QuestionsQuestions (GPPB Resolution NO. 20-2012)
Section 63 of RA 9184 mandates the Government Procurement Policy Board (GPPB) to formulate and amend, whenever necessary, the Implementing Rules and Regulations (IRR) and corresponding standard forms for procurement.
It is required to guarantee the faithful performance by the winning bidder of its obligations under the contract, in accordance with the Bidding Documents (IRR Section 39.1).
A warranty security is required from the contract awardee for the procurement of goods and infrastructure projects to ensure compliance with warranty obligations (IRR Section 62).
Performance and warranty securities, as prescribed in Sections 39 and 62, shall be submitted for contracts acquired through the alternative methods of procurement, except for Shopping (Section 52) and certain Negotiated Procurement cases enumerated in the IRR.
Excluded are: Shopping (Section 52), Negotiated Procurement under Sections 53.2 (emergency cases), 53.5 (Agency-to-Agency), 53.9 (small value procurement), 53.10 (lease of real property), 53.12 (Community Participation), and 53.13 (UN agencies).
Because Agency-to-Agency and Community Participation modalities were not included among those exempt under Section 54.5 from the posting of performance and warranty securities.
It stated that, subject to appropriate guidelines, the Procuring Agency may require the Servicing Agency to post a performance security (Section 39) and/or a warranty security (Section 62).
Pursuant to Section 5(c), the MOA was to reflect the agreement of the parties regarding the posting of a performance bond and/or a warranty security.
It amended Section 54.5 so that Agency-to-Agency (53.5) and Community Participation (53.12) are added to the list of Negotiated Procurement methods exempt from posting performance and warranty securities.
It deleted Sections 5(c) and 6(e), and renumbered the remaining provisions: Sections 5(d) and (e) became 5(c) and 5(d), and Section 6(f) became Section 6(e).
Because the servicing agency, having a legal mandate to deliver/undertake the needed goods, services, or infrastructure/consulting requirements, provides assurance that it can execute and perform the contract according to agreed requirements.
Project sustainability and social objectives drive the modality; local communities take ownership and directly benefit, but may lack financial capability to post the required securities.
It is the legal basis/source reference for the Guidelines on Agency-to-Agency Agreements, which were amended/deleted in the subject resolution.
The proposal to exempt Agency-to-Agency and Community Participation was discussed in the IATWG’s 9th Regular Meeting (13 July 2012), where the IATWG recommended amendment; the GPPB then adopted the recommendation in its 7th Regular Meeting.
It took effect immediately upon approval (27 July 2012).
The Procuring Entity would no longer require the posting of performance and warranty securities for contracts acquired through Agency-to-Agency (53.5) or Community Participation (53.12), consistent with the amended Section 54.5.