PhilGEPS or the website of the procuring entity, if any, within 15 c.d. from the issuance of the NTP. Notice to Proceed BAC shall declare a failure of bidding when:
(1) No bids are received;
(2) All prospective bidders are declared ineligible;
(3) All bids fail to comply with all the bid
requirements or fail post-qualification; or
(4) The bidder with the LCRB refuses, without
justifiable cause, to accept the award of
contract, and no award is made in accordance
with Section 40 of the Act and the IRR.

BAC shall conduct mandatory review to determine reason for failed bidding. If necessary ABC may be adjusted,
subject to the required approvals, and conduct a re-
bidding. Failure of Bidding Reservation Clause declares that the Head of the Procuring Entity (HOPE) reserves the right to reject any and all bids, to declare a failure of bidding, or not to award the contract. (IRR Section 41);

Situations when it may be exercised:

If there is prima facie evidence of collusion;

If the BAC is found to have failed in following the prescribed bidding procedures; or

For any justifiable and reasonable ground where the award of the contract will not redound to the benefit of the GOP. Reservation Clause Justifiable and reasonable grounds when the award of contract will not redound to the benefit of the GOP:

If the physical and economic conditions have significantly changed so as to render the project no longer economically, financially or technically feasible, as determined by the HOPE;

If the project is no longer necessary, as determined by the HOPE; and

If the source of funds for the project has been withheld or reduced through no fault of the procuring entity. Reservation Clause Domestic Preference Applies only when the lowest bid has a foreign component (foreign bid/entity) and the next lowest bid has a domestic component (domestic bid/entity)

Foreign Bid – offer of any articles, materials or supplies not manufactured or to be manufactured in the Phil. substantially from articles, materials, of the growth, production, or manufacture, as the case may be in the Philippines;

Domestic bid – offer of any articles, materials or supplies of the growth or production of the Phil., or manufactured or to be manufactured in the Phil. substantially from articles, materials or supplies of the growth, production, or manufacture, as the case may be, of the Philippines. Domestic entity – an individual or sole proprietor who is a citizen of the Philippines, or a partnership, corporation, cooperative, or association duly organized under the laws of the Philippines and of which complies with the ff:

At least 75% Filipino interest or outstanding capital stock;

Habitually established in business and engaged in the manufacture or sale of product to be bid; and

In existence for at least five (5) consecutive years.

Domestic Entities can only claim preference if certified by SEC/DTI/CDA

Domestic Bidders can only claim preference if certified by DTI Sample Computation Bid Security GPPB Resolution No. 03-2012 dated 27 Jan. 2012

Existing forms have monetary value which increase bid prices and transactional costs to bidders and procuring entity;

Bid Security which has no monetary value, such as a Bid Securing Declaration, will increase bidders participation; decrease transactional costs; and reduce bid prices;

Use of Bid Securing Declaration (BSD) is recognized by multilateral development partners and used by other countries;

BSD is an undertaking by a prospective bidder to pay the corresponding fine and be suspended for a period of time from being qualified to participate in any government procurement activity if it violates any of the conditions stated therein Bid Securing Declaration Guidelines on the use of Bid Securing Declaration:

BSD shall be valid up to a maximum of 120 c.d. from date of bid opening, unless duly extended by bidder upon request of the HOPE;

BSD validity and expiration is similar to that of bid security;

BSD shall be enforced when bidder violates the conditions of the undertaking;

Penalties: a) Automatic blacklisting for 2 years in all government procurement activities; and b) Payment of fine Bid Securing Declaration Sworn Certification against Forum Shopping (Amended by GPPB Resolution No. 05-2012 dated 30 March 2012) Requisites of a Valid Protest Payment of a non-refundable Protest Fee of
not less than 1% of ABC Filed with the HOPE Verified Position Paper If RFR is denied BAC decisions may be
protested in writing to the HOPE BAC decisions at any stage of procure-
ment process may be questioned by
filing a request for reconsideration (RFR) Court action may be resorted to only after protests have been completed Revised Protest Fee Rate ABC RANGE PROTEST FEE
50M pesos and below 0.75% of the ABC
> 50M to 100M pesos PhP 500,000.00
>100M to 500M pesos 0.5% of the ABC
>500M to 1 billion pesos PhP 2,500,000.00
>1B to 2 billion pesos 0.25% of the ABC
>2B to 5 billion pesos PhP 5,000,000.00
>5 billion pesos 0.1 % of the ABC Protest Mechanism Protest Mechanism "The discretion to accept or reject a bid and award contracts is vested in the government agencies entrusted with that function. The discretion given to authorities to accept or reject a bid is of such wide latitude that courts will not interfere, unless it is apparent that it is exercised arbitrarily, or, used as a shield to a fraudulent award." Albay Accredited Constructors Association v. Ombudsman,
G.R. No. 133517, January 30, 2006 "A reservation of the government of its right to reject any bid, generally vests in the authorities a wide discretion as to who is the best and most advantageous bidder. The exercise of such discretion involves inquiry, investigation, comparison, deliberation and decision, which are quasi-judicial functions, and when honestly exercised, may not be reviewed by the court." Albay Accredited Constructors Association v. Ombudsman,
G.R. No. 13351, January 30, 2006 Phil. Pharmawealth, Inc. v. PCMC BAC, et. al.,
G.R. No. 167806, 26 June 2006 "The doctrine of exhaustion of administrative remedies calls for resort first to the appropriate administrative authorities to accord them the prior opportunity to decide controversies within their competence before the same may be elevated to the courts of justice for review."
Within 3 c.d. from receipt by bidder of notice from BAC that the bidder has the LCB, the bidder shall submit the following documentary requirements:

a) Tax clearance;
b) Latest income and business tax returns;
c) Certificate of PhilGEPS Registration; and
d) Other appropriate licenses and permits
required by law and stated in the Bidding
Documents. Contract Implementation Advance payment shall be made only after prior approval of the President and shall not exceed fifteen percent (15%) of the contract amount (P.D. 1445);

A single advance payment not exceeding 50% of contract amount shall be allowed for the for the following where requirement of down payment is a standard industry practice;

Hotel and restaurant services;
Use of conference/seminar and exhibit areas; and
Lease of Office space

Advance payment not exceeding 15% shall also be allowed for procurement of goods to address contingencies arising from natural or man-made calamities in areas where a “State of Calamity has been declared. Advance Payment for Goods GPPB Resolution 04-2010 dated 25 June 2010 - Amendment of Sec. 4.5 of Annex “D” of the IRR to read as follows:

“Upon submission of an irrevocable letter of credit or bank guarantee issued by a Universal or Commercial Bank, advance payment not to exceed fifteen percent (15%) of the contract amount shall be allowed and paid within sixty (60) calendar days from signing of the contract. The irrevocable letter of credit or bank guarantee must be for an equivalent amount, shall remain valid until the goods are delivered, and accompanied by a claim for advanced payment.”

Approved by the President under Memorandum Order No. 15 dated 9 May 2011. Advance Payment for Goods Advance Payment can be requested by contractor, however:
payment must not exceed fifteen percent (15%) of the total contract price, and must be made in lump sum or, at the
most, two (2) installments according to a schedule
specified in the ITB;

Advance payment shall be made only upon submission to and acceptance by procuring entity of an irrevocable standby L/C of equivalent value, a bank guarantee or a surety bond callable upon demand;

The advance payment shall be repaid by the contractor by deducting fifteen percent (15%) from his periodic progress payments; Advance Payment for Infra Refers to the amount equal to ten percent (10%) of the progress payments, before deductions are made, that is withheld by the procuring entity to cover the uncorrected discovered defects and third party liabilities;

Collected from all progress payments until works equivalent to fifty percent (50%) of the value of works, as determined by the procuring entity, is accomplished.

If, after fifty percent (50%) completion, the work is satisfactorily done and on schedule, no additional retention shall be made; otherwise, the ten percent (10%) retention shall continue to be imposed;

Shall be due for release after the defects liability period (1 year after completion) and upon final acceptance of the works. Retention Money for Infra Instead of Retention Money, the contractor may request that it issues in favor of the government, any of the following:

Irrevocable standby L/C from a commercial bank;
Bank guarantees; or
Surety Bond callable on demand;

The Financial instruments must be of amounts equivalent to the retention money substituted for and acceptable to the government, must be valid for a duration to be determined by the concerned procuring entity, and answer for the purpose for which the ten percent (10%) retention is intended. Retention Money for Infra
Variation Order may either be in the form of a Change Order or Extra Work Order;

Change Order or Extra Work Order involving a cumulative amount exceeding five percent (5%) of the original contract, no work thereon may commence unless said Change Order or Extra Work Order has been approved by the HOPE or his duly authorized representative. Variation Order (for Infra) Adjustments provided for in a Variation Order costing more than ten percent (10%) of the original project costs shall be the subjects of another contract if the works are separable from the original contract;

If these adjustments are urgently necessary to complete the original scope of work, the HOPE may authorize the Variation Order beyond ten percent (10%) but not more than twenty percent (20%), subject to the guidelines to be determined by the GPPB;

In case the Variation Order exceeds ten percent (10%), the procuring entity must ensure that appropriate sanctions are imposed on the designer, consultant or official responsible for the original detailed engineering design; Variation Order (for Infra) "The winning bidder is not precluded from modifying or amending certain provisions of the contract bidded upon. However, such changes must not constitute substantial or material amendments that would alter the basic parameters of the contract and would constitute a denial to the other bidders of the opportunity to bid on the same terms." PSALM vs. Pozzolanic Phillippines, Inc.,
G.R. No. 183789, August 24, 2011 Amendments of Contracts Amendments of Contracts "Hence, the determination of whether or not a modification or amendment of a contract bidded out constitutes a substantial amendment rests on whether the contract, when taken as a whole, would contain substantially different terms and conditions that would have the effect of altering the technical and/or financial proposals previously submitted by other bidders." PSALM vs. Pozzolanic Phillippines, Inc.,
G.R. No. 183789, August 24, 2011 Dir. Renato M. de Vera, MNSA
DBM-Regional Office IV-B
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