STREAMLINING THE RULES AND PROCEDURES ON THE REVIEW AND APPROVAL OF ALL CONTRACTS OF DEPARTMENTS, BUREAUS, OFFICES AND AGENCIES OF THE GOVERNMENT, INCLUDING GOVERNMENT-OWNED OR …

WHEREAS,
to achieve the foregoing; the National Economic and Development
Authority (NEDA) has recommended the issuance of this Executive Order;

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Philippines, by virtue of the powers vested in me by law, do hereby order:

SECTION 1.   Public Bidding.
— It is the policy of this Administration that all Government Contracts
shall be awarded through open and competitive public bidding, save in
exceptional cases provided by law and applicable rules and regulations,
as described In Section 2 of this Executive Order.

Except
for contracts required by law to be acted upon and/or approved by the
President, Department Secretaries shall have full authority to give fine
approval and/or enter into all Governments Contracts of their
respective departments and of bureaus, offices, and agencies,
government-owned or controlled corporations and their subsidiaries
attached or under the control and/or supervision of the Department
Secretary, awarded through public bidding, regardless of the amount
involved.

Every
Department Secretary and Head of a bureau, office, and agency of the
government, as well as the Head and governing board of a
government-owned or controlled corporation and its subsidiary, shall be
responsible and accountable for ensuring that all Government Contracts
entered into are accordance with all existing laws, rules and
regulations and are consistent with the spending and development
priorities of government.

SECTION 2.   Exceptions to Public Bidding.
— The law and applicable rules and regulations provide for exceptional
cases where a Government Contract may be accepted from the requirement
of public bidding, as follows:

a.         For
infrastructure projects, including supply contracts, civil works, and
other related contracts, as provided under Section 62, Chapter 13, Book
IV, Revised Administrative Code of 1987, Section 4, Presidential Decree
No. 1594, and Executive Order No. 40 dated October 8, 2001 [EO 40] and
its Implementing Rules and Regulations;

b.         For
procurement of goods, supplies, materials and related services as
provided under EO 40 and its Implementing Rules and Regulations; and

c.         For consulting services as provided under EO 40 and its Implementing Rules and Regulations.

SECTION 3.   Requirements for Exception from Public Bidding.
— Where the Department Secretary has made a determination that a
Government Contract involving an amount of at least Three Hundred
Million Pesos (P300 Million) falls under any of the exceptions from
public bidding described in Section 2 hereof, the Department Secretary
shall, before proceeding with the alternative modes of procurement as
provided by law and applicable rules and regulations, obtain the
following:

a.         An opinion from the Secretary of Justice that said Government Contract falls within the exceptions from public bidding; and

b.         Approval
from the Director-General of NEDA to proceed with a specific
alternative mode of procurement under the exceptional cases provided by
law and applicable rules and regulations.

After
compliance with the foregoing requirements, except for contracts
required by law to be acted upon and/or approved by the President,
Department Secretaries shall have full authority to give final approval
and/or enter into such Government Contracts excepted from the
requirement of public bidding, regardless of the amount involved:

Where
a Government Contract, not required by law to be acted upon and/or
approved by the President; involves an amount below Three Hundred
Million Pesos (P300 Million) and the concerned Department Secretary has
made a determination that the Government Contract falls under any of the
exceptions from public bidding described in Section 2 hereof, the
Department Secretary has full authority to give final approval and/or
enter into the Government Contract without need of obtaining the
foregoing requirements.

The
Department Secretary may delegate in writing to appropriate officials,
subject to appropriate ceilings, this authority to determine whether a
Government Contract involving an amount below Three Hundred Million
Pesos (P300 Million) falls under any of the exceptions from public
bidding described in Section 2 hereof.

SECTION 4.   Governing Law for Government Contracts. —

a.         BOT
Contracts. Contracts undertaken through Build Operate and Transfer
(BOT) schemes and other variations shall be governed by the provisions
of Republic Act No. 6957, as amended by Republic Act No. 7718, and its implementing Rules and Regulations.

b.         Contracts
for infrastructure projects, including supply contracts, civil works,
and other related contracts. Contracts for infrastructure projects,
including supply contracts, civil works, and other related contracts
shall be governed by the Revised Administrative Code of 1987,
Presidential Decree No. 1594 and EO 40 and its Implementing Rules and
Regulations.

c.         Contracts
for goods, supplies, materials and related services. Contracts for
goods, supplies, materials and related services shall be governed by EO
40 and its implementing Rules and Regulations.

d.         Contracts for consulting services.  Contracts for consulting services shall be governed by EO 40 and its Implementing Rules and Regulations.

e.         Lease
Contracts. Lease contracts for goods, supplies and materials shall be
governed by EO 40 and its Implementing Rules and Regulations. Lease
contracts for real estate and other properties shall be governed by
Executive Order No. 301 dated July 26, 1987 and guidelines issued by the
Department of Public Works and Highways.

f.          ODA-funded
Contracts. Government Contracts financed wholly or partly with Official
Development Assistance (ODA) funds shall be governed by Republic Act
No. 4860, as amended and Republic Act No. 8182, as amended by Republic
Act No. 8555.

NEDA
shall issue guidelines for Government Contracts financed with ODA funds
with the objective of promoting transparency, impartiality, and
accountability in government transactions.

SECTION 5.   Joint Venture Agreements.
— NEDA shall, in consultation with the Department of Justice, issue
guidelines regarding joint venture agreement with private entities with
the objective of promoting transparency, impartiality, and
accountability In government transactions and, where applicable,
complying with the requirements of an open and competitive public
bidding.

SECTION 6.   Transactions of Government Financial Institutions.
— Transactions of government financial Institutions in the ordinary
course of business shall not be covered by the provisions of this
Executive Order.  Such transactions shall instead
be subject to applicable provisions of law and to guidelines, rules and
regulations issued by the Department of Finance.

SECTION 7.   Requirements for all Government Contracts. — All Government Contracts shall: be:

a.         Processed
completely by the concerned department, bureau, office and agency of
the government, including a government-owned or controlled corporation
and its subsidiary;

b.         Signed
and/or approved by the Head of the bureau, office, and agency of the
government, the Head and/or governing board of the government-owned or
controlled corporation and its subsidiary and the Department Secretary;
and

c.         Accompanied by the certifications issued by (i)
the concerned Department Secretary; (ii) the Head of the bureau, office
of the agency; and, (iii) the Head and governing board of the
government-owned or controlled corporation or its subsidiary, that the contract is in accordance with all existing laws, rule and regulations.

SECTION 8.   Author to Bind the Government.
— All Government Contracts shall require the approval of the Department
Secretary after the Government Contract has been signed and/or approved
by the Head of a bureau, office or agency or by the Head and/or
governing board of the government-owned or controlled corporation or its
subsidiary, before the Government Contract shall be considered approved
in accordance with law and binding on the government.

Except
for contracts required by law to be acted upon and/or approved by the
President, the Department Secretary possesses the full authority to
approved and/or enter into a Government Contract binding on the
government.  However, a Department secretary may
delegate in writing to appropriate officials, subject to appropriate
ceilings, this authority to approve a Government Contract involving an
amount below Three Hundred Million Pesos (P300 Million), whether
publicly bidded or excepted from public bidding, as he sees fit under the circumstances.

For
Government Contracts signed by the Head of a bureau, office, and agency
of the government, and by the Head and/or governing board of a
government-owned or controlled corporation and its subsidiary attached
to or under the Office of the President, the Executive Secretary shall
approve the Government Contract in accordance herewith.

All
Government Contracts entered into in violation of the provisions of
law, existing rules and regulations, and this Executive Order shall be
considered contracts entered into without authority and are thus invalid
and not binding on the government.

SECTION 9.   Government Contracts Requiring Presidential Action and/or Approval. — a.
All Government Contracts required by law to be acted upon and/or
approved by the President, and any subsequent amendments or supplements
thereto, shall not be signed until after the NEDA Board, which is
chaired by the President of the Philippines, has favorably acted upon or approved the same.

b.         All
Government Contracts required by law to be acted upon and/or approved
by the President, and any subsequent amendments or supplements thereto,
shall be submitted to NEDA, through its Director-General, within seven
(7) days from the approval by the Department Secretary concerned, for NEDA’s review and evaluation:

Government
Contracts submitted hereunder shall be accompanied by a complete
execution copy of the contract, related agreements, annexes, other
approvals and permits, including a detailed summary of the pertinent
laws, rules and regulations governing the processing and award of the
contract, and the certifications issued by (i)
the, concerned Department Secretary; (ii) the Head of the bureau,
office or agency; and (iii) the Head and governing board of the
government-owned or controlled corporation or its subsidiary, that the
contract is in accordance with all existing laws, rules and regulations.

c.         Within
thirty (30) days from receipt of the Government Contracts, and any
subsequent amendments or supplements thereto, NEDA shall submit its
recommendation to the NEDA Board which is chaired by the President of
the Philippines, for appropriate action.

d.         Within
seven (7) days from the date of the NEDA Board’s action, NEDA, through
its Director-General, shall formally notify the Department Secretary
concerned of the action of the NEDA Board, including any comments
thereon.

SECTION 10. Submission of Government Contracts.
— With a view to creating a repository of all important Government
Contracts; a complete copy of all Government Contracts involving an
amount of at least Three Hundred Million Pesos (P300 Million) shall be.
submitted to NEDA, through its Director-General, within seven (7) days
from the date of signing and/or approval, thereof, accompanied with a
complete copy of its related agreements, annexes, other approvals and
permits, a detailed summary of the pertinent laws, rules and regulations
governing the processing and award of the contract, and the
certification required under Section 7 hereof.

SECTION 11. Splitting of Government Contracts. — Splitting of Government Contracts is not allowed.  Splitting
of Government Contracts means the division or breaking up of Government
Contracts into smaller quantities and amounts, or dividing contracts
implementation into artificial phases or sub-contracts for the purpose
of evading or circumventing the requirements of law and this Executive
Order, especially the necessity of public bidding and the requirements
for exceptions therefrom in accordance with Section 3 hereof.

SECTION 12. Local Government Units.
— All contracts of Local Government Units funded by the national
government shall be governed by the provisions of this Executive Order
and its implementing guidelines, rules and regulations.  Furthermore,
Local Government Units are encouraged to apply the provisions of this
Executive Order for contracts entered into and/or funded by Local
Government Units.

SECTION 13. Prospective Application.
— All Government Contracts, including those presently being processed
and/or reviewed by the NEDA Board in accordance with Administrative
Order No. 7 dated March 23, 2001, shall hereafter be processed and/or
reviewed in accordance with this Executive Order.

SECTION 14. Implementing Guidelines, Rules and Regulations. — NEDA shall, within thirty (30) days from the effectivity
of this Executive Order, issue the appropriate guidelines, rules and
regulations to implement the provisions of this Executive Order.

Such guidelines, rules and regulations shall include, among others, provisions governing:

a.         ODA-funded contracts,

b.         Joint venture agreements with private entities, and

c.         submission of Government Contracts to NEDA.

All such guidelines, rules and regulations shall be subject to the approval of the President of the Philippines.

NEDA may recommend penalties for violations of the provisions of this Executive Order for the approval of the President.

NEDA
shall likewise submit, within the same period, a complete list of all
Government Contracts required by law to be acted upon and/or approved by
the President.  For this purpose, NEDA may
request the assistance of all departments, bureaus, office or agencies
of government, as well as government-owned controlled corporations and
their subsidiaries.

SECTION 15. Applicability of Existing Laws. — The provisions of the following shall continue to be applicable:

a.         Executive Order No. 292 dated July 26, 1987 or the Revised Administrative Code of 1987;

b.         Presidential Decree No. 1594;

c.         Republic Act No. 6957, as amended by Republic Act No. 7718, and its Implementing Rules and Regulations;

d.         Executive Order No. 301 dated July 26, 1987; and

e.         Executive Order No. 40 dated October 8, 2001 and its Implementing Rules and Regulations.

SECTION 16. Repeal and Amendments. — The following orders, issuances, memoranda and other President Issuances are hereby repealed:

a.         Executive Order No. 380 dated November 27, 1989;

b.         Executive Order No. 381 dated November 27, 1989;

c.         Executive Order No. 354 dated July 5, 1996;

d.         Administrative Order No. 7 dated March 23, 2001;

e.         Memorandum Circular No. 25 dated February 10, 1999;

f.          Memoranda
from the President dated August 25, 1998, September 7, 1998, January
25, 1999, February 5, 1999, February 8, 1999, February 10, 1999,
February 23, 1999, and July 12, 1999; all relating to the submission of
contracts/agreements on infrastructure and infra-related projects worth
of P50 Million and above for review by the, Office of the President;

g.         Memorandum from the President dated February 8, 2000 on Review of ODA-funded Contracts, and

h.         Memorandum
from the President dated June 30, 2000 on the review of contracts
disposing government land, whether by lease or sale.

Memorandum
Order No. 266 dated November 28, 1989 insofar as it relates to joint
venture agreements with private entities is hereby amended accordingly.

All
other Presidential directives, issuances, orders, rules and regulations
or parts thereof inconsistent with this Executive Order are likewise
hereby repealed or modified accordingly.

SECTION 17. This Executive Order shall take effect immediately upon publication in two (2) newspapers of general circulation.

Adopted: 27 May 2002

By the President:

(SGD.) ALBERTO G. ROMULO
Executive Secretary