Amendment on Advance Payment in RA 9184 IRR-A

The amendment specifically revises No. 4 of Annex "D" (Contract Implementation Guidelines for the Procurement of Goods, Supplies, and Materials) in the IRR-A of RA 9184.
The key purpose is to include a detailed provision regarding the application and regulation of advance payments in government procurement contracts.
The amendment was proposed and endorsed by the GPPB-Technical Support Office and approved through GPPB Resolution No. 04-2005.

Advance payment in procurement is regulated under the amended guidelines.
As per Presidential Decree 1445, advance payments require prior approval from the President of the Philippines.
The advance payment amount is capped at fifteen percent (15%) of the contract amount unless the President directs otherwise.
Exceptions exist where prior presidential approval is not necessary, specifically under conditions set forth in subsections 4.3 and 4.4.

Progress payments must first be deducted against any advance payment until fully depleted, unless the President approves otherwise.
A higher single advance payment of up to fifty percent (50%) of the contract amount is allowed without prior presidential approval in cases of contracts involving:
1. Hotel and restaurant services
2. Use of conference, seminar, and exhibit areas
3. Lease of office space
These services are recognized as having standard industry practices that justify higher down payments.

An advance payment of up to fifteen percent (15%) of the contract amount is allowed without prior presidential approval for procurement of goods in response to natural or man-made calamities.
The area must be officially declared under a "State of Calamity" by the appropriate government authorities.

The existing provision No. 4 of Annex "D" is renumbered to No. 5 to accommodate the new Section 4 on advance payments.
All other provisions of Annex "D" remain unchanged.
This amendment took effect immediately upon approval by the President on May 19, 2005.

The amendment was approved by President Gloria Macapagal-Arroyo and signed by Executive Secretary Eduardo R. Ermita.