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Reason for Contract Extension

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Reason for Contract Extension

Post by Trisha68 on Tue May 06, 2014 9:49 am

Need your help:

The contract for our office's security services is about to expire. This has been overlooked hence resulting to lack of budget to post a bid. Is it possible to extend the contract for a year using the lack of approved budget as a reason?

Thank you!

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Registration date : 2014-05-06

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Re: Reason for Contract Extension

Post by attywaws on Thu May 08, 2014 11:48 am

Hi Ms. Trisha,

The contract cannot be extended for the very reason that you have no budget for the security services. Kindly refer to the condition below as provided for under GPPB Resolution No. 03-2011:

Sec. 4.3 The procuring entity concerned has substantially undertaken the procurement activities required prior to the award of the new contract under R.A. 9184 and its IRR.

In interpreting the condition, "substantially undertaken the procurement activities" should be understood as  there should already be steps which were undertaken by the procuring entity to procure the services subject of the contract extension, i.e. Posting of Invitation to Bid, Conduct of Bidding, etc.

This provisions is a safeguard against unwarranted contract extensions by the procuring entity as a contract extension is prone to abuse.

Considering that the procuring entity has no budget for the security services, then the "procurement activities" could not have been undertaken since the absence of budget would imply its absence of the PPMP and ultimately in the APP. To do this would violate the mandatory provisions under Sec. 7 of the IRR.
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