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Contract Agreement vs. Purchase Order


BACK ISSUES
This should have been a non-debatable issue by this date. But for the purposes of discussion, can we really  dispense Contract Agreement form in favor of the Purchase Order (PO) in our dealings with the supplier?

For all we know, PO is a Commission on Audit (COA) prescribed format equivalent to a contract. It has  been incorporated as one of the documentary requirements for accounting and auditing matters.In practice,  PO is indispensable. That means, even in the presence of any contract, a PO must be accomplished. So if   that is the case, why not use PO alone? Before we answer the question, we first seek the roots of the  Contract Agreement form. The term “Contract Agreement” can be found under Sec.37.2.3 of the Revised  IRR of RA 9184 (Government Procurement Reform Act): 37.2.3. The following documents shall form part  of the contract:
a)  Contract Agreement; (emphasis supplied)
x x x
Take note that Sec.37 is all about contract signing after a successfully completed procurement process  undertaken thru Public Bidding. And it is not just from any manual or any directives. There is this statutory  provision of requiring a Contract Agreement form. This can be found in the latter pages of Philippine Bidding  Documents (PBDs) issued by the GPPB as “Bidding Forms”. And PBDs are also mandatory requisites of  the same law as the Basis for Bidding Documents of the Procuring Entity:

17.1. The Bidding Documents shall be prepared by the procuring entity following the standard forms and manuals prescribed by the GPPB. The Bidding Documents shall include the following:
x x x
l) Form of Contract and General and Special Conditions of Contract. (emphasis supplied) http://wp.me/p2ghmr-2O

This means that likewise, a Contract Agreement form is a substantial requirement should the mode of  procurement undertaken was public bidding. But what harm can non-adherence to the prescribed form  cause the Procuring Entity in not following the provisions of the law? Suppose the PE complied with the  Bidding Documents anyway. We can enumerate some of them as follows:
1. There will be a great chance of missing out general conditions of the the contract as compiled by the  GPPB in enforcing the PO instead;
2. There will be a great chance of missing out special conditions of the contract as introduced by the  Procuring Entity during the preparation of the Bidding Documents; and, 3. There will be a lot to reconcile  with if the bidder after have read the conditions of the contract before submitting the bid, finds out later after  the award, that he is bounded by another set of conditions with the Purchase Order (PO) form.
We in the government procurement profession, in our pursuit and advocacy to institute real reforms, have  already accepted the fact that a Contract Agreement and Purchase Order form may have to be accomplished both for compliance, although we are very much inclined to insist the former as in lieu of the latter. However, since the PO form is from COA, an independent commission under the constitution and the  supreme audit institution, we leave to them the idea of predisposing the PO as part of the documentary  requirements for public bidding. Besides, PO can still be used for Alternative Methods of Procurement provided for under Article XVI of RA 9184.
This is (also) the author’s stand. Let this opinion be heard for ratification or rebuttal.
Contract Agreement vs. Purchase Order
By: ENGR. JHEZ SALVADOR │Operation Eposé Vol. 10 Blg. 02 July 22 - July 28, 2012 


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