Question & AnswerQ&A (MEMORANDUM ORDER NO.172)
The purpose of Memorandum Order No. 172 is to approve the amendment to No. 4 of Annex "D", Contract Implementation Guidelines for the Procurement of Goods, Supplies, and Materials, of the IRR-A of Republic Act No. 9184, providing for the inclusion of a provision for the application of advance payment for procurement of goods as Section 4 of Annex "D" of the IRR-A of R.A. No. 9184.
The approval for advance payments exceeding 15% of the contract amount must be made by the President of the Philippines, except for specific cases under sections 4.3 and 4.4 where no prior approval by the President is necessary.
Under normal circumstances, the advance payment shall not exceed fifteen percent (15%) of the contract amount unless otherwise directed by the President.
Contracts entered into by a procuring entity for hotel and restaurant services, use of conference/seminar and exhibit areas, and lease of office space allow a single advance payment not to exceed fifty percent (50%) of the contract amount without prior approval of the President.
Yes, advance payments not to exceed fifteen percent (15%) of the contract amount are allowed for procurement of goods required to address contingencies arising from natural or man-made calamities in areas where a "State of Calamity" has been declared by appropriate authorities.
All progress payments shall first be charged against the advance payment until the latter has been fully exhausted, unless otherwise approved by the President.
Presidential Decree 1445 provides the basis for requiring prior approval of the President for advance payments.
The Supreme Court declared the joint participation of the Congressional Oversight Committee in the formulation of the Implementing Rules and Regulations unconstitutional, which necessitated amendments to the IRR-A of Republic Act No. 9184.
The Government Procurement Policy Board-Technical Support Office (GPPB-Technical Support Office) formulated and proposed the amendment, which was endorsed by the GPPB per Resolution No. 04-2005.
The amendment took effect immediately upon approval on May 19, 2005.