II. PROCEDURAL STEPS FOR THE PROCUREMENT OF GOODS AND INFRASTRUCTURE PROJECTS

II. Procedural Steps for the Procurement of Goods and Infrastructure Projects A. Procurement Planning 1. Preparation of bidding Documents a) Forms and Contents of the Bidding Documents Approved Budget for the Contract; Invitation To Bid; Eligibility Requirements; Instructions To Bidders; Scope of work; Plans/Drawings and Technical Specs;

II Procedural Steps for the Procurement of Goods and Infrastructure Projects Form of Bid, Price Form, and List of Goods or Bill of Quantities; Delivery Time or Completion Schedule; Form, Amount, and Validity Period of Bid Security; Form, Amount, and Validity of Performance Security and Warranty; and, Form of Contract and General and Special conditions of Contracts.

2. Determination of ABC Quantities – all construction quantities shall be computed of not more than 10% of the final quantities. Unit Prices – shall be based on current prices as projected over the proposed construction period. The ABC shall specify for each major work item, such as earthwork, roadwork, and massive concreting, the components for equipment rentals, fuel, labor, materials and overhead, including the cost of the approved construction safety and health program and warranty premium.

2. Determination of ABC The ABC shall be composed of Direct Cost and Indirect Cost. Direct Cost: a) Cost of Materials per Items of Work: - cost at source including processing, - loading, royalties, local taxes, etc. - expenses for hauling to project site. - handling expenses. - storage expenses. - allowance for waste and/or losses. b) Cost of Labor c) Equipment Expenses

2. Determination of ABC Indirect Cost: a) Overhead Expense (5 – 8% of EDC) b) Contingencies (.5 – 3% of EDC) c) Miscellaneous Expenses( .5 – 1% of EDC) d) Contractors Profit Margin (5 -10% of EDC) e) VAT – 12% of EDC, OCM, and Profit

3. Annual Procurement Plan (APP) The APP shall include provisions for foreseeable emergencies based on historical records No procurement shall be undertaken unless it is in accordance with the approved APP The end-user units shall prepare the respective Project Procurement Management Plan (PPMP) for the different programs, activities, and projects (PAPs) Updating of the PPMPs and the consolidated APP shall be undertaken every 6 mons or as often as may be required by the HOPE.

Project Procurement Management Plan (PPMP) shall include: Info on whether PAPs will be contracted out, implemented by Admin or consigned; Type and objective of the contract to be employed; Extent/size of contract scopes/packages; Procurement methods to be adopted (indicating if outsourced); Time schedule for each procurement activity and for the contract implementation; Estimated budget for the general components of the contract.

PROCEDURES IN PROCUREMENT (Infrastructure Projects) Pre-procurement Conference Advertisement / Posting Pre-Bid Conference Submission and Receipt of Bid Bid Evaluation Post-Qualification Award of Contract

B. Pre-procurement Conference IRR R.A.#9184 B. Pre-procurement Conference Prior to advertisement, the BAC, through it Secretariat, shall call for a pre-procurement conference, to; Confirm the description and scope of the contract, the ABC, and the contract duration; Ensure that the procurement is in accordance with the APP and PPMP Determine the readiness of the procurement; Review, modify and agree on the criteria for eligibility screening; Review, modify and agree on the criteria for the evaluation of bids/proposals;

F. Clarify that the specifications and other terms in. the F. Clarify that the specifications and other terms in the bidding documents are minimum requirements; G. Reiterate and emphasize the importance of confidentiality during the bid evaluation process, and the applicable sanctions and penalties; The holding of a pre-procurement conference may not be required for small procurements, i.e., procurement of infrastructure projects costing five million pesos (P5,000,000.00) and below;

C. Advertisement / Posting Advertised at least ONCE in a newspaper of general nationwide circulation which have been regularly published for at least two (2) years before the date of issuance of the advertisement; For contracts above P5 million

Posted in the G-EPS (FOR 7 CALENDAR DAYS) IRR R.A.#9184 Posted continuously in the website of the procuring entity concerned;(FOR 7 CALENDAR DAYS) Posted in the G-EPS (FOR 7 CALENDAR DAYS) Posted at any conspicuous place reserved for this purpose in the premises of the procuring entity.

For contracts P5 million and below Posted continuously in the website of the procuring entity concerned;(FOR 7 CALENDAR DAYS) Posted in the G-EPS FOR 7 CALENDAR DAYS) Posted at any conspicuous place reserved for this purpose in the premises of the procuring entity. Note: For priority programs and infra projects funded out of the annual GAA the procuring entity may also publish in local newspaper of general circulation

For infrastructure projects, the following maximum periods from date of advertisement and/or 1st day of posting of the Invitation to Apply for Eligibility and to Bid up to bid opening shall be observed:

Estimated Contract Cost (in pesos) IRR R.A.#9184 Estimated Contract Cost (in pesos) Period Fifty (50) million and below 50 calendar days Above fifty (50) million 65 calendar days

Eligibility Screening Eligibility Criteria The following persons/entities shall be allowed to participate in the bidding for infrastructure project: Duly licensed Filipino citizens/sole proprietorships; (Foreign bidders may be eligible to participate in the procurement of Infrastructure Projects when provided for under any treaty or international or executive agreement)

Partnership duly organized under the laws of the Phil Partnership duly organized under the laws of the Phil. and of which at least 75% of the interest belongs to citizens of the Phil.; Corporations duly organized under the laws of the Phil. And of which at least 75% of the outstanding capital stock belongs to citizen of the Phil.; Persons/entities forming themselves into a joint venture; Cooperatives duly registered with CDA

Must have a PCAB license Must have completed, within 10 years, at least one contract that is similar to the contract to be bid and whose value adjusted to current price using the NSO consumer price indices website, at least 50% of the ABC to be bid: In the case of small A and B contractors without similar experience on the contract to be bid, they may be allowed to bid if the cost of such contract is not more than 50% of their registration particular for such category. The allowable range of contract cost per PCAB registration of contractor shall be:

Registration Particular Category Allowable Range of Contract Cost (in Million Pesos) Small A Up to 0.5 Small B Up to 15 Medium A Up to 100 Medium B Up to 200 Large A Up to 300 Large B Less than or above 300

The Contractor’s Performance Evaluation System (CPES) rating and/or certificate of completion and owner’s acceptance of the contract must be satisfactory. Credit line commitment of at least 10% of ABC, or, The prospective bidder’s NFCC must be at least equal to the ABC, calculated as follows: NFCC =[(Current assets minus current liabilities) multiplied by (K)] minus the value of all outstanding works or projects under ongoing contracts, including awarded contracts yet to be started.

K = 10 for a contract duration of one year or less, 15 for a contract duration of more than one year up to two years, and 20 for a contract duration of more than two years. The BAC shall determine if each prospective bidder is eligible to participate in the bidding by examining the completeness of each prospective bidder’s eligibility requirements or statements against a checklist of requirements, using a non discretionary “pass/fail” criteria, and shall be determined as either “eligible” or “ineligible”. The eligibility check shall not exceed 3 days

6. TAX CLEARANCE CERTIFICATE DULY APPROVED BY BIR IRR R.A.#9184 6. TAX CLEARANCE CERTIFICATE DULY APPROVED BY BIR

Notwithstanding the eligibility of a prospective bidder, the procuring entity concerned reserves the right to review it qualifications at any stage of the procurement process if it has reasonable grounds to believe that a misrepresentation has been made by the said prospective bidder, or that there has been a change in the prospective bidder’s situation from the time it submitted its eligibility requirements.

Eligibility Check for Infrastructure Projects The determination of eligibility shall be based on the submission of the following: Class “A” Documents Legal Documents Department of Trade and Industry (DTI) business name registration or SEC registration certificate, or CDA for cooperatives, whichever may be appropriate under existing laws of the Philippines; Valid and current Mayor’s permit/municipal license.

Technical Documents Statement of the prospective bidder of all its ongoing and completed govt. and private contracts, including awarded but not yet started, if any; Valid PCAB license and registration

Financial Documents f, Prospective bidders computation of its NFCC e, Prospective bidders Audited Financial Statement for the preceding calendar which should not be earlier than 2 years from the date of bid submission f, Prospective bidders computation of its NFCC

Class “B” Documents Valid joint venture agreement, in case of a joint venture and eligibility docs for each member; and Letter authorizing the BAC or its duly authorized representative/s to verify any or all of the documents submitted for the eligibility check. The prospective bidder or its duly authorized shall certify under oath that each of the documents submitted is an authentic and original copy, or a true and faithful reproduction or copy of the original, complete, and that all statement and information provided therein are true and correct

For Foreign-funded Procurement, the GOP and the bilateral or international financing institution may agree on another track record requirement Government corporate entities may be eligible to participate in Competitive bidding only if they can establish that they: legally and financially autonomous, operate under commercial law, and are not dependent agencies of the GOP or the Procuring Entity

D. Pre-Bid Conference For contracts to be bid with an a approved budget of P1,000,000.00 or more, the BAC shall convene at least one (1) pre-bid conference to clarify and/or explain any requirements, terms, conditions and specifications stipulated in the bidding documents. For contracts to be bid costing less than P1,000,000.00, pre-bid conferences may be conducted at the discretion of the BAC. Subject to the approval of the BAC, a pre-bid conference may also conducted upon written request of any prospective bidder.

The pre-bid conference shall be held at least 12 cd before the deadline for the submission and receipt of bids. If the proc entity determines that by reason of the method, nature, or complexity or when intern’l participation will be more advantageous to the GOP, a longer period for the preparation of bid is necessary, pre-bid can be held at least 30 cd before submission and receipt of bids. The pre-bid conference shall discuss, the technical and financial components of the contract to be bid. The minutes of the pre-bid conference be made available to all participants not later than 3 cd after the pre-bid conference.

Request for clarification(s) must be in writing and submitted to the BAC at least 10 cd before the deadline set for the submission and receipt of bids. The BAC shall respond to the said request by issuing a Supplemental/Bid Bulletin, at least 7 cd before the deadline for the submission and receipt of bids. Any Supplemental/Bid Bulletin issued by the BAC shall also be posted on the website of the procuring entity concerned, if available, and on the G-EPS

E. Submission and Receipt of Bids Eligible bidder shall submit their bids through their authorized officer or their duly authorized representative ; in the prescribed Bid Form, including its annexes, as specified in the bidding documents, (ii) on or before the specified deadline, and (iii) in two (2) separate sealed bid envelopes, the technical component and the financial component of the bid. Bids submitted after the deadline shall not be accepted by the BAC.

The first envelope (Technical Proposal) shall contain the following technical information/documents, at the least: Eligibility requirements Bid security as to form, amount and validity period; Project Requirements: a) Organizational chart for the contract to be bid, b) List of contractor’s personnel (viz., project managers, project engineers, materials engineers and foremen), to be assigned to the contract to be bid, with their complete qualification and experience data;

c) list of contractor’s equipment units, which are c) list of contractor’s equipment units, which are owned, leased, and/or under purchased agreements, supported by certification of availability of equipment from the equipment lessor/vendor for the duration of the project; 4. Sworn Statement as to the following: a) It is not “ blacklisted” or barred from bidding b) Each of the documents submitted in satisfaction of the bidding requirements is an authentic copy of the original, complete, and all statements made therein are true and correct, c) it is authorizing the head of the procuring entity or his duly authorize representative/s to verify all documents submitted,

d) The signatory is the duly authorize representative, and granted full power and authority to do, execute and perform any and all acts necessary and/or to represent the prospective bidder in the bidding, with the duly notarized Secretary’s Certificate attesting to such fact, if corporation, partnership or joint venture e) It complies with the Disclosure provision under Section 47 f) It complies with the responsibilities of a prospective or eligible bidder provided in the PBDs; g) It complies with existing labor laws and standards

a, Bid in the Financial Bid form ; b, Bid in the Bill of Quantities; The second envelope shall contain the following financial information: a, Bid in the Financial Bid form ; b, Bid in the Bill of Quantities; c, Detailed Estimate; d, Cash Flow by quarter

Modification and Withdrawal of Bids A bidder may modify its bid, provided that this is done before the deadline for the submission and receipt of bids. Where a bidder modifies its bid, it shall not be allowed to retrieve its original bid, but shall only be allowed to send another bid equally sealed, properly identified, marked as a “modification”. Bid modifications received after deadline shall not be considered and shall be returned to the bidder unopened.

A bidder may, through a letter, withdraw its bid before the deadline for the receipt of bids. Withdrawal of bids after the applicable deadline shall be subject to appropriate sanctions. A bidder may also express its intention not to participate in the bidding through a letter which should reach and be stamped received by the BAC before the deadline for the receipt of bids. A bidder that withdraws its bids shall not be permitted to submit another bid, directly or indirectly, for the same contract.

Bid Security The Bid security shall be in an amount at least equal to, and not lower than, a percentage of the approved budget for the contract to be bid, as advertised by the concerned procuring entity, in a form of;

Form of Security Amount in % of Approved Budget for the Contract 1. Cash, cashier’s check, manager’s check, back draft/guarantee confirmed by a universal or commercial bank duly licensed in the Phil Two percent(2%) 2. Irrevocable letter of credit issued by a universal or commercial bank confirmed or authenticated in the Phil if Two percent (2%) 3. Surety bond, callable on demand Five percent (5%) 4. Any combination of the foregoing Proportionate to share of form with respect to total amount of security

Bid Securing Declaration This is a duly notarized undertaking which states, among others, that the bidder shall enter into contract with the procuring entity and furnish the required performance security within 10 cd from receipt of NTA and committing to pay the corresponding fine and be suspended to participate in any govt. procurement in the event it violates any of the conditions stated

Bid Opening The BAC shall open the bids at the time, date and place specified in the Invitation to Apply for Eligibility and to Bid and the bidding documents. The bidders or their duly authorized representatives may attend the opening of bids. All members of the BAC or their duly authorized representatives who are present during bid opening shall initial every page of the original copies of all bids received and opened. The minutes of the bid opening shall be made available to the public upon written request and payment of a specified fee.

Ceiling of Bid Prices The approved budget for the contract under bidding shall be the upper limit or ceiling for acceptable bid prices. If a bid price, as evaluated and calculated in accordance with this IRR, is higher than the approved budget for the contract under bidding, the bidder submitting the same shall be automatically disqualified. There shall be no lower limit or floor on the amount of the award.

. For Foreign-funded Procurement, the ABC shall be applied as ceiling provided that: Bidding documents are obtainable free of charge on a freely accessible website; The procuring entity has procedures in place to ensure that the ABC is based on recent estimates made by the Engineer or the responsible unit of the procuring entity and that they are based on adequate detailed engineering and reflect the quality, supervision and risk and inflationary factors, as well as the prevailing market price; The procuring entity has trained estimators on estimating prices and analyzing bid variance; The agency has established a system to monitor and report bid prices relative to ABC and Engineers estimate. The procuring entity has established monitoring and evaluation system for contract implementation to provide feed back on actual goods and works.

F. Detailed Evaluation of Bids The BAC shall immediately conduct a detailed evaluation of all bids rated “passed” using a non-discretionary criteria, which shall include a consideration of the following: Completeness of the bid. Bids not addressing or providing all of the required items in the bidding documents including, where applicable, bill of quantities, shall be considered non-responsive, but specifying a “0” (zero) for the said item would mean that its being offered for free to the Government; and Arithmetical corrections. Consider computational errors, omissions, and other Bid modifications, if allowed in the Bidding Documents

In case of discrepancies between: IRR R.A.#9184 In case of discrepancies between: (a) bid prices in figures and in words, the latter shall prevail; (b) total prices and unit prices, the latter shall prevail; (c) unit cost in the detailed estimates and unit cost in the bill of quantities, the latter shall prevail.

F. Detailed Evaluation of Bids The entire evaluation process shall be completed in not more than 7 cd for projects costing more than 50 million and not more than 5 cd for projects less than 50 million.

Ranking of Total Bid Prices Based on the detailed evaluation of bids, those that comply with the above-mentioned requirements shall be ranked in the ascending order of their total calculated bid prices, as evaluated and corrected for computational errors, discounts and other modifications, to identify the Lowest Calculated Bid. Total calculated bid prices, as evaluated and corrected for computational errors, discounts and other modifications, which exceed the approved budget for the contract shall not be considered.

IRR R.A.#9184 G. Post- Qualification The post-qualification shall verify, validate and ascertain all statements made and documents submitted by the bidder with the Lowest Calculated Bid, using non-discretionary criteria. These criteria shall consider, but shall not be limited to, the following:

Legal Requirements. To verify, validate and ascertain licenses and agreements submitted by the bidder and the fact that he is not included in any Government “blacklist” b.Technical Requirements. To determine compliance with the requirements. Financial Requirements. To verify , validate and ascertain the bid price proposal of the bidder and, the required bank commitment to provide a credit line to the bidder in the amount specified and over the period stipulated in the Instructions to Bidders.

G. Post-Qualification Within 7 cd from the determination of the LCB, the BAC shall conduct and accomplish the post-qualification of the bidder with LCB In exceptional cases, the post-qualification may be extended by the HOPE but in no case shall the aggregate period exceed 30 cd

Award of Contract Award of contract shall be made to the bidder with the Lowest Calculated Responsive Bid, as its submitted bid price or its calculated bid price, whichever is lower.

Form of Performance Security Amount of Performance Security (% of Total Contract Price) 1. Cash, cashier’s check, manager’s check, back draft/guarantee confirmed by a universal or commercial bank duly licensed in the Phil Ten percent (10%) 2. Irrevocable letter of credit issued by a universal or commercial bank confirmed or authenticated in the Phil if 3. Surety bond, callable on demand Thirty Percent (30%) 4. Any combination of the foregoing Proportionate to share of form with respect to total amount of security

H. CONTRACT AWARD HOPE shall approve or disapprove the recommendation of award within a period not exceeding: 7 cd - projects costing above 50 million 5 cd – projects costing 50 million and below

I. CONTRACT SIGNING The winning bidder shall comply with all the remaining documentary requirements within 10 cd. The procuring entity shall enter into contract with the winning bidder within the same 10 day period provided that all documentary requirements are complied with

APROVAL OF CONTRACT HOPE shall be given the following maximum period for approving the contract: 15 cd - for projects with an ABC of above 50 million 5 cd – for projects with an ABC of 50 million and below

J. Notice to Proceed The procuring entity shall issue the NTP together with a copy of the approved contract within: 3 cd – for projects with an ABC of above 50 million 2 cd – for projects with an ABC of 50 million and below

Defects/Liability Period Warranty Defects/Liability Period Warranty Period 1 Year 2 to 15 Years Project Completion Final Acceptance

After final acceptance of the project by the Government, the contractor shall be held responsible for structural defects and/or failure of the completed project within the following warranty periods from final acceptance, except those occasioned by force majeure and those caused by other parties: Permanent Structures: Fifteen (15) years Building of types 4 and 5, steel and concrete bridges, flyovers, concrete aircraft movement areas, ports, dams, diversion tunnels, causeways, wharves, piers, dikes, filtration and treatment plants, sewerage systems, power plants, transmission and communication towers, railway system, and other similar structures

Semi-Permanent Structures: Five (5) years Building types 1, 2 and 3, concrete roads, asphalt roads, river control, drainage, irrigation and drainage canals, municipal ports and river landing, deep wells, rock causeway, pedestrian overpass, and other similar structures; and Other Structures: Two (2) years Bailey and wooden bridges, shallow wells, spring development, and other similar structures.

WARRANTY SECURITY The warranty security shall be denominated in Philippine pesos, remain effective for one (1) year from the date of issuance of the Certificate of Acceptance by the Procuring Entity

In cases where structural defects and/or failure arise during the warranty period, the following persons/parties shall be held liable: Contractor – where structural defects and/or failure arise due to faults attributable to improper construction use of inferior quality/substandard materials, and any violation of the contract plans and specs. the contractor shall be held liable; Consultants – where structural defects and/or failures arise due to faulty and/or inadequate design and specifications as well as construction supervision, then the consultant who prepared the design or undertook construction supervision for the project shall be held liable;

Procuring Entity’s Representatives/Project Manager/Construction Managers and supervisors – the project owner’s representative/s project manager, construction managers, and supervisor/s shall be held liable in cases where the structural defects/failures are due to his/their willful intervention in altering the designs and other specifications; negligence or omission in not approving or acting on proposed changes to noted defects or deficiencies in the design and/or specifications; and the use of substandard construction materials in the project;

Third Parties – Third Parties shall be held liable in cases where structural defects/failure are caused by work undertaken by them such as leaking pipes, diggings/excavations, underground cables and electrical wires, underground tunnel, mining shaft and the like, in which case the applicable warranty to such structure should be levied to third parties for their constn. or restoration works. Users – in cases where structural defects/failures are due to abuse/misuse by the end user of the constructed facility and/or non-compliance by a user with the technical design limits and/or intended purpose of the same, then the user concerned shall be held liable

IRR R.A.#9184 The term “Structural Defects” shall mean major faults/flaws/deficiencies in one or more key structural elements of the completed elements of the project which may lead to structural failure of the completed elements or structure. The term “Structural Failures” is defined as an occurrence where one or more key structural elements in an infrastructure facility fails or collapses, thereby rendering the facility or part thereof incapable of withstanding the design loads, and/or endangering the safety of the users or the general public.

CONTRACT IMPLEMENTATION Variation Orders – are change orders or extra work orders which should not exceed 10 % of the original project cost.

Variation Orders beyond 10% shall. either be subjected to. another Variation Orders beyond 10% shall either be subjected to another contract to be bid if the works are separable to complete the original scope of work, be authorized by the head of the procuring entity but not more than 20% subject to guidelines by GPPB, but with appropriate sanctions to the designer, consultant or official responsible for the original design.

Supplemental agreement is no longer allowed . Liquidated Damages shall be imposed for delays in completion of work but “Incentive Bonus” shall not be allowed.

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