Guidelines on Blacklisting in Government Procurement

Legal basis and related instruments

Republic Act No. 9184 (the Government Procurement Reform Act) authorizes Section 75 for the formulation of implementing rules and standard forms through the Government Procurement Policy Board (GPPB) and the Joint Congressional Oversight Committee.
The guidelines are issued pursuant to Section 69.4 of the Implementing Rules and Regulations Part A (IRR-A) of Republic Act No. 9184, which directs the GPPB to issue guidelines for blacklisting.
The guidelines are aligned with Section 69 and Section 69.4 of Republic Act No. 9184 and relevant provisions of the IRR-A, including Section 68 of the IRR-A for contract termination situations.
The rules adopt and integrate prior blacklisting reports and related PCAB license suspension/revocation records effective at the IRR-A effectivity date through Section 9.4.

Scope of covered procurement entities

The guidelines govern the blacklisting of manufacturers, suppliers, distributors, contractors, and consultants (“contractors” for brevity) involved in government procurement.
The blacklisting covers offenses committed during competitive bidding and during contract implementation, consistent with Section 69.4 of the IRR-A of Republic Act No. 9184.
The guidelines apply to all branches, constitutional commissions, and offices, agencies, departments, bureaus, offices, and instrumentalities of the Government.
The guidelines apply to government-owned and/or controlled corporations (GOCCs), government financial institutions (GFIs), state universities and colleges (SUCs), and local government units (LGUs).

Core definitions for proceedings

Appellate Authority is the department, office, or government unit exercising general and/or administrative supervision/control over the blacklisting agency; department-level agencies exercise appellate authority over covered offices, agencies, bureaus, government units, GOCCs, and SUCs under their jurisdiction.
Appellate Authority decisions are final and executory when the blacklisting agency is not under general and/or administrative supervision/control of any department, office, or government unit.
Award means the written notice from the procuring entity accepting a bid or proposal.
Blacklisting is the administrative penalty disqualifying a person or entity from participating in any government procurement for a given period.
Suspension is the administrative penalty imposed for infractions committed during the competitive bidding stage, prohibiting the contractor from further participation in that agency’s bidding process.
Consolidated Blacklisting Report is the report prepared by the GPPB containing the list of suppliers, manufacturers, distributors, contractors, or consultants blacklisted by procuring entities.
Contract Implementation is the process of undertaking a project or contract under the contract documents.
Termination of Contract is extinction of contract due to resolution or rescission under Articles 1191, 1380, 1381 of the Civil Code, Section 68 of the IRR-A of Republic Act No. 9184, and other applicable laws arising from contractor default.
Delist means removal of a person/entity from the Consolidated Blacklisting Report.
Blacklisted Person/Entity means a person/entity disqualified by an agency and/or included in the GPPB Consolidated Blacklisting Report.

Prohibited participation and disqualification effects

A person/entity blacklisted by a procuring entity and/or included in the GPPB Consolidated Blacklisting Report is prohibited from participating in the bidding of all government projects during the period of disqualification, unless delisted under the guidelines.
A joint venture or consortium that is blacklisted, or that has blacklisted member/s or partner/s, is prohibited from participating in government procurement during the period of disqualification.
A person/entity that is a member of a blacklisted joint venture or consortium is likewise prohibited from participating in government procurement during the period of disqualification.
For corporations, a single stockholder and his/her relatives up to the third civil degree of consanguinity or affinity, plus their assignees, who hold at least twenty percent (20%) of the shares, and the corporation’s chairman and president, are blacklisted when they are determined to hold the same controlling interest in a previously blacklisted corporation or in two corporations that have been blacklisted; the corporations of which they are part are also blacklisted.

Sanctions and grounds: bidding stage

During the competitive bidding stage, the procuring entity shall impose suspension for one (1) year for the first offense and suspension for two (2) years for the second offense from participating in the public bidding process.
The imposition of suspension is without prejudice to additional administrative sanctions under internal agency rules and to further criminal prosecution under applicable laws.
The following are grounds for suspension during competitive bidding:
- Submission of eligibility requirements containing false information or falsified documents.
- Submission of bids containing false information or falsified documents, or concealment of such information in the bids to influence eligibility screening or any other stage of public bidding.
- Unauthorized use of one’s name, or using the name of the name of another, for public bidding purposes.
- Withdrawal of a bid, or refusal to accept an award, or to enter into contract with the government without justifiable cause, after being adjudged as having submitted the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid.
- Refusal or failure to post the required performance security within the prescribed time.
- Refusal to clarify or validate in writing its bid during post-qualification within seven (7) calendar days from receipt of the request for clarification.
- Any documented unsolicited attempt by a bidder to unduly influence the outcome of bidding in its favor.
- Other acts defeating the purpose of competitive bidding, including (i) not buying bid documents or not complying with evaluation requirements, and (ii) habitually withdrawing from bidding or submitting letters of non-participation for at least three (3) times within a year, except for valid reasons.
When suspension is imposed, the bid security posted by the concerned bidder or prospective bidder is forfeited.

Sanctions and grounds: contract implementation stage

During contract implementation, the procuring entity shall impose suspension for one (1) year for the first offense and two (2) years for the second offense from participating in public bidding for violations committed during the contract implementation stage.
The suspension is without prejudice to additional administrative sanctions under internal agency rules and to criminal prosecution under applicable laws.
Violations during contract implementation include, among others:
- Failure, due solely to the contractor’s fault or negligence, to mobilize and start work or performance within the period in the Notice to Proceed (NTP).
- Failure to fully and faithfully comply with contractual obligations without valid cause, or failure to comply with any written lawful instruction of the procuring entity or its authorized representatives.
- Assignment and subcontracting of the contract or any part thereof, or substitution of key personnel named in the proposal, without prior written approval by the procuring entity.
- For goods procurement: unsatisfactory progress in delivery arising from the manufacturer/supplier/distributor’s fault or negligence and/or unsatisfactory or inferior quality of goods as may be provided in the contract.
- For consulting services procurement: poor performance arising from the consultant’s fault or negligence, including defective design resulting in substantial corrective works; failure to deliver critical outputs due to fault or negligence; specifying inappropriate, substandard, or way above acceptable materials; and allowing defective workmanship or works by a contractor being supervised by the consultant.
- For infrastructure projects procurement: poor performance by the contractor or unsatisfactory quality and/or progress due to the contractor’s fault or negligence as reflected in the Constructor’s Performance Evaluation System (CPES) rating sheet; if the CPES rating sheet is unavailable, the procuring entity’s existing performance monitoring system applies.
- For infrastructure projects, poor performance includes: (i) negative slippage of 15% and above within the critical path due entirely to the contractor’s fault or negligence; and (ii) quality of materials and workmanship not complying with approved specifications due to the contractor’s fault or negligence.
- Willful or deliberate abandonment or non-performance of the project or contract resulting in substantial breach without lawful and/or just cause.
When suspension is imposed during contract implementation, the contractor’s performance security is also forfeited.

Suspension and blacklisting during bidding

A suspension and blacklisting proceeding may be initiated by any bidder/prospective bidder or any duly authorized observer by filing a written complaint with the Bids and Awards Committee (BAC).
The BAC may also commence the proceedings motu proprio upon prima facie determination that the bidder/prospective bidder committed any ground for blacklisting during the competitive bidding stage.
At the option of the procuring entities, a reasonable fee may be required for initiating the suspension and blacklisting proceedings.
Upon verification of grounds for blacklisting, the BAC shall immediately notify the contractor in writing, stating: (i) the complaint or BAC consideration; (ii) the grounds; (iii) the opportunity to show cause; (iv) that a hearing will be conducted upon request allowing documentary evidence, verbal testimony, and cross-examination; and (v) the consequences of suspension and blacklisting.
Within five (5) calendar days from receipt of notification, the contractor shall submit a written answer with documentary evidence to the BAC and include a manifestation for a hearing on questions of fact; no time extension is allowed.
If the contractor fails to answer within the period, the BAC shall issue a resolution recommending to the head of the procuring entity the immediate suspension and forfeiture of bid security.
If a hearing is requested, the BAC shall immediately set the hearing date and time; the hearing is non-litigious and must be terminated within five (5) days.
If no hearing is requested, the BAC decides based on the complaint, answer, documentary evidence, and verified facts.
If the BAC finds the contractor at fault, it issues a resolution recommending suspension and bid security forfeiture.
The Head of the Procuring Entity must decide within fifteen (15) days from receipt of the BAC resolution and records to determine whether reasonable cause exists.
If reasonable cause exists, the Head suspends the contractor from participating in any bidding process of the agency and declares the bid security forfeited; otherwise, the case is dismissed.
The decision must clearly state the facts, evidence, and law basis, and the penalty effectivity date if applicable.
The Head may delegate to the BAC the authority to impose corresponding sanctions provided in the guidelines.
For multiple offenses or combinations for the same project/contract in the same agency, each violation is meted the corresponding penalty.
The Head furnishes the suspended contractor a copy of the decision immediately from promulgation.
Suspension becomes effective upon receipt of notice and remains in effect during the motion for reconsideration and protest; it terminates only upon reversal by the Head or appellate authority.
If no motion for reconsideration or protest is filed, the decision becomes final and executory after seven (7) calendar days from receipt of notice, and the Head then issues a Blacklisting Order disqualifying the contractor from participating in bidding of all government projects.
A Motion for Reconsideration may be filed by the suspended person/entity within seven (7) calendar days from receipt of notice of decision, based on: (i) non-conformity with evidence and/or facts presented, and/or (ii) newly discovered evidence or facts that could not be discovered and produced earlier and that would probably alter the result; only one (1) Motion for Reconsideration may be filed with the blacklisting agency.
The Head resolves the Motion for Reconsideration with finality within fifteen (15) calendar days from filing and furnishes a copy immediately upon promulgation.
A protest may be filed under Section 55.1 of the IRR-A of Republic Act No. 9184 with the appellate authority within seven (7) calendar days from receipt of the resolution on the Motion for Reconsideration.
Agency decisions become final and executory after seven (7) calendar days from receipt of notice of decision or resolution on the Motion for Reconsideration; if a protest is filed, the affirmed/modified/reversed decision becomes final and executory upon receipt by the agency and the concerned person/entity.
Upon finality of the suspension, the Head or appellate authority issues a Blacklisting Order disqualifying the erring contractor from participating in bidding of all government projects.

Blacklisting during contract implementation

Upon termination of a contract due to the contractor’s default, the Head of the Procuring Entity shall immediately issue a Blacklisting Order disqualifying the erring contractor from participating in the bidding of all government projects.
The contractor’s performance security is forfeited upon issuance of the Blacklisting Order after termination due to default.

Blacklisting status before order issuance

Before issuance of a Blacklisting Order, the erring contractor may participate in procurement of any government project except in the agency where the contractor is suspended.
If the Blacklisting Order is issued prior to the date of the Notice of Award (NOA), the blacklisted person/entity is not qualified for award, and the project/contract is awarded to another bidder pursuant to Republic Act No. 9184 and its IRR-A.
If the Blacklisting Order is issued after award, the awarded project/contract is not prejudiced by the order provided the offenses are not connected with the awarded project/contract.

Delisting and maintenance of records

A blacklisted person/entity is automatically delisted after the period for the penalty expires, unless the blacklisting agency requests the GPPB to maintain the person/entity in the Consolidated Blacklisting Report due to justifiable reasons.
In cases where maintenance is requested, the person/entity is delisted only upon issuance of a Delisting Order by the blacklisting agency.

GPPB reporting, consolidation, and posting

The blacklisting agency shall submit to the GPPB within seven (7) calendar days after issuance of Blacklisting Orders/Delisting Orders:
- The Blacklisting Order signed by the Head or appellate authority, including required details such as Department/Office Order or Board Resolution number, name and address of the blacklisted person/entity, license number if applicable, Authorized Managing Officer (AMO), project/contract name and location/amount, specific ground(s)/offense(s) under Section 4, the sanction imposed and its start and completion date, issuance date, and other conditions extending the sanction duration under Sections 4.
- The Delisting Order signed by the blacklisting agency, including Department/Office Order or Board Resolution number, name and address, the project/contract name and location, the sanction lifted, the number of previously issued blacklisting orders/resolutions, delisting effectivity date, and delisting approval date.
The GPPB prepares the Consolidated Blacklisting Report every quarter based on submitted orders and disseminates it to procuring entities and the Commission on Audit (COA).
The report is posted in the GPPB website and the Government Electronic Procurement System (G-EPS) and indicates the number of blacklisting occurrences, the type of offense/violation, the penalty imposed, and the blacklisting agency concerned.
The GPPB delists from the report those whose sanctions are automatically lifted after serving the penalty period and those whose sanctions are lifted through Delisting Orders.
For infrastructure projects, if a blacklisting agency refers the case to the Philippine Contractors Accreditation Board (PCAB) for license suspension/revocation, the agency submits to PCAB a copy of the decision with supporting documents.
All existing blacklisting reports of government procuring entities and the list of constructors whose licenses are suspended or revoked by the PCAB as of the IRR-A effectivity date are adopted and made part of the GPPB Consolidated Blacklisting Report upon issuance of these guidelines.

Amendments and effectivity

The GPPB may introduce modifications to these guidelines by amending specific provisions as the need arises during implementation.
Any amendment applies to government projects advertised for bid after the effectivity of the amendment.
These guidelines or any amendments take effect immediately after publication in the Official Gazette or a newspaper of general nationwide circulation and upon filing with the University of the Philippines Law Center of three (3) certified copies.