Definition of Terms
- Coercive Practice: Threats or harm to influence procurement or contract execution.
- Collusive Practice: Bid-fixing schemes among bidders to prevent competition.
- Corrupt Practice: Bribery or disadvantageous contracts as per RA 3019.
- Fraudulent Practice: Misrepresentation of facts to influence contract outcomes.
- Head of the Procuring Entity: Official with authority over procurement, varying by agency type.
- Implementing Unit: Unit supervising contract implementation.
- Termination in Part/Whole: Ending part or all uncompleted contract work.
- Show Cause: Notice requiring Contractor/Consultant to explain why contract should not be terminated.
- Verified Report: Report by Implementing Unit recommending termination.
Grounds for Termination of Contracts
- Termination for Default: Due to Supplier/Contractor/Consultant failure to perform or deliver as agreed, with specific criteria for goods, infrastructure, and consulting contracts.
- Termination for Convenience: Possible when project implementation is impractical or unnecessary due to events like changes in law or fortuitous events.
- Termination for Insolvency: If Supplier/Contractor/Consultant is declared bankrupt by a court.
- Termination for Unlawful Acts: Based on corrupt, fraudulent, collusive, coercive practices or use of forged/adulterated documents.
- Termination by Contractor/Consultant: Allowed if work stoppage exceeds 60 days for reasons outside their fault or material breach by Procuring Entity.
Procedures for Termination of Contracts
- Verification: Implementing Unit verifies grounds within 7 days and submits Verified Report.
- Notice to Terminate: Issued by Head of Procuring Entity including grounds, extent, and instructions.
- Show Cause: Contractor/Consultant has 7 days to respond with verified position paper.
- Rescission: Procuring Entity may withdraw Notice before receiving position paper if conditions change.
- Decision: Head has 10 days to decide post-position paper; contract deemed terminated upon notice.
- Contract Termination Review Committee (CTRC): Optional committee to assist decision-making.
- Take-over of Contracts: Possible negotiated procurement if terminated due to default or insolvency.
- Procuring Entity's Options in Convenience Termination for Goods: Accept delivery of ready goods, cancel remainder, and pay for partial work.
- Notice by Contractor/Consultant: Requires 30 days written notice of intention to terminate.
Amendments
- GPPB may amend guidelines as needed.
- Amendments apply to projects advertised after amendment effectivity.
Effectivity
- Guidelines take effect 15 days after publication and filing with the UP Law Center.