841 Phil. 297
PERALTA, J.:
1) | Memorandum of Agreement (MOA) dated February 2, 2007 for the Construction of Stamped Concrete Sidewalk and Installation of Streetlights (Main Road) located at Boracay, Aklan;[4] |
2) | MOA dated September 6, 2007 for the Boracay Environmental Infrastructure Project (BEIP)-Extension of Drainage Component System (Main Road and Access Road) located at Barangay Balabag, Boracay, Aklan;[5] |
3) | MOA dated December 7, 2007 for the Additional Sidewalk, Streetlighting and Drainage System (Main Road), located at Bora cay, Aklan;[6] |
4) | MOA dated September 19, 2008 for the Widening ofBoracay Road along Willy's Place at Barangay Balabag, Boracay, Aklan;[7] and |
5) | MOA dated February 29, 2008 for the Perimeter Fence at Banaue Hotel in Banaue, Ifugao.[8] |
On August 30, 2012, TIEZA filed a Refusal of Arbitration (Motion to Dismiss for Lack of Jurisdiction),[12] instead of filing an Answer. TIEZA argued that CIAC has no jurisdiction over the case filed by Global-V because the Complaint does not allege an agreement to arbitrate and the contracts do not contain an arbitration agreement in accordance with Sections 2.3 and 2.3.1[13] of the CIAC Revised Rules of Procedure Governing Construction Arbitration (CIAC Rules).
Widening of Boracay Road along Willy's Place P2,305,738.07Construction of Stamped Concrete Sidewalk and Installation of Streetlights 5,222,948.37Additional Sidewalk Streetlight and Drainage System (Main Road) 5,279,380.10BEIP Extension of Drainage Component System (Main Road & Access Road) 332,815.76Perimeter Fence at Banaue Hotel 249,873.54Interest (6% as of 31 July 2012) 2,722,980.50Moral damages 100,000.00Exemplary damages 100,000.00Attorney's fees 350,000.00[11]
Respondent [TIEZA] filed its Motion to Dismiss on the ground that the CIAC has no jurisdiction over the instant case in the absence of an arbitration clause in the MOA between the parties. Respondent also expresses the view that the arbitration cannot proceed because Claimant [Global-V] failed to exhaust administrative remedies.TIEZA filed a motion for reconsideration of the Arbitral Tribunal's Order dated December 18, 2012. The Arbitral Tribunal denied the motion for reconsideration in its Order dated January 29, 2013, thus:
On the first ground, Respondent has cited Section 2.3 of the CIAC Revised Rules of Procedure Governing Construction Arbitration (CIAC Rules), which states "For the CIAC to acquire jurisdiction, the parties to the dispute must be bound by an arbitration agreement in their contract or subsequently agree to submit the same to voluntary arbitration."
On the second ground, Respondent draws the attention of this Tribunal to the absence of allegation in the Complaint filed by Claimant that it exhausted administrative remedies. Respondent alleges that Claimant did not exhaust administrative remedies by failing to file a money claim before the Commission on Audit (COA). It cited the case of National Irrigation Authority vs. Enciso (G.R. No. 142571, 5 May 2006), which states: "Only after COA has ruled on the claim, may the injured party invoke judicial intervention by bringing the matter to this court on petition for certiorari."
On the other hand, Claimant asserts that the absence of an arbitration clause in the MOA does not deprive the CIAC of jurisdiction in view of a provision in R.A. 9184 which states:Section 59. Arbitration. - Any and all disputes arising from. the implementation of a contract covered by this Act shall be submitted to arbitration in the Philippines according to the provisions of Republic Act No. 876, otherwise known as the "Arbitration Law": Provided, however, That, disputes that are within the competence of the Construction Industry Arbitration Commission to resolve shall be referred thereto. The process of arbitration shall be incorporated as a provision in the contract that will be executed pursuant to the provisions of this Act, Provided[,] That by mutual agreement, the parties may agree in writing to resort to alternative modes of dispute resolution.It is Claimant's position that the provisions cited above, being provisions of law, are deemed part of the MOA between the parties and therefore the requirement under Section 2.3 of CIAC Rules has been effectively met. Claimant alleges that, in fact, there is an arbitration clause in the MOA inasmuch as the General Conditions of Contract, which are integral parts of the MOA, have the above-cited provisions in Par. 21.3 of Clause 21 thereof.
On the issue of Failure to Exhaust Administrative remedies raised by the Respondent, particularly in Claimant not first filing its money claims with the COA, Claimant contends that a later case on this issue effectively counters the claim of Respondent. In Vigilar vs. Aquino (G.R. No. 180388, 18 January 2011), the Supreme Court disregarded the defense on not first filing the claim before the COA on the ground that application of the rule would cause unreasonable delay or official inaction to the prejudice of the contractor.
We rule in favor of the Claimant. The absence of an arbitration clause in the main body of the MOA is not fatal to the case of the Claimant. Claimant has correctly pointed out that the above-cited provisions in R.A. 9184 are deemed incorporated in the MOA. To rule otherwise would frustrate the intention of the law. In any case, the applicable provisions of R.A. 9184 are found in "The General Conditions of Contract".
On the issue of exhaustion of administrative remedies, Claimant has complied with this condition, correctly citing the Vigilar vs. Aquino case. In addition, under Section 3.2 of the CIAC Rules, Claimant has satisfied precondition no. 2, viz "there is unreasonable delay in acting upon the claim by the government office or officer to whom appeal is made." In the instance case, more than three years have elapsed since the date Claimant made its Final Demand for payment before the head of TIEZA himself WHEREFORE, Respondent's Motion to Dismiss for lack of jurisdiction is hereby dismissed for lack of merit.[19]
Respondent [TIEZA] contends that this Tribunal erred in ruling that: (1) it has jurisdiction over the complaint; and (2) Claimant [Global-V] has complied with the requirement of exhaustion of administrative remedies. On the first issue, Respondent has reiterated its position [that] the contract between the parties does not have an arbitration clause. On the second issue, Respondent argues that the cited Vigilar vs. Aquino case involves a claim which remained unpaid for two decades while the Claim of Claimant involves a lesser period.On February 11, 2013, TIEZA filed its Answer Ex Abundanti Ad Cautelam[21] in compliance with the directive of the Arbitral Tribunal.
This Tribunal stands by its previous ruling that the provisions of Section 59 of R.A. No. 9184 are deemed incorporated in the contract between the parties. There are several alternative modes of dispute resolution; arbitration is one of them. This Tribunal['s] reading of the cited provisions of R.A. No. 9184 is that the parties reduce their agreement in writing should they choose to resort to alternative modes of dispute resolution, other than arbitration.
On the issue of exhaustion of administrative remedies, this Tribunal holds the view that the period of unreasonable delay cited in the Vigilar vs Aquino case should not be interpreted literally. In the instant case, considering the amount of claim involved, the period of almost five years of nonpayment can already be considered as unreasonable delay, which would exempt Claimant from the "Exhaustion of Administrative Remedies" rule.
In view of the foregoing, Respondent's MR is hereby denied with finality for lack of A1erit. Moreover, Respondent is directed to submit its Answer to Claimant's Complaint within ten (10) daysfrom receipt of this Order.[20]
On July 16, 2013, the Arbitral Tribunal promulgated its Final Award[32] in favor of Global-V, to wit:
- Is Claimant entitled to its claims involving the construction of Perimeter Fence at Banaue Hotel in Banaue, Ifugao and BEIP Extension of Drainage Component System (Main and Access Road)? 1.1 If so, how much per project?
- For being negotiated contracts, are the contracts for the widening of Boracay Road along Willy's Place; Construction of Stamped Concrete Sidewalk and Installation of Streetlights, Additional Street Lighting and Drainage System (Main Road) valid? 2.1 If these contracts are valid, is Claimant entitled to its claims? 2.2 If so, how much?
- Is Claimant entitled to its claim for payment of the construction of Stamped Concrete Sidewalk and Installation of Streetlights? 3.1 Has Claimant the authority from its joint venture partner to claim for payment of the above?
- Is Claimant entitled to payment of interest at 6% as of 31 July 2012 in the total sum of P2,722,980.50 including accrued amounts from 31 July 2012 until the principal obligations shall have been paid?
- Is Claimant entitled to payment of moral damages, exemplary damages and attorney's fees in the amount of P550,000.00?
- 6. Who should bear the cost of arbitration?[31]
8. SUMMARY OF RULINGSTIEZA filed with the Court of Appeals a petition for review with prayer for restraining order and writ of preliminary injunction. It raised the following Issues:
The rulings of this Arbitral Tribunal may be summarized as follows:
(1) Claimant [Global-V] is entitled to the release of retention fees for the BEIP Extension of Drainage Component System (Main Road and Access Road) Project and the Perimeter Fence at Banaue Hotel Project. (2) The contracts for the widening of Boracay Road along Willy's Place; Construction of Stamped Concrete Sidewalk and Installation of Streetlights, Additional Street Lighting and Drainage System (main Road) are valid. (3) Claimant is entitled to the payment of the cost of undertaking the Boracay Road along Willy's Place Project. (4) Claimant is entitled to its claim in connection with the Additional Street Lighting and Drainage System (Main Road) Project. (5) Claimant's claim in connection with the Construction of Stamped Concrete Sidewalk and Installation of Streetlights Project is denied for lack of authority from its partner to file this Arbitration. (6) Claimant is not entitled to its claims for moral and exemplary damages. (7) Claimant is entitled to recovery of attorney's fees. (8) Respondent [TIEZA] shall bear the cost of arbitration.
9. AWARD
WHEREFORE, award is hereby rendered in favor of Claimant in the amount of P10,178,440.17[.] The Respondent shall also bear the cost of arbitration in the amount of P322,897.58.
The Award shall earn interest at 6% per annum computed from the time of (sic) this Award becomes final until full payment shall have been made.
SO ORDERED.[33]
In a Decision[35] dated June 19, 2014, the Court of Appeals granted the petition, nullified the Final Award of the Arbitral Tribunal dated July 16, 2013, and dismissed Global-V's complaint on the ground that CIAC has no jurisdiction over the case under Section 4 of Executive Order (E.O.) No. 1008, because the parties did not agree to submit to arbitration any and all of their disputes arising from the construction contracts.I
THE CIAC HAS NO JURISDICTION OVER THE CLAIM OF THE RESPONDENT.
- The respondent did not comply with the CIAC Rules.
- The respondent's claims are money claims within the primary jurisdiction of the COA, not the CIAC.
- There was no agreement to arbitrate between the petitioner and the respondent.
- Sec. 59 of R.A. No. 9184 does not ipso facto vest the CIAC with jurisdiction over disputes arising from the construction contracts with the government, as it contains a condition that the parties 'incorporate the process of arbitration in the contract.'
II
THE RESPONDENT IS NOT ENTITLED TO PAYMENT FOR THE SUBJECT CONTRACTS.
- The MOAs for the Widening of the Boracay Road along Willy's Place, Construction of the Stamped Concrete Sidewalk and Installation of Streetlights Project, and Additional Sidewalk, Street Lighting, and Drainage System (Main Road) Projects are void.
- The respondent is not entitled to the retention money in the BEIP Extension of Drainage Component System (Main Road & Access Road) and the Perimeter Fence at Banaue Hotel Projects.
III
THE RESPONDENT IS NOT ENTITLED TO INTEREST, DAMAGES, AND COST OF ARBITRATION.[34]
WE revisited the memoranda of agreement entered into by TIEZA and Global-V together with the attachments thereto, such as the Special Conditions of the Contract (SCC) and General Conditions of the Contract (GCC), and found that they indeed agreed to submit to arbitration any and all of their disputes arising from the construction contracts.Moreover, the Court of Appeals ruled that it is the stipulation of the parties to submit their construction dispute to arbitration that determines whether CIAC could exercise jurisdiction over the case; such that, the failure of the complainant to allege in the Complaint or Request for Arbitration such agreement will not deny CIAC of such power conferred on it by law. Besides, the MOAs, to which the Special Conditions of the Contract and the General Conditions of Contract were attached, were submitted to the Arbitral Tribunal for its study.
Clause 20 of the General Conditions of Contract (GCC) which accompanied the memoranda of agreement reads -20. Resolution of DisputeThe agreement of the parties to submit their disputes arising from the implementation of the memoranda of agreement to arbitration under RA 9285 is apparent from the aforementioned stipulation. Also evident is the fact that such stipulation is restricted by a condition that the process of arbitration shall be incorporated in the contract.
x x x
20.2 Any and all disputes ar smg from the implementation of this Contract covered by R.A. 9184 and its IRR-A shall be submitted to arbitration in the Philippines according to the provisions of [R]epublic Act 9285, otherwise known as the "Alternative Dispute Resolution Act 2004"; Provided, however, [t]hat process of arbitration shall be incorporated as a provision in this Contract that will be executed pursuant to the provisions of the Act and its IRR-A; Provided, further, [t]hat, by mutual agreement, the parties may agree in writing to resort to other alternative modes of dispute resolution. Additional instructions on resolution of disputes, if any, shall be indicated in the SCC. x x x
In OUR questioned Decision, it is the failure of the parties to incorporate in their contract the procedure for the conduct of arbitration that led US to conclude that the CIAC lacks jurisdiction over the controversy. However, after a more careful scrutiny and study of the instant case and the prevailing laws and judicial antecedents, WE are directed to a different conclusion such that non-compliance with a stipulated condition in the contract will not divest the CIAC of its jurisdiction over the construction controversy. The mere presence of an arbitration clause in their contract is sufficient to clothe CIAC [with] the authority to hear and decide the construction suit. On this score, WE cannot subscribe to TIEZA's claim that Section 59 of RA 9184 does not ipso facto vest the CIAC with jurisdiction over disputes arising from construction contracts with the government, as they contain a condition that the parties incorporate the process of arbitration in the contract. Neither would the provision under the SCC where the name and address of the Arbiter were not indicated, as what was written therein was "N. A.", strip the CIAC of its power over the extant construction contract dispute.
This was the ruling of the Supreme Court in Hutama-Rsea Joint Operations, Inc. v. Citra Metro Manila Tollways Corp. [G.R. No. 180640, April 24, 2009] -x x x
It bears to emphasize that the mere existence of an arbitration clause in the construction contract is considered by law as an agreement by the parties to submit existing or future controversies between them to CIAC jurisdiction, without any qualification or condition precedent. To affirm a condition precedent in the construction contract, which would effectively suspend the jurisdiction of the CIAC until compliance therewith, would be in conflict with the recognized intention of the law and rules to automatically vest CIAC with jurisdiction over a dispute should the construction contract contain an arbitration clause.[38]
I. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN RULING THAT THE CIAC HAD JURISDJCTION OVER THE DISPUTE DESPITE THE PARTIES' STIPULATION IN THE CONTRACT THAT THERE WILL BE NO ARBITRATION;I. Whether or not the Court of Appeals erred in ruling that CIAC had jurisdiction over the dispute.
II. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN RULING THAT THE CIAC HAD JURISDICTION OVER THE DISPUTE NOTWITHSTANDING THE PRIMARY JURISDICTION OF THE COA OVER THE MONEY CLAIM OF GLOBAL-V;
III. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN RULING THAT THE NEGOTIATED PROCUREMENT OF THE CONTRACTS BETWEEN TIEZA AND GLOBAL-V IS VALID UNDER R.A. NO. 9184;
IV. THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN AWARDING INTEREST, ATTORNEY'S FEES, AND COSTS OF ARBITRATION.[40]
SECTION 4. Jurisdiction. - The CIAC shall have original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines, whether the dispute arises before or after the completion of the contract, or after the abandonment or breach thereof. These disputes may involve government or private contracts. For the Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary arbitration.The CIAC, pursuant to its rule-making power granted by E.O. No. 1008, promulgated the first Rules of Procedure Governing Construction in August 1988, and it has amended the rules through the years to address the problems encountered in the administration of construction arbitration.
The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and workmanship; violation of the terms of agreement; interpretation and/or application of contractual time and delays; maintenance and defects; payment, default of employer or contractor and changes in contract cost.
Excluded from the coverage of this law are disputes arising from employer-employee relationships which shall continue to be covered by the Labor Code of the Philippines.
SECTION 2.1 Jurisdiction. - The CIAC shall have original and exclusive jurisdiction over construction disputes, which arose from, or is connected with contracts entered into by parties involved in construction in the Philippines whether the dispute arose before or after the completion of the contract, or after the abandonment or breach thereof. These disputes may involve government or private contracts.From the foregoing, it is evident that for CIAC to acquire jurisdiction over a construction controversy, the parties to a dispute must be bound by an arbitration agreement in their contract or subsequently agree to submit the same to voluntary arbitration, and that an arbitration clause in a construction contract or a submission to arbitration of a construction dispute shall be deemed an agreement to submit an existing or future controversy to CIAC's jurisdiction.
2.1.1 The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and workmanship; violation of the terms of agreement; interpretation and/or application of contractual provisions; amount of damages and penalties; commencement time and delays; maintenance and defects; payment default of employer or contractor and changes in contract cost.
x x x
SECTION 2.3 Condition for exercise of jurisdiction. - For the CIAC to acquire jurisdiction, the parties to a dispute must be bound by an arbitration agreement in their contract or subsequently agree to submit the same to voluntary arbitration.2.3.1 Such arbitration agreement or subsequent submission must be alleged in the Complaint. Such submission may be an exchange of communication between the parties or some other form showing that the parties have agreed to submit their dispute to arbitration. Copies of such communication or other form shall be attached to the Complaint.SECTION 4.1 Submission to CIAC Jurisdiction. - An arbitration clause in a construction contract or a submission to arbitration of a construction dispute shall be deemed an agreement to submit an existing or future controversy to CIAC jurisdiction, notwithstanding the reference to a different arbitration institution or arbitral body in such contract or submission. (Emphasis supplied.)
x x x
20. Resolution of DisputeUndoubtedly, Clause 20.2 of the General Conditions of Contract is an arbitration clause that clearly provides that all disputes arising from the implementation of the contract covered by R.A. No. 9184 shall be submitted to arbitration in the Philippines. In accordance with Section 4.1 of the CIAC Rules, the existence of the arbitration clause in the General Conditions of Contract that formed part of the said MOAs shall be deemed an agreement of the parties to submit existing or future controversies to CIAC's jurisdiction. Since CIAC's jurisdiction is conferred by law, it cannot be subjected to any condition; nor can it be waived or diminished by the stipulation, act or omission of the parties, as long as the parties agreed to submit their construction contract dispute to arbitration, or if there is an arbitration clause in the construction contract.[44] Hence, the fact that the process of arbitration was not incorporated in the contract by the parties is of no moment. Moreover, the contracts in this case are expressly covered by R.A. No. 9184 (The Government Procurement Reform Act), which provides under Section 59[45] thereof that all disputes arising from the implementation of a contract covered by it shall be submitted to arbitration in the Philippines, and disputes that are within the competence of CIAC to resolve shall be referred thereto.
x x x
20.2. Any and all disputes arising from the implementation of this Contract covered by x x x R.A. 9184 and its IRR-A shall be submitted to arbitration in the Philippines according to the provisions of [R]epublic Act 9285, otherwise known as the "Alternative Dispute Resolution Act 2004"; Provided, however, That process of arbitration shall be incorporated as a provision in this Contract that will be executed pursuant to the provisions of the Act and its IRR-A; Provided, further, That, by mutual agreement, the parties may agree in writing to resort to other alternative modes of dispute resolution. Additional instructions on resolution of disputes, if any, shall be indicated in the SCC.[43]
During his testimony, Claimant's witness presented documents showing that it was Claimant (sic) who amply justified the award of the three projects to Claimant based on negotiated procurement (Exhibit Nos. C-02, C-14, C-15, C-28, C-29 and C-30).The Court Appeals was likewise not convinced by the same arguments raised before this Court by TIEZA, as it held:
x x x
In the documents presented by Claimant, Respondent justified the negotiated procurement under Section 53(b) of R.A. No. 9184 for the Boracay Road along Willy's Place Project, and under Section 53(d) for the Construction of Stamped Concrete Sidewalk and Installation of Streetlights Project and the Additional Street Lighting and Drainage System (Main Road) Project.
Section 53(b) of R.A. 9184 states:"b. In case of imminent danger to life or property during a state [of] calamity, or when time is of the essence arising from natural or man-made calamities or other causes where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities"In his Memorandum to Respondent's General Manager dated 19 September 2008 (Exhibit C-02), the Deputy General Manager invoked the abovequoted provision to justify the award of the Boracay Road along Willy's Place Project. He stated in the memorandum that "the immediate completion of the project is necessary because of the continuing and consistent influx of tourists to Boracay particularly this (sic) coming holidays and peak season."
Section 53 (d) of RA. 9184 states:"Where the subject contract is adjacent or contiguous to an ongoing infrastructure project, as defined in the IRR; Provided, however, That the original contract is the result of a Competitive Bidding; the subject contract to be negotiated has similar or related scopes of work; it is within the contracting capacity of the contractor; the contractor uses the same prices or lower unit prices as in the original contract less mobilization cost; the amount involved does not exceed the amount of the on-going project; and the contractor has no negative slippage Provided further, That negotiatiOns for procurement are commenced before the expiry of the original contract. Wherever applicable, the principle shall also govern consultancy contract, where the consultants have unique experience and expertise to deliver the required service"This provision was invoked by Respondent's Technical Evaluation Committee and Bids and Awards Committee in justifying the award of the Construction of Stamped Concrete Sidewalk and Installation of Streetlights Project and the Additional Street Lighting and Drainage System (Main Road) Project.
Notwithstanding the reversal in the stand of the Respondent on the.validity of the award of the aforementioned projects under negotiated procurement, there appear to be no substantial reasons to disturb the original findings of Respondent's officials that the projects could be negotiated. Therefore, this Tribunal hereby upholds the validity of the contracts.[51]
It is to be noted that the subject MOAs were entered into by the then PTA, the precursor of TIEZA. The PTA officers ruled that the projects could be negotiated, and therefore, need not go through public bidding because of the urgent need to accomplish them in view of the continuing influx of tourists in Boracay. Worthy of emphasis is the fact that tourism is the primary source of livelihood in Boracay. With the great flow of tourists in the island, especially during peak season, it is the duty of the tourism department to take steps to secure the safety of the people therein. In this regard, the three projects were offered to Global-V via negotiated procurements. Global-V is the same company that was previously contracted, through competitive bidding, for the construction of the BEIP Drainage Component System. In March, 2009 after the completion of the projects, Global-V billed PTA for the same. The demand continued until PTA was replaced by TIEZA. Despite the demands for payment, however, TIEZA failed and refused to pay the costs of the project as it is now questioning the validity of the contracts entered into by its predecessor because the projects did not go through the process of public bidding.The Court holds that the aforecited MOAs are valid as they complied with the requirements of negotiated procurement under Section 53, paragraphs (b) and (d) of R.A. No. 9184.
TIEZA's contention fails to convince. The agreements between PTA and Global-V have a binding effect against TIEZA, especially that the latter came into the picture only after the completion of the projects. To OUR minds, the change in the organizational structure and officers ofPTA cannot defeat the validity of the contracts. If WE are to rule otherwise, great injustice would be inflicted upon Global-V who did its part of the contract and after it had completed its undertakings, it is only to be rebuffed by TIEZA by assailing the enforceability of the contracts.
x x x
What further convinces US to allow the contracts is the fact that the public is now enjoying and benefiting from the said projects. Hence, it is only proper that Global-V be compensated therefor.[52]
x x x x[54] SECTION 53. Negotiated Procurement. - Negotiated Procurement shall be allowed only in the following instances:
b) In case of imminent danger to life or property during a state of calamity, or when time is of the essence arising from natural or man-made calamities or other causes where immediate action is necessary to prevent damage to or loss oflife or property, or to restore vital public services, infrastructure facilities and other public utilities.
x x x x[55] Rollo, p. 252.
d) Where the subject contract is adjacent or contiguous to an on-going infrastructure project, as defined in the IRR: Provided, however, That the original contract is the result of a Competitive Bidding; the subject contract to be negotiated has similar or related scopes of work; it is within the contracting capacity of the contractor; the contractor uses the same prices or lower unit prices as in the original contract less mobilization cost; the amount involved does not exceed the amount of the ongoing project; and, the contractor has no negative slippage: Provided, further, That negotiations for the procurement are commenced before the expiry of the original contract. Whenever applicable, this principle shall also govern consultancy contracts, where the consultants have unique experience and expertise to deliver the required service[.]
x x x x[57] Procuring Entity - refers to any branch, department, office, agency, or instrumentality of the government, including state universities and colleges, government-owned and/or -controlled corporations, government financial institutions, and local government units procuring Goods, Consulting Services and Infrastructure Projects (Section 5 (o), R.A. No. 9184).
(e) Negotiated Procurement - a method of Procurement that may be resorted under the extraordinary circumstances provided for in Section 53 of this Act and other instances that shall be specified in the IRR, whereby the Procuring Entity directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant.