Approving Amendments to Annex "E" of the Revised Implementing Rules and Regulations of Republic Act No. 9184

October 7, 2011

GPPB RESOLUTION NO. 08-11

APPROVING AMENDMENTS TO ANNEX "E" OF THE REVISED IMPLEMENTING RULES AND REGULATIONS OF REPUBLIC ACT NO. 9184

WHEREAS, Republic Act (RA) No. 9184, entitled "An Act Providing for the Modernization, Standardization and Regulation of the Procurement Activities of the Government and for Other Purposes," took effect on 26 January 2003, while its Implementing Rules and Regulations (IRR) Part A took effect on 8 October 2003; aAcDSC

WHEREAS, the Government Procurement Policy Board (GPPB), under Section 63 of the RA 9184 and its IRR-A, is mandated to formulate and amend public procurement policies, rules and regulations, and amend the IRR, whenever necessary;

WHEREAS, after extensive consultation and deliberations, the GPPB approved the Revised IRR of RA 9184 through GPPB Resolution 03-2009 during its meeting held last 22 July 2009. It was published in a Supplemental Issue of the Official Gazette last 3 August 2009, and took effect on 2 September 2009;

WHEREAS, in a meeting held on 28 January 2011, the GPPB and its Inter Agency Technical Working Group (IATWG) agreed to revise portions of Annex "E" of the Revised IRR pertaining to the process and conditions for grant of variation orders as embodied in its Resolution 03-2011 published in The Manila Times on 6 April 2011;

WHEREAS, to avoid vague understanding and ambiguous interpretation of the processes and conditions for granting variation orders, there is a need to clarify and revise Sections 1.5 and 3.1 of Annex "E" of the revised IRR;

WHEREAS, in a meeting held on 7 October 2011, the GPPB discussed the unclear and equivocal provisions and deliberated on the corrections necessary to provide a clear and unambiguous guidance on the proper process and considerations for granting variation orders.

NOW, THEREFORE, for and in consideration of the foregoing, WE, the Members of the GOVERNMENT PROCUREMENT POLICY BOARD, by virtue of the powers vested on US by law, hereby RESOLVE to confirm, adopt and approve, as WE hereby confirm, adopt and approve, the following revisions to Sections 1.5 and 3.1 of Annex "E" of the IRR of RA 9184:

	Current Provision	Approved Revision
Section 1.5
In claiming for any Variation Order, the	In claiming for any Variation Order, the
contractor shall, within seven (7) calendar	contractor shall, within seven (7) calendar
days after such work has been commenced	days after such work has been commenced
or after the circumstances leading to such	pursuant to Section 3.2 hereof; or, within
condition(s) leading to the extra cost, and	twenty-eight (28) calendar days after the
within twenty-eight (28) calendar days	circumstances or reasons justifying a claim for
deliver a written communication giving full	extra cost shall have occurred, deliver a notice
and detailed particulars of any extra cost in	giving full and detailed particulars of any extra
order that it may be investigated at that time.	cost in order that it may be investigated at that
Failure to provide either of such notices in	time. Failure to provide either of such notices
the time stipulated shall constitute a waiver	in the time stipulated shall constitute a waiver
by the contractor for any claim. The	by the contractor for any claim. The
preparation and submission of Variation	preparation and submission of Variation
Orders are as follows:	Orders are as follows:
a)	If the procuring entity's	No revision
	representative/Project Engineer
	believes that a Change Order or
	Extra Work Order should be issued,
	he shall prepare the proposed Order
	accompanied with the notices
	submitted by the contractor, the plans
	therefor, his computations as to the
	quantities of the additional works
	involved per item indicating the
	specific stations where such works
	are needed, the date of his inspections
	and investigations thereon, and the
	log book thereof, and a detailed
	estimate of the unit cost of such
	items of work, together with his
	justifications for the need of such
	Change Order or Extra Work Order,
	and shall submit the same to the
	Head of the Procuring Entity for
	approval.
b)	The procuring entity's representative/	b)	The Head of the Procuring Entity or
	Project Engineer, upon receipt of the		his duly authorized representative
	proposed Change Order or Extra		procuring entity's representative/Project
	Work Order shall immediately instruct		Engineer, upon receipt of the proposed
	the technical staff of the Region to		Change Order or Extra Work Order shall
	conduct an on-the-spot investigation to		immediately instruct the appropriate
	verify the need for the work to be		technical staff or office of the procuring
	prosecuted. A report shall be		entity to conduct an on-the-spot
	submitted directly to the procuring		investigation to verify the need for the
	entity's representative/Project		work to be prosecuted and to review the
	Engineer.		proposed plan, quantities, and prices of
				the work involved.
c)	The procuring entity's representative/	c)	The technical staff or appropriate office
	Project Engineer, after being satisfied		of the procuring entity shall submit a
	that such Change Order or Extra Work		report of their findings and
	Order is justified and necessary, shall		recommendations, together with the
	review the estimated quantities and		supporting documents, to the Head of
	prices and forward the proposal with		the Procuring Entity or his duly
	the supporting documentation to the		authorized representative for
	Head of the Procuring Entity or his		consideration.
	duly authorized representative for
	consideration.
d)	If, after the review of the plans,	d)	The Head of the Procuring Entity or his
	quantities and estimated cost of		duly authorized representative, acting
	the items of work involved, the		upon the recommendation of the
	proper office of the procuring		technical staff or appropriate office,
	entity empowered to review and		shall approve the Change Order or Extra
	evaluate Change Orders or Extra		Work Order after being satisfied that the
	Work Orders recommends approval		same is justified, necessary, and in
	thereof, the Head of the Procuring		order.
	Entity or his duly authorized
	representative, believing the Change
	Order or Extra Work Order to be in
	order, shall approve the same.
e)	The timeframe for the processing	No revision
	of the Variation Orders from the
	preparation up to the approval by
	the procuring entity concerned shall
	not exceed thirty (30) calendar days.
Section 3.1
Under no circumstances shall a contractor	3.1.	Under no circumstances shall a
proceed to commence work under any		contractor proceed to commence work
Change Order or Extra Work Order unless		under any Change Order or Extra Work
it has been approved by the Head of the		Order unless it has been approved by the
Procuring Entity or his duly authorized		Head of the Procuring Entity or his duly
representative. Exceptions to the preceding		authorized representative. Exceptions to
rule are the following:		the preceding rule are the following:
a.	The Head of the Procuring Entity or	3.2.	However, under any of the following
	his duly authorized representative		conditions, the procuring entity's
	may, subject to the availability of		representative/Project Engineer may,
	funds, authorize the immediate start		subject to the availability of funds and
	of work under any Change Order or		within the limits of his delegated
	Extra Work Order under any or all		authority, allow the immediate start of
	of the following conditions:		work under any Change Order or Extra
				Work Order:
	i)	In the event of an emergency		i)	In the event of an emergency
		where the prosecution of the			where the prosecution of the
		work is urgent to avoid			work is urgent to avoid
		detriment to public service,			detriment to public service,
		or damage to life and/or			or damage to life and/or
		property; and/or			property; and/or
	ii)	When time is of the essence;		ii)	When time is of the essence;
Provided, however, That such approval is	Provided, however, That such approval is
valid on work done up to the point where	valid on work done up to the point where
the cumulative increase in value of work	the cumulative increase in value of work
on the project which has not yet been	on the project which has not yet been
duly fully approved does not exceed five	duly fully approved does not exceed five
percent (5%) of the adjusted original	percent (5%) of the adjusted original
contract price whichever is less;	contract price whichever is less;
Provided, further, That immediately after	No revision
the start of work, the corresponding Change
Order or Extra Work Order shall be
prepared and submitted for approval in
accordance with the above rules herein
set. Payments for works satisfactorily
accomplished on any Change Order or
Extra Work Order may be made only
after approval of the same by the Head
of the Procuring Entity or his duly
authorized representative.
b.	For a Change Order or Extra Work	Provided, finally, That for a Change Order
	Order involving a cumulative amount	or Extra Work Order involving a
	exceeding five percent (5%) of the	cumulative amount exceeding five
	original contract price, no work	percent (5%) of the original contract
	thereon may be commenced unless	price, no work thereon may be
	said Change Order or Extra Work	commenced unless said Change Order or
	Order has been approved by the	Extra Work Order has been approved by
	procuring entity's representative/	the Head of the Procuring Entity or
	Project Engineer.	his duly authorized representative
			procuring entity's representative/Project
			Engineer.

 

This resolution shall take effect immediately.

APPROVED this 7th day of October 2011 at Pasig City, Philippines.

(SGD.) DEPARTMENT OF BUDGET AND MANAGEMENT

(SGD.) NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY

By:

(SGD.) DEPARTMENT OF EDUCATION

By:

(SGD.) DEPARTMENT OF ENERGY

By:

(SGD.) DEPARTMENT OF FINANCE

By:

(SGD.) DEPARTMENT OF HEALTH

By:

(SGD.) DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT

By:

(SGD.) DEPARTMENT OF NATIONAL DEFENSE

By:

(SGD.) DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS

By:

(SGD.) DEPARTMENT OF SCIENCE AND TECHNOLOGY

By:

(SGD.) DEPARTMENT OF TRADE AND INDUSTRY

By:

(SGD.) DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS

By:

(SGD.) PRIVATE SECTOR REPRESENTATIVE

Attested by:

 

(SGD.) DENNIS S. SANTIAGOBoard Secretary, GPPB