Republic of the Philippines

Department of Health
OFFICE OF THE SECRETARY

DEC 29 2020

ADMINISTRATIVE ORDER
No. 2020- 0062

SUBJECT: Guidelines for the Implementation of Projects Funded Under the Health
Facilities Enhancement Program (HFEP) Fiscal Year 2020

I. RATIONALE

The implementation of the Health Facilities Enhancement Program (HFEP) is

committed to achieve the country’s overall health system goals which are mainly to improve
health outcomes, provide financial risk protection and responsiveness. The HFEP
implementation for the Fiscal Year 2020 is guided by the Department of Health's (DOH)
FOURmula One Plus for Health (F1 plus) to attain the government mandate to implement
Republic Act (R.A.)11223 otherwise known as the Universal Health Care Law.

The approved budget for the Health Facilities Enhancement Program (HFEP) in the
General Appropriations Act (GAA) 2020 is primarily apportioned for the purchase of medical
equipment for the DOH hospitals, LGU hospitals, Rural Health Units (RHU) and Barangay
Health Stations (BHS). The approved budget also provides fund for the construction of thirty
(30) new BHS and for the completion, repair, renovation, rehabilitation of RHUs, City Health
Offices (CHOs) and BHS. The GAA also includes the approved fund for the procurement of
eighteen (18) Medical Transport Vehicles for Local Government Unit (LGU) Health Facilities.

II. OBJECTIVE

This Administrative Order provides the guidelines for the procurement and
implementation of HFEP funded projects for equipment, infrastructures, and medical transport
vehicles as prescribed in the Republic Act (R.A.) No. 11465 otherwise known as the General
Appropriations Act for Fiscal Year 2020.

III. SCOPE

This Order covers the implementation of projects under the HFEP FY 2020 by the
Central Office, Centers for Health Development (CHDs), DOH hospitals, Ministry of Health.
Bangsamoro Autonomous Region in Muslim Mindanao (MOH-BARMM) pursuant tq Re.
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11054 Organic Law for the BARMM, and other government health facilities. 8@
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IV. DEFINITION OF TERMS |
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1. Health Facility - refers to an establishment, whether stationary or mobile, lapd
based or otherwise, that provides healthcare services such as diagnostic, therape
rehabilitative, palliative, and/or related health services.
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 2. Implementing Unit refers to the health facility or the Center for Health
—

Development (CHD) or other DOH offices or operating units where the fund is
appropriated and capable of carrying out the implementation of the proposed
project(s).

3. Medical Transport Vehicle — a motor vehicle designed and equipped to transport

patients and/or provide medical services. Examples are land ambulances, sea
ambulance, dental health bus, mobile clinics, etc.

4. Slippage -is a delay in work execution occurring when actual accomplishment falls
below the target as measured by the difference between the scheduled and actual
accomplishment of the Work by the Contractor as established from the work
schedule. This is actually described as a percentage of the whole Works.

5. Variation Order — may either be in the form of a Change Order, Extra Work Order,
or Supplemental Agreement, issued to cover any increase or decrease in work
quantity, including introduction of new work items not included in the original
contract, including the reclassification of work items that are due to change of plans
and specifications.

V. GENERAL GUIDELINES

1. Budget. The total approved budget for the implementation of HFEP projects in the DOH-
Central Office, CHDs, DOH Hospitals, other DOH facilities and LGU health facilities is
Eight Billion Three Hundred Fifty One Million Six Hundred Ten Thousand Pesos
(P8,351,610,000.00) shall be used exclusively for the following purposes:

Comprehensive For Later Release Total

Project Release
Medical Php 5,864,710,000.00 Php 1,086,400,000.00 Php 6,951,110,000.00
Equipment
Infrastructure Php 0.00 Php 1,337,500,000.00 Php 1,337,500,000.00
Medical
Transport Php 0.00 Php 63,000,000.00 Php 63,000,000.00
Vehicle

Php 8,351,610,000.00

Total approved budget for the Implementation of HFEP Projects under GAA 2020

2. Release of Budget

a. Upon the release of the budget from the Department of Budget and Management
~
_- ~~~ (DBM), the DOH Central Office shall sub-allot or transfer the fund to the implementing
units the CHDs, DOH Hospitals, Corporate Hospitals and MOH-BARMM. The
such as
~sub-aHetment or transfer shall be in accordance with the National Budget Circular
No.'578 issued by the DBM.

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Cranartment of Health
 b. For the projects under the For Later Release classification, the DBM requirements for
the issuance of the Special Allotment Release Order (SARO) or General Allotment
Release Order (GARO) are specified in Annex A: Requirements for the release of
funds for the projects under For Later Release.
3. Implementation of Projects

a. The implementing units where the fund is sub-alloted or transferred shall primarily
implement the equipment and infrastructure projects.

Medical transport vehicle projects shall be primarily implemented by the Health

Facilities Enhancement Program Management Office (HFEP-MO). The
implementation, upon the approval of the DOH Executive Committee, may also be
designated to the respective CHD and/or to the hospitals that have the capability to
conduct the procurement. In such case, the HFEP-MO shall prepare the necessary
Department Order and Sub-allotment Guidelines.
|

All procurements for infrastructure, equipment and medical transport vehicle projects
shall be in accordance with the pertinent provisions of R.A. No. 9184 or otherwise
known as Government Procurement Reform Act and its Implementing Rules and
Regulations, and other pertinent accounting and auditing laws, rules and regulations.

4. Reporting. All CHDs, DOH Hospitals, other DOH Health Facilities, LGU Health Facilities
and MOH-BARMM shall submit to the HFEP MO the monthly Physical and Financial
Performance Real-Time Report (PAFPRR) for all projects not later than the 10" day of
each succeeding month, in soft and in signed hard copies.

VI. SPECIFIC GUIDELINES

A. Implementation of Equipment Projects

1. The implementing unit shall prepare the Terms of Reference (TOR) or the Purchase
Request (PR) and other pertinent procurement documents. The implementing unit shall
establish its own Technical Working Group (TWG) that shall prepare the PR or TOR.
The TWG shall be at least composed of representatives from the end-users and from
the engineering and/or biomedical department of the health facility.

The PR or TOR shall include amongst others, the detailed equipment technical
specifications, accessories, technical documents, compliance with applicable product
standards, warranty, completion period for the delivery and installation (if applicable),
functional testing and commissioning, training for end-users and maintenance staff,
preparation of the installation site (if applicable), payment terms, etc. The TWG can
use as references the available technical specifications issued by the World Health
Organization (WHO) which can be found in the WHO official website
(http://bit.ly/WHO-TS).

The TWG shall have the responsibility and accountability to ensure that no item in the
PR or TOR is referenced to a specific brand of the equipment as provided under the
Thplementing Rules and Regulations of R.A. No. 9184, Rule VI, Sec. 18. Prior
inimencement of the procurement, the Bids and Awards Committee (BAC) of

CORAZOIN/S. CRUZ
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KAITS - RECORDS SECTION

Dopgrimeni of Healllr
 the implementing unit shall require the TWG to indicate in each page of the PR or TOR
the names and signatures of the TWG members signifying that no item in the PR or
TOR is referenced to a specific brand of the equipment.

4. For radiologic equipment, the implementing unit shall use the TOR (and its
amendments, if any) issued by HFEP-MO and cleared by the Physics Laboratory
Support Division, Central Services Laboratory of the Food and Drug Administration.

5. For equipment that requires the preparation of installation site, the implementing unit
shall ensure that prior to procurement, the installation site has the required infrastructure
including the electrical utilities and if necessary, adequate water supply. The installation
site must be ready and must not cause any delay in the delivery, installation and
commissioning of the equipment. The implementing units shall likewise ensure the
availability of the trained personnel for the operation of the equipment.

6. The implementing unit shall verify that the suppliers participated in the bidding for the
equipment projects are not included in the current Government Procurement Policy
Board (GPPB) list of blacklisted entities (gpbb.gov.ph/blacklistedsuppliers.php).

7. Immediately after the completion of the procurement, the implementing unit shall
ensure that the equipment is properly classified and recorded in the books of assets of
the health facility.

8. For the equipment procured by the CHD for the LGU health facilities, the turnover of
the equipment shall be accompanied by the corresponding Deeds of Donation as
appropriate, and shall be in accordance with the Government Accounting and Auditing
Manual (GAAM).

B. Implementation of Infrastructure Projects

1. The implementing units shall ensure that the infrastructure projects conform to the
GAA 2020 General and Special Provisions for infrastructure projects.

2. The implementing unit shall submit the approved Schematic Floor Plan to the DOH-
Health Facilities Services Regulatory Bureau (HFSRB) or to the respective CHD-
Regulations, Licensing and Enforcement Division (RLED) and secure a Permit to
Construct (PTC) prior to the preparation of the Detailed Architectural and Engineering
Design (DAED).

3. The implementing unit shall prepare and approve the DAED Plans, Detailed Unit Price
Analysis (DUPA) and other bidding documents required for the procurement of the
project.

4. The building design shall strictly conform to the provisions of the latest edition of the
following Building Codes, other pertinent Laws and their Implementing Rules and
Regulations (IRR), and DOH Manuals and Standards:

7
CRTIFED TRUE BORE
a.‘National Building Code of the Philippines (PD No. 1096)
Pi hilippine Green Building Code, a Referral Code of PD No.1096
Se To d. Nafiondl Structural Code of the Philippines (NSCP) Latest Edition
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- RECORDS SECTION
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Plumbing Code of the Philippines (RA No. 1378)
New Philippine Electrical Engineering Law (RA No. 7920)
Philippine Mechanical Engineering Act of 1998 (RA No. 8495)
ER Fire Code of the Philippines (RA No. 9514)
Ecological Solid waste Management Act (RA No0.9003)
RFT
DOH Healthcare Waste Management Manual 4 Edition
Philippine Clean Air Act of 1999 (RA No. 8749)
Philippine Clean Water Act (RA No. 9275)
gr
. DOH Hospital Licensing Standards for Physical Plant (DOH AO 2012-0012)
Joint DOH and DENR Administrative Order (AO 02-2005)
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Local ordinances and regulations

5. The building design shall likewise strictly adhere to the DOH Administrative Order
2020-0011 Guidelines in the Implementation of the Unified Color, Signage
Features, and Design of Identified Interior Spaces for Health Facilities
Enhancement Program (HFEP)-funded and coordinated Health Facilities and
Medical Transport Vehicles.

6. For the facility having a gross floor area of 10,000 square meters or more, the
implementing unit shall comply with the DOH Department Circular No. 2019-0059
Green Certification of Government Healthcare Facility Projects.

7. The implementing unit shall verify that the contractors participating in the bidding for
the infrastructure projects are not included in the current Construction Industry
Authority of the Philippines (CIAP) list of blacklisted contractors and GPPB list of
blacklisted entities (gpbb.gov.ph/blacklistedsuppliers.php).

8. The implementing unit shall clearly indicate in the contract that the contractor shall be
the one responsible for securing the required national and local government permits
such as Building Permit, Occupancy Permit, Utility Power Company approval, etc. The
contract shall also specify that all documents needed for the application for the permits
that are originating from the implementing unit shall be promptly provided to the
contractor.
|

9. The implementing unit shall ensure that any change in the specifications of materials
shall be permitted only if the alternative material is stronger or more durable than the
originally specified material and that the funds for any additional cost shall be
available and certified by the institution’s budget officer.

10. Preconstruction Conference shall be conducted prior to the commencement of the

project to ensure that all issues are discussed and agreed upon by the implementing
units and the contractor.

11. Prior to the installation of any equipment/assemblies/machines required for the project,
especially by a separate contractor/supplier, a pre-installation conference shall be
conducted.

12. A Construgtion Progress Conference shall be held on an agreed interval to properly

(MBE progress of the project.

CORAZON
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Depsartment of Health:
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 13. The implementing unit shall conduct a weekly/bi-weekly/monthly inspection to
properly monitor the progress of the project.

14. Any Variation Orders or changes in the specifications of the materials shall be
is
permitted only if the alternative material stronger or more durable than the originally
specified material and that funds for any additional cost shall be available and certified
by the institution’s budget officer.

15. The implementing unit shall clearly indicate in the Contract the appropriate duration of
the project recommended by HFEP MO. The duration of the project with a contract cost
of below Phpl10 Million up to Php50 Million shall be in accordance with Annex B:
Duration of the project recommended by HFEP MO

16. For projects with a cost of more than Php50 Million, the duration shall be based on the
Construction Schedule considering the use of optimum additional resources. The
schedule shall be approved by the respective CHD and shall be endorsed to the HFEP
MO Project Monitoring Unit (PMU) for the monitoring and evaluation of the project.

17. In case of Negative Slippage, the Calibrated Actions shall be in accordance with
Annex C: Negative Slippage and Calibrated Actions

18. Project Completion Phase. The Implementing Unit shall use the Forms in Annex D:
Punch-list Forms as a tool in conducting the preliminary inspection when the project
has reached ninety-five percent (95%) accomplishment of the total contract amount. A
copy of the report shall be provided to the Contractor for the preparation of the final
turnover of the project. The report shall contain, among others, the remaining works,
work deficiencies for necessary corrections, and the specific duration/time to fully
complete the project considering the approved remaining contract time. This, however,
shall not preclude the claim of the implementing unit for any liquidated damage. The
Punch-listing shall be conducted with the presence of the Contractor and the end-users
or their duly authorized representatives.

19. Post-construction Phase. The Implementing Unit shall inspect the project three (3)
months prior to the expiration of the Defects Liability Period. The Implementing Unit
shall accomplish the Form in Annex E: Post-Construction Report Form and provide
a copy to the Contractor to undertake the repair of any damage to the Works. The
expenses that will be incurred due to the repair of the damages shall be at his own
expense borne by the Contractor. Upon completion rectification/repair as stated in the
Post-Construction Report, the Implementing Unit shall issue to the Contractor the Form
in Annex F: Defects Liability Certificate together with the Certificate of Final
Acceptance.

20. The implementing units shall designate its Engineering and/or Infrastructure
Department to be the custodian of the accomplished report Forms described in Annexes
CtoF.

-.-- 21. The CHDs may enter into a Memorandum of Agreement (MOA) with the concerned
oC
LGU for the implementation of infrastructure project/s pursuant to Section 87 of the
ovisions of the GAA 2020, provided that the LGU has:

3S Ne AN

HRITS - RECORDS SECTION

 a. Capability to implement the project by administration or contract and in
accordance with the design, plan, specifications, and such other standards and
policies of the DOH;
b. No COA audit findings in previous HFEP project/s;
c. Good track record in implementing infrastructure projects as evidenced by full
liquidation documents;
d. Seal of Good Local Governance or Seal of Good Financial Housekeeping

The sample template for the MOA is provided in Annex G: Sample template for
the Memorandum of Agreement (MOA) between CHDs and LGUs.

22. Administrative Overhead Expenses — In accordance with Section 6 Special Provisions

of the GAA 2020 Special Provisions, in the implementation of infrastructure projects
costing more than One Million Pesos (P1,000,000.00), the DOH is authorized to
deduct not more than one and one half percent (1 2%) of the project cost to be used
for administrative overhead expenses. Administrative overhead expenses shall include
but not limited to the following, for monitoring and inspection of projects:
ow
Hiring of job order personnel
Transportation expenses, hiring of vehicles and gasolines
Per diems
oe Communication allowance;
Supplies and materials in reporting and documentation

C. Procurement of Medical Transport Vehicles

1. The TOR that shall be used for the procurement of the medical transport vehicle shall
be the Terms of Reference (and its amendments, if any) issued by HFEP-MO.

2. The requirements and procedures on the turnover of the medical transport vehicle to
the respective recipients shall be in accordance with DOH Department Order No.
2018-0338: Guidelines on the Distribution of Medical Transport Procured Under
HFEP to the Respective Recipients. All medical transport vehicles shall be turned
over to the designated recipients with corresponding Deeds of Donation as appropriate
and shall be in accordance with the Government Accounting and Auditing Manual
(GAAM).

D. Project Modification or Realignment

Project modification shall follow Section 70 of the General Provisions of the GAA 2020
and the Sec. 3.10 of the National Budget Circular (NBC) No.578 dated 6 January 2020
issued by the DBM as shown in Annex H.

E. Use of Savings |

Use of savings shall be pursuant to Sections 66, 67, 68, and 69 of the General Provisions
of the GAA 2020 and sec. 3.11 of NBC No.578 as shown in Annex H.
F. Penalties for Failure to Strictly Enforce the HFEP Project Implementation Guidelines

a
The concerned implementing unit shall see to itthat this Guidelines shall be strictly
enforced. Failure to do so shall, after due process, "make the responsible
officials/employees liable and subject—to~the—pemalttes for Violation of
D CORY
CERTIFI TRU

CORAZON / CELA CRUZ

KASITS . RECORDS
SLETIIN
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Eepartimenat Henlt
—
 Reasonable Office Rules and Regulations under Section 46 (F)(3) of the Revised Rules of
Administrative Cases in the Civil Services (RRACCS), as follows:
1. First offense: Reprimand
2. Second offense: Suspension for 1 - 30 days
3. Third offense: Dismissal

G. Roles and Responsibilities

1. The HFEP MO shall prepare the corresponding Guidelines on the sub-allotment and
utilization of funds for the infrastructure and equipment projects appropriated in the
GAA for the DOH hospitals and/or other DOH health facilities and to the respective
CHD for the implementation of the projects for LGU health facilities. The HFEP MO
shall likewise prepare the necessary Guidelines for the transfer of funds and
Memorandum of Agreement for the infrastructure and equipment projects appropriated
in the GAA for the health facilities operated by other NGAs, DOH Corporate Hospitals
and DOH BARMM.

Upon the approval of the Department Order on the Sub-allotment and Disbursement of
Funds, the Administration and Financial Management Team (AFMT), through the
Financial and Management Service (FMS) shall facilitate and process the release of the
Sub-allotment Advice (SAA).

The HFEP-MO shall provide oversight functions to CHDs, DOH Hospitals, and LGU
health facilities in the implementation of HFEP Projects including the monitoring and
evaluation of the status of HFEP projects. The HFEP-MO shall likewise provide
technical assistance, if necessary, to the HFEP projects, The HFEP MO Project
Monitoring Unit (PMU) shall provide and manage all information systems required for
the implementation and coordination of HFEP projects. It shall provide technical and
logistical assistance to make operational, comprehensive and updated information
system on HFEP.

The CHDs shall be the regional manager, implementing arm, and procuring entity of
the DOH for their respective programs. They shall provide technical assistance and
monitor all HFEP projects in the LGUs, maintain and regularly update the Physical and
Financial Performance Real-Time Report (PAFPRR) in coordination with the LGU units
and the HFEP MO.

VII. REPEALING CLAUSE

All orders, rules, regulations, and other related issuances inconsistent with or contrary
to this Order are hereby repealed, amended, or modified accordingly.

VIII EFFECTIVITY
This Order shall take effect immediately upon publication in newspaper of general
circulation.

“ISCO A
Secr®tary of Health
QUE III, MD, MSc
~~

CERTIFIED TR! E COPY

JAN 12 2002

CORAZON A.
DELY
KMNTS~ RECORDS SECTION
CRUZ
()/ 8

Daparintent ©7 Health
Annex A: Requirements for the release of funds for the projects under For
Later Release

Annex B: Duration of the project recommended by HFEP MO

Annex C: Negative Slippage and Calibrated Actions

Annex D: Punch-list Forms

Annex E: Post-Construction Report Form

Annex F: Defects Liability Certificate

Annex G: Sample template for the Memorandum of Agreement (MOA)

between CHDs and LGUs

Annex H: Relevant Provisions of the GAA 2020 and NBC No. 578 for
HFEP FY 2020
Annex A
Requirements for release of funds for the projects under For Later Release HFEP 2020

1. Request letter for the release of the funds addressed to the HFEP MO

2. Detailed Financial Plan

Physical Plan

Monthly Disbursement Plan

Program of works/Project Profile

Agency certification that the project can be implemented within the validity of the
appropriation

For equipment projects: list of equipment to be procured and its Purchase Request

For infrastructure projects: Clearance from the Department of Public Works and
Highways (DPWH) for building structural integrity/resiliency; signed picture of geo-
tagged actual location of project and/or form the Department of Environmental and
Natural Resources (DENR) for environmental clearance.

Commitment from the agency head to fund the cost of maintenance and repair of the
projects

10. Certification from the agency head that the project is not fully funded from other sources.
 Annex B
Standard Construction Duration per Project Construction Cost & Estimated Monthly Percentage of
Accomplishment of HFEP Infrastructure Projects
Day Day Day
Project Contra Day Day Day Day Day Day Day
Construction 121- 1561- 181- 211- 241- 271-
Duratio 31. 61- 91-
Cost 1-30 150 180 210 240 270 300
n 60 90 120
P10M & below 120CD 20% 50% 80% 100% |

P11-P25M 180 CD 10% 20% 56% 70% 80% 100%

P26M-P40M 240 CD 8% 16% 40% 56% 67% 75% 92% 100%
P41M-P50M 300 CD 7% 14% 21% 43% 56% 74% 81% 88% 95% 100%

Notes:

1. For projects P51M & above, computation shall be based on the Construction Schedule (Bar
Chart/S-Curve), considering the use of optimum additional resources. The Construction
Schedule are to be prepared by the CHD/DOH Hospitals Engineers. Provide approved copies
to HFEP Performance Management Unit (PMU) for proper monitoring and evaluation.

2. The above duration is applicable for New Construction Projects, provide additional 20% for
projects with existing facilities for Repair/Renovation/Rehabilitation/Improvement.

3. For existing facilities, the end-user should submit a Plan for Patient Transfer before submitting
proposals. Turn-over of the site to the Procuring Entity should be accomplished during the Pre-
procurement of the project.

is
4. The Start Date, the date when the Contractor is
obliged to commence execution of the Works.
The contractor should be granted possession the site upon issuance of the Notice to Proceed.
of
Annex C: Negative Slippage and Calibrated Actions

(AGENCY LETTER HEAD)

(Date of Issuance)

(Authorized Managing Officer)

Position
Company/Firm
Complete Address

SUBJECT : Notice for the Negative Slippage

15t Warning

Dear Mr /Ms. (Last Name):

This refers to your contract, (Name of Project) in the amount of (Contract Amount in words and
in numbers). Please be informed that as of (date the accomplishment was computed), due to your
fault caused by (state the reason e.g. limited equipment, materials, manpower, etc.), you have
incurred a negative slippage as follows:
Accomplishment
p
Name of Project
Planned Revised
-
Actual
(‘Name o
Project)
:
f _.%
Pursuant to DOH Department Order No.
_..%
—

, Series of 2019, Annex

a . %

- Administrative Action on
Contracts with Negative Slippage in Accordance with the Revised Implementing Rules and Regulations
(RIRR) of R.A. 9184; you are hereby directed to submit, within seven (7) calendar days from receipt
hereof, a detailed "catch-up plan” on a two-week basis to eliminate the slippage and a revised Construction
Schedule/Bar Chart.

In the action program being required, specify therein the additional input resources such as money,
On-
manpower, materials, equipment, and management to cope up and meet the desired result accordingly.
site supervision shall likewise be intensified and evaluation of project performance shall be done every
other week.

Your immediate compliance on this matter is hereby sought.

Very truly yours,

(Head of Procuring Entity)

Position

Cc: LEONITA P. GORGOLON, MD, MHA, MCHM, CEO VI

Director IV, Health Facilities Enhancement Program
Annex C: Negative Slippage and Calibrated Actions
(AGENCY LETTER HEAD)

(Date of Issuance)

(Authorized Managing Officer)

Position
Company/Firm
Complete Address

SUBJECT : Notice for the Negative Slippage

Final Warning

Dear Mr./Ms. (Last Name):

This refers to your contract, (Name of Project) in the amount of (Contract Amount in words and
in numbers). Please be informed that as of (date the accomplishment was computed), due to your
fault caused by (state the reason e.g. limited equipment, materials, manpower, etc.), you have
incurred a negative slippage as follows:
Accomplishment
p

9
Name of Project
Planned Revised
-
Actual
(Name oJ _.%
:
Project) — . %

Pursuant to DOH Department Order No. , Series of 2019,

Annex - Administrative Action on
Contracts with Negative Slippage in Accordance with the Revised Implementing Rules and Regulations
(RIRR) of R.A. 9184; you are hereby directed to submit, within seven (7) calendar days from receipt
hereof, a more detailed program of activities with weekly physical targets, a revised Construction
Schedule/Bar Chart, together with the required additional input resources to accelerate your work
accomplishment and reduce the slippage over a defined time period.

On-site supervision shall likewise be intensified and evaluation of project performance shall be done at
least once a week.

Your immediate compliance on this matter is hereby sought.

Very truly yours,

(Head of Procuring Entity)

Position
Cc: LEONITA P. GORGOLON, MD, MHA, MCHM, CEO VI
Director IV, Health Facilities Enhancement Program
Annex C: Negative Slippage and Calibrated Actions
(AGENCY LETTER HEAD)

(Date of Issuance)

(Authorized Managing Officer)

Position
Company/Firm
Complete Address

SUBJECT : Notice to Terminate Contract

Dear Mr./Ms. (Last Name):

This refers to your contract, (Name of Project) in the amount of (Contract Amount in words and
in numbers). Please be informed that as of (date the accomplishment was computed), due to your
fault caused by (state the reason e.g. limited equipment, materials, manpower, eic.), you have
incurred a negative slippage as follows:
. Accomplishment
Name of Project ;
Actual
Planned Revised
(‘Name oJ
Project)
i _.% _.% _.%
Pursuant to Department Order No. , Series of 2019, Annex - Administrative Action on Contracts
with Negative Slippage in Accordance with the Revised Implementing Rules and Regulations (RIRR) of
R.A. 9184; you are hereby directed to "show cause" within seven (7) calendar days from receipt hereof
why your contract should not be terminated, pursuant to Section IV.3 Appendix 4 of R.A. 9184.

Your immediate compliance on this matter is hereby sought.

Very truly yours,

(Head of Procuring Entity)

Position

Cc: LEONITA P. GORGOLON, MD, MHA, MCHM, CEO VI

Director IV, Health Facilities Enhancement Program
 Annex D:
Health Facilities Enhancement Program

HFEP FORM NO.

PUNCHLIST FORM

NAME OF FACILITY
PROJECT DESCRIPTION
LOCATION
CONTRACT AMOUNT
CONTRACTOR
IMPLEMENTING AGENCY DATE OF INSPECTION

COMPLETE ACTION TO BE TAKEN &

Room/Area FINDINGS
YES NO N/A DURATION

CONFORMED BY THE CERTIFIED BY END-USER:

INSPECTED BY: APPROVED BY:
CONTRACTOR

Name & nature Name & S

DATE: DATE:
 Annex E
Health Facilities Enhancement Program

HFEP FORM NO.

POST-CONSTRUCTION
INSPECTION REPORT
NAME OF FACILITY
PROJECT DESCRIPTION
LOCATION
CONTRACT AMOUNT
CONTRACTOR
IMPLEMENTING AGENCY DATE OF INSPECTION
CERTIFCATE OF ACCEPTANCE & TURN-OVER . NO & DA
DEFECT LIABILITY PERIOD:

DEFECTIVE ACTION TO BE TAKEN &

Room/Area FINDINGS DURATION
YES NO N/A

FOR COMPLIANCE BY THE

APPROVED BY: CERTIFIED BY END-USER:
INSPECTE D BY:
CONTRACTOR

Name & S Name & nature

DATE: DATE:
Annex F

Republic of the Philippines

Department of Health
{AGENCY LETTER HEAD}

Defects Liability Certificate

Health
We, the undersigned hereby certify and accept the hereunder specified
attached
Infrastructure project which has been inspected and defects have been corrected per hereto
documents supporting final acceptance of the project.
Name of Facility: Specify Name of Health Facility
Location: Specify exact address of the facility (Building No., Street Name,
Brgy. Municipality/City, Province, Region)
Project Description: State Project Description and Program of Works
Actual Date of Specify Actual Date of Completion
Completion:
Remarks Choose one of the following:
o Completed with no defects
o Completed with corrected defects
Work Done by: Choose one of the following:
o By Administration
e By Contract
If through contract,
Contract Amount: Specify Amount
Contractor & Address Specify Name and Address of Contractor

Certified by: Accepted by:

End-User
Head of Procuring Entity
Date: Date:

Acknowledge by:

Contractor
Date:
~
III
Annex G: Sample template for the Memorandum of Agreement (MOA) between
CHDs and LGUs
Accountant

MEMORANDUM OF AGREEMENT

KNOW ALL MEN BY THESE PRESENTS:

PDO This agreement is entered into by and between:

The CENTER FOR HEALTH DEVELOPMENT for with office
Director

address at represented by , MD MPH, CESO

IIL,
in
her capacity as Director IV, herein after referred to as “CHD-_”
and
Regional

The {MUNICIPALITY/PROVINCE} OF with office address at

his
herein represented by {MAYOR/GOVERNOR}
after referred to as “LGU”
capacity as {Municipal Mayor/Provincial Governor}, herein
Witnesseth

for
WHEREAS, Department of Health thru the Health Facilities Enhancement Program
( Php

)
CY has appropriated the amount of
intended for the Completion of
Unit of thru transfer of
to be implemented and procured by the Local Government
Mayor/Governor

fund.

NOW, THEREFORE, consideration of the foregoing premises and stipulations herein

in follows:
set forth, the Parties hereto agree and do hereby agree as

,
A. FUND UTILIZATION
Act (GAA)CY ____or Republic Act under
1. The funds skall be chargeable against the General Appropriations
of Health for Comprehensive Release (FCR)
the Health Facilities Enhancement Program of the Department
and shall be obligated On or before
implementation/procurement
transfer the fund according to the scheme or mode of project
2. CHD- shall
adopted by the Local Government Unit as set forth in Section C of this Memorandum of Agreement.

calendar days from the date of receipt

In the event that the LGU fails to execute the project within
M/PHO

3 the CHD- __, unless otherwise with justifiable

of the First (1%) Tranche, the funds shall be reverted back to
reasons.

B. RESPONSIBILITIES OF THE LGU

Mayor/Provincial Governor}, to enter
1. Submit a Sangguniang Bayan Resolution authorizing the {Municipal
into an agreement with the CHD-___;
complies with the existing DOH standards for
Treasurer

7 Ensure that the Schematic Plan for the infrastructure project

licensing and accreditation;
Drawing (DAED) Plans, Technical Specifications,
3. Prepare complete Detailed Architecture and Engineering
Detailed Cost Estimates, Approved Budget of the Contract and all other
Scope of Work, Bill of Quantities,
the National Building Code, Structural, Electrical,
Documents for Bidding Purposes following provisions of
Law, and all other pertinent laws and regulations;
Mun./Prov.

Sanitary and Mechanical Codes, Fire Code, Accessibility

III

Bid and award the infrastructure project in conformity to the provisions of R.A. 9184 and its Revised IRR
Accountant

and allow CHD- personnel to act as observer in the bidding process and as member in the Technical
Working Group for prequalification and bid evaluation;
Supervise the implementation of the project following the highest standards for materials control, safety,
and quality assurance and hire or assign a quality control engineer for such purpose and secure the necessary
local permits;
PDO
Attend monitoring meetings called for by CHD- ___ and immediately act on the observations made by the
agency which would require corrections and revisions on the implementation
of the project;

Director
Raise to CHD-
for arbitration, any issues on the project implementation and must seek first the
clearance and approval of the agency for any proposed Variation Orders;
oo Ensure immediate implementation and completion of the Project within the specified duration;
the Certificate of
Together with CHD-____, conduct final inspection of the project prior to the issuance of
Completion;
and submit
10. Regularly submit the Fund Utilization Report (FUR) of the infrastructure project to CHD-___
Regional

enumerated in Section C herein, corresponding to the chosen scheme/mode

the docum=ntary requirements
of project implementation;
11. Ensure that the health facility shall be functional within three (3) months after
the turnover and acceptance
of the project and should be utilized according to its purpose;
Annual Operational Plan
12. Ensure that funds shall be provided and reflected in the {Municipal/Provincial}
and acquisition of
for the continuing maintenance and operations of the facility/infrastructure project
equipment;
13. Book-up the cost of the infrastructure project in the Book of Accounts
and furnish CHD-____a copy of the
six months after completion of the said project;
Journal Entry Voucher (JEV) within (6)
Mayor/Governor
14 Ensure that the health facility will be accredited by PhilHealth in its Maternity Care Package.

C. RESPONSIBILITIES OF THE CHD- ___

requirements that corresponds to
1. Release / transfer the funds _ to the LGU after receipt of the documentary
adopted by the LGU as set forth herein, to wit:
the scheme or mode of project implementation/procurement

A. Project Implemented by Contract

execution of this
1. First (1) Tranche - Twenty percent (20%) of the Total Project Allocation upon
the LGU - to be accomplished
MCA and submission of the following documentary requirements by
in three (3) sets;
(100%) utilization of previous
e Fund Utilization Report (FUR) showing One Hundred Percent
HFEP Infra Projects with full release of funds and completed projects
by the CHD-_ Regional
M/PHO e Detailed Architectural and Engineering Drawings (DAED) approved
Director
e Approved and notarized Memorandum of Agreement (MOA)
LCE
e Program of Work (POW) approved by the
e Colored pictures of the existing health facility BEFORE the implementation of the current
Project, if applicable
Total Contract Price (PTCP), after
2. Second (2°) Tranche - Fifty percent (50%) of the Project’s
the LGU - to be accomplished in three
submission of the following documentary requirements by
(3) sets:
Second (2nd) Tranche
Letter request of the LGU for the release of the
Treasurer

e
least Sixty percent (60%) of the
e Fund Utilization Report (FUR) showing utilization of at
amount released in the First (1°) Tranche
Pictures with caption of the ON-GOING implementation
of the Project.
Mun./Prov.
e
e Minimum of:
e 4 - Angles Exterior and
e 5 - Angles Interior
- The remaining balance of the Project’s
Total Contract Price (PTCP) including Extra
3. Final Release
that the project has reached at least fifty percent (50%)
Work/Variation Order if any, provided
 completion and the LGU has submitted the following requirements to CHD- oo - to be accomplished
III
in three (3) sets:
e Letter request of the LGU for the release of the remaining fund.
Accountant
e Fund Utilization Report ( FUR ) equivalent to at least sixty percent (60%) of the total amount
Tranche.
previously released for the 1St and 2nd
e Statement of Work Accomplished (SWA) equivalent to at least 50% of the PTCP.
e if
As-Built Plan, there are any changes in the plan or Variation order Pictures with caption of
the ON-GOING implementation of the project Minimum of:
e 4 - Angles Exterior and
5 - Angles Interior
:

e
that were previously
PDO

e Copy of Journal Entry Voucher (JEV) of completed HFEP Infra Projects

the {Municipal/Provincial} Government through a MOA with CHD-_, if
implemented by
applicable.
Director

B. Project Implemented by Administration execution of this

Regional
1. First (1) Tranche - Twenty percent (20%) of the Total Project Allocation upon
by the LGU - to be accomplished
MOA and submission of the following documentary requirements
in three (3) sets:
utilization of previous
e Fund Utilization Report (FUR) showing One Hundred Percent (100%)
HFEP infra projects with full release of funds and completed projects, if applicable
the CHD- Regional
e Detailed Architectural and Engineering Drawings (DAED) approved by _
Director
e Approved and notarized Memorandum of Agreement (MOA)
Program of Work (POW) approved by the LCE
of the current
e Colored pictures of the existing health facility BEFORE the implementation
Project, if applicable
Materials upon submission by the LGU
2. Second (2°) Release - Equivalent to 100% of the cost of
Mayor/Governor

of the following documentary requirements in three (3) sets:

e Approved Purchase Order (PO)

Notice of Award
cost after deducting the total amount of the
e¢

3. Final Release - The remaining balance of the Project

15T and 2° Tranche releases to cover the Labor Cost based on the approved Program of Work and
the following requirements in three (3) sets:
upon submission by the LGU of
balance
e Letter request of the LGU for the release of remaining
Fund Utilization Report (FUR) showing utilization of at least sixty percent (60%) of the total
e
amount released in the 1St and 2nd Tranche
HFEP Infra Projects completed and
e Copy of Journal Entry Voucher (JEV) of previous
through MOA with CHD-____, if
implemented by the {Municipal/Provincial} Government
applicable.
Office in the preparation of schematic
M/PHO
Provide technical assistance to the {Municipal/Provincial} Engineering
plans for infrastructure;
Plans, Technical Specifications, Scope of
Evaluate and approve the Detailed Architecture and Engineering
and award of the infrastructure project;
Work and the Approved Budget for the Contract prior to bidding
Attend all meetings called for by the GU-BAC
IL. in the conduct of infrastructure as
procurement observer,
and act promptly on any requests for arbitration or for Variation
Monitor progress of infrastructure project
Orders;
Together with the LGU, conduct final inspection
of the project prior to issuance of the Certificate of
Completion;
within the specified project duration;
Ensure that the LGU/contractor complete the infrastructure project
Treasurer

usual budgeting, accounting and auditing rules and

Ensure that utilization of funds shall follow the
regulations;
supporting documents to DOH Finance
Submit a Monthly Fund Utilization report with all the pertinent
Service (cc: HFEP) on or before the 7th day of the following
Mun./Prov.

month.
D. AMENDMENTS
This MOA may be amended or revoked only upon mutual consent of the parties provided
which
that all amendments shall be covered by Supplemental Provisions signed by both parties
shall be incorporzted by way of reference as an integral part of this MOA.

IN WITNESS WHEREOF,
at
the Parties have affixed their hands this day of
For the CHD- : For the {Municipality/Province} of
DIRECTOR 1V
|

{MAYOR/GOVERNOR}
Signed in the Presence of
{M/PHO}
PDO,

Accountant III {Municipal/Provincial} Treasurer

ACKNOWLEDGEMENT

Republic of the Philippines )

Province of ~~) S.S.
X
XX
this of
and City of
Notary Public for and in the Province
a
,
BEFORE ME, the

|
Philippines, personally appeared
,
at
following:

Name
Type of Government Place/Date of sve
Issued ID/No.

their respective
All personally known to me, upon, competent
proof of identity indicated below
and
to be the same persons who executed the foregoing document
name and signature,
their free and voluntary act and deed.
s
acknowledged to me that the same is written
this page on which the acknowledgment
This instrument consists of 5 pages, including witnesses.
thereof by the parties and their instrumental
and signed on each and every page and at the date first abovewritten:
WITNESS MY HAND AND SEAL on the place
Notary Public

Doc No.
Page No.
Book No.
Seriesof
Annex H: Relevant Provisions of the GAA 2020 and NBC No. 578 for HFEP
FY 2020
General Appropriations Act 2020 General Provisions
of the Semate of the thilippices, the Speaker
sec. 66. Authority to Saviegs. The President of the philippines, the President
Use
Court, the Heads of the Civil Service Comsission, the Commission on
of the House of Representatives, the Chisf Justice of the Swprese to awgaest actual deficiencies
and use savings in their respective appropriatioss
Elections, and tha COA are hereby authorized fo declare
incurred for the current year in any ites of their respective appropriations.
and amnual report
foregoing constitutivaal officers authorized to use savisgs
shall be responsible for epsuring that a semestral
The
of the Semate of the philippines and the Speaker of the Howse of
be subsitted to the President
on their respective use of savings shall the sources and grounds
indicate among others, the amount of savings geserated,
Representatives, copy furnished the DBA. The report shall augsanted. They shall likewise ensure
in their respective appropriations
used therefor, and the existing program, activity ar project
websites.
that said reports are posted on their raspactive

balances of any released appropriztions in this Act which have aot been
Sec. 67. Meaning of Savings. Savings refer to partioes or
obligated as a result of any of the fallowing:
for which the appropriation is authorized; ar
(a) completion, fisal discontinuance, or abandonment of a program, activity or project

and efficiencies and thus evabled an agency to weet and deliver the
(b) isplementation of measures ressliing in improved systess
required or planned largets, programs and services approved ia this Act at a lesser cost.

used as basis in the declaratisa of savings, such discontineed ar abandosed program,

In casa final discostisuance or abandomasnt is
for Funding in the mext two (2) fiscal years.
activity ar project shall no longer be proposed

not be considered savings.

allutsents that ware not obligated due io the fault of the agescy concernad shall
to use savings im their
Augaantation is the act of the constitutional afficars authorized
Sec. 68. Rules on Augwentatiea. withis their respective offices. # deficiency in an
in apy existing itew of appropriation
respective appropriations to cover a deficiency
itew of appropriation say result fros:
:

the program, activity or project; or

{a} Usforeseen godi fications or adjustsents in

Re-assessaent in the sss, prioritization and/or

distribution of resources.
{b)

appropriated for am activity or project astharized in this Act.

An ites of appropriation shall pertain to the aspunt
activity or
should be within tbe scope of, or covered by an existing
The particelars of the expenditures to be funded from savings classfes is ssfficient for the purpose of
of the availability of allotment
project. The existence of an activity or project regardless
asguentation.
or the use af an appropriations
project be funded by augaentation fros savings by
In no case shall a son-existent activity
aor

anthorized in this Act.

be given to the payseat of compensation, year-snd
the use of savisgs, priority stall
sec. 69. Priority in the Use of Savings. In of veterans, and other perscanel besefiis authorized
bonus and cash gift, retiresent gratuity,
terainal leave benafits, ald-ags pension
activity covered in this Act.
by law and in this Act, as
well as the implementation of priority project or
 Sac. 70. Rules on Modification in the Allotsent. As a general rele, departseats, bureays, asd offices of the National
govarssent, including Comstitutional Qffices enjoying fiscal automomy and SUCs shall spead what is programmed in their respective
appropriations in this Act. In exceptional circumstances, agencies may modify the allotment isswed within am activity or praject
subject to approval of tha following ensued by the tisely submission of reports by all offices coscersed:

(a) The beads of agencies, far Lhe following: (i) change in tha details of am activity or project without chasging its satare and
within the same operating wnit; and (ii) change In the object of expeaditure (Travelling Expemses, or Iavestsent Outlays) within
an allotment class (MOOE, or Capital Outlays);

(b) The DBM, in the following modifications: (i) From one allotseat class to another; (ii) from one operating unit to another;
(iii) within a special purpose Fuad; and (iv) for the paysest of magma carta bemefits avthorized under Section 50 bersaf; and

(c} The President of the Philippines, for the paymest of imtalligeace funds within the Executive branch.

All sodification in the allotment sball rat estail any increase in the tatal amount apprapriated for am activity or praject.

National Budget Circular No. 578 January 6, 2020

3.10 Modification of Allotments Issued

As a general rule, departments, bureaus and offices of the National

Government, including Constitutional Offices enjoying fiscal autonomy and
SUCs shall spend what is
programmed in their respective appropriations in the
FY 2020 GAA.

In exceptional circumstances, agencies may modify the allotment issued

within an activity or project (Section 70, GP of the FY 2020 GAA), upon
of
timely submission of reports by all offices concerned. The existence
in the recipient P/A/P is not
an allotment class or object of expenditure
necessary for purposes of modification.

3.10.1 Modification refers to any change within an activity, project, in

operating unit, allotment class, object of expenditure, within a special
authorized under the
purpose fund (SPF) and within the purpose
Unprogrammed Appropriation, as reflected in the FY 2020
GAA.

3.10.2 Modification covering allotments for MOOE and CO shall not entail
for an activity or
any Increase In the total amount appropriated
of with several activities, modification
project. In the case programs
may be done only within each activity. ¢
3.11 Use of Savings to Augment Deficient Appropriations for P/A/Ps

The following guidelines shall be observed in the use of savings to augment

deficient appropriations for P/A/Ps in the FY 2020 GAA:

3.11.1 Savings as defined under Section 67, GP of the FY 2020 GAA, refer
to portions or balances of any released appropriations in the FY 2020
GAA which have not been obligated as a result of any of the following:

3.11.1.1 Completion, final discontinuance, or abandonment of a

is
program, activity or project for which the appropriation
authorized. However, in case the declaration of
savings is based on final discontinuance or
abandonment, such discontinued or abandoned
for
program, activity or project cannot be proposed
funding in the next two (2) fiscal years, i.e., 2021
and 2022; and
in improved
3.11.1.2 Implementation of measures resulting
enabled an agency to
systems and efficiencies and thus
meet and deliver the required or planned GAA targets,
in the FY 2020 at a
programs and services approved
lesser cost.
GP of the FY 2020 GAA, is the
11.2 Augmentation, pursuant to Section 68,
savings In their
act of the constitutional officers. authorized toinuse existing item of
respective appropriations to cover a deficiency any
offices.
appropriation within thelr respective

11.3 An item of appropriation shall pertain to

the amount appropriated for
in the FY 2020 GAA. A deficiency in
an activity or project authorized
from:
an item of appropriation may result
in the P/A/P;
3.11.3.1 Unforeseen modifications or adjustments
and
distribution
3.11.3.2 Re-assessment in the use, prioritization and/or
of resources.
3.11.4 Savings may be used to augment actual deficiency/ies incurred for
the current year in any existing item activity or project within the
respective appropriations of each authorized constitutional officer
cited in Section 66, GP of the FY 2020 GAA. The existence of an
activity or project regardless of the availability of allotment class/es
is sufficient for the purpose of augmentation (Section 68, GP of the
FY 2020 GAA).

3.11.5 In the use of savings, priority shall be given to the payment of

compensation, year-end bonus and cash gift, retirement gratuity,
terminal leave benefits, old-age pension of veterans, and other
personnel benefits authorized by law and under the FY 2020 GAA, as
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well as the implementation of priority project or activity covered in

the FY 2020 GAA (Section 69, GP of the FY 2020 GAA).