A. Rationale

B. Objective

C. Scope

D. Basis

C. Definition:

1. Job Order – refers to piece work (pakyaw) or intermittent or emergency jobs such as clearing of debris on the road, canals, waterways, etc., after natural / man-made disasters / occurrences and other manual / trades and crafts services such as carpentry, plumbing, electrical and the like. These jobs are of short duration and for a specific piece of work.

2. Contract of Service (COS) – refers to the engagement of the services of an individual, private firm, other government agency, non-governmental agency or international organization as consultant, learning service provider or technical expert to undertake special project or job within a specific period. This will also refer to the engagement of contractors or providers of janitorial, security, and other support services.

4. Support services – may include janitorial, security, driving, data encoding, equipment and grounds maintenance and other services that support the day to day operations of the agency.

5. Institutional Contract – refers to the agreement between the NFA and contractor or service provider duly-registered and recognized by authorized government agencies to provide services such as janitorial, security, consultancy, and other support services.

II. IMPLEMENTING GUIDELINES

A. GENERAL POLICIES

1. The project or job to be performed by the JO and COS worker should not be part of the regular functions of NFA’s employees, or the expertise is not available in NFA, or it is impractical or more expensive for NFA to directly undertake the service provided by the individual or institutional contractor.

2. JO and COS workers should not be designated to positions exercising control or supervision over regular and career employees.

3. JO and COS workers shall not be utilized to perform jobs which require financial or property accountabilities.

4. The services of the JO and COS workers are not covered by CSC law and rules thus, not creditable as government service. They do not enjoy the benefits enjoyed by government employees, such as leave, PERA, RATA and thirteenth month pay.

5. Requests to engage JO/COS workers shall be reviewed and evaluated by HRMD (for C.O.) / RAO (for F.O.) and approved according to specs of authority (item II.B.4 [Approval]). The field office / central office department/office concerned shall be responsible in selecting and engaging the JO / COS in accordance with these guidelines.

6. Existing Contract of Service or Job Order workers can be given priority in the appointment by the agency to its vacant positions, particularly entry positions, provided they meet the appropriate eligibility and other qualification requirements for the position subject to existing Civil Service law and rules. However, depending on their qualifications, they shall be contenders along with other NFA employees slated for promotion.

B. SPECIFIC POLICIES

1. JOB ORDER

a. Engaging Job Order workers shall be limited to piece work (pakyaw), emergency or intermittent work such as clearing of debris on roads, canals, waterways, etc., after natural / man-made disasters / occurrences; other trades and crafts, and manual tasks such as carpentry, plumbing, painting, electrical and the like which are not part of the regular functions of NFA employees. These jobs are of short duration and for a specific piece of work.

b. Engaging Job Order workers is not a procurement activity under RA 9184 (section 4, item 4.5 of the IRR of RA 9184). Engagement of a JO worker shall be documented using a Job Order Contract (Exhibit 1) to be signed by the Provincial Manager (for FOs) / Head of Office (for CO).

c. JO workers must possess the education, experience and skills required to perform the job and must comply with the following conditions:

i. must not be previously dismissed from government service by reason of an administrative offense;
ii. must have no pending criminal case against him / her;
iii. must comply with the rules on nepotism (i.e. should not be within the third [3^rd] civil degree of consanguinity or affinity to the hiring authority of NFA and/or representative).

d. Applicants for JO services shall be required to submit the following documents to the concerned Field Office Administrative Unit/HRMD (for CO):

• Information Sheet with recent picture
• NBI Clearance
• Tax Identification No. (TIN)
• Other requirement relevant to the job that may be required by the hiring office.
e. The time and schedule of work shall be agreed upon by NFA and the JO worker.

f. The same JO worker may be rehired by NFA provided it is for a different scope of work. Example: The same carpenter who did the fitting of the new wooden door of the office may be rehired to do the fitting of the staffhouse door.

g. Claims for payment of JO services shall be supported by the following documents:

• BUR
• Certified true copy of approved Contract
• Certified true copy of approved budgetary requirement
• Statement of Billing (Exhibit 2) with Accomplishment Report / Number of hours or days worked, prepared by the JO and certified by the Head of Office
• Other pertinent documents which may be deemed necessary by the ASD / Accounting Unit
2. CONTRACT OF SERVICE

1.1 Engaging COS workers shall be limited to consultants, learning service providers, and/or other technical experts to undertake special project or job within a specific period, and to contractors or providers of janitorial, security, and other support services.

1.2 Per Annex “B” (General Principles on Consulting Services) of the IRR of RA 9184, a Consultant is a natural or juridical person, qualified by appropriate education, training and relevant experience to render any or all of the types and fields of consulting services as defined in the said Annex B, subject to the requirements for eligibility check and post-qualification provided in the same IRR.

1.3 Contract of Service (COS) may either be Institutional or Individual:


1.3.1 INSTITUTIONAL CONTRACT OF SERVICE

a. Institutional Contract of Service may be engaged for lump sum work or services to perform janitorial services, security services, consultancy, learning services, and other support functions or allied services, for a maximum period of one (1) year, subject to the provisions of RA 9184 and its IRR, and pertinent budgeting, accounting and auditing rules and regulations.

b. The contractor or service provider should meet the following requirements (per CSC, COA and DBM Circular No. 1 s. 2017), aside from the eligibility requirements of RA 9184:


b.1 duly registered with the Department of Labor and Employment (DOLE);

b.2 duly registered with the Bureau of Internal Revenue (BIR)

b.3 For sole proprietorship, duly registered with the DTI

b.4 For corporations and partnerships, duly registered with the SEC;

b.5 must be an active employer registered with the following agencies:

i. SSS

ii. Home Development Mutual Fund (Pag-IBIG Fund), and

iii. PhilHealth

c. Workers engaged through institutional COS shall remain to be employees of the contractor or service provider.

d. The discipline of workers under institutional contract of service shall be the responsibility of the contractor or service provider. NFA may report to the contractor or service provider any misconduct or wrongdoing of the said worker/s.

e. The contractor or service provider shall be responsible for providing the workers with compensation and benefits compliant with existing labor law including the necessary social security and other benefits mandated by law in addition to the direct compensation as payment for their services.

f. Institutional Contract of Service (COS) shall use the contract agreement in Exhibit 3 (for the supply of Goods and Services) or Exhibit 4 (for Consultancy), to be signed by the Administrator / Regional Manager.

1.3.2 INDIVIDUAL CONTRACT OF SERVICE

a. Individual Contract of service may be resorted to for consultants/contractors. It shall be subject to pertinent provisions of RA 9184 and its IRR, and existing budgeting, accounting and auditing rules and regulations.

b. Individual consultants are those that fall under the types and fields of consulting services in Annex B General Principles on Consulting Services of the IRR of RA 9184.

The period of contract of an individual consultant shall depend upon the term of the project or job but only for a maximum of one (1) year renewable at the option of the Head of Procuring Entity but in no case shall exceed the term of the latter.

However, for Highly Technical Consultants engaged through negotiated procurement, the period of contract, at the most, shall be on a six (6) month basis, renewable at the option of the appointing Head of Procuring Entity, but in no case shall exceed the term of the latter (per Annex H Consolidated Guidelines for the Alternative Methods of Procurement of the IRR of RA 9184, item V.D.7 Highly Technical Consultants).

c. Individual contractors shall include learning service providers, technical experts, and subject matter experts, to undertake special projects or jobs within a specific period.

The period of contract of an individual contractor shall depend upon the term of the project or job, but not to exceed six months.

d. Individual Contract of Service (COS) for consultants / contractors shall use the contract agreement in Exhibit 4 to be signed by the Administrator / Regional Manager.


1.4 Eligibility Requirement

Aside from the requirement in item II.B.1.3.1.b of these guidelines, contractors and service providers should comply with the eligibility requirement of RA 9184 depending upon the mode of procurement. For competitive bidding, please refer to Rule VIII, sections 23 and 24 of the IRR of RA 9184. For alternative methods of procurement, please refer to Annex “H” (Consolidated Guidelines for Alternative Methods of Procurement), Appendix A (Documentary Requirement - Alternative Methods of Procurement) of the IRR of RA 9184.
3. SCOPE OF WORK

The JO/COS workers shall only perform functions and other work incidental, necessary and related to the scope of work specifically defined in the COS contract / Job Order Contract.

JO / COS workers shall not be assigned to do personal errands by any NFA official / employee. Said official / employee shall be solely responsible for whatever happens to the said JO / COS worker during the course of performing such errand. He / she shall likewise be solely responsible if the said JO / COS files a complaint to CSC or any labor institution or court. The NFA shall have no liability whatsoever in either case.


4. APPROVAL

a. Requests of field offices to engage JO/COS workers shall be approved by the concerned Regional Manager upon review and evaluation of the RAO. The field office concerned shall have the authority to select and engage the JO/COS, in accordance with these guidelines.

b. Requests of Central Office (CO) departments/offices to engage JO/COS workers shall be approved by the Deputy Administrator for Finance and Administration upon review and evaluation of the Human Resource Management Department (HRMD) and recommendation of the Assistant Administrator for Finance and Administration. The requesting department/office shall have the authority to select and engage the JO/COS likewise in accordance with these guidelines.

c. Requests to engage JO/COS workers shall follow the format prescribed in Exhibit 5. If the request is acceptable, the RAO / HRMD shall favorably endorse the request (Exhibit 6) attaching the necessary documentary requirements.

d. JO/COS requirement should be included in the approved Annual Procurement Plan.


5. PAYMENT

a. Contract of Service

Contract of Service shall be paid subject to the provisions of RA 9184 and its IRR. Individuals hired through Contract of Service shall have the option to enroll in social benefit programs thru the SSS, Phil-Health and Pag-IBIG Fund. Payment of COS shall be charged against the MOOE.

b. Job Order

The services of a Job Order worker shall be paid according to an agreed contract amount for the piece of work. It shall be charged against the MOOE.

c. Payment of COS and JO workers shall be subject to pertinent budgeting, accounting and auditing rules and regulations.

6. TAXATION

a. For taxation and withholding tax purposes pursuant to Revenue Memorandum Circular No. 130-2016 dated December 8, 2016, the remuneration or fees received by individuals under a Contract of Service or Job Order shall be treated as follows:

a.1 Professionals Hired Under a Contract of Service or Job Order
Creditable Withholding Tax – Payments to professionals are subject to creditable withholding tax on the gross professional, promotional and talent fees or any other form of remuneration for their services, including per diems, allowances, and any other form of income payment not subject to withholding tax on compensation at the following rates:

i. 15% - if the gross income for the current year exceeds P720,000.00;

ii. 10% - if the gross income for the current year does not exceed P720,000.00.

In general, individuals who follow an independent trade, business, or profession, offering their services to the public, are considered professionals.

a.2 Non-Professionals Hired Under a Contract of Services or Job Order
Regular Income Tax – Payments to individuals who are not professionals shall not be subject to creditable withholding tax, but shall be subject to the pertinent provision of the TRAIN law (Tax Reform for Acceleration and Inclusion).
a.3 Tax Treatment Common to Professionals and Non-Professionals Hired Under a Contract of Service or Job Order Basis.
i. VAT or Percentage Tax – There being no “employer – employee relationship”, the services performed are considered as a sale or performance of service subject to the 12% VAT.

ii. Payments to individuals whose annual gross receipts do not exceed P1,919,500.00 are exempt from VAT, but shall be subject to the 3% percentage tax, which shall be withheld by the government office, agency, GOCC, province, city or municipality making the money payment to such individuals.

b. All concerned are hereby guided by RMC No. 130-2016 which clarifies the tax treatment and appropriate withholding taxes on income payments by the departments and agencies of the government, including GOCCs, and GFIs to individuals engaged under a Job Order or Contract of Service agreement.

7. REPORTING AND MONITORING

a. The Regional Offices shall submit monthly to HRMD and ASD a Consolidated Regional Job Order / Contract of Service Workers Utilization Report (Exhibit 7) which indicates among others, the names and the corresponding work performed, work station and rate of JO workers and individual COS contracted per province including those in the Regional Office.

b. HRMD shall review the JO/COS utilization of field offices to check their compliance with existing policies.

c. The Provincial Offices (for FO) and HRMD (for CO) shall maintain a profile of JO / COS workers for the last two (2) years contracted at their end, for ready reference in case top management requests for data concerning JO/COS utilization.

d. Payment of wages of JO / COS who were found to be contracted without authority shall be the personal liability of the Provincial / Department Manager who contracted them.

Employees and officials found to violate the provisions of these guidelines may be charged before the proper administrative bodies (Office of the Ombudsman, Office of the President or Civil Service Commission) for violation of existing Civil Service law and rules of serious nature or conduct prejudicial to the best interest of the service.

Lt. Col. Jason L. Y. Aquino (Ret.) PA, NFA Administrator

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EXHIBITS

Exhibit 1 - Job Order Contract
Exhibit 3 - Contract Agreement
Exhibit 4 - Contract Agreement
Exhibit 5 - Request for Authority to Engage Job Order/Contract of Service Workers
Exhibit 6 - Request for Authority to Engage in Job Order/COS Workers
Exhibit 7 - Consolidated Regional Job Order/Contract of Service Workers Utilization Report
Exhibit 2 - Statement of Billing