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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 2016 Revised  Implementing  Rules and Regulations  (IRR) took effect on 28
October 2016;

WHEREAS, Section 63 of RA 9184 and its 2016 Revised IRR authorizes the Government Procurement Policy Board (GPPB) to formulate public procurement policies, rules and regulations, and amend, whenever necessary, its IRR;

WHEREAS, to further improve public procurement rules, for a more efficient and  effective  Philippine  public  procurement  system,  the  GPPB,  during  its 3rd Regular Meeting on 30 May 2017, approved the amendments and corrections to the 2016 Revised IRR of RA 9184;

WHEREAS,  Section  62.1 of the 2016 Revised  IRR of RA 9184 mandates that the obligation for warranty for the procurement of goods shall be covered by either retention money in an amount equivalent to at least one percent (1%) of every progress payment, or a special bank guarantee equivalent to at least one percent (1%) of the total contract price;

WHEREAS,  during the 4th  GPPB Regular Meeting on 31 July 2017, as an off-shoot of the discussion on the additional corrections to the 5th Edition of the Philippine  Bidding  Documents  for  Goods,  particularly  on  the  rule  on  warranty security  in the form of retention  money  or special bank guarantee,  the GPPB-TSO reported that while the 2016 Revised IRR of RA 9184 already lowered the rate  of  the  warranty  security  for  the  procurement  of  goods  from  at  least  ten percent  (10%)  to  at  least  one  percent  (1%),  agencies  are  still  requiring  10% warranty security because of the word “at least” in the 2016 Revised IRR of RA 9184,  thereby  effectively  defeating  the  purpose  of prescribing  a lower  rate  of warranty security that would eventually lower the bid prices;

WHEREAS, after careful review and due deliberation, the GPPB agreed to prescribe  the rate of the warranty  security  for the procurement  of goods  to at least one percent (1%) but not to exceed five percent (5%);

NOW, THEREFORE,  for and in view of all the foregoing, WE, the Members of  the  GOVERNMENT   PROCUREMENT   POLICY  BOARD,  by  virtue  of  the powers vested on US by law and other executive issuances, hereby RESOLVE to confirm, adopt, and approve, as WE hereby confirm, adopt, and approve the amendment of Section 62.1 of the 2016 Revised IRR of RA 9184 to read as:

“For the procurement of Goods, in order to assure that manufacturing defects shall be corrected by the supplier, a warranty security shall be required from the contract awardee for a minimum period of three (3) months, in the case of Expendable Supplies, or a minimum period of one (1) year, in the case of Non-expendable Supplies, after acceptance by the Procuring Entity of the delivered supplies.

The obligation for the warranty shall be covered by either retention money in an amount equivalent to at least one percent (1%) but not to exceed five percent (5%) of every progress payment, or a special bank guarantee equivalent to at least one percent (1%)  but not to exceed five percent (5%) of the total contract price. The said amounts shall only be released after the lapse of the warranty period or, in the case of Expendable Supplies, after consumption  thereof:  Provided,  however,  That  the  supplies  delivered  are free from patent and latent defects and all the conditions imposed under the contract have been fully met.

This amendment to Section 62.1 of the 2016 Revised IRR of RA 9184 shall take effect after fifteen (15) days following the completion of its publication in the Official Gazette or a newspaper of general nationwide circulation and upon filing of three (3) certified copies with the University of the Philippines Law Center.

APPROVED this 31st day of July 2017 at Pasig City, Philippines.

DEPARTMENT  OF BUDGET AND MANAGEMENT
DEPARTMENT  OF EDUCATION DEPARTMENT 

OF ENERGY DEPARTMENT  OF NATIONAL DEFENSE
DEPARTMENT  OF PUBLIC WORKS AND HIGHWAYS DEPARTMENT  OF SCIENCE AND TECHNOLOGY DEPARTMENT  OF TRADE AND INDUSTRY PRIVATE SECTOR REPRESENTATIVE