Republic of the Philippines

Province of Bataan
City of Balanga
OFFICE OF THE CITY MAYOR
(047) 237-2256 / 237-2969 / 237-3510

EXECUTIVE ORDER NO. 17, SERIES OF 2020

“CREATING THE CONTRACT TERMINATION REVIEW COMMITTEE
IN THE CITY OF BALANGA”

WHEREAS, Republic Act No. 9184, otherwise known as the Government Procurement
Reform Act, governs the procurement of infrastructure projects, goods and consulting services,
regardless of source of funds, by all branches and instrumentalities of government, its
departments, offices and agencies, including government-owned and/or-controlled
corporations and local government units;

WHEREAS, Annex I of the “2016 Revised Implementing Rules and Regulations of

Republic Act No. 9184” provides the guidelines on termination of contracts, in the event that
government procurement contracts will be terminated for default, convenience, insolvency,
unlawful acts or by the contractor or consultant;

WHEREAS, pursuant to the guidelines, the Head of the Procuring Entity (HOPE) renders
the decision within ten days upon receipt of verified position paper, based on the grounds
stated in the notice to terminate;

WHEREAS, the procedures for termination of contracts allow the creation of a

committee who will assist the HOPE in the discharge of his function under the guidelines;

WHEREAS, due to the nature of the function involved, especially the review of items and
works involved, it is imperative to establish a body that will provide technical, financial and
legal assistance to the HOPE prior to contract termination;

NOW, THEREFORE, I, FRANCIS ANTHONY S. GARCIA, by virtue of the power vested in

me by law as the Chief Executive of the City of Balanga, hereby create the Contract Termination
Review Committee in the City of Balanga, to wit :

SECTION I
COMPOSITION
The Contract Termination Review Committee in the City of Balanga shall be composed
of the following :

CHAIRPERSON : MRS. LILIBETH T. CALATA

City Government Department Head I
City General Services Office (GSO)

CO-CHAIRPERSON : ENGR. MIGUEL A. SANCHEZ III

Officer-In-Charge (OIC)
City Engineer’s Office (CEO)

2nd Floor, Balanga City Hall, Barangay Poblacion, Balanga City, Bataan 2100
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MEMBERS : MRS. ELSA P. ILAGAN

City Government Department Head I
City Planning & Development Office (CPDO)

MRS. JOER GRACE H DE MESA

City Government Department Head I
City Budget Office (CBO)

ENGR. MARILEN Z. ALONZO

City Government Department Head I
City Assessor’s Office

MRS. MYRNA B. ROMAN

City Government Department Head I
City Accounting & Internal Audit Office (CAIAO)

ATTY. APRIL LORELEI A. ATCHECO

City Government Department Head I
City Legal Office Office

MS. MARIVIC T. DELOS NIEVES

Admin. Officer V
City General Services Office (GSO)

ENGR. ROSALIE R. DELORINO

Engineer I
City Engineer’s Office (CEO)

MS. MA. ROWENA S. MANLAPID

Legal Assistant II
City Legal Office

SECTION II
FUNCTIONS, DUTIES & RESPONSIBILITIES

The Contract Termination Review Committee in the City of Balanga shall have the
following functions, duties and responsibilities pursuant to the “Guidelines on Termination of
Contracts (Annex I of the “2016 Revised Implementing Rules and Regulations of Republic Act
No. 9184), to wit:

1. Receive and review the Verified Report to be submitted by the Implementing Unit,
which details the acts or causes which may constitute as ground for termination of
government procurement contract;
2. Recommend to the HOPE and facilitate the preparation of the Notice to Terminate to be
approved by the HOPE, which shall state:
a. that the contract is being terminated for any of the ground(s) afore-mentioned,
and a statement of the acts that constitute the ground(s) constituting the
same;
b. the extent of termination, whether in whole or in part;
c. an instruction to the Supplier/Contractor/Consultant to show cause as to why the
contract should not be terminated; and
d. special instructions of the Procuring Entity, if any;

2nd Floor, Balanga City Hall, Barangay Poblacion, Balanga City, Bataan 2100
[email protected]
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3. Receive and review the Verified Position Paper to be submitted by the supplier,
contractor or consultant, as the case may be;
4. Submit a recommendation and facilitate the preparation of the Decision to be approved
by the HOPE;
5. Whenever necessary, coordinate with the concerned offices during the conduct of the
contract termination process;
6. Monitor the timelines involved and ensure compliance with the procedure for the
termination of government procurement contracts.

SECTION IV
MEETINGS

The Contract Termination Review Committee shall convene/meet for special and
emergency meetings as the need arises. A majority of all the committee members shall
constitute a quorum.

SECTION V
GUIDELINES ON TERMINATION OF CONTRACTS

The Contract Termination Review Committee shall be guided by the following guidelines
as provided for under Annex I of the “2016 Revised Implementing Rules and Regulations of Republic
Act No. 9184”, to wit :

I. Purpose, Scope and Application :

These guidelines aim to promote fairness in the termination of procurement

contracts and to prescribe contract conditions and measures to enable government to
protect its interests. For this purpose, policies and procedures relating to the whole or
partial termination of government procurement contracts of goods, infrastructure
projects, and consulting services are herein established.

II. Definition of Terms :

1) Coercive Practice means harming or threatening to harm, directly or indirectly,

persons or their property to influence their participation in a procurement process,
or affect the execution of a contract;
2) Collusive Practice means a scheme or arrangement including practice among
bidders (prior to or after bid submission) designed to establish bid prices at artificial
non-competitive levels to prevent free and open competition;
3) Corrupt Practice means the offering, giving, receiving or soliciting of anything of
value to influence the action of a public official in the selection process or in contract
execution. It also means entering, on behalf of the Government, into any contract or
transaction manifestly and grossly disadvantageous to the same, whether or not the
public officer profits or will profit thereby; and similar acts as provided in Republic
Act 3019;
4) Fraudulent Practice means a misrepresentation of facts in order to influence a
selection process or the execution of a contract to the detriment of the Procuring
Entity;

2nd Floor, Balanga City Hall, Barangay Poblacion, Balanga City, Bataan 2100
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5) Head of the Procuring Entity refers to :

(i) the head of the agency or his duly authorized official, for national government
agencies;
(ii) the governing board or its duly authorized official, for government-owned and/or
controlled corporations; or
(iii) the local chief executive, for local government units. Provided, that in a
department, office or agency where the procurement is decentralized, the Head
of each decentralized unit shall be considered as the Head of the Procuring Entity
subject to the limitations and authority delegated by the head of the department,
office or agency;
6) Implementing Unit refers to the unit or office having direct supervision or
administration over the implementation of the contract such as the Project
Management Office or the End-User Unit;
7) Termination in Part means the termination of a part but not all, of the work that has
not been completed and accepted under a contract;
8) Termination in Whole means the termination of all of the work that has not been
completed and accepted under a contract;
9) Show Cause refers to a notice which the Procuring Entity is required to issue prior to
terminating a contract. The purpose of a show cause notice is to enable the
contractor to present its position why the contract should not be terminated;
10) Verified Report refers to the report submitted by the Implementing Unit to the
Head of the Procuring Entity setting forth its findings as to the existence of grounds
or causes for termination and explicitly stating its recommendation for the issuance
of a Notice to Terminate.

III. Grounds for Termination of Contracts :

A. Termination for Default :

1) In contracts for Goods :

The Procuring Entity shall terminate a contract for default when any of the
following conditions attend its implementation :

a) Outside of force majeure, the Supplier fails to deliver or perform any or

all of the Goods within the period(s) specified in the contract, or within
any extension thereof granted by the Procuring Entity pursuant to a
request made by the Supplier prior to the delay, and such failure
amounts to at least ten percent (10%) of the contract price;
b) As a result of force majeure, the Supplier is unable to deliver or perform
any or all of the Goods, amounting to at least ten percent (10%) of the
contract price, for a period of not less than sixty (60) calendar days after
receipt of the notice from the Procuring Entity stating that the
circumstance of force majeure is deemed to have ceased; or
c) The Supplier fails to perform any other obligation under the Contract.

2nd Floor, Balanga City Hall, Barangay Poblacion, Balanga City, Bataan 2100
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2) In contracts for Infrastructure Projects :

The Procuring Entity shall terminate a contract for default when any of the
following conditions attend its implementation :

a) Due to the Contractor’s fault and while the project is on-going, it has
incurred negative slippage of fifteen percent (15%) or more in
accordance with Presidential Decree 1870;
b) Due to the Contractor’s fault and after the contract time has expired, it
has incurred a negative slippage of ten percent (10%) or more in the
completion of the work; or
c) The Contractor :
i. abandons the contract works, refuses or fails to comply with a valid
instruction of the Procuring Entity or fails to proceed expeditiously
and without delay despite a written notice by the Procuring Entity;
ii. does not actually have on the project site the minimum essential
equipment listed on the Bid necessary to prosecute the Works in
accordance with the approved work plan and equipment deployment
schedule as required for the project;
iii. does not execute the Works in accordance with the contract or
persistently or flagrantly neglects to carry out its obligations under
the contract;
iv. neglects or refuses to remove materials or to perform a new work
that has been rejected as defective or unsuitable; or
v. sub-lets any part of the contract works without approval by the
Procuring Entity.

3. In contracts for Consulting Services :

The Procuring Entity shall terminate a contract for default when any of the
following conditions attend its implementation :

a) Outside of force majeure, the Consultant fails to deliver or perform the

Outputs and Deliverables within the period(s) specified in the contract,
or within any extension thereof granted by the Procuring Entity
pursuant to a request made by the Consultant prior to the delay;
b) As a result of force majeure, the Consultant is unable to deliver or
perform a material portion of the Outputs and Deliverables for a period
of not less than sixty (60) calendar days after the Consultant’s receipt of
the notice from the Procuring Entity stating that the circumstance of
force majeure is deemed to have ceased; or
c) The Consultant fails to perform any other obligation under the contract.

B. Termination for Convenience :

The Procuring Entity may terminate the 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.

2nd Floor, Balanga City Hall, Barangay Poblacion, Balanga City, Bataan 2100
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C. Termination for Insolvency :

The Procuring Entity shall terminate the contract if the

Supplier/Contractor/Consultant is declared bankrupt or insolvent as determined with
finality by a court of competent jurisdiction. In this event, termination will be without
compensation to the Supplier/Contractor/Consultant, provided that such termination
will not prejudice or affect any right of action or remedy which has accrued or will
accrue thereafter to the Procuring Entity and/or the Supplier/Contractor/Consultant.

D. Termination for Unlawful Acts :

The Procuring Entity may terminate the contract in case it is determined prima
facie that the Supplier/Contractor/Consultant has engaged, before or during the
implementation of the contract, in unlawful deeds and behaviors relative to contract
acquisition and implementation. Unlawful acts include, but are not limited to, the
following :

a) Corrupt, fraudulent, collusive and coercive practices;

b) Drawing up or using forged documents;
c) Using adulterated materials, means or methods, or engaging in production
contrary to rules of science or the trade; and
d) Any other act analogous to the foregoing.

E. Termination by Contractor/Consultant :

1) In contracts for Infrastructure Projects :

The Contractor may terminate its contract with the Procuring Entity if the
works are completely stopped for a continuous period of at least sixty (60)
calendar days through no fault of its own, due to any of the following reasons :

a) Failure of the Procuring Entity to deliver, within a reasonable time,

supplies, materials, right-of-way, or other items it is obligated to furnish
under the terms of the contract; or
b) The prosecution of the work is disrupted by the adverse peace and order
situation, as certified by the Armed Forces of the Philippines Provincial
Commander and approved by the Secretary of National Defense.

2) In contracts for Consulting Services :

The Consultant may terminate its agreement with the Procuring Entity if
the latter is in material breach of its obligations pursuant to the contract and has
not remedied the same within sixty (60) calendar days following its receipt of the
Consultant’s notice specifying such breach.

IV. PROCEDURES FOR TERMINATION OF CONTRACTS :

1) Verification. Upon receipt of a written report of acts or causes which may constitute
ground(s) for termination as aforementioned, or upon its own initiative, the
Implementing Unit shall, within a period of seven (7) calendar days, verify the
existence of such ground(s) and cause the execution of a Verified Report, with all
relevant evidence attached;

2nd Floor, Balanga City Hall, Barangay Poblacion, Balanga City, Bataan 2100
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2) Notice to Terminate. Upon recommendation by the Implementing Unit, the Head of

the Procuring Entity shall terminate contracts only by a written notice to the
Supplier/Contractor conveying the termination of the contract. The notice shall
state:
a) that the contract is being terminated for any of the ground(s) afore-mentioned,
and a statement of the acts that constitute the ground(s) constituting the same;
b) the extent of termination, whether in whole or in part;
c) an instruction to the Supplier/Contractor/Consultant to show cause as to why the
contract should not be terminated; and
d) special instructions of the Procuring Entity, if any. The Notice to Terminate shall be
accompanied by a copy of the Verified Report.

3) Show Cause. Within a period of seven (7) calendar days from receipt of the Notice of
Termination, the Supplier/Contractor/Consultant shall submit to the Head of the
Procuring Entity a verified position paper stating why the contract should not be
terminated.

If the Supplier/Contractor/Consultant fails to show cause after the lapse of the

seven (7) day period, either by inaction or by default, the Head of the Procuring
Entity shall issue an order terminating the contract.

4. Rescission of Notice of Termination. The Procuring Entity may, at anytime before

receipt of the Supplier’s/Contractor’s/Consultant’s verified position paper to
withdraw the Notice to Terminate if it is determined that certain items or works
subject of the notice had been completed, delivered, or performed before the
Supplier’s/Contractor’s/Consultant’s receipt of the notice.

5. Decision. Within a non-extendible period of ten (10) calendar days from receipt of the
verified position paper, the Head of the Procuring Entity shall decide whether or not
to terminate the contract. It shall serve a written notice to the
Supplier/Contractor/Consultant of its decision and, unless otherwise provided, the
Contract is deemed terminated from receipt of the Supplier/Contractor/Consultant
of the notice of decision. The termination shall only be based on the ground(s)
stated in the Notice to Terminate.

6. Contract Termination Review Committee (CTRC). The Head of the Procuring Entity
may create a committee to assist him in the discharge of his function under these
Guidelines. All decisions recommended by the CTRC shall be subject to the approval
of the Head of the Procuring Entity.

7. Take-over of Contracts. If a Procuring Entity terminates the contract due to default,

insolvency, or for cause, it may enter into a Negotiated Procurement pursuant to
Section 53(c) of R.A. 9184 and 53.3 of its IRR.

8. Procuring Entity’s Options in Termination for Convenience in Contracts for Goods.

The goods that have been performed or are ready for delivery within thirty (30)
calendar days after the Supplier’s receipt of 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 elect :

a) to have any portion delivered or performed and paid at the contract terms and
prices; and/or
b) to cancel the remainder and pay to the Supplier an agreed amount for partially
completed or performed goods and for materials and parts previously procured by
the Supplier.

2nd Floor, Balanga City Hall, Barangay Poblacion, Balanga City, Bataan 2100
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If the Supplier suffers loss in its initial performance of the terminated contract,
such as purchase of raw materials for goods specially manufactured for the
Procuring Entity which cannot be sold in open market, it shall be allowed to recover
partially from the contract, on a quantum meruit basis. Before recovery may be
made, the fact of loss must be established under oath by the Supplier to the
satisfaction of the Procuring Entity before recovery may be made.

9. Notice by Contractor/Consultant. The Contractor/Consultant must serve a written

notice to the Procuring Entity of its intention to terminate the contract at least thirty
(30) calendar days before its intended termination. The Contract is deemed
terminated if it is not resumed in thirty (30) calendar days after the receipt of such
notice by the Procuring Entity.

V. AMENDMENTS :

1. In the implementation of these Guidelines, the Government Procurement Policy

Board (GPPB) may introduce modifications hereto through the amendment of its
specific provisions as the need arises; and
2. Any amendment to these Guidelines shall be applicable to government projects
advertised for bid after the effectivity of the said amendment.

SECTION VI
SEPARABILITY CLAUSE

If, for any reason, any portion of this Order is declared unconstitutional or invalid, the
same shall not affect the validity of the other provisions not affected thereby.

SECTION VII
REPEALING CLAUSE

All orders, rules, regulations and issuances or parts thereof, which shall be found
contrary to or inconsistent with the provisions of this Order are hereby amended, repealed or
modified accordingly.

SECTION VIII
EFFECTIVITY

This Executive Order shall take effect immediately upon approval and shall remain valid
and effective, unless sooner revoked, amended or terminated.

SO ORDERED.

Done this 20th day of February 2020 in the City of Balanga, Province of Bataan.

FRANCIS ANTHONY S. GARCIA

City Mayor

2nd Floor, Balanga City Hall, Barangay Poblacion, Balanga City, Bataan 2100
[email protected]
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