EXECUTIVE ORDER NO. 109
EXECUTIVE ORDER NO. 109 -
STREAMLINING THE RULES AND PROCEDURES ON THE REVIEW AND APPROVAL OF ALL
CONTRACTS OF DEPARTMENTS, BUREAUS, OFFICES AND AGENCIES OF THE
GOVERNMENT, INCLUDING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS AND
THEIR SUBSIDIARIES
WHEREAS,
in line with the government’s program of good governance, there is a
need to streamline procedures for the review and approval of government
contracts for the expeditious implementation of development projects
and the speedy delivery of basic services while promoting transparency,
impartiality and accountability in government transactions;
WHEREAS, to achieve the foregoing; the National Economic and
Development Authority (NEDA) has recommended the issuance of this
Executive Order;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the
Philippines, by virtue of the powers vested in me by law, do hereby
order:
Section 1. Public Bidding. — It is the policy of this
Administration that all Government Contracts shall be awarded through
open and competitive public bidding, save in exceptional cases provided
by law and applicable rules and regulations, as described In Sec. 2
of this Executive Order.
Except for contracts required by law to be acted upon and/or approved
by the President, Department Secretaries shall have full authority to
give fine approval and/or enter into all Governments Contracts of their
respective departments and of bureaus, offices, and agencies,
government-owned or controlled corporations and their subsidiaries
attached or under the control and/or supervision of the Department
Secretary, awarded through public bidding, regardless of the amount
involved.
Every Department Secretary and Head of a bureau, office, and agency of
the government, as well as the Head and governing board of a
government-owned or controlled corporation and its subsidiary, shall be
responsible and accountable for ensuring that all Government Contracts
entered into are accordance with all existing laws, rules and
regulations and are consistent with the spending and development
priorities of government.
Sec. 2. Exceptions to Public Bidding. — The law
and applicable rules and regulations provide for exceptional cases
where a Government Contract may be accepted from the requirement of
public bidding, as follows:
a.
For infrastructure projects, including supply contracts, civil works,
and other related contracts, as provided under Sec. 62, Chapter 13,
Book IV, Revised Administrative Code of 1987, Sec. 4, Presidential
Decree No. 1594, and Executive Order No. 40 dated October 8, 2001 [EO
40] and its Implementing Rules and Regulations;
b. For
procurement of goods, supplies, materials and related services as
provided under EO 40 and its Implementing Rules and Regulations; and
c. For
consulting services as provided under EO 40 and its Implementing Rules
and Regulations.
Sec. 3. Requirements for Exception from Public
Bidding. — Where the Department Secretary has made a determination that
a Government Contract involving an amount of at least Three Hundred
Million Pesos (P300 Million) falls under any of the exceptions from
public bidding described in Sec. 2 hereof, the Department Secretary
shall, before proceeding with the alternative modes of procurement as
provided by law and applicable rules and regulations, obtain the
following:
a.
An opinion from the Secretary of Justice that said Government Contract
falls within the exceptions from public bidding; and
b. Approval
from the Director-General of NEDA to proceed with a specific
alternative mode of procurement under the exceptional cases provided by
law and applicable rules and regulations.
After compliance with the foregoing requirements, except for contracts
required by law to be acted upon and/or approved by the President,
Department Secretaries shall have full authority to give final approval
and/or enter into such Government Contracts excepted from the
requirement of public bidding, regardless of the amount involved:
Where a Government Contract, not required by law to be acted upon
and/or approved by the President; involves an amount below Three
Hundred Million Pesos (P300 Million) and the concerned Department
Secretary has made a determination that the Government Contract falls
under any of the exceptions from public bidding described in Sec. 2
hereof, the Department Secretary has full authority to give final
approval and/or enter into the Government Contract without need of
obtaining the foregoing requirements.
The Department Secretary may delegate in writing to appropriate
officials, subject to appropriate ceilings, this authority to determine
whether a Government Contract involving an amount below Three Hundred
Million Pesos (P300 Million) falls under any of the exceptions from
public bidding described in Sec. 2 hereof.
Sec. 4. Governing Law for Government Contracts. —
a.
BOT Contracts. Contracts undertaken through Build Operate and Transfer
(BOT) schemes and other variations shall be governed by the provisions
of Republic Act No. 6957, as amended by Republic Act No. 7718, and its
implementing Rules and Regulations.
b. Contracts
for infrastructure projects, including supply contracts, civil works,
and other related contracts. Contracts for infrastructure projects,
including supply contracts, civil works, and other related contracts
shall be governed by the Revised Administrative Code of 1987,
Presidential Decree No. 1594 and EO 40 and its Implementing Rules and
Regulations.
c. Contracts
for goods, supplies, materials and related services. Contracts for
goods, supplies, materials and related services shall be governed by EO
40 and its implementing Rules and Regulations.
d. Contracts
for consulting services. Contracts for consulting services shall be
governed by EO 40 and its Implementing Rules and Regulations.
e. Lease
Contracts. Lease contracts for goods, supplies and materials shall be
governed by EO 40 and its Implementing Rules and Regulations. Lease
contracts for real estate and other properties shall be governed by
Executive Order No. 301 dated July 26, 1987 and guidelines issued by
the Department of Public Works and Highways.
f. ODA-funded
Contracts. Government Contracts financed wholly or partly with Official
Development Assistance (ODA) funds shall be governed by Republic Act
No. 4860, as amended and Republic Act No. 8182, as amended by Republic
Act No. 8555.
NEDA shall issue guidelines for Government Contracts financed with ODA
funds with the objective of promoting transparency, impartiality, and
accountability in government transactions.
Sec. 5. Joint Venture Agreements. — NEDA shall, in
consultation with the Department of Justice, issue guidelines regarding
joint venture agreement with private entities with the objective of
promoting transparency, impartiality, and accountability In government
transactions and, where applicable, complying with the requirements of
an open and competitive public bidding.
Sec. 6. Transactions of Government Financial
Institutions. — Transactions of government financial Institutions in
the ordinary course of business shall not be covered by the provisions
of this Executive Order. Such transactions shall instead be subject to
applicable provisions of law and to guidelines, rules and regulations
issued by the Department of Finance.
Sec. 7. Requirements for all Government Contracts.
— All Government Contracts shall: be:
a.
Processed completely by the concerned department, bureau, office and
agency of the government, including a government-owned or controlled
corporation and its subsidiary;
b. Signed
and/or approved by the Head of the bureau, office, and agency of the
government, the Head and/or governing board of the government-owned or
controlled corporation and its subsidiary and the Department Secretary;
and
c. Accompanied
by the certifications issued by (i) the concerned Department Secretary;
(ii) the Head of the bureau, office of the agency; and, (iii) the Head
and governing board of the government-owned or controlled corporation
or its subsidiary, that the contract is in accordance with all existing
laws, rule and regulations.
Sec. 8. Author to Bind the Government. — All
Government Contracts shall require the approval of the Department
Secretary after the Government Contract has been signed and/or approved
by the Head of a bureau, office or agency or by the Head and/or
governing board of the government-owned or controlled corporation or
its subsidiary, before the Government Contract shall be considered
approved in accordance with law and binding on the government.
Except for contracts required by law to be acted upon and/or approved
by the President, the Department Secretary possesses the full authority
to approved and/or enter into a Government Contract binding on the
government. However, a Department secretary may delegate in writing to
appropriate officials, subject to appropriate ceilings, this authority
to approve a Government Contract involving an amount below Three
Hundred Million Pesos (P300 Million), whether publicly bidded or
excepted from public bidding, as he sees fit under the circumstances.
For Government Contracts signed by the Head of a bureau, office, and
agency of the government, and by the Head and/or governing board of a
government-owned or controlled corporation and its subsidiary attached
to or under the Office of the President, the Executive Secretary shall
approve the Government Contract in accordance herewith.
All Government Contracts entered into in violation of the provisions of
law, existing rules and regulations, and this Executive Order shall be
considered contracts entered into without authority and are thus
invalid and not binding on the government.
Sec. 9. Government Contracts Requiring
Presidential Action and/or Approval. — a. All Government Contracts
required by law to be acted upon and/or approved by the President, and
any subsequent amendments or supplements thereto, shall not be signed
until after the NEDA Board, which is chaired by the President of the
Philippines, has favorably acted upon or approved the same.
b. All Government Contracts required by law to be
acted upon and/or approved by the President, and any subsequent
amendments or supplements thereto, shall be submitted to NEDA, through
its Director-General, within seven (7) days from the approval by the
Department Secretary concerned, for NEDA’s review and evaluation:
Government Contracts submitted hereunder shall be accompanied by a
complete execution copy of the contract, related agreements, annexes,
other approvals and permits, including a detailed summary of the
pertinent laws, rules and regulations governing the processing and
award of the contract, and the certifications issued by (i) the,
concerned Department Secretary; (ii) the Head of the bureau, office or
agency; and (iii) the Head and governing board of the government-owned
or controlled corporation or its subsidiary, that the contract is in
accordance with all existing laws, rules and regulations.
c. Within thirty (30) days from its receipt of the
Government Contracts, and any subsequent amendments or supplements
thereto, NEDA shall submit its recommendation to the NEDA Board which
is chaired by the President of the Philippines, for appropriate action.
d. Within seven (7) days from the, date of the NEDA
Board’s action, NEDA, through its Director-General, shall formally
notify the Department Secretary concerned of the action of the NEDA
Board, including any comments thereon.
Sec. 10. Submission of Government Contracts. —
With a view to creating a repository of all important Government
Contracts; a complete copy of all Government Contracts involving an
amount of at least Three Hundred Million Pesos (P300 Million) shall be.
submitted to NEDA, through its Director-General, within seven (7) days
from the date of signing and/or approval, thereof, accompanied with a
complete copy of its related agreements, annexes, other approvals and
permits, a detailed summary of the pertinent laws, rules and
regulations governing the processing and award of the contract, and the
certification required under Sec. 7 hereof.
Sec. 11. Splitting of Government Contracts. —
Splitting of Government Contracts is not allowed. Splitting of
Government Contracts means the division or breaking up of Government
Contracts into smaller quantities and amounts, or dividing contracts
implementation into artificial phases or sub-contracts for the purpose
of evading or circumventing the requirements of law and this Executive
Order, especially the necessity of public bidding and the requirements
for exceptions therefrom in accordance with Sec. 3 hereof.
Sec. 12. Local Government Units. — All contracts
of Local Government Units funded by the national government shall be
governed by the provisions of this Executive Order and its implementing
guidelines, rules and regulations. Furthermore, Local Government Units
are encouraged to apply the provisions of this Executive Order for
contracts entered into and/or funded by Local Government Units.
Sec. 13. Prospective Application. — All Government
Contracts, including those presently being processed and/or reviewed by
the NEDA Board in accordance with Administrative Order No. 7 dated
March 23, 2001, shall hereafter be processed and/or reviewed in
accordance with this Executive Order.
Sec. 14. Implementing Guidelines, Rules and
Regulations. — NEDA shall, within thirty (30) days from the effectivity
of this Executive Order, issue the appropriate guidelines, rules and
regulations to implement the provisions of this Executive Order.
Such guidelines, rules and regulations shall include, among others,
provisions governing:
a.
ODA-funded contracts,
b. Joint venture agreements with private entities, and
c. submission of Government Contracts to NEDA.
All such guidelines, rules and regulations shall be subject to the
approval of the President of the Philippines.
NEDA may recommend penalties for violations of the provisions of this
Executive Order for the approval of the President.
NEDA shall likewise submit, within the same period, a complete list of
all Government Contracts required by law to be acted upon and/or
approved by the President. For this purpose, NEDA may request the
assistance of all departments, bureaus, office or agencies of
government, as well as government-owned controlled corporations and
their subsidiaries.
Sec. 15. Applicability of Existing Laws. — The
provisions of the following shall continue to be applicable:
a.
Executive Order No. 292 dated July 26, 1987 or the Revised
Administrative Code of 1987;
b.
Presidential Decree No. 1594;
c. Republic
Act No. 6957, as amended by Republic Act No. 7718, and its Implementing
Rules and Regulations;
d. Executive
Order No. 301 dated July 26, 1987; and
e. Executive
Order No. 40 dated October 8, 2001 and its Implementing Rules and
Regulations.
Sec. 16. Repeal and Amendments. — The following
orders, issuances, memoranda and other President Issuances are hereby
repealed:
a.
Executive Order No. 380 dated November 27, 1989;
b. Executive
Order No. 381 dated November 27, 1989;
c. Executive
Order No. 354 dated July 5, 1996;
d.
Administrative Order No. 7 dated March 23, 2001;
e. Memorandum
Circular No. 25 dated February 10, 1999;
f. Memoranda
from the President dated August 25, 1998, September 7, 1998, January
25, 1999, February 5, 1999, February 8, 1999, February 10, 1999,
February 23, 1999, and July 12, 1999; all relating to the submission of
contracts/agreements on infrastructure and infra-related projects worth
of P50 Million and above for review by the, Office of the President;
g. Memorandum
from the President dated February 8, 2000 on Review of ODA-funded
Contracts, and
h. Memorandum
from the President dated June 30, 2000 on the review of contracts
disposing government land, whether by lease or sale.
Memorandum Order No. 266 dated November 28, 1989 insofar as it relates
to joint venture agreements with private entities is hereby amended
accordingly.
All other Presidential directives, issuances, orders, rules and
regulations or parts thereof inconsistent with this Executive Order are
likewise hereby repealed or modified accordingly.
Sec. 17. This Executive Order shall take effect
immediately upon publication in two (2) newspapers of general
circulation.
DONE in the City of Manila,
this 27th day of May, in the year of Our Lord Two Thousand and Two.
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Since 19.07.98.