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lesser goods to be delivered

Post by bogkalabog on Mon May 16, 2011 3:48 pm

supplier and procuring entity (PE) entered into a contract for the delivery of x quantity of supplies for a period of one (1) year to be delivered on a monthly basis. however, PE established that x quantity is more than what is needed, so PE requested the supplier to lessen the x quantity to be delivered per month in which supplier agreed. is there a violation here?
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Re: lesser goods to be delivered

Post by sunriser431 on Tue May 17, 2011 9:48 pm

bogkalabog wrote:supplier and procuring entity (PE) entered into a contract for the delivery of x quantity of supplies for a period of one (1) year to be delivered on a monthly basis. however, PE established that x quantity is more than what is needed, so PE requested the supplier to lessen the x quantity to be delivered per month in which supplier agreed. is there a violation here?
Excerpts from the PBDs, which is self explanatory.
Section IV. General Conditions of Contract
24. xxxx
25. Termination for Convenience
25.1. The Procuring Entity may terminate this Contract, in whole or in part, at any time for its convenience. The Head of the Procuring Entity may terminate a contract for the convenience of the Government if he has determined the existence of conditions that make Project Implementation economically, financially or technically impractical and/or unnecessary, such as, but not limited to, fortuitous event(s) or changes in law and national government policies.
Hopefully, the provision in GCC 25 might be of help.
bounce
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Re: lesser goods to be delivered

Post by RDV @ GP3i on Wed May 18, 2011 10:55 am

sunriser431 wrote:
bogkalabog wrote:supplier and procuring entity (PE) entered into a contract for the delivery of x quantity of supplies for a period of one (1) year to be delivered on a monthly basis. however, PE established that x quantity is more than what is needed, so PE requested the supplier to lessen the x quantity to be delivered per month in which supplier agreed. is there a violation here?
Excerpts from the PBDs, which is self explanatory.
Section IV. General Conditions of Contract
24. xxxx
25. Termination for Convenience
25.1. The Procuring Entity may terminate this Contract, in whole or in part, at any time for its convenience. The Head of the Procuring Entity may terminate a contract for the convenience of the Government if he has determined the existence of conditions that make Project Implementation economically, financially or technically impractical and/or unnecessary, such as, but not limited to, fortuitous event(s) or changes in law and national government policies.
Hopefully, the provision in GCC 25 might be of help.
bounce

There would be no violation or problem if both parties to the contract have agreed to the reduction in the quantity to be delivered, particularly on the part of the supplier. There would be a violation if the order to reduce the number of quantities to be delivered is done unilaterally by the procuring entity. Why? Because the ordered items could have already been manufactured, ordered (from abroad), or ready for delivery; hence, costs would have already been incurred by the supplier in preparing for the delivery of the ordered items before any unilateral action to reduce the number ordered was done by the procuring entity.

If the procuring entity decided to terminate the contract for convenience (as, I presume, being suggested by sunriser), the GPPB guideline on the matter (GPPB Resolution 018-2004), provides that "The goods that have been performed or are ready for delivery within 30 c.d. after the Supplier's receipt of the Notice to Terminate shall be accepted by the Procuring Entity at the contract terms and prices."

For goods not yet performed or ready for delivery, the procuring entity may also cancel the remainder and pay the supplier an agreed amount for partially completed or performed goods and for materials and parts previously procured by the supplier.

If the supplier suffers loss in its initial performance of the terminated contract due to purchase of raw materials for goods to be manufactured, the supplier shall be allowed to recover partially from the contract on a quantum meruit basis, subject to proof of actual loss has been suffered to the satisfaction of the procuring entity.
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Re: lesser goods to be delivered

Post by bogkalabog on Wed May 18, 2011 3:27 pm

thank you very much for those "inputs".
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Re: lesser goods to be delivered

Post by bogkalabog on Fri May 20, 2011 3:31 pm

additional inquiry...... if there is a mutual agreement between the PE and the supplier on the lesser quantity of goods, will it follow that there would be an amendment of the signed contract?
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Re: lesser goods to be delivered

Post by engrjhez® on Sun May 22, 2011 11:47 pm

bogkalabog wrote:additional inquiry...... if there is a mutual agreement between the PE and the supplier on the lesser quantity of goods, will it follow that there would be an amendment of the signed contract?

You don't need to amend the contract anymore. In exercising termination by convenience, the goods delivered and services rendered shall be paid by the PE prior to termination. Smile
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Re: lesser goods to be delivered

Post by bogkalabog on Mon May 23, 2011 3:26 pm

engrjhez® wrote:
bogkalabog wrote:additional inquiry...... if there is a mutual agreement between the PE and the supplier on the lesser quantity of goods, will it follow that there would be an amendment of the signed contract?

You don't need to amend the contract anymore. In exercising termination by convenience, the goods delivered and services rendered shall be paid by the PE prior to termination. Smile

no sir, we will not be terminating the contract, we will just lessen the quantity of goods to be delivered.
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