Advance Payment for Goods and Services

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Advance Payment for Goods and Services

Post by msm326 on Tue Sep 15, 2009 8:56 am

Good Day to all Forum Members
I would like to seek your views regarding advance payments for Goods and Services (advance payment) . The concern is about on package survey works for PNR projects. It can be noted that IRR had stated advance payment .there are different views on different lectures and we are discussing this together with our accountant although it is already on her discretion to check it but all the papers and supporting documents particularly the contracts were being processed in the Office of the MGSO beign the procuring unit and secretariat. Which will prevail RA9184 provisions or RA 7160? (just on payment of advance for services on this particular contract)? Others are clearly been stated in the LGU Procurement Manual. Thank you very much ....

msm326 I love you
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Re: Advance Payment for Goods and Services

Post by riddler on Tue Sep 15, 2009 10:39 am

msm326 wrote:Good Day to all Forum Members
I would like to seek your views regarding advance payments for Goods and Services (advance payment). The concern is about on package survey works for PNR projects. It can be noted that IRR had stated advance payment .there are different views on different lectures and we are discussing this together with our accountant although it is already on her discretion to check it but all the papers and supporting documents particularly the contracts were being processed in the Office of the MGSO beign the procuring unit and secretariat. Which will prevail RA9184 provisions or RA 7160? (just on payment of advance for services on this particular contract)? Others are clearly been stated in the LGU Procurement Manual. Thank you very much ....

msm326 I love you

The old and new IRR only allowed Advance Payment which are limited to Infrastructure and Consultancy Services.

4. ADVANCE PAYMENT for Infrastructures

4.1. The procuring entity shall, upon a written request of the contractor which shall be
submitted as a contract document, make an advance payment to the contractor in
an amount not exceeding fifteen percent (15%) of the total contract price, to be
made in lump sum or, at the most, two installments according to a schedule
specified in the Instructions to Bidders and other relevant Tender Documents.

1. Advance Payment for Mobilization for Consultancy (in the form of SErvices)

The Government, as it considers fair and reasonable, may allow advance payment to
the Consultant in the amount which shall not exceed fifteen percent (15%) of the
contract amount to cover the cost of mobilization, subject to the posting of an
irrevocable standby letter of credit issued by an entity acceptable to the agency and
of an amount equal to the advance payment. The advance payment shall be repaid
by the Consultant by deducting from his progress payments such sum as agreed
upon during the contract negotiations until fully liquidated within the duration of the
contract.

For Advance Payment of limited Services/Goods as pointed by RDV under PD 1445, the Advance Payment needs an approval from the Office of the President.


4. Advance Payment
4.1. In accordance with Presidential Decree 1445, advance payment shall be made only
after prior approval of the President, and shall not exceed fifteen percent (15%) of
the contract amount, unless otherwise directed by the President; Provided, however,
that for cases mentioned under 4.3, 4.4, and 4.5 of these guidelines, no prior
approval by the President shall be necessary.

4.2. All progress payments shall first be charged against the advance payment until the
latter has been fully exhausted, unless otherwise approved by the President.

4.3. A single advance payment not to exceed fifty percent (50%) of the contract amount
shall be allowed for contracts entered into by a procuring entity for the following
services where requirement of down payment is a standard industry practice:

REVISED IMPLEMENTING RULES AND REGULATIONS OF R.A. 9184

a) Hotel and restaurant services;
b) Use of conference/seminar and exhibit areas; and
c) Lease of office space.

4.4. Advance payment not to exceed fifteen percent (15%) of the contract amount,
unless otherwise directed by the President, shall also be allowed for procurement of
goods required to address contingencies arising from natural or man-made calamities
in areas where a “State of Calamity” has been declared by appropriate authorities.

4.5. For goods supplied from abroad ten percent (10%) of the Contract Price shall be
paid within 60 days from signing of the contract and upon submission of a claim and
a bank guarantee issued by a licensed bank for the equivalent amount valid until the
goods are delivered and in the form provided in the Bidding Documents.

4.5. For goods supplied from abroad ten percent (10%) of the Contract Price shall be
paid within 60 days from signing of the contract and upon submission of a claim and
a bank guarantee issued by a licensed bank for the equivalent amount valid until the
goods are delivered and in the form provided in the Bidding Documents.
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Re: Advance Payment for Goods and Services

Post by engrjhez® on Tue Sep 15, 2009 9:02 pm

msm326 wrote:Good Day to all Forum Members
I would like to seek your views regarding advance payments for Goods and Services (advance payment) . The concern is about on package survey works for PNR projects. It can be noted that IRR had stated advance payment .there are different views on different lectures and we are discussing this together with our accountant although it is already on her discretion to check it but all the papers and supporting documents particularly the contracts were being processed in the Office of the MGSO beign the procuring unit and secretariat. Which will prevail RA9184 provisions or RA 7160? (just on payment of advance for services on this particular contract)? Others are clearly been stated in the LGU Procurement Manual. Thank you very much ....

msm326 I love you

See the most participated topic (i believe before you came) on CASH ADVANCE here. There is a lot to read though.

As a rule, if a later (newer) law repeals an older law, only provisions found inconsistent with the older one should be updated. Let it guide you then Smile.
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Re: Advance Payment for Goods and Services

Post by msm326 on Wed Sep 16, 2009 9:18 am

thank you very much engrjhez...
I read it but my concern is on advance payment for services sana not on Cash Advance....
waiting for some views from all of you....
msm326 Very Happy
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Re: Advance Payment for Goods and Services

Post by engrjhez® on Wed Sep 16, 2009 10:53 am

msm326 wrote:thank you very much engrjhez...
I read it but my concern is on advance payment for services sana not on Cash Advance....
waiting for some views from all of you....
msm326 Very Happy

I believe the discussion already have, if not directly, answered that query:

1. ADVANCE PAYMENTS SHALL IN NO CASE BE ALLOWED except specifically for Infrastructure Projects and Consultancy Services as pointed out by Engr.Ruel (mobilization in favor of contractor/consultant);

2. CASH ADVANCE shall only be allowed after some justifications and legal basis for such advances (it is specifically accomplished by the government themselves).

I think no.1 is a general rule. The supplier/contractor/consultant shall only be paid AFTER GOODS WERE ALREADY DELIVERED and SERVICES ALREADY RENDERED. You cannot apply that rule if you are paying someone who doesn't have any accomplishment yet.

I hope this has shed some light on your question.

Very Happy
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Re: Advance Payment for Goods and Services

Post by msm326 on Wed Sep 16, 2009 12:36 pm

Thank you again.....
need to clarify everything they might I the one who's mahigpit....salamat talaga
msm326
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to msm326

Post by aubreypl on Wed Jul 21, 2010 10:33 am

is advance payment subject to wthholding tax?
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Re: Advance Payment for Goods and Services

Post by sunriser431 on Fri Jul 23, 2010 12:50 am

aubreypl wrote:is advance payment subject to wthholding tax?
For similar topic follow this link (double posting)http://gppb.topicsolutions.net/contract-implementation-f29/withholding-tax-on-advance-payment-t888.htm#6575 Smile
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