Prohibition of Automatic Renewal of Gov't Contracts

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EXECUTIVE ORDER NO. 298: Prohibition of Automatic Renewal of Gov't Contracts

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Title Supreme Court: Prohibition of Automatic Renewal of Gov't Contracts

Law: Executive Order No. 298

Decision Date: Aug 12, 1940

Manuel L. Quezon's Executive Order No. 298 mandates public bidding for all government contracts, prohibiting automatic renewals and allowing exceptions only under extraordinary circumstances with prior approval from key officials.

automatic renewal

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Prohibition on Automatic Renewal of Contracts

Government contracts, whether existing or new, shall not be renewed or entered into automatically without undergoing public bidding again.
Automatic renewal is considered contrary to public interest and the established policy of competitive bidding.

Exceptions to the Requirement for Public Bidding

Contracts may be renewed or entered into without public bidding only under very extraordinary reasons.
Prior consultation with the Auditor General, the Secretary of Justice, and the relevant Department Secretary is mandatory.
Approval must be secured from the President before proceeding without public bidding.

Emergency Procurement Procedures

The Secretary of the Department concerned may certify urgency due to emergency situations involving potential loss of life, property danger, or critical public service delays.
Upon certification, the Purchasing Agent may procure the required supplies, materials, or equipment without public bidding.
Such procurement must follow a thorough market canvass to assure reasonableness of prices.

Procurement from Exclusive Dealers

Purchases without bidding are allowed when the items are sold exclusively by a dealer or manufacturer with no sub-dealers offering lower prices.
No suitable substitutes should be available elsewhere under more advantageous terms to the Government.

Continuity of Existing Regulations

Department Orders Nos. 73 and 74 from the former Department of Commerce and Communications remain effective.
The provisions of Department Order No. 2 of the Department of Finance (Jan 14, 1936) continue to be followed.

Revocation of Previous Executive Orders

Executive Order No. 16 (Feb 3, 1936), as amended by Executive Order No. 98 (Apr 24, 1937), is revoked by this Order.

Administrative and Legal Authority

The Order is issued by the President of the Philippines under the powers vested by law.
It applies to the Philippine Government and all its branches, subdivisions, agencies, or instrumentalities, ensuring uniform compliance with bidding and contract renewal policies.

END