Scribd
Upload
46 views3 pages

Coa Gov Ph-Untitled

The reservation clause allows a procuring entity to reject any and all bids for a contract to declare a failed bidding, or to not award the contract. It aims to protect the government's interest. Per the Supreme Court, bidders are bound by this clause and cannot compel an award. A procuring entity may exercise the right under the clause if there is evidence of collusion, failure to follow bidding procedures, or if project is no longer economically viable, necessary, or funded. However, abuse of this right for personal gain is penalized.

Uploaded by

Palanas A. Vince
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
46 views3 pages

Coa Gov Ph-Untitled

The reservation clause allows a procuring entity to reject any and all bids for a contract to declare a failed bidding, or to not award the contract. It aims to protect the government's interest. Per the Supreme Court, bidders are bound by this clause and cannot compel an award. A procuring entity may exercise the right under the clause if there is evidence of collusion, failure to follow bidding procedures, or if project is no longer economically viable, necessary, or funded. However, abuse of this right for personal gain is penalized.

Uploaded by

Palanas A. Vince
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 3

Untitled

coa.gov.ph/phocadownload/userupload/ABC-Help/Updated_Guidelines_in_the_Audit_of_Procurement/Annex
7/section3 part1-4.htm

1/3
What is the Reservation Clause?

The Reservation Clause declares that the Procuring Entity reserves the right to reject
any and all bids, to declare a failure of bidding, or not to award the contract. (IRR-A
Section 41)

In the case of Mata v. San Diego, G.R. No. L-30447 (March 21, 1975), the Supreme
Court of the Philippines declared that a bidder is bound by the reservation clause, and
the said clause vests in the authority concerned the discretion to ascertain who among
the bidders is the lowest responsive bidder or the lowest and best bidder or most
advantageous to the best interest of the Government. As such, a bidder has no right or
cause of action to compel the BAC or agency to award the contract to it. The Court
further stated that this requires inquiry, investigation, comparison, deliberation and
decision – a quasi-judicial function which, when honestly exercised, may not be
reviewed by the courts. It should be noted, however, that R.A. 9184 Section 41, has
placed some limiting qualifiers on the possible contents of the Reservation Clause.

When may the Procuring Entity exercise its right to reject bids, declare a failure
of bidding, or not award the contract?

The Procuring Entity may exercise the right to reject any and all bids, to declare a
failure of bidding, or not to award the contract in any of the following situations (IRR-A
Section 41.1):

1. If there is prima facie evidence of collusion between appropriate public officers or


employees of the Procuring Entity, or between the BAC and any of the bidders, or
between or among the bidders themselves, or between a bidder and a third party,
including any act which restricts, suppresses or nullifies or tends to restrict,
suppress or nullify competition;

2. If the BAC is found to have failed in following the prescribed bidding


procedures, for which the applicable sanctions shall be applied to the erring
officers, as provided in IRR-A Section 65; or

3. For any justifiable and reasonable ground where the award of the contract will
not redound to the benefit of the government as follows:

a. If the physical and economic conditions have significantly changed so as to


render the project no longer economically, financially or technically feasible
as determined by the Head of the Procuring Entity;
b. If the project is no longer necessary as determined by the Head of the
Procuring Entity; and
c. If the source of funds for the project has been withheld or reduced through
no fault of the Procuring Entity.

If the Head of the Procuring Entity abuses his power to reject any and all bids, as
provided by the Reservation Clause, with manifest preference to any bidder who is
closely related to him in accordance with IRR-A Section 47, or if it is proven that he
exerted undue influence or undue pressure on any member of the BAC or any officer or
employee of the Procuring Entity to take such action, and the same favors or tends to
favor a particular bidder, he shall be meted with the penalties provided in IRR-A Section
65. (IRR-A Section 65.1.5)

2/3
3/3

You might also like