GPPB Resolution No. 08-2011

(NAR) VOL. 23 NO. 1, JANUARY - MARCH 2012)

[ GPPB RESOLUTION NO. 08-2011, October 07, 2011 ]

APPROVING THE 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;

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, In claiming for any Variation Order, the contractor shall, within seven (7) the contractor shall, within seven (7) calendar days after such work has calendar days after such work has been commenced or after the been commenced pursuant to Section circumstances leading to such 3.2 hereof; or, within twenty-eight condition(s) leading to the extra cost, (28) calendar days after the and within twenty-eight (28) calendar circumstances or reasons justifying a days deliver a written communication claim for extra cost shall have giving full and detailed particulars of occurred, deliver a notice giving full any extra cost in order that it may be and detailed particulars of any extra investigated at that time. Failure to cost in order that it may be provide either of such notices in the investigated at that time. Failure to time stipulated shall constitute a provide either of such notices in the waiver by the contractor for any claim. time stipulated shall constitute a The preparation and submission of waiver by the contractor for any Variation Orders are as follows: claim. The preparation and submission of Variation Orders are as follows: ------------------------------------------------------------------------------------------------ ----------------------------------------------------------------------------a) If the procuring entity’s No revision representative/ 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 b) The Head of the Procuring Entity representative/Project engineer, upon or his duly authorized representative receipt of the proposed Change Order procuring entity’s or Extra Work Order shall representative/Project Engineer, upon immediately instruct the technical staff receipt of the proposed Change Order of the Region to conduct an on-the- or spot Extra Work Order shall investigation to verify the need for the immediately instruct the appropriate work to be prosecuted. A report shall technical staff or office of thebe submitted directly to the procuring procuring entity to conduct an on-entity’s representative/Project the-spot investigation to verify the Engineer. need for the work to be prosecuted and to review the proposed plan, quantities, and prices of the work involved. ------------------------------------------------------------------------------------------------ ----------------------------------------------------------------------------c) The procuring entity’s c) The technical staff or appropriate representative/Project Engineer, after office of the procuring entity shall being satisfied that such Change Order submit a report of their findings and or Extra Work Order is justified and recommendations, together with the necessary, shall review the estimated supporting documents, to the Head of quantities and prices and forward the the Procuring Entity or his duly proposal with the supporting authorized representative for documentation to the Head of the consideration. Procuring entity or his duly authorized representative for consideration. ------------------------------------------------------------------------------------------------ ----------------------------------------------------------------------------d) If, after the review of the plans, d) The Head of the Procuring Entity quantities and estimated cost of the or his duly authorized representative, items of work involved, the proper acting upon the recommendation of office of the procuring entity the technical staff or appropriate empowered to review and evaluate office, shall approve the Change Change Orders or Extra Work Orders Order or Extra Work Order after recommends approval thereof, the being satisfied that the same is Head of the Procuring entity or his justified, necessary, and in order. 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 of No revision 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 3.1. Under no circumstances shall a contractor proceed to commence work contractor proceed to commence under any Change Order or Extra work under any Change Order or Work Order unless it has been Extra Work Order unless it has been approved by the Head of the Procuring approved by the Head of the entity or his duly authorized Procuring Entity or his duly representative. Exceptions to the authorized representative. preceding rule are the following: Exceptions to the preceding rule are the following:------------------------------------------------------------------------------------------------ ----------------------------------------------------------------------------a. The Head of the Procuring entity or 3.2. However, under any of the his duly authorized representative following conditions, the procuring may, subject to the availability of entity’s representative/ Project funds, authorize the immediate start of Engineer may, subject to the work under any Change Order or availability of funds and within the Extra Work Order under any or all of limits of his delegated authority, the following conditions: allow the immediate start of 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 work where the prosecution of the work is is urgent to avoid detriment to urgent to avoid detriment to public public service, or damage to life service, or damage to life and/or 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 Provided, however, That such is valid on work done up to the point approval is valid on work done up to where the cumulative increase in value the point where the cumulative of work on the project which has not increase in value of work on the yet been duly fully approved does not project which has not yet been duly exceed five percent (5%) of the fully approved does not exceed five adjusted original contract price percent (5%) of the adjusted original whichever is less; contract price which ever is less; ------------------------------------------------------------------------------------------------ ---------------------------------------------------------------------------- Provided, further, That immediately No revision after 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 involving a cumulative amount Order or Extra Work Order involving exceeding five percent (5%) of the a 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 ChangeOrder has been approved by the Order or Extra Work Order has been procuring entity’s approved by the Head of the representative/Project engineer. Procuring Entity or his duly authorized representative procuring entity’s representative/ Project engineer. ------------------------------------------------------------------------------------------------ ---------------------------------------------------------------------------- This resolution shall take effect immediately. th APPROVED this 7 day of October 2011 at Pasig City, Philippines. Adopted: 07 October 2011 Signed by the Representatives of the Following Agencies: DEPARTMENT OF BUDGET AND MANAGEMENT NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY DEPARTMENT OF EDUCATION DEPARTMENT OF ENERGY DEPARTMENT OF FINANCE DEPARTMENT OF HEALTH DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT DEPARTMENT OF NATIONAL DEFENSE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS DEPARTMENT OF SCIENCE AND TECHNOLOGY DEPARTMENT OF TRADE AND INDUSTRY PRIVATE SECTOR REPRESENTATIVE Attested by:

(SGD.) DENNIS S. SANTIAGO Board Secretary, GPPB Executive Director, GPPB-TSO