CIVIL, PENAL AND

ADMINISTRATIVE PROVISIONS
STANDARD OF ETHICS

Highest Standard of Ethics

• The standard of ethics required to be observed by

procuring entities and bidders, manufacturers, suppliers
or distributors during the procurement and execution of
contract.

• Bidders determined to have committed corrupt,

fraudulent, collusive and coercive practices by the
government will not be eligible to bid in its projects.
STANDARD OF ETHICS

Unlawful Acts

❑ Coercive Practice
❑ Collusive Practice
❑ Corrupt Practice
❑ Fraudulent Practice
PENAL PROVISIONS
COVERAGE
• Without prejudice to the provisions of Republic Act No.
3019, otherwise known as the “Anti-Graft and Corrupt
Practices Act” and other penal laws.

COVERAGE:

1. Public officers who commit any of the acts

enumerated under Section 65.1 of the IRR, and the
private individuals who collude with them.
2. Private individuals who commit any of the following
acts enumerated under Sections 65.2 and 65.3 of the
IRR, and public officer who conspires with them.
COVERAGE

❑ It shall cover all types of procurement whether done

manually or electronically.

❑ When the bidder is a juridical entity, criminal liability and

the accessory penalties shall be imposed on its
directors, officers or employees who actually commit
any of the foregoing acts.
COVERAGE

❑ If a person previously held liable or found guilty under

the provisions of the Act and this IRR has a controlling
interest in a prospective bidder-entity the said bidder-
entity shall be disqualified to participate in any
procurement activity being conducted by the
Government.
APPLICABLE PENALTY
❑ Imprisonment for not less than six (6)
years and one (1) day but not more
than fifteen (15) years.

❑ Penalty of temporary or perpetual disqualification from

public office (Public Official)

❑ Permanent from transacting

business with the government (Private Individual)
JURISDICTION

Jurisdiction over the offenses defined under this

Rule shall belong to the appropriate courts,
according to laws existing at the time of the
commission of the offenses.
OFFENSES COMMITTED :
BY PUBLIC OFFICERS
Section 65(a) of RA 9184

Delaying, Unduly
Open any without
justifiable influencing
sealed Bid cause, the or exerting
including but screening for undue
not limited to eligibility,
pressure on
Bids that may opening of bids,
have been evaluation and any member
submitted post evaluation of of the BAC or
bids, and any officer or
through the awarding of
electronic contracts beyond employee of
system the prescribed the procuring
periods of action. entity
OFFENSES COMMITTED :
BY PUBLIC OFFICERS
Section 65(a) of RA 9184

When the head of the

agency abuses the
Splitting of contracts
exercise of his power to
reject any and all bids
OFFENSES COMMITTED :
BY PRIVATE INDIVIDUALS
Section 65(b) of RA 9184

❑Agreement and ❑ Agreement to secure

submission to submit bids undue advantage
with pre-arranged lowest bid ❑ Employment of scheme
❑Malicious submission of disadvantageous to the
different bids through two or public
more persons

*Public officers conspiring with the private individuals

are also liable under the provision.
OFFENSES COMMITTED :
BY PRIVATE INDIVIDUALS
Section 65(b) of RA 9184
When two or more bidders agree and
submit different bids as if they were
bona fide, when they know that one or
more of them was so much higher than
the other that it could not be honestly
accepted and that the contract will
surely be awarded to the pre-arranged
lowest bid.
When two or more bidders enter into
an agreement which call upon one to
refrain from bidding for procurement
contracts, or which call for withdrawal
of Bids already submitted, or which
are otherwise intended to secure an
undue advantage to any one of them.
Government Procurement Policy Board – Technical Support Office
When a bidder maliciously submits
different bids through two or more
persons, corporations, partnerships or
any other business entity in which he has
interest to create the appearance of
competition that does not in fact exist so
as to be adjudged as the winning bidder.
When a bidder, by himself or in
connivance with others, employs
schemes which tend to restrain the
natural rivalry of the parties or operates
to stifle or suppress competition and thus
produce a result disadvantageous to the
public.
OFFENSES COMMITTED :
BY PRIVATE INDIVIDUALS
Section 65(c) of RA 9184
Submission of eligibility
Submission of bidding documents
requirements containing false
containing false information of
information of falsified
falsified documents or concealment
documents or concealment of
of such information
such information

Using name of another or

allowing another to use one’s Withdrawal of bid
name

*Public officers conspiring with the private individuals are

also liable under the provision.

Government Procurement Policy Board – Technical Support Office

CIVIL LIABILITY
CIVIL LIABILITY

Without prejudice to administrative sanctions that may be

imposed in proper cases, a conviction under the Act and
this IRR or R.A. 3019 shall carry with it civil liability, which
may either consist of:

❑ Restitution for the damage done; or

❑ Forfeiture in favor of the government of any unwarranted

benefit derived from the act or acts in question or both,
at the discretion of the courts.
ADMINISTRATIVE
SANCTIONS
 ADMINISTRATIVE SANCTIONS

In addition to the penal and civil sanctions, the HOPE,

subject to the authority delegated to the BAC, if any, shall
impose on bidders or prospective bidders, the
administrative penalty of:

❑ Suspension for 1 year (first offense); for 2 years (second

offense) from participating in the public bidding process,
and disqualification from further participating in the
public bidding being undertaken by the PE

❑ Forfeiture of Bid Security or the Performance Security

 ADMINISTRATIVE SANCTIONS

❑ The procedures for the blacklisting of manufacturers,

suppliers, distributors, contractors, or consultants for
Government projects shall be undertaken in accordance
with the guidelines to be issued by the GPPB.

(GPPB Resolution No. 40-2017 pursuant to Section 69.4

of the Revised IRR)
UNIFORM GUIDELINES ON
BLACKLISTING
UNIFORM GUIDELINES ON BLACKLISTING

GPPB
Title / Subject Matter Date Approved Effective Date
Resolution
40-2017 Approving the Revised December 21, September 4, 2018
Uniform Guidelines for 2017
Blacklisting of
Manufacturers, Suppliers,
Distributors, Contractors
and Consultants.
UNIFORM GUIDELINES ON BLACKLISTING

GPPB
Title / Subject Matter Date Approved Effective Date
Resolution
14-2020 Approving the Prescribed June 25, 2020 August 7, 2020
Form of Blacklisting Order,
the Implementation of the
Online Blacklisting Portal
for Posting and Updating
of status of blacklisted
entities.
DEFINITION OF TERMS

BLACKLISTING
Administrative penalty disqualifying a person or an entity from
participating in any government procurement for a given period.

BLACKLISTED PERSON/ENTITY

A person/entity who was disqualified by

an agency and/or is included in the GPPB
Consolidated Blacklisting Report
DEFINITION OF TERMS
SUSPENSION

Interim penalty imposed for infractions committed by a

bidder during the procurement stage, whereby such
bidder is prohibited from further participation in any of
the bidding process of an agency

Shall be effective during the period of motion for

reconsideration and/or appeal, and shall terminate
only upon final decision by the HoPE or appellate
authority
DEFINITION OF TERMS

DELISTING
Removal of a person/entity from the Consolidated Blacklisting Report
(https://gppb.gov.ph/ConsolidatedBlacklistingReport.php)

A blacklisted
person/entity shall be
automatically
delisted after the
period for the penalty
has elapsed.
SCOPE OF BLACKLISTING

Blacklisting shall apply to the following persons:

Individuals or Sole Proprietorships – Bidders and spouses

Partnerships – Partnership itself & its partners

Cooperatives – Cooperative itself & members of the board of directors, general

manager or chief executive officer

Partnership, Joint Venture or Consortium, or has blacklisted member/s and/or

partner/s, as well as a person/entity who is a member of a blacklisted joint venture or
consortium

Corporations - a single stockholder, together with his/her relatives up to the third civil
degree of consanguinity or affinity, and their assignees, holding at least 20% of the
shares therein, its chairman and president
BLACKLISTING DURING
PROCUREMENT STAGE
GROUNDS FOR BLACKLISTING DURING
PROCUREMENT STAGE
Submission of eligibility requirements containing false
information/falsified documents
Submission of Bids that contain false information or
falsified documents, or the concealment of such
information in the Bids in order to influence the
outcome of eligibility screening or any other stage of
the public bidding
Refusal to clarify or validate in writing its Bid during
post qualification within a period of 7 CDs from receipt
of the request for clarification
Any documented unsolicited attempt by a bidder to
unduly influence the outcome of the bidding in his
favor
Allowing the use of one’s name, or using the name of
the name of another for purpose of public bidding
Withdrawal of a bid, or refusal to accept an award, or
enter into contract without justifiable cause, after he
had been adjudged as having submitted the
LCRB/HRRB
Refusal or failure to post the required performance
security within the prescribed time
All other acts that tend to defeat the purpose of the
competitive bidding, such as habitually withdrawing
from bidding or submitting late bids or patently
insufficient bids, for at least 3 times within a year,
except for valid reasons
SANCTIONS FOR BLACKLISTING DURING
PROCUREMENT STAGE

Bid Security Forfeiture

1st offense: Blacklisting for 1 year
2nd offense: Blacklisting for 2 years
Enforcement of Bid Securing Declaration

Without prejudice to the imposition of additional

administrative sanctions as the internal rules of the
agency may provide and/or further criminal
prosecution.
BLACKLISTING PROCEDURE DURING
PROCUREMENT STAGE
Initiation of Action
Who may initiate?
• Any bidder/prospective bidder
• Duly authorized observer
• BAC
“Contractors” shall refer to
manufacturers, suppliers,
distributors, contractors and
consultants
BAC notifies
Contractor in writing
upon verification of
existence of grounds
• That a complaint has been filed
• That he has opportunity to show
cause
• That a hearing shall be
conducted, upon request
• The consequence of being
suspended and blacklisted
Contractor shall submit its
written answer to BAC with
documentary evidence and
request for hearing, if he so
desires, within 5 cd from
receipt of notification
NO TIME EXTENSION
SHALL BE ALLOWED
BLACKLISTING PROCEDURE DURING
PROCUREMENT STAGE
IF CONTRACTOR DOES NOT SUBMIT ANSWER
C
O DISMISS THE
N Within 15 CDs from NO
CASE
T BAC recommends to receipt of BAC
Does NOT the HoPE the
R Submit resolution and
suspension of the records of BAC
A answer Contractor and the Proceeding, HoPE
C forfeitureof bid determines
T security. existence of HoPE issues a
O reasonable cause YES Suspension
R Order and
forfeiture of bid
Within 5 CDs from security
receipt of
notification from
BAC
BLACKLISTING PROCEDURE DURING
PROCUREMENT STAGE
BAC immediately
IF CONTRACTOR SUBMITS ANSWER sets the date and
time for hearing
C YES BAC conducts hearing
O
N
T
R Submits Request for BAC determines
NO
A
C
answer hearing existence of fault YES A
T
O
R
Based on the
Within 5 cd from
complaint, answer and
receipt of
documentary evidence
notification from
and facts verified
BAC
BLACKLISTING PROCEDURE DURING
PROCUREMENT STAGE
IF CONTRACTOR SUBMITS ANSWER

DISMISS THE
NO
CASE
BAC recommends to the Within 15 CDs from receipt
HoPE the suspension of the
A Contractor and the
of BAC resolution and
records of BAC Proceeding,
forfeiture of bid security. HoPE determines
existence of reasonable
cause HoPE issues a
YES
Suspension Order
and forfeiture of
bid security
BLACKLISTING PROCEDURE DURING
PROCUREMENT STAGE
NOTICE OF DECISION: The HoPE shall furnish the suspended contractor a
copy of the decision immediately after its promulgation.

EFFECT OF DECISION:
1. Contractor is suspended upon receipt of the notice of decision.
2. The suspension shall remain in effect during the period of motion for
reconsideration and appeal, and shall terminate only upon a reversal of the
decision by HoPE or appellate authority.
3. If no motion for reconsideration or appeal is filed, the decision shall become
final and executory after the lapse of 7 CDs from the receipt of the notice of
decision, and the HoPE shall issue the BLACKLISTING ORDER to the
Contractor.
BLACKLISTING PROCEDURE DURING
PROCUREMENT STAGE
IF CONTRACTOR FILES MOTION FOR RECONSIDERATION AND APPEAL

C NO HoPE issues
O Blacklisting Order
HoPE resolves
N Files MR motion within 7
T CDs from receipt Files Appellate
R YES Authority
Appeal
A resolves appeal
C within 7 CDs
T Within 3 CDs from receipt of
O notice of decision, based on
R the ff:
1. Decision does not Filed with the If appeal is NOT
conform with the appellate authority granted, HoPE
evidence/facts within 7 CDs from issues Blacklisting
2. Newly discovered receipt of notice Order.
evidence
 BLACKLISTING DURING
CONTRACT
IMPLEMENTATION STAGE
GROUNDS FOR BLACKLISTING DURING CONTRACT
IMPLEMENTATION STAGE
1. Failure of the contractor, due solely to his fault or negligence, to mobilize
and start work or performance within the specified period in the Notice to
Proceed (“NTP”);
1. Failure by the contractor to fully and faithfully comply with its contractual
obligations without valid cause, or failure by the contractor to comply with
any written lawful instruction of the procuring entity or its representative(s)
pursuant to the implementation of the Contract;
1. Assignment and subcontracting of the contract or any part thereof or
substitution of key personnel named in the proposal without prior written
approval by the PE
GROUNDS FOR BLACKLISTING DURING CONTRACT
IMPLEMENTATION STAGE
4. For the procurement of goods, unsatisfactory progress in the delivery of the
goods by the manufacturer, supplier or distributor arising from his fault or
negligence and/or unsatisfactory or inferior quality of goods, as may be
provided in the contract;

4. For the procurement of consulting services, poor performance by the consultant

of his services arising from his fault or negligence;

4. For the procurement of infrastructure projects, poor performance by the

contractor or unsatisfactory quality and/or progress of work arising from his fault
or negligence as reflected in the Constructor's Performance Evaluation System
rating sheet, or the existing performance monitoring system of the PE.
GROUNDS FOR BLACKLISTING DURING CONTRACT
IMPLEMENTATION STAGE
7. Willful or deliberate abandonment or non-performance of the project or
contract by the contractor resulting to substantial breach thereof without
lawful and/or just cause;

7. In case it is determined prima facie that the contractor has engaged,

before or during implementation of the contract, in unlawful deeds and
behaviors relative to contract acquisition and implementation as
enumerated in Section III.D. of the Guidelines on Termination of
Contracts.
SANCTIONS FOR BLACKLISTING DURING
CONTRACT IMPLEMENTATION STAGE

Performance Security Forfeiture

1st offense: Blacklisting for 1 year
2nd offense: Blacklisting for 2 years

Without prejudice to the imposition of additional

administrative sanctions as the internal rules of the
agency may provide and/or further criminal
prosecution.
BLACKLISTING PROCEDURE DURING CONTRACT
IMPLEMENTATION STAGE
❑ Upon termination of contract due to default and/or unlawful acts of the
contractor, the HoPE shall issue within 7 CDs a Blacklisting Order.

❑ Where contract termination is no longer possible, but the contractor

committed acts or causes which may constitute ground(s) for blacklisting,
the implementing unit shall, within 7 CDs after the lapse of project duration,
cause the execution of a Verified Report, with all relevant evidence
attached, subject to the following procedures:

Notice of
Show Cause Decision
Blacklisting
BLACKLISTING PROCEDURE DURING CONTRACT
IMPLEMENTATION STAGE
Notice of Blacklisting
Upon recommendation by the IU, the
HoPE shall initiate the blacklisting
procedures by a written notice to the
contractor with the following information:
1. a statement of the acts that
constitute the ground/s for
blacklisting;
2. an instruction to the contractor to
show cause as to why it should not
be blacklisted; and
3. special instructions of the PE, if any.
The Notice of Blacklisting shall be
accompanied by a copy of the Verified
Report
Show Cause
❑ Within a period of 7 CDs from
receipt of the Notice of
Blacklisting, the contractor shall
submit to the HoPE a verified
position paper stating why it
should not be blacklisted.
❑ If the contractor fails to show
cause after the lapse of the 7-day
period, either by inaction or by
default, the HoPE shall issue a
Blacklisting Order.
Decision
Within a non-extendible period of 10
CDs from receipt of the verified
position paper, the HoPE shall
decide whether or not to blacklist
the contractor. It shall serve a
written notice to the contractor of its
decision which shall become final
and executory after the lapse of 7
CDs from the receipt of the notice of
decision.
WHEN DOES BLACKLISTING ORDER BECOME
FINAL AND EXECUTORY?

1. If the bidder did not file a Motion for Reconsideration (MR) on the Decision
to Suspend, said Decision becomes final and executory after the lapse of 7
CDs counted from receipt of the Notice of the Decision; or,

1. If the bidder did not file an Appeal after his MR has been denied, the
Decision becomes final and executory after the lapse of 7 CDs counted
from receipt of the resolution on the motion for reconsideration; or,

1. If an Appeal was filed and the same was denied, the Decision becomes
final and executory upon receipt by the agency and person/entity
concerned of the Decision on the protest.
STATUS OF BLACKLISTED PERSON/ENTITY

BEFORE ISSUANCE BLACKLISTING BLACKLISTING

OF BLACKLISTING
ORDER
The erring contractor may
participate in the
procurement of any
government project
except in the agency
where he is suspended
ORDER ISSUED
BEFORE NOA
The blacklisted
person/entity shall not be
qualified for award and
such project/contract
shall be awarded to
another bidder pursuant to
R.A. 9184 and its IRR
ORDER ISSUED
AFTER NOA
The awarded
project/contract shall not
be prejudiced by the
said order: Provided, that
the said offense(s) is/are
not connected with the
awarded project/contract

Effectivity period for the penalty shall be clearly specified n the Blacklisting Order
and shall commence on the same date of its issuance
APPLICATION OF PENALTY

Remaining 2-year BO
period of New 2-year BO (latter shall be deemed
previous BO terminated and subsumed)

Offense
>3 2-year BO
BLACKLISTING ORDER FORM
GPPB Circular No. 03-2020

https://www.gppb.gov.ph/downloadables/forms/BOForm.docx
BLACKLISTING ORDER FORM
GPPB Circular No. 03-2020
The Blacklisting Order duly signed by the HoPE/appellate authority shall
contain the following:
1. Department/Office Order or Board Resolution number,
2. Complete registered business name, address and PhilGEPS
registration number of the blacklisted person/entity,
3. License number, if applicable,
4. Authorized Managing Officer,
5. Name of project/contract and location/amount,
6. Specific ground(s)/offense(s) committed,
7. Sanction imposed and its specific duration (“start” and “end” dates),
and
8. Date of issuance of the order to blacklist.
ONLINE BLACKLISTING
PORTAL
USE OF THE ONLINE BLACKLISTING PORTAL
GPPB Resolution No. 14-2020 and GPPB Circular No. 03-2020 (25 June 2020)

The Online Blacklisting Portal is an electronic facility developed by the

GPPB-TSO which allows PEs to post issued Blacklisting Orders, update
the status, and access information related to agency blacklisting.
USE OF THE ONLINE BLACKLISTING PORTAL
GPPB Resolution No. 14-2020 and GPPB Circular No. 03-2020 (25 June 2020)

Blacklisting Orders (BOs) must be posted (encoded and uploaded) in the

OBP three (3) calendar days from the date of its effectivity.

In case of a lawful order from a judicial or quasi-judicial body directing to

temporarily or permanently lift the period of suspension or remove the name
of a Blacklisted Entity from the Consolidated Blacklisting Report, the PE,
through its official or alternate user, shall immediately remove the name of
Blacklisted Entity upon receipt of the order
The Blacklisted Entity shall only be qualified to participate in all
government procurement during the period of the temporary
lifting or removal
USE OF THE ONLINE BLACKLISTING PORTAL
GPPB Resolution No. 14-2020 and GPPB Circular No. 03-2020 (25 June 2020)

Upon lapse of the temporary lifting order, the PE’s official or alternate
user shall immediately repost the name of a Blacklisted Entity in the
Consolidated Blacklisting Report
Upon reposting, the PE’s official or alternate user shall adjust
the period of suspension by adding the number of days the
suspension of the Blacklisted Entity was temporarily lifted or
its name was removed from the Consolidated Blacklisting
Report in order to fully serve the one (1) year or two (2) years
penalty, as the case may be.
 TERMINATION OF
CONTRACTS
(Annex “I” of 2016 IRR OF RA NO. 9184)
TERMINATION OF CONTRACTS

• Guidelines on Termination of Contracts – Annex I of

the 2016 Revised IRR of R.A. 9184

• Objectives:
1. Promote fairness in the termination of procurement
contracts; and
2. Prescribed contract conditions and measures to
enable the government to protect its interests.

53
TERMINATION OF CONTRACTS

Date Approved
GPPB
Title / Subject Matter &
Resolution
Effective Date

07-2019 APPROVING AMENDMENTS TO ITEM III (A)1(A), March 8, 2019

(B) AND (C) OF ANNEX “I” OF THE 2016 REVISED
IMPLEMENTING RULES AND REGULATIONS OF May 4, 2019
REPUBLIC ACT NO. 9184, CLAUSES 23.1 UNTIL (Published Date
23.5 OF THE GENERAL CONDITIONS OF THE – Effective
CONTRACT, PHILIPPINE BIDDING DOCUMENTS Immediately
FOR THE PROCUREMENT OF GOODS AND
CLAUSE ON LIQUIDATED DAMAGES OF THE
GENERAL CONDITIONS OF THE CONTRACT,
PHILIPPINE BIDDING DOCUMENTS FOR THE
PROCUREMENT OF GOODS, INFRASTRUCTURE
PROJECTS AND CONSULTING SERVICES

54
GROUNDS FOR TERMINATION

1. Termination for Default;

2. Termination for Convenience;
3. Termination for Insolvency;
4. Termination for Unlawful Acts; and
5. Termination by Contractor / Consultant.

55
TERMINATION FOR DEFAULT
The PE shall terminate a contract when any of the following
conditions attend its implementation:
1. In contracts for Goods
a. outside force majeure, the Supplier fails to perform or
deliver any or all of the Goods, wherein such failure
amounts to at least 10% of the contract price;
b. As a result of force majeure, the Supplier is unable to
deliver or perform any or all of the Goods, wherein such
failure amounts to at least 10% of the contract price, for a
period of not less than 60 cd after receipt of notice from the
PE that the force majeure is deemed to have ceased;
c. The Supplier fails to perform any other obligation under the
Contract.
56
TERMINATION FOR DEFAULT

2. In contracts for Infrastructure Projects

a. Due to Contractor’s fault and while the project is on-

going, it has incurred a negative slippage of 15% or
more;
b. After the expiration of the contract time, the
Contractor incurred negative slippage of 10% or
more, due to its own fault; or

57
TERMINATION FOR DEFAULT
2. In contracts for Infrastructure Projects

c. The Contractor commits any or all of the

following:
i. Abandons the contract works, refuses or fails
to comply with a valid instruction of the PE or
fails to proceed expeditiously and without delay
despite a written notice by the PE;
ii. Does not have the listed minimum essential
equipment in the project site in accordance
with the approved work plan and equipment
deployment schedule;
58
TERMINATION FOR DEFAULT
2. In contracts for Infrastructure Projects

c. The Contractor commits any or all of the

following:
iii. Does not execute the works in accordance with
the contract or neglects to carry out its
contractual obligations;
iv. Neglects or refuses to remove materials or
perform a new work that has been rejected as
defective or unsuitable; or
v. sub-lets any part of the works without
approval of the PE.
59
TERMINATION FOR DEFAULT
3. In contracts for Consulting Services
a. outside force majeure, the Consultant fails to deliver
or perform the Outputs and Deliverables within the
period specified in the contract, or within any granted
extension;
b. As a result of force majeure, the Consultant is unable
to deliver or perform a material portion of Outputs
and Deliverables for a period of not less than 60 cd
after receipt of notice from the PE that the force
majeure is deemed to have ceased;
c. The Consultant fails to perform any other obligation
under the Contract.
60
TERMINATION FOR CONVENIENCE

❑ The PE may terminate the contract at any time for its

convenience.

❑ The HOPE shall determine the existence of conditions

that would make the project implementation
economically, financially or technically impractical
and/or unnecessary.

61
TERMINATION FOR INSOLVENCY

❑ The PE shall terminate the contract if the

Supplier/Contractor/Consultant is declared bankrupt or
insolvent as determined with finality by a court of
competent jurisdiction.
❑ The bankruptcy/insolvency of the Supplier/Contractor/
Consultant must be that as determined by a court of
competent jurisdiction.

❑ Termination will be w/out compensation provided

that such termination will not prejudice or affect
any right of action or remedy w/c has accrued or
will accrue thereafter
62
TERMINATION FOR UNLAWFUL ACTS

❑ The PE may terminate the contract in case it is

determined prima facie that the Supplier/ Contractor/
Consultant has engaged, before or during the
implementation of the contract in unlawful deeds and
behaviors relative to the contract acquisition and
implementation.

63
TERMINATION FOR UNLAWFUL ACTS
❑ Unlawful acts include, but not limited to, the following:
Corrupt, Fraudulent, Collusive,
and Coercive Practices

Controlling shareholders in common with Bidder receives/received any direct or indirect

another Bidder Forge Documents
subsidy from another Bidder

Bidder has a relationship with common third

Bidders have the same legal parties, that may provide information or
representatives influence the Bid of another Bidder

64
TERMINATION BY CONTRACTOR/
CONSULTANT
1. In contracts for Infrastructure Projects
❑ The Contractor may terminate his contract with the PE
if the works are completely stopped for a
continuous period of at least 60 cd, through no
fault of its own for the following reasons:
i. Failure of PE to deliver supplies, materials, right-of-
way, or other items under the terms of the
contract; or
ii. Works is disrupted by adverse peace and order
situation, certified by the AFP Provincial
Commander and approved by the Secretary of
National Defense.
65
TERMINATION BY CONTRACTOR/
CONSULTANT

2. In contracts for Consulting Services

❑ The Consultant may terminate its agreement with the

PE if the latter is in material breach of its contractual
obligations and has not remedied the same within 60
cd from receipt of the Consultant’s notice specifying
such breach.

66
PROCEDURES FOR TERMINATION OF CONTRACTS

Verification

Notice to
Decision Terminate

Rescission of
Show
Notice of
Cause
Termination

67
PROCEDURES FOR TERMINATION OF CONTRACTS

1. Verification

❑ The implementing unit shall, within 7cd from receipt of

written report of acts or causes which may constitute
ground/s for termination, verify the existence of such
grounds, and shall execute a Verified Report, with all
relevant evidence attached.

68
PROCEDURES FOR TERMINATION OF CONTRACTS

2. Notice to Terminate
❑ The HOPE shall terminate contract only by written
notice to the Contractor/Supplier stating therein the
following:
i. the grounds and the statement of the acts that
constitute the grounds for which the contract is being
terminated;
ii. extent of termination;
iii. an instruction to the Supplier/ Contractor/Consultant
to show cause why the contract should not be
terminated; and
iv. special instruction of the PE, if any.

69
PROCEDURES FOR TERMINATION OF CONTRACTS

2. Notice to Terminate

❑ The PE may withdraw the Notice to Terminate, at any

time before the receipt of the Supplier’s/ Contractor’s/
Consultant’s position paper.

❑ Withdrawal of Notice to Terminate shall be based on

PE’s determination that items or works, subject of the
notice, had been completed, delivered, or performed.

70
PROCEDURES FOR TERMINATION OF CONTRACTS

3. Show Cause

❑ A Verified position paper shall be submitted by the

Supplier/ Contractor/ Consultant to the HOPE within
7cd from receipt of the Notice of Termination.

❑ Failure by the Supplier/ Contractor/ Consultant to

submit the verified position paper within the
reglementary period shall cause the HOPE to issue
an Order of termination.

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4. Decision

❑ Within a non-extendible period of 10 cd upon receipt

of the verified position paper, the HOPE shall decide,
whether or not to terminate the contract.

❑ Failure by the Supplier/ Contractor/ Consultant to

submit the verified position paper within the
reglementary period shall cause the HOPE to issue
an Order of termination.

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4. Decision

❑ Termination shall be based only on the ground/s

stated in the Notice to Terminate.
❑ HOPE may create Contract Termination Review
Committee (CTRC) to assist him in the discharge of
his function.
❑ All findings or decisions of the CTRC are subject to
the approval of the HOPE.

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5. Take-over of Contracts

❑ If a PE terminates a contract due to default,

insolvency, or for a cause, it may enter into a
Negotiated Procurement pursuant to Section 53(c) of
RA 9184 and 53.3 of its IRR.

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❑ Sections 53.3.1 to 53.3.3 of the IRR of RA 9184 provides

for the procedures in conducting the negotiation, thus:
1. The contract may be negotiated starting with the second lowest
calculated/highest rated bidder for the project under consideration at
the bidder’s original bid price.

2. If negotiation fails, then negotiation shall be done with the third lowest
calculated/highest rated bidder at his original price. If the negotiation
fails again, a short list of at least three (3) eligible contractors shall be
invited to submit their bids, and negotiation shall be made starting with
the lowest calculated/highest rated bidder.

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❑ Sections 53.3.1 to 53.3.3 of the IRR of RA 9184

provides for the procedures in conducting the
negotiation, thus:
3. Authority to negotiate contracts for projects under
these exceptional cases shall be subject to prior
approval by the Heads of the Procuring Entities
concerned, within their respective limits of approving
authority.

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6. PE’s options in Termination for Convenience

❑ Applies only to contract for Goods
❑ Goods shall be accepted if performed or are ready for delivery
within 30 cd after receipt of Supplier’s Notice to Terminate at
the contract terms and prices.
❑ Goods not yet performed or ready for delivery, PE may elect:
i. to have any portion delivered or performed and paid at the
contract terms and prices; and/or
ii. to cancel the remaining and pay to the Supplier an agreed
amount for partially completed or performed goods and for
materials and parts previously procured by the Supplier

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7. Notice by Contractor/Consultant

❑ Written notice must be served to the PE at least 30

cd before its intended termination.

❑ Contract is deemed terminated if it is not resumed in

30 cd after receipt of such notice by the PE.

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