APPENDIX 4
GUIDELINES ON TERMINATION OF CONTRACTS
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.
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.