GPPB UPDATES AND LATEST ISSUANCES January 2013 – May 2014

GPPB UPDATES AND LATEST ISSUANCES January 2013 – May 2014
CAPACITY DEVELOPMENT DIVISION Government Procurement Policy Board Technical Support Office (GPPB-TSO)

Outline Scope and Application Procurement Organizations PhilGEPS
Bidding Documents Bidding Procedure Detailed Evaluation of Bids Post-qualification Award of Contract Alternative Methods of Procurement Contract Implementation Protest Mechanism Blacklisting

SCOPE AND APPLICATION

Scope and Application: Authority of GPPB
On Granting exemption from application of RA 9184 It is beyond the authority of the GPPB to grant exemptions from the application of RA 9184 and its IRR as it does not have the mandate to legislate nor determine the coverage of the law. The GPPB however, may render contemporaneous construction of the provisions of the law pursuant to its quasi-legislative fiat, and issue rules and regulations on the basis of its rule-making power. NPM LNU conducted a public bidding for the Construction of New LNU House, the bid opening for which was scheduled on 18 December Unfortunately, failure of bidding was declared by the Bids and Awards Committee (BAC) for the first time because no bids were received. Considering that the appropriation for the project will lapse on 31 December 2013, and considering further that there is no more time to conduct a second bidding, LNU is requesting authority from the Government Procurement Policy Board (GPPB) to use Negotiated Procurement (Two-Failed Bidding) under Section 53.1 of the IRR after one failed bidding.

On Resolving issue on post-disqualification GPPB cannot grant a bidder’s request to resolve the issue of their post-disqualification. Nonetheless, they are urged to follow the prescribed rules and procedures on Protest Mechanism laid down in Section 55 of the IRR of RA 9184. Itcannot dictate to the procuring entity how to decide or resolve issues relative to its procurement activities. The GPPB is a quasi-legislative body mandated to formulate and amend the IRR. It has no quasi-judicial powers and functions; hence, cannot investigate and ascertain the existence of facts, hold hearings, and exercise discretion of a judicial nature over actual controversies with regard to the conduct of bidding by procuring entities. NPM Guamor recently participated in the procurement of an infrastructure project for the construction of health facilities in Catanduanes by the DPWH. Guamor was declared as the bidder with the Lowest Calculated Bid, but was subsequently post-disqualified allegedly without concrete justification provided by the procuring entity. It is in this context that Guamor is requesting the GPPB to resolve the issues of its disqualification.

On Declaring Failure of Bidding GPPB is not vested with the authority to declare a PE’s procurement activity to have incurred a failure of bidding. Declaration of failure of bidding is within the authority and accountability of the Bids and Awards Committee and the Head of the Procuring Entity to exercise, under Sections 35 and 41 of the IRR of RA 9184, respectively. NPM That the bidding of BCS for a 4-color offset machine be declared failure of bidding and seeking clarification whether it can resort to Negotiated Procurement (Two-Failed Biddings) under Section 53.1 of the revised Implementing Rules and Regulations (IRR) of Republic Act No. (RA) 9184 if the first bidding for a 2-color offset machine results in a failure of bidding, and whether it may resort to Limited Source Bidding instead.

Scope and Application: Non-Applicability of RA 9184 and its IRR
Lease Concession Agreement This may be most appropriately conducted following PPP-related laws, rules, and regulations, such as BOT Law or JV Guidelines. NPM Partnership with interested private entities Transactions involving the contribution of money/capital, services, or assets by the parties to the transaction is considered a Joint Venture (JV) agreement under Section 5.7 of the Guidelines and Procedures for Entering Into Joint Venture Agreements Between Government and Private Entities (JV Guidelines). NPM

Treaty or International Executive Agreements Procurement rules shall not apply in cases when a Treaty or International or Executive Agreement expressly provides use of foreign government/foreign or international financing institution procurement procedures and guidelines. NPM

Disposal of Confiscated Properties The Manual on the Disposal of Government Property covers the disposal of government properties. The issuance of rules or guidelines on disposal of government properties is outside the mandate of GPPB. NPM Part D, Section 1.0 of the Manual on the Disposal of Government Property states that it covers the disposal of government property which are unserviceable, obsolete, forfeited, abandoned, excess or surplus to the needs of the government, or junk or scrap materials. It does not categorically include confiscated properties. The Systems and Productivity Improvement Bureau of the DBM, as the office responsible for drafting the Manual through National Budget Circular No. 425 dated 28 January 1992 pursuant to Executive Order No. 285 dated 25 July 1987 is the proper authority to provide clarification on the applicability of the Manual to disposition of confiscated properties.

Leasing Out of Government Properties for Private Use As long as lease out undertakings do not involve expenditure of public funds for the procurement of goods, works and consulting services, RA 9184, its IRR, and its associated rules will not apply. Transactions involving lease of government properties for private use are covered by Executive Order No. 301, series of 1987 (EO 301). NPM the PFDA is a national government entity with corporate powers created by virtue of Presidential Decree No. 704, as amended by Executive Order No It is mandated to develop, manage, and operate regional fish port complexes, ice plant and cold storages, including municipal fish ports. In line with its corporate functions, the PFDA generates revenues from collecting port fees, and leasing out facilities as well as industrial and commercial lands within its ports for private use.

Engagement of Personnel under Job Order and Contract of Service RA 9184 and its IRR will not apply in the hiring of individual personnel under Job Order or Contract of Service : The engagement does not require that level of expertise as primary consideration for its selection, It is not what is contemplated under the definition and enumeration of what involves General Support Services and analogous services. However, RA 9184 and its IRR find applicability in the engagement of non-personal service through sole proprietorship, partnership or a corporation contracted for the purpose. NPM applicability of Republic Act (RA) No and its revised Implementing Rules and Regulations (IRR) in the engagement of Contract of Service Personnel on Job Order Basis if the desired service would require adequate external technical and professional capability and expertise that are beyond the existing capacity of the procuring entity, then the rules and regulations on the procurement of consulting services under RA 9184 and its IRR shall be applicable.

Scope and Application: Expandable Supplies
Spare Parts as Expandable Supplies If the spare parts sought to be procured have a life expectancy of more than one (1) year but which shall have decreased substantially in value after being put to use for only one (1) year, then the same shall be classified as expendable supplies. NPM whether spare parts should be classified as expendable or non-expendable goods. Section 5(m) of the IRR defines expendable supplies as articles which are normally consumed in use within one (1) year or converted in the process of manufacture or construction, or those having a life expectancy of more than one (1) year but which shall have decreased substantially in value after being put to use for only one (1) year.

Scope and Application: Procurement of Second-Hand Equipment
Procurement of second-hand, refurbished, or reconditioned equipment is allowed under RA 9184 and its IRR. The decision of PE to procure second-hand, refurbished, or reconditioned equipment does not require prior approval or confirmation from GPPB inasmuch as the responsibility to identify projects, as well as its requirements and specifications, including considerations for the acquisition of brand new or second hand goods/ equipment, rests with the procuring entity. NPM BCS intended to procure brand new printing equipment with Approved Budget for the Contract (ABC) in the amount of Ten Million Five Hundred Thousand Pesos (PhP10,500,000.00). When the fiscal year 2013 was about to end, BCS decided to seek the assistance of the Procurement Service of the Department of Budget and Management (PS-DBM) in the procurement of the aforesaid printing equipment. However, since the cost of brand new printing equipment is One Hundred Thirty Five Million Pesos (PhP135,000,000.00), PS-DBM advised BCS to secure the written permission of the Government Procurement Policy Board (GPPB) to procure second-hand printing equipment.

Scope and Application: General Support Service
Engineering Services as General Services For the maintenance of PE’s offices and facilities, engineering services may be considered as within the contemplated coverage of general support services, in the same vein as are the services for janitorial and security. NPM requesting for approval that engineering services be included in the same general support services category as janitorial and security services, and allow the CCP to hire a contractor for said service for up to three (3) years. CCP hires an engineering contractor for the maintenance of its buildings’ civil, electrical, and mechanical facilities, which are necessary for the continuous operation of CCP offices, rehearsal halls, and three performance venues. It is the observation of the CCP that existing procurement rules and regulations do not specifically address the matter of contracting for engineering services on a multi-year basis as it does with security and janitorial services

Scope and Application: General Support Service
Encoding Service as General Support Service “General support services” is understood to include those services that are essential, indispensable, or necessary to support the operations of the procuring entity or for the enhancement of the welfare of its personnel, including non-personal or contractual services. If the encoding services being acquired are essential, indispensable, or necessary to support of PE’S operations, then such service may be considered within the coverage of the term “general support services”. The DOTC has been annually procuring encoding services to continuously update the data in various automated systems it operates. Last year, a contract was awarded to a service provider for a period of one (1) year, renewable for two (2) years, subject to an annual performance evaluation. At the end of the first year, an annual performance evaluation was conducted, and a request to the Bids and Awards Committee (BAC) was made for the renewal of said contract. However, your office was advised that the procurement of the encoding services have to be done through public bidding, as it does not fall under general support services. NPM

Scope and Application: Accreditation of Bidders
Accreditation System Municipal Order requiring an accreditation process for Bidders as a condition precedent for their participation in procurement activities of the local government unit runs counter RA 9185 and its IRR would limit the participation of bidders only to those accredited suppliers, to the exclusion and prejudice of other bidders in the market, it in fact contravenes the very basic principles of competitive bidding. NPM

Scope and Application: Registry System
Registry system should not be considered an accreditation system, and is not tantamount to a finding of eligibility, nor a guarantee that the registered supplier, contractor, or consultant will be eligible for any particular procurement activity or contract award. Prospective bidders not included in the registry system used by the procuring entity, whether the PhilGEPS or its own manual or electronic system, should not be precluded from participating in any procurement opportunity. NPM Inca was denied of its request to join public bidding with the Quezon City Government “on the basis that your company is not listed in the registered bidders for the year 2013.” The Quezon City Government further explained that it is “currently adopting a Periodic Registry System as per Resolution No R, which provides that ‘a prospective bidder may only apply for registration under the Registry System during the last quarter of the year, for the purpose of qualifying to participate in the succeeding year in the bidding for the procurement of goods.” In addition, Inca is being required to establish an office/satellite office located in Quezon City for the approval of its registration and eligibility to bid. It is in this context that clarification is being requested on whether prospective bidders may be required to apply for business registration permits in the LGU where it intends to participate, as part of the qualification process.

Scope and Application: Bidder’s Right to Ask Questions
Protest Mechanism Section 55 of the IRR states that prospective bidders are allowed to question decisions of the BAC at any stage of the procurement process by filing a request for reconsideration within three (3) calendar days from receipt of written notice or upon verbal notification of such decision. Clarifications Section 22 also affords bidders the opportunity to raise concerns or clarifications on the requirements, terms, conditions, and specifications stipulated in the bidding documents for the contract to be bid. Questions or clarifications pertaining to the matters that may be discussed during the pre-bid conference must be raised at least ten (10) calendar days before the deadline set for the submission and receipt of bids NPM

Scope and Application: Mixed Procurement
Classification of ICT Services An ICT procurement consisting of different components involving goods, infrastructure project or consulting service is regarded as a mixed procurement and the nature thereof is based on the primary purpose of the contract, which must be determined by the procuring entity based on its identified needs and the best way by which these needs may be addressed, managed and satisfied. NPM

Scope and Application: Mixed Procurement
“Installation” of air conditioning system as a Construction Activity The motivation and underlying reason behind the project is of primordial importance as this will dictate the nature and categorization of the procurement and the process and procedures to be adopted whether the procurement activity is treated as goods or infrastructure project. NPM Whether the “installation” of an air conditioning system is a construction activity and therefore should be properly classified as procurement of an infrastructure project. The Generic Procurement Manual (Volume 1), defined a “Contractor” as one who undertakes to perform a work or service, or supply of goods and “Incidental Services” as those services ancillary to the supply of the goods, such as transportation and insurance, installation, commissioning…

Scope and Application: PADPAO Rates
PADPAO rates are rates issued and prescribed by the PADPAO, an organization of private security agencies (PSAs), in order to ensure that its member security agencies pay uniform rates for the service of its security guards. However, said rate must be compliant to the wage orders issued by RTWPB which form part of the labor laws and standards in order to qualify PSA as bidder. Their compliance is ensured through the submission of an Omnibus Sworn Statement. Non-compliance therewith shall result in the bidder’s disqualification. NPM NTC proceeded with the procurement of security services, and issued Supplemental Bid Bulletin requiring that the “PADPAO rate shall be strictly followed”. This is with the Bids and Awards Committee’s (BAC) presumption that the PADPAO rate is compliant with the rates under prevailing wage order issued by the Regional Tripartite Wages and Productivity Board (RTWPB). Certain disqualified bidders pointed out that strict compliance with the PADPAO rate should have been followed. Others on the other hand, pointed out and insisted on compliance with the existing wage order issued by the RTWPB. Although bidders were instructed to strictly comply with the PADPAO rate, NTC firmly believes that said requirement should not have been taken as a waiver of the existing wage rate in the prevailing wage order issued by the RTWPB.

Scope and Application: Extension of Mandatory Periods
Should PE decides to extend the period, it must show and provide compelling, sufficient, valid, reasonable, and justifiable cause. Such valid justification, however, will only free officials from penal sanction or liability, but not from applicable administrative and civil sanctions or liabilities under existing laws, rules and regulations NPM FACTS: DepEd-BAC has extended the post-qualification process thrice, for ninety (90) calendar days, due to the complexity and peculiarity of the project, consisting of 11 lots and 310 items Mass Production and Supply and Delivery of Science and Mathematics Equipment to 544 Public Secondary Schools, RSHSs and ESEP Schools, with an ABC of PhP 642,876,

Scope and Application: Trade-in Transaction
Proposal amounts to an acquisition of brand new equipment, rather than just mere repair services, which is different from the original procurement activity. Proposal is akin to a trade-in transaction. It involves two distinct, but relatively connected activities of government, namely, Disposal (EO 888) and Procurement (RA 9184). Although trade-in is not prohibited, the PE must have intended to resort to such scheme from the start, and not merely as an after-thought, considering that corresponding disposal and procurement processes and documentations must be complied with. NPM FACTS: BI procured the services for the repair of its 3M Passport Readers through Direct Contracting with Secur Links as the exclusive authorized service center of 3M Phil. In the course of the project, Secur Links informed BI that there are no more available parts for the 3M Passport Readers of BI since 3M has withdrawn it from the market. 34/46 units to be repaired entail replacement of spare parts, while 12/46 require replacement of power supply only. Secur Links proposed to replace BI’s existing 34 units with new models at the cost of the repair (PhP6,015,450), and repair the remaining 12 units (PhP127,680). ISSUE: Whether BI can accept the proposal of Secur Links.

Scope and Application: Joint Venture Agreements
The IAESP reveals that the Project pertains to a JV between a GOCC and a private entity in pursuit of development goals. The rules for such transaction are either covered by the Joint Venture Guidelines issued by NEDA pursuant to §8 of EO 423 (s. 2005); or by RA 6957 (BOT Law), as amended by RA 7718. Since the Project involves a JVA, RA 9184 and its IRR, including its associated guidelines, such as the Guidelines on the Sale of Bidding Documents, do not apply. NPM FACTS: Butuan City Water District received an Unsolicited Proposal for a JV from TwinPeak Hydro Resources Corp. BCWD caused the publication of an Invitation to Apply for Eligibility and Submit Proposal (IAESP) for a Competitive Challenge. The entity is questioning the propriety of setting the amount of Tender Documents at P1Million and the incompleteness of the published IAESP due to lack of information required in an Invitation to Bid under RA 9184 and its IRR. ISSUE: Whether the action of the PE is proper and in accordance with RA 9184, its IRR, and associated guidelines.

Scope and Application: Submission of Letter of Intent (LOI)
The submission of LOI is no longer required upon the effectivity of GPPB Resolution No on 10 September 2013. NPM Bendimil Construction and Development Corporation (Bendimil) was not allowed to purchase Plans and the Bid Documents for two (2) projects under the Philippine Fisheries Development Authority because the deadline for submission of LOI has already passed.

Scope and Application: Projects Partly Funded by Private Funds
As long as public fund is utilized or contemplated to be spent for any procurement activity, it shall by force, fall within the ambit of the present procurement law. NPM

Scope and Application: Grant of Honoraria
Payment of honoraria is limited to procurement that involves competitive bidding: Competitive Bidding (Section 10), Limited Source Bidding (Section 49), Negotiated Procurement under Two-Failed Biddings (Section 53.1) Honoraria will not be paid when procurement is through all the other alternative modes of procurement NPM Approved and adopted by the GPPB through Resolution No dated 29 June 2007.

Scope and Application: Grant of Honoraria
Section 5 of DBM BC A provides that the Chairs and members of the BAC and its TWG may be paid honoraria only for successfully completed procurement projects. If the items awarded in the first bidding and those subject of the re-bidding belong in the same procurement project that is identified, described, detailed, scheduled, and budgeted for in the procuring entity’s PPMP, the BAC may only claim honoraria once all items have been successfully awarded. Hence, if the BAC has already received its honoraria, it should no longer be entitled to claim on the basis of the successfully awarded items during the re-bid. The grant of honoraria shall not exceed the rates and limits prescribed in Sections 5.3 and 5.4 of BC A NPM Mindanao University of Science and Technology (MUST) conducted bidding for a procurement project involving several items, where award was made for some items, and the rest was subsequently subjected to re-bidding. It is in this context that MUST is inquiring whether the Bids and Awards Committee (BAC) may be paid honoraria in case the re-bidding is successful and it has already claimed honoraria on the basis of awarded items in the first bidding.

PROCUREMENT ORGANIZATIONS

Procurement Organizations: Head of the Procuring Entity
Designation as OIC, although temporary in nature, entails the assignment of additional functions bestowed upon him – functions which otherwise would have been performed by a duly appointed regular Chief. Designation entails exercise and execution of actual, related, incidental power and authority inherent in the office, unless designation contains specific reservations, limitations, or qualifications on the functions to be performed. Hence, the OIC is authorized to make decisions on procurement activities of the PE, subject to the limits stated in the Department Circular. NPM FACTS: BFP conducted public bidding for the procurement of fire trucks through its BAC, which was chaired by CSupt Bearis. The BAC recommended award of contract to the JV of Kolonwel and Hubei. CSupt Perez, the OIC-BFP Chief then, brought the BAC recommendation to the SILG, with a recommendation to disapprove the BAC’s decision because Kolonwel failed to comply with the EFPS filed Tax Return. Kolonwel instituted a case with the Ombudsman against the CSupt Perez, which led to the latter’s preventive suspension. CSupt Bearis was designated OIC-BFP Chief. As OIC-BFP Chief, he approved the BAC resolution recommending award to the JV, issued NOA, and recommended it for further approval by the SILG. ISSUE: Whether an official designated as OIC, and not as Chief or Acting Chief of BFP, can exercise the duties, power, and functions of the HOPE.

Procurement Organizations: BAC Functions
On Declaration of failure of bidding The authority of the BAC to declare a failure of bidding is limited to instances enumerated in Section 35.1 of the IRR of RA 9184, specifically, when (a) no bids are received, (b) all prospective bidders are declared ineligible, (c) all bids fail to comply with all the bid requirements or fail post-qualification, or, in the case of consulting services, there is no successful negotiation, or (d) the bidder with the LCB or HRB refuses to accept the award. The BAC cannot declare a failure of bidding for reasons other than those provided in Section 35. It cannot exercise the reservation clause provided in Section 41 of the IRR in declaring a failure of bidding since such authority exclusively belongs to the HOPE. The deadline for the submission and receipt of bids is scheduled at 1:30 p.m., but the Bids and Awards Committee (BAC) informed the bidders present to wait for further potential bidders to submit additional proposals. At 2 p.m., the BAC finally declared the bid as closed with two (2) bidders present, and with only the proposal of Alenia Aermacchi officially submitted. After such declaration, the other bidder questioned the late issuance of Supplemental/Bid Bulletin responding to the requests for clarifications, and requested for a postponement of the bidding. Despite your objection on the acceptance of the other bidder’s remark, the BAC announced a failure of bidding. It then suspended the proceedings for an internal executive session. Thereafter, the BAC recognized their mistake in issuing the Supplemental/Bid Bulletin belatedly, and explained that the BAC did not consider the request for extension since it was also submitted outside the prescribed time. However, we note that you also stated that the BAC declared the request for postponement acceptable and extended the bid closing date up to 18 November 2013. NPM

Procurement Organizations: BAC Functions
On evaluation of bids The BAC, in line with its function of determining the eligibility of prospective bidders, conducting the evaluation of bids and undertaking post-qualification, is in the position to rate bidders as having “passed” or “failed” in complying with the requirements in the Bidding Documents in accordance with the provisions of RA 9184 and its IRR. NPM

Procurement Organizations: Qualifications of a BAC Chair
Procuring entity’s compliance with the ranking requirement under Section of RA 9184 and its IRR for its BAC composition and membership is based on the term “permanent”. The term “permanent”, does not qualify whether the personnel occupying the plantilla position holds the same in a contractual, regular, or permanent status, rather the concern specifically refers to whether the position exists within the organizational structure of the procuring entity. HOPE may appoint someone as BAC Chairperson provided that he is occupying a plantilla position that is at least third ranking within the organizational structure of the PE and is not a designated approving authority. NPM The Chancellor appointed her Executive Assistant, who is allegedly not holding a “permanent” position as the BAC Chairperson. Is this a violation of Section 11 of RA No and its revised Implementing Rules and Regulations (IRR).

Procurement Organizations: Qualifications of a BAC Chair
4th Level Official cannot be designated as BAC Chairperson The absence of a personnel occupying the position of Sr. Vice President (second ranking), does not make the plantilla positions for the Sr. Department Manager (fourth ranking) a third ranking plantilla position. As long as the entire organizational structure has the Sr. Vice President position in the plantilla, the Sr. Department Manager position remains a fourth ranking plantilla position, for which reason the Sr. Department Manager cannot be designated as BAC Chairman. NPM Whether a Sr. Department Manager, a fourth ranking permanent official, can be classified as third ranking permanent official and designated as BAC Chairman based on the decision of the Management not to fill-up the Sr. Vice President position, the second ranking permanent position. Section of Republic Act (RA) No and its revised Implementing Rules and Regulations (IRR) provide that the Chairman of the BAC should be at least a third ranking permanent official of the Procuring Entity (PE).

Procurement Organizations: Qualifications of a BAC Vice-Chairman
Executive Assistant of the General Manager as BAC Vice-Chairperson The EA of the GM may be appointed as Vice-Chairman of the BAC provided that he possesses all the qualifications as a regular member of the BAC under Section (b) or Section (c) of the IRR of RA 9184, and does not have an approving authority delegated unto him by the HOPE. The prohibition stated in Section of IRR of RA No is limited to the HOPE and/or approving authority wherein they cannot be the Chairman or a member of the BAC. It is the approving authority that may be deemed the alter-ego of the HOPE. Thus, for the Alter-Ego Principle to apply, the EA should be the designated approving authority by the HOPE. seeking conformity and/or guidance on the approval of the Board of the Philippine National Railways (PNR) as Head of the Procuring Entity (HOPE) on the regular membership to the Bids and Awards Committee (BAC) of your Executive Assistant (EA). Under the PNR’s Organizational Structure, the GM is the highest management official of the PNR. The GM’s EA is functionally the GM’s alter ego. As such, and although with a salary grade of 20, the EA supervises the Department Managers to Supervisors in accordance with the GM’s policy directions. On 20 November 2013, the PNR Board approved the appointment of the EA as Vice-Chairman of the PNR BAC. NPM

Procurement Organizations: Qualifications of a BAC Member
4th Level Official as BAC Member The BAC for regional offices consists of at least three (3) regular members, and at least two (2) provisional members. The regular BAC members, including the BAC Chairperson, shall be at least third ranking permanent officials. Fourth ranking permanent officials of regional offices are disqualified from becoming regular BAC members, but may be designated as a provisional BAC member since Section 11 of the IRR does not require a provisional BAC member to be of a specific rank, thus implying that an employee of any rank can qualify as a provisional BAC member. NPM Whether a regional office, with only five (5) division chiefs, can designate a 4th level official as BAC member.

Procurement Organizations: Concurrent Positions in the BAC and its Secretariat
RA 9184 and its IRR do not categorically prohibit the HOPE from designating the same personnel as BAC member and BAC Secretariat Head. Nevertheless, procurement officials should avoid holding concurrent positions in the BAC and its Secretariat in accordance with the thrust to professionalize the procurement organization geared towards strengthening the procurement functions in order to increase operational effectiveness and efficiency. NPM Whether the Finance and Administration Division (FAD) Chief of a regional office can concurrently be a Bids and Awards Committee (BAC) member and BAC Secretariat Head Concurrent appointments as BAC member and BAC Secretariat Head diminishes the effectiveness of the BAC and BAC Secretariat in carrying out their functions

Procurement Organizations: Authority of BAC Sec Head to Notarize
It is not advisable that the BAC Secretariat Head be the same Notary Public who will notarize the ensuing contract for the project although the BAC Secretariat Head is, technically speaking, not a party to a contract between the procuring entity and the winning bidder. It is worthy to stress that questions, insinuations and doubts on the execution of documents should be obviated at all times. NPM FACTS: BFP conducted public bidding for the procurement of fire trucks through its BAC, which was chaired by CSupt Bearis. The BAC recommended award of contract to the JV of Kolonwel and Hubei. CSupt Perez, the OIC-BFP Chief then, brought the BAC recommendation to the SILG, with a recommendation to disapprove the BAC’s decision because Kolonwel failed to comply with the EFPS filed Tax Return. Kolonwel instituted a case with the Ombudsman against the CSupt Perez, which led to the latter’s preventive suspension. CSupt Bearis was designated OIC-BFP Chief. As OIC-BFP Chief, he approved the BAC resolution recommending award to the JV, issued NOA, and recommended it for further approval by the SILG. ISSUE: Whether an official designated as OIC, and not as Chief or Acting Chief of BFP, can exercise the duties, power, and functions of the HOPE.

Procurement Organizations: Authority of BAC Sec Head to Sign Document
BAC Secretariat Head’s authority to sign procurement-related documents should be confined to those that are within the scope of her duties and responsibilities under Republic Act (RA) No and its IRR, and should exclude those that require the exercise of discretion, consent or approval on matters under the jurisdiction of a different authority NPM FACTS: BFP conducted public bidding for the procurement of fire trucks through its BAC, which was chaired by CSupt Bearis. The BAC recommended award of contract to the JV of Kolonwel and Hubei. CSupt Perez, the OIC-BFP Chief then, brought the BAC recommendation to the SILG, with a recommendation to disapprove the BAC’s decision because Kolonwel failed to comply with the EFPS filed Tax Return. Kolonwel instituted a case with the Ombudsman against the CSupt Perez, which led to the latter’s preventive suspension. CSupt Bearis was designated OIC-BFP Chief. As OIC-BFP Chief, he approved the BAC resolution recommending award to the JV, issued NOA, and recommended it for further approval by the SILG. ISSUE: Whether an official designated as OIC, and not as Chief or Acting Chief of BFP, can exercise the duties, power, and functions of the HOPE.

Procurement Organizations: Authority of BAC Sec to Open and Examine Bids
Sections 12.1, 30.1 and 30.2 of the revised IRR of RA 9184 categorically vests upon the BAC the authority to determine each bidder's compliance with the required documents for purposes of eligibility Such authority cannot be delegated to the BAC Secretariat NPM FACTS: BFP conducted public bidding for the procurement of fire trucks through its BAC, which was chaired by CSupt Bearis. The BAC recommended award of contract to the JV of Kolonwel and Hubei. CSupt Perez, the OIC-BFP Chief then, brought the BAC recommendation to the SILG, with a recommendation to disapprove the BAC’s decision because Kolonwel failed to comply with the EFPS filed Tax Return. Kolonwel instituted a case with the Ombudsman against the CSupt Perez, which led to the latter’s preventive suspension. CSupt Bearis was designated OIC-BFP Chief. As OIC-BFP Chief, he approved the BAC resolution recommending award to the JV, issued NOA, and recommended it for further approval by the SILG. ISSUE: Whether an official designated as OIC, and not as Chief or Acting Chief of BFP, can exercise the duties, power, and functions of the HOPE.

Procurement Organizations: BAC Sec to Conduct Limited Source Bidding
Section 12.1 of the IRR of RA 9184 categorically vests upon the BAC the authority to process and evaluate the procurement requirements of bidders. The BAC Secretariat, which is tasked to assist the BAC, cannot be delegated with the functions expressly conferred upon the BAC by RA 9184 and its IRR. An exception to this policy was established for procurement using Shopping and Negotiated Procurement (Small Value Procurement) under GPPB Resolution No for the reason that these particular methods of procurement are used for contracts that are of considerably small amount and are generally simple/routinary, such that delegating the functions to another unit will be more efficient and economical for the procuring entity. However, GPPB Resolution No did not provide that the same exception be applicable to LSB inasmuch as the circumstances surrounding procurement activities using LSB are not similar to those covered by Shopping and Negotiated Procurement (Small Value Procurement). whether the Bids and Awards Committee (BAC) may delegate the conduct of Limited Source Bidding (LSB) to another office. the Bangko Sentral ng Pilipinas (BSP) intends to devolve the conduct of LSB to its Procurement Office, an organic department charged with the duty to assist the BAC in processing the procurement requirements of BSP. BSP notes that the delegation to appropriate bureau, committee, or support unit duly authorized by the BAC is allowed in alternative modes of procurement, such as in Shopping and Negotiated Procurement (Small Value Procurement). NPM

Procurement Organization: Provisional Member
FACTS: A provisional member in the DOTC BAC resigned when he was designated to a different position. The BAC recommended the Chief of Planning Division as replacement. However, HOPE designated the EA for Budget and Finance Concerns as replacement. It is argued that the EA is considered the HOPE’s alter-ego, and should thus be prohibited from being a BAC member. ISSUE: Whether there was a circumvention of Section of the IRR of RA 9184 with the designation of the EA as provisional member. Alter Ego principle (also Doctrine of Qualified Political Agency) falls under the control power of the President, and dictates that department secretaries are considered alter egos of the President. Approving authority may be deemed the alter ego of the HOPE. Thus, for the Alter Ego principle to apply, the EA must be designated as the approving authority. It is only when the EA is an approving authority that it is disqualified under § of the IRR of RA 9184 from becoming a BAC member. NPM

Procurement Organization: Separate BAC
NPM FACTS: MWSS seeks confirmation on the creation of separate BACs for ISSUE: Whether a 5th ranking official may be designated as an alternate to a regular BAC member who is a 4th ranking official. NPM CSU has 8 campuses throughout Cagayan. Campuses have been given administrative and fiscal autonomy due to its geographical locations. CSU has no existing Central BAC exercising university-wide jurisdiction. Each campus has its separate BACs, except for CSU Caritan and CSU Carig which shares a BAC. Designated BAC members are from the campus where the BAC is organized, and the chair is usually the 3rd ranking official. Hierachy is as follows: President, Campus Executive Officer, College Dean. ISSUE: Whether CSU’s separate BACs comply with RA 9184 and its IRR. The HOPE may create a separate BAC pursuant to § of the IRR to expedite the bidding of its numerous projects without the need of securing any approval or ratification from GPPB, provided it is warranted by: the number of the items, and the complexity of the items to be procured by the PE. Rank requirement for BAC members provided in § of the IRR should be followed in the creation of separate BACs. NPM State University has authority to establish separate BACs upon its determination that the creation of separate BACs according to its geographical location is necessary to expedite the procurement process. It may create separate BACs for each of its campuses. NPM

Procurement Organization: Special BAC for Multi-Agency Joint Procurement
The BAC composition established in Section 11.2 of the IRR of RA 9184 requires that the members be permanent officials of the procuring entity, i.e., those occupying plantilla position in the procuring entity. The concept of a multi-agency joint procurement that will be conducted using a Special BAC composed of the agencies’ respective officials will run counter to the provisions of RA 9184 and its IRR. whether the Constitutional Fiscal Autonomy Group (CFAG), composed of the Supreme Court, the Commission on Elections, the Civil Service Commission, the Commission on Audit, the Office of the Ombudsman, and the Commission on Human Rights, could jointly procure bullet-resistant vehicles for key officials of the CFAG. CFAG discussed the security issues faced by its key officials in a meeting, and is now evaluating the necessity and feasibility of procuring bullet-resistant vehicles for its key officials. Its initial findings show that there will be substantial reduction in the procurement cost if the vehicles are bought in bulk instead of holding separate procurements by each of the member-offices. Hence, CFAG is contemplating of doing a joint procurement and bidding process, for which purpose, a special Bids and Awards Committee (BAC) composed of members from the CFAF member-offices will be created. The CFAG checked the guidelines on Negotiated Procurement (Agency-to-Agency) and Negotiated Procurement (Procurement Agent) but found them to be inadequate to address its concerns. It is in this context that you are seeking guidance on the validity of a multi-agency joint procurement, and the procedure that must be undertaken therefor. NPM

Procurement Organization: Conflict of Interest
FACTS: BFP conducted public bidding for the procurement of fire trucks through its BAC, which was chaired by CSupt Bearis. The BAC recommended award of contract to the JV of Kolonwel and Hubei. CSupt Perez, the OIC-BFP Chief then, brought the BAC recommendation to the SILG, with a recommendation to disapprove the BAC’s decision because Kolonwel failed to comply with the EFPS filed Tax Return. DILG Legal Service issued Memorandum opining that in case the BFP Chief disapproves the BAC Resolution, said decision need not be elevated to SILG since what is required to be elevated is a decision seeking “further approval”. ISSUE: Whether the HOPE is required to elevate the BAC Recommendations for “further approval” only when he/she favorably recommends the BAC Recommendation. Conflict of interest arises when, in the case of the subject matter of the inquiry, the Chairman of the BFP-BAC that conducted the earlier procurement was eventually designated as OIC-BFP Chief. In this case, the subject procurement is deprived of checks and balances as one of the persons conducting the bid evaluation and post-qualification, who is no less than the BAC Chair, may have that degree of proclivity towards the recommended action of the BAC; thus, the subsequent award of contract may no longer enjoy the cold neutrality of an impartial HOPE. NPM

PhilGEPS

PhilGEPS: Registration
FACTS: Philcoa intends to procure variety of seednuts from its only registered supplier who could not validly register with PhilGEPS due to absence of a valid business permit. ISSUE: Whether registration with PhilGEPS is required for procurement activities below 50K. §8.5.1 RA 9184 IRR requires suppliers, contractors, consultants to register with PhilGEPS. It does not qualify based on threshold. Inapplicability of the posting requirement is not tantamount to a situation where PhilGEPS registration may also be dispensed with since the amount of the project is not a factor for the condition to apply. Registration with PhilGEPS is absolute, and must be complied with regardless of the cost of procurement. NPM

PhilGEPS: Registration Certificate
FACTS: A bidder submitted a copy of its PhilGEPS registration certificate as part of its eligibility and shortlisting documents. It was valid at that time. It was eventually declared the HRRB and issued a NOA. However, before the signing of the contract, it was discovered that the PhilGEPS registration certificate has expired. Thus, the HOPE refused to sign the contract. The HRRB subsequently submitted its renewed PhilGEPS reg cert. ISSUE: Whether an award of contract can be recommended again after the bidder has submitted a renewed PhilGEPS Reg Cert. Although bidders are not precluded from submitting the post-qualification documents required in §34.2 RA 9184 IRR during submission of bids, it is prudent for the PE to request the latest and current documents during post-qualification PE cannot recommend the award of contract if the bidder failed to submit a current and updated PhilGEPS Registration Certificate within 3 calendar days from its receipt of the BAC’s notice. Its belated submission of a renewed PhilGEPS Registration Certificate does not cure the defect, and should result in the disqualification of the bidder and forfeiture of its bid security. NPM

BIDDING DOCUMENTS

Bidding Documents: Wage Adjustment in ABC
§35.2 of RA 9184 IRR provides that when there is failure of bidding, the BAC shall conduct mandatory review and evaluation of the terms, conditions, and specifications in the bidding documents. Prior to the 2nd bidding, PE may modify the ABC for its procurement of security services to incorporate the new minimum wage rate/adjustment, subject to the necessary approval processes in changing the APP to reflect the revised ABC for the project. NPM FACTS: PE conducted public bidding for the procurement of security services based on the approved 2012 APP, but failed. During preparations for the 2nd bidding, DOLE and PADPAO issued the new minimum wage rates/adjustments. ISSUE: Whether PE can reflect the new minimum wage rate/adjustment in the original ABC prior to the conduct of the second bidding.

Bidding Documents: Authorized Representative
§25.2 RA 9184 IRR requires the bidder or its duly authorized representative to issue a sworn statement that the signatory is the duly authorized representative, and granted full power and authority to represent the bidder. §29 RA 9184 IRR provides that bidders or their duly authorized representative may attend opening of bids. PE cannot restrict participation only to the principal/bidder, but shall likewise extend the representation to the duly authorized representative of the sole proprietorship. NPM FACTS: NFA required in its IB that sole proprietorship can only be represented by its owner/proprietor in all bidding activities. ISSUE: Whether sole proprietorships cannot authorize a representative to represent the company in bidding activities.

Bidding Documents: Technical Specifications
PEs are precluded from requiring specific country of origin as part of the technical specifications for the project. Specifications shall be based on the performance requirements and recognized industry standards and not on the basis of country of origin. NPM FACTS: Bidder submitted a letter to PE requesting clarification on the tech specs as regards the indicated Japan make and model, and suggesting the consideration of vehicle make from other countries. ISSUE: Whether the PE can specify a specific country of origin as part of the tech specs.

Bidding Documents: Net Financial Contracting Capacity (NFCC)
Required Amount of NFCC Participating bidder should be required to submit an NFCC that is at least equal to all the lots to which it participated in, in order to establish the bidder’s financial liquidity and absorptive capacity in carrying out the contractual obligations required by the lots to which it participated in. NOTE: Credit Line Commitment shall no longer be accepted as an alternative to the prospective bidder’s computation of Net Financial Contracting Capacity. (GPPB Resolution ) NPM whether the amount of the NFCC should be at least equal to the ABC on a per lot basis, or on the total ABC for all lots participated in

NFCC Computation During the preliminary examination of bids, the BAC shall examine the NFCC computation submitted by the bidder based on a non-discretionary “pass/fail” criterion. Bidders shall be deemed compliant with the requirement if the submitted NFCC computation is at least equal to the ABC; otherwise, it will be declared “failed” regardless of the fact that the computation was based on an erroneous data or a mistake in arithmetical computation. NPM Is an incorrect NFCC computation, due to a mistakenly lifted figure from the Audited Financial Statements (AFS), considered “passed” if the entries in the AFS are used, the NFCC will still be more than the Approved Budget for the Contract (ABC)?

Basis in the Computation of NFCC The total “current” assets and liabilities as indicated in the prospective bidder’s AFS, which is stamped “received” by the BIR or its duly accredited and authorized institutions for the preceding calendar year, should be the basis for computing the NFCC. NPM

Bidding Documents: Similar Contracts
Nature of Similar Contracts PEs have the responsibility to clarify in the Bidding Documents what projects can be considered similar to the contract being bid out, for purposes of determining compliance with the SLCC requirement. As guidance, a contract shall be considered "similar" to the contract to be bid if it involves goods or services of the same nature and complexity as the subject matter of the project being procured. Similarity of contract should be interpreted liberally in the sense that it should not refer to an exact parallel, but only to an analogous one of similar category. NPM FACTS: PE conducted procurement of Aids to Navigation (ATON) Equipment. JV bidder is inquiring if air navigation equipment may be considered similar contracts. JV bidder was disqualified for its failure to include the foreign partner’s Mayor’s Permit and failure to satisfy the SLCC requirement. JV argues that the foreign partner’s country of origin, Singapore, does not issue Mayor’s Permit, but the equivalent document, which it included in its bid, is a Certificate of Incorporation of a Private Company. JV also inquires on the types of similar contracts to the project. ISSUE: Whether the PE can specify a specific country of origin as part of the tech specs.

Bidding Documents: Similar Contracts
Definition or description of a “similar contract” should not unreasonably limit competition and inequitably bar participation of capable suppliers. Similarity of contract should be interpreted liberally in the sense that it should not refer to an exact parallel, but only to an analogous one of similar category. NPM

Bidding Documents: Single Largest and Completed Contract (SLCC)
IRR does not give the PE the option to adopt a different criterion for eligibility. PE cannot aggregate the amount of two (2) contracts as compliance with the eligibility criterion on SLCC under Section of the IRR. NPM Whether PE may allow a bidder to submit a combination of two (2) similar projects for purposes of complying with the requirement for the submission of at least one (1) similar contract that is at least 50% of the ABC

Sub-contracting to be included in SLCC IRR of RA 9184 does not limit the contracts that should be included in the statement of all ongoing and completed contracts to those where the bidder is the principal or main contractor. It can be inferred from the PBDs that sub-contracts should be included in the statement together with the percentage of the bidder’s participation as a sub-contractor. NOTE: The 10-year limitation under Section is no longer applicable. (GPPB Resolution No , ) NPM

SLCC Requirement for Small A and Small B Projects A contractor will be qualified even if it does not have at least fifty percent (50%) SLCC if such bidder is either a Small A or Small B contractor participating in a project the Approved Budget for the Contract for which is within fifty percent (50%) of its ARCC. NPM Edro is registered with the Philippine Contractors Accreditation Board (PCAB) under the Small B category. In some instances where it participates in public bidding activities, Edro has been disqualified by the Bids and Awards Committee (BAC) for failure to submit at least one (1) completed contract similar to the contract being bid out although the project to be bid out falls under the Small B category. Edro requests GPPB to review the BAC resolution issued by the Municipality of Sta. Teresita, Cagayan regarding its declaration of Edro’s ineligibility.

SLCC Requirement for Several Lots In the case of a procurement activity that is divided into several lots, where each lot may result in a separate contract, the ABC for each lot becomes the reference of the required minimum percentage of the amount of the SLCC to be complied. The participation of a bidder in several lots does not require the submission of an SLCC that will specifically correspond to each lot. It is sufficient that the bidder presents an SLCC that complies with the percentage requirement for every lot that it participates in. NPM Nikka Trading has been participating in competitive biddings in government. Per its experience, procuring entities have been packaging their procurement projects in a single Invitation to Bid for similar and related requirements, but divide the same into several lots. In such procurement activities, the prevailing interpretation of the procuring entities where you participate in is that the SLCC should be considered as against the total Approved Budget for the Contract (ABC), i.e., the SLCC is evaluated vis-à-vis the total project amount and not on a per lot basis. It is in this context that the above-mentioned clarification is being requested.

Bidding Documents: Statement of Ongoing Contracts
Bidder should submit a statement of all its on-going government and private contracts within the relevant period stated in the Bid Documents, including contracts awarded but not yet started, if any, as part of the Class “A” Eligibility Documents. Additional documentary proof to support the statement of on-going contracts such as contracts and notices to proceed need not be attached. However, the BAC may request for additional proof (e.g. copies of contracts and notices to proceed) during post-qualification in order to verify, validate and ascertain all statements made and documents submitted by the bidder. NPM whether it is mandatory for a bidder to attach proof (e.g. copies of official receipts, contracts, or notices to proceed) to its statement of on-going and completed contracts which forms part of the eligibility requirements required during bid submission or whether the said proof should just be required during post-qualification.

Projects where a NOA has been issued, but for which no contract has been signed yet, should be included in the statement of ongoing government and private contracts because these are already considered awarded contracts. NPM Whether projects may be considered as “ongoing” if it has been awarded to the bidder through the issuance of the Notice of Award (NOA) by the Head of the Procuring Entity (HOPE), but no contract has been signed yet; and Whether non-inclusion of said projects in the statement of all ongoing and completed government and private contracts required under Section 23.1(a)(iii) of the revised Implementing Rules and Regulations (IRR) of Republic Act No. (RA) 9184 is a ground for disqualification and blacklisting.

The statement of ongoing government and private contracts to be submitted by the bidder should include all of its ongoing government and private contracts, even if they are immaterial or dissimilar to the contract to be bid. GPPB Resolution No provides that the failure to include or disclose complete information in the statement of contracts shall result in the “disqualification of the bidder for non-compliance with the eligibility requirement under Sections 23.1 or 24.1 of the revised IRR.” and may also be a ground for blacklisting under Section 65.3 (a) or (b) of the revised IRR NPM Is the list of “selected and relevant” ongoing and completed government and private contracts instead of a “statement of all ongoing and completed” government and private contracts” considered substantial compliance; hence, can be rated “passed”?

Bidding Documents: Charging of fees
Decision in charging fees for bidding documents, whether for the first bidding or any subsequent re-bidding, depends upon the procuring entity, taking into account the need to recover the cost of its preparation and development vis-a-vis the effects on competition and participation of bidders. However, fees must conform with the standard rates for the sale of bidding documents under GPPB Resolution No , which took effect on 4 September 2012. NPM

Bidding Documents: Discounts
Discounts stated in the Bid Form allow bidders to itemize the application of discounts that are not yet reflected in the amounts specified in its BOQ and detailed estimates vis-à-vis the program of works, as there could be a situation that the decision to offer a discount came long after these amounts have been prepared, finalized, and reflected in the bid documents, and changing the entries may be too cumbersome and time consuming for the bidder. Discount offered in the Bid Form may be accepted even though the financial documents do not contain or indicate any reference to such discount. NPM FACTS: BAC found out that a bidder offered a discount using the Bid Form prescribed in the PBDs. However, while the bid price, as read during the bid opening, matched the bidder’s declaration of costs for the project stated in the program of works and detailed estimates, the same documents did not indicate the discount offered. ISSUE: Whether the discount offered may be considered valid.

Bidding Documents: Discounts
Although Section of the IRR does not mention the word “discount”, ITB Clause 27.4 of the PBDs for the Procurement of Infrastructure Projects provides that the determination of the Lowest Calculated Bid requires the evaluation and correction for computational errors, discounts and other modifications. If the offered discount does not qualify the methodology of its application, it can be presumed that the discount will apply to the whole amount of the identified bid price. For instance, the bidder’s offer is PhP961,474.88, and offered a discount 5%. The total calculated bid will be determined by deducting 5% from the bid price of PhP961, The clause “excluding any discounts offered in item (d) below found in paragraph (b) of the Bid Form, please note that considering that discounts cannot be offered in relation to performance security, such clause will have no effect on the computation of the bid price vis-à-vis the offered discount to arrive at the total calculated bid price. whether Samal City may consider and apply the five percent (5%) discount offered by a bidder to its bid price. Samal City used the Philippine Bidding Documents (PBDs) for the Procurement of Infrastructure Projects, including the Bid Form therein. One of the bidders in its submitted Bid Form stated that its bid offer is Nine Hundred Sixty One Thousand Four Hundred Seventy Four Pesos and 88/100 (PhP961,474.88), and offered a discount of five percent (5%). It is noted that the Bids and Awards Committee (BAC) of Samal City is confused on how to apply the offered discount since paragraph (b) of the Bid Form states that “The total price of our Bid, excluding any discounts offered in item (d) below is: [insert information]”, while paragraph (d) states that “If our Bid is accepted, we commit to obtain a Performance Security in the amount of [insert percentage amount] percent of the Contract price for the due performance of the Contract.” Fourth Edition, December 2010. NPM

Bidding Documents: Re-advertisement of IB
Advertisement or posting requirement under §21 RA 9184 IRR serves as a notice to bidders informing them, directly or by reference, of the matters to be bid upon and of the time and place of receiving bids. Re-advertisement is not necessary since the original IB that was advertised already provided the necessary and relevant information that would sufficiently notify the public of the procurement opportunity, including relevant components and the corresponding ABC for each component. NPM FACTS: PE advertised the IB indicating the ABC for the project, as well as its 2 components, along with their respective number of units and ABC/unit. Eventually, PE issued Supplemental/Bid Bulletin inviting bids for the 2 separate components. Prospective bidder now questions the separation of the components without re-advertising the IB. ISSUE: Whether the PE may validly divide a single procurement project into 2 lots with 2 separate ABCs without re-advertising the amended/revised IB.

Bidding Documents: Supplemental/Bid Bulletin
§ RA 9184 IRR allows PEs to issue Supplemental/Bid Bulletins upon their initiative for the purpose of clarifying or modifying any provision in the Bidding Documents, including the IB. Accordingly, PE has the authority to revise or amend any statement in the Bidding Documents, including the IB, specifically when such revision or amendment is made for the purpose of clarifying or modifying its provisions. Supplemental/Bid Bulletins must be posted in the PhilGEPS and at the PE’s website, in order to address aspects of competition and transparency. NPM FACTS: PE advertised the IB indicating the ABC for the project, as well as its 2 components, along with their respective number of units and ABC/unit. Eventually, PE issued Supplemental/Bid Bulletin inviting bids for the 2 separate components. Prospective bidder now questions the separation of the components without re-advertising the IB. ISSUE: Whether the PE may validly divide a single procurement project into 2 lots with 2 separate ABCs without re-advertising the amended/revised IB.

Conduct of a new pre-bid conference In the case of a new procurement activity or a re-bidding activity, bidders are informed of the details of the pre-bid conference through the IB, which should comply with the posting/advertisement requirements under Section 21.2 of the IRR of RA 9184. In case the BAC decides to conduct new pre-bid conference not included in the IB, it has to issue a Supplemental/Bid Bulletin on the matter. The Supplemental/Bid Bulletin should be posted on the PhilGEPS and the website of the procuring entity, if available. The BAC must inform bidders who have submitted bids before the issuance of Supplemental/Bid Bulletin. a new pre-bid conference was held for the procurement of the Project without prior posting therefor in the websites of the Philippine Government Electronic Procurement System (PhilGEPS) and DND or advertisement in a newspaper of nationwide circulation. NPM

Extension of the bid closing time If the procuring entity intends to postpone or reschedule the deadline for the submission and receipt of bids, it may do so by issuing a Supplemental/Bid Bulletin specifying the revised schedule for the procurement activity. Section of the IRR of RA 9184 provides that “Supplemental/Bid Bulletins may be issued upon the procuring entity’s initiative for purposes of clarifying or modifying any provision of the Bidding Documents at least seven (7) calendar days before the deadline for the submission and receipt of bids.” The deadline for the submission and receipt of bids is scheduled at 1:30 p.m., but the Bids and Awards Committee (BAC) informed the bidders present to wait for further potential bidders to submit additional proposals. At 2 p.m., the BAC finally declared the bid as closed with two (2) bidders present, and with only the proposal of Alenia Aermacchi officially submitted. After such declaration, the other bidder questioned the late issuance of Supplemental/Bid Bulletin responding to the requests for clarifications, and requested for a postponement of the bidding. Despite your objection on the acceptance of the other bidder’s remark, the BAC announced a failure of bidding. It then suspended the proceedings for an internal executive session. Thereafter, the BAC recognized their mistake in issuing the Supplemental/Bid Bulletin belatedly, and explained that the BAC did not consider the request for extension since it was also submitted outside the prescribed time. However, we note that you also stated that the BAC declared the request for postponement acceptable and extended the bid closing date up to 18 November 2013. NPM

Failure to Post Section of the IRR of RA 9184 states that “[a]ny Supplemental/Bid Bulletin issued by the BAC shall also be posted on the PhilGEPS and the website of the procuring entity concerned, if available.” The phrase “if available” refers to the phrase “the website of the procuring entity”, and not “the PhilGEPS”. PE is mandated to post the Supplemental/Bid Bulletin in the PhilGEPS website. The failure of the BAC to comply with this procedural requirement amounts to a failure to follow the prescribed bidding procedures that may warrant declaration of failure of bidding by the Head of the Procuring Entity pursuant to Section 41 (b) of the IRR of RA 9184. MIAA conducted public bidding for the Supply, Installation, and Commissioning of Fourteen (14) Units Brand New Full Body Scanning Equipment at NAIA Terminals. A prospective bidder (Bidder 1) requested for an amendment of the Terms of Reference. The MIAA BAC granted the request by issuing Bid Bulletin No. 3 and transmitting the same to the prospective bidders via facsimile. On the day of bid opening, only two (2) bidders participated, one of which was Bidder 1 who was declared as the bidder with the Lowest Calculated Bid (LCB). The other participating bidder (Bidder 2) subsequently questioned the non-publication of Bid Bulletin No. 3 in the MIAA and PhilGEPS websites, contrary to Section of the revised Implementing Rules and Regulations (IRR) of Republic Act No. (RA) The MIAA BAC resolved to recommend to the MIAA Board the declaration of failure of bidding based on Section 41 (b) of the IRR of RA 9184 in view of the MIAA BAC’s failure to follow the prescribed procedure under Section of the same IRR. The MIAA Board agreed to the recommendation and declared the public bidding a failure. Expectedly, Bidder 1 filed a motion for reconsideration on the MIAA Board’s decision, arguing that Bidder 2’s letter should not have been considered as it was sent during the “no contact period” under Section 32.1 of the IRR of RA 9184 and that the publication of Bid Bulletin is not mandatory since Section of the IRR merely requires publication in PhilGEPS “if available”. NPM

Contracts for General Support Services
Bidding Documents: Contracts for General Support Services Multi-Year Contract General Appropriations Act provides that no agency shall enter into a multi-year contract without securing a Multi-Year Obligational Authority (MYOA) from the DBM following the provisions of Circular Letter No dated 27 October 2004. As such, PE must first verify if it is allowed to enter into multi-year contracts or whether its governing board is authorized to enter into multi-year contracts under its enabling law or corporate charter. In the event that the confirmation yields a negative result, the contract should be procured on a yearly basis. on December 2008, the Supreme Court En Banc promulgated the issuance of a “Continuing Mandamus” for the Local Water Utilities Administration and other agencies, through the local water districts and in coordination with the Department of Environment and Natural Resources, to provide, install and maintain sewerage and sanitation facilities and the efficient and safe collection, treatment and disposal of sewage in the provinces of Laguna, Cavite, Bulacan, Pampanga, and Bataan at the earliest possible time. However, since construction of the wastewater and disposal facilities would entail a large investment, the LWD intends to outsource this kind of service. It is in this wise that LWD is inquiring whether it can enter into a five-year contract with a service provider. The Revised Guidelines on Extension of Contracts for General Support Services does not prohibit procuring entities from entering into contracts on a multi-year basis. It simply provides that contracts for general support services can be extended, but not to exceed one (1) year. NPM

Bidding Documents: Contracts for General Support Services Amendment of Existing Multi-Year Contract Section 5 of the Guidelines on the Procurement of Security and Janitorial Services provides that all bid prices for a duration of three (3) years shall be fixed and shall not be adjusted during contract implementation. One of the exceptions is, when during the term of the contract the procuring entity sees the need for an increase or decrease in the number of security guards, it may make the necessary adjustments in the bid price provided that the resulting cost does not exceed the Approved Budget for the Contract (ABC) for the relevant year. Whether PE is allowed to amend the existing multi-year contract for security services so that it would not have to conduct a public bidding in case the approved budget for 2014 would be sufficient to cover the costs of the additional guards for the two newly opened offices. NPM

Bidding Documents: Contracts for General Support Services Extension of contract for additional guards procured through SVP The Guidelines for Extension of Contracts do not require that the original contract to be extended was awarded as a result of competitive bidding. Hence to maintain status quo in the operations of the procuring entity, the contract for additional guards procured through SVP may be extended subject to the other conditions provided in the Guidelines. Whether the contract for additional guards procured through Small Value Procurement (SVP) may be extended on a monthly basis until the approval of the 2014 budget. It is represented that PE have an existing multi-year contract for security services for the years However, during the 3rd quarter of 2013, PE opened two (2) new offices, Davao South and Digos offices, which necessitated the procurement of eight (8) additional security guards. Since the current budget cannot cover the cost of the increase in security guards, PE decided to procure them using the alternative modality of SVP from a different security agency. The procedural requirements under the Guidelines mandates that all contract extensions shall be subject to prior approval of the Head of Procuring Entity or his/her duly authorized representative upon recommendation of the BAC. And in the event that the proposed contract extension exceeds six (6) months, what is incumbent upon the Head of the Procuring Entity is to immediately report in writing its intention to extend the said service to the GPPB. The GPPB's approval for such extension, however, is not necessary. NPM

Contract Implementation: Contracts for General Support Services
Contract Extension for General Support Services of a Province All contract extensions shall be subject to the prior approval of the HOPE upon recommendation of the BAC. If the proposed contract extension exceeds six (6) months, the HOPE is required to inform the GPPB in writing of its intent to extend beyond six (6) months. Approval of the GPPB to extend the ongoing contracts for general support services of the Province is not necessary, since it could do so as long as the a conditions provided in the Guidelines are complied with. NPM GPPB Resolution No provides the following conditions when procuring entities may extend the duration or effectivity of an ongoing contract: No contract extension shall exceed one (1) year. The original contract subject of the extension was awarded in accordance with the provisions of RA 9184 and its IRR. The procuring entity has substantially undertaken the procurement activities required prior to award of the new contract under RA 9184 and its IRR. The contract extension is undertaken due to circumstances beyond its control and the procuring entity concerned cannot award a new contract within a month after the expiration of the term of the original contract. The contemplated extension is merely an emergency measure to maintain status quo in the operations of the procuring entity and to avoid interruption of service. The current service provider has not violated any of the provisions of the original contract. The terms and conditions of the original contract shall not be changed or modified, except when changes or modifications will redound to the advantage of the government at no additional cost to the procuring entity.

Bidding Documents: Additional Participants in Consultancy Service Contract
Section 61.1 provides that all bid prices shall be considered as fixed prices, and therefore not subject to price adjustment and escalation during the contract implementation. Section 2 of Annex F of the IRR of RA 9184 reiterates the same principle and adds that any extension of the contract time shall not involve any additional cost. Clause 55.6 of the GCC of the Philippine Bidding Documents for the Procurement of Consulting Services provides that no additional payment for variation order, if any, shall be allowed for the consultancy contract Contract Implementation Guidelines for the Procurement of Consulting Services. Additional participants may be allowed provided that there will be no increase in contract cost, otherwise it shall be considered violative of the provisions of RA 9184, its IRR and associated issuances. NPM FACTS: PE advertised the IB indicating the ABC for the project, as well as its 2 components, along with their respective number of units and ABC/unit. Eventually, PE issued Supplemental/Bid Bulletin inviting bids for the 2 separate components. Prospective bidder now questions the separation of the components without re-advertising the IB. ISSUE: Whether the PE may validly divide a single procurement project into 2 lots with 2 separate ABCs without re-advertising the amended/revised IB.

Bidding Documents: Additional Deliverables in Consultancy Contract
PE may revise an existing design contract to include additional deliverables, provided, that such revision will entail no additional payment or cost. BCDA entered into a consultancy contract for the design of a proposed ramp that will connect C-5 Road to McKinley Parkway Road within Bonifacio Global City (BGC). The final design submitted by the consultant to, and is now pending approval of, BCDA was conceptualized prior to the construction of SM Aura in a parcel of land considered as a civic center in the Master Development Plan of BGC to which the ramp was designed to connect at level with the McKinley Parkway Road. However, BCDA feels that the present design will no longer be responsive to the traffic condition in the area due to the presence of SM Aura. BCDA deems it necessary to have the ramps re-designed in a way that will improve traffic movement and circulation in the area and the rest of BGC. Such re-design, however, will entail additional costs for the consultant. Section 61.1 of the revised Implementing Rules and Regulations (IRR) of Republic Act No. (RA) 9184 provide that all bid prices shall be considered as fixed prices, and therefore not subject to price adjustment and escalation during the contract implementation. Moreover, Section 2 of Annex “F” of the IRR of RA 9184 reiterates the principle that all consultancy contracts shall be fixed price contracts and any extension of contract time shall not involve any additional cost. Lastly, Clause 55.6 of the General Conditions of Contract of the Philippine Bidding Documents for the Procurement of Consulting Services provides that no additional payment for variation order, if any, shall be allowed for the consultancy contract. NPM

Bidding Documents: Modification of Bidding Documents
Modifying or Adding to the Statements in the Invitation to Bid Procuring entities are allowed to insert any necessary information in the Invitation to Bid as it deems relevant to the procurement project. However, such information must conform to the Instructions to Bidders and, in particular, to the relevant information in the Bid Data. Clause 20.3 of the PBDs for the Procurement of Goods provides that the original and copies of the envelopes containing the technical and financial components of the bid shall be signed by the bidder, but is silent whether the same should be done with the single envelope where all the envelopes containing the original and copies of the technical and financial components of the bid are enclosed. The instruction that “all envelopes shall be duly signed in the sealed overlaps or flaps by the bidder or duly authorized representative in order to maintain the integrity of the documents” may be considered an additional information that procuring entities may validly include in the Invitation to Bid inasmuch as it is not contrary to the provisions of the PBDs. NPM DA-RFU3 published an Invitation to Bid for the procurement of 1,200 pieces of laminated sacks. The Invitation to Bid includes a statement that “all envelopes shall be duly signed in the sealed overlaps or flaps by the bidder or duly authorized representative in order to maintain the integrity of the documents”. It also contains the reservation clause provided under Section 41 of the IRR of RA During the opening of bids, only the bid of one of the two bidders who submitted bids was opened because the other bidder’s outer envelope enclosing the technical and financial envelopes was unsigned and not properly sealed. The bidder filed a motion for reconsideration arguing that the PBDs, which was adopted for the bidding documents for the procurement project, only require that the original and copies of the bid be signed and does not require the same for the envelope where the technical and financial components are enclosed.

Bidding Documents: Modification of Bidding Documents
Change in Project Site The change in the project site after the issuance of Notice of Award amounts to modification of bidding documents and it is not allowed under RA 9184 and its IRR. Modification of government contracts, after the same had been awarded after a public bidding, is not allowed because such modification serves to nullify the effect of public bidding and whatever advantages the Government had secured thereby and may also result in manifest injustice to other bidders. (Mata v. San Diego G.R. No. L-30447, 21 March 1975.) NPM

Bidding Documents: Source of Funds
Malolos City is inquiring whether its Invitation to Bid (IB) complies with the requirement that source of funding should be specified, as well as the effect in case of failure to comply with the said requirement. As provided in the template for the IB in the PBDs for the Procurement of Infrastructure Projects, the source of funding and the year to be indicated shall be the Budget for the contract approved by the respective Sanggunian of the local government unit. The information required in the IB should be clear and adequate for the prospective bidder to understand and identify in accordance with the guide notes provided in the PBDs, failure to comply with which may affect the validity of the process. NPM

Bidding Documents: Bill of Quantities
The Bill of Quantities forms part of the Philippine Bidding Documents (PBDs) for Goods and Infrastructure Projects, which should be properly filled-out and submitted by the bidder as part of his Bidding Documents, and evaluated by the bids and Awards committee (BAC) using a non-discretionary “pass/fail” criterion. When a quantity of an item submitted by the bidder does not comply with the quantity prescribed in the Bill of Quantities, the bid shall be considered non-responsive and the bidder shall be disqualified accordingly. NPM

Bidding Documents: Bill of Quantities
Unless the Instructions to Bidders allow partial bids, bids that do not address or provide all the required items or where no price was indicated in the Bidding Documents, including bill of quantities, shall be considered non-responsive, and thus, automatically disqualified. Specifying a “0” (zero) or a “-” (dash) for an item would mean that it is being offered for free to the Government. NPM

Bidding Documents: Bid Securing Declaration
Section 27.2 gives bidders the option to choose from the acceptable forms of Bid Security, including the Bid Securing Declaration. PE may not limit the acceptable forms of bid security to only cash or cashier’s/manager’s check and bank draft/guarantee or irrevocable LC. NOTE: Bid Securing Declaration as an additional form of bid security (GPPB Resolution ) NPM

BIDDING PROCEDURES

Bidding Procedures: Pre-Qualification
Berlyn Enterprises (Berlyn), participated in the public bidding conducted by the Philippine Coast Guard (PCG) for the procurement of forty (40) rubber boats with an Approved Budget for the Contract of PhP 32 Million. The BAC required interested bidders to undergo pre-qualification. Berlyn participated in the pre-qualification and eventually issued a Pre-Qualification Certificate. . However, on the day of the bidding, the PCG BAC declared Berlyn ineligible to join on the ground that the statement of all ongoing and completed contracts does not contain a single largest completed similar contract amounting to at least fifty percent (50%) of the contract to be bid. The practice of pre-qualification has been abandoned in RA 9184 and its IRR. the results of a pre-qualification have no legal force and effect, bearing or weight, and cannot preempt the findings of the BAC during the preliminary examination of bids conducted during the opening of bids. Hence, a bidder may still be declared ineligible during the opening of bids despite a finding of qualification during the purported pre-qualification exercise. NPM

Bidding Procedures: Pre-Bid Conference
Section 22.1 of the IRR of RA 9184 provides that at least one (1) pre-bid conference should be conducted by the procuring entity for projects costing at least PhP1 Million, in order to afford prospective bidders the opportunity to inquire on or clarify any of the requirements, terms, conditions, and specifications stipulated in the Bidding Documents. Failure to conduct a pre-bid conference for the Project amounts to a violation of a mandatory provision of law, which will render the procurement activity void under Article 5 of the Civil Code of the Philippines. NPM

Bidding Procedures: Refusal to Accept a Bid
Procuring entity cannot validly and legally refuse to accept a bid submitted before the deadline for the submission indicated in the RFQ. This shall open a ground for the aggrieved bidder to file a request for reconsideration and, subsequently, protest as provided in Section 55 of RA 9184 and its IRR, without prejudice to the institution of civil, administrative and/or criminal actions against the erring officials under applicable laws and rules. NPM

Bidding Procedures: Bid Opening
BAC should open a reconsidered bid under the same circumstances as it opened the bids that were not disqualified, i.e., upon a duly scheduled opening of bid with proper notices to the concerned entities. NPM

Bidding Procedures: Opening of a Reconsidered Bid
Section 30 requires that the preliminary examination of bids be conducted by merely checking for the presence or absence of documentary requirements using a non-discretionary “pass/fail” criterion. However, the BAC has the right to review the qualifications of a bidder during the same stage if it has reasonable grounds to believe that a misrepresentation has been made or there has been changes in the bidder’s capability to undertake the project. NPM

DETAILED EVALUATION OF BIDS

Detailed Evaluation of Bids: Arithmetical Corrections
The process of rounding off numbers may be construed as an arithmetical correction which may be done during the evaluation of bids for the determination of the LCB. However, the details on how the prices should be rounded off should be clearly stated by the procuring entity in its Invitation to Bid (IB), and applied similarly to all bids so as to ensure that bids are evaluated on equal footing, to ensure fair and competitive bid evaluation Item 7, IB for Goods; Item 8, IB for Infrastructure Projects. Having made the arithmetical correction, and the bidder with the LCRB fails, refuses or is unable to enter into contract with the procuring entity and furnish the required performance security within ten (10) calendar days from receipt of the notice of award, the bid security shall be forfeited and appropriate sanctions provided in the IRR and existing laws shall be imposed Is the process of rounding off number considered an arithmetical correction? Can the TWG do an arithmetical correction during bid evaluation? What action may the BAC take if the bidder does not accept the arithmetical correction made by the BAC/TWG? NPM

Detailed Evaluation of Bids: Valid PCAB License
A valid PCAB license required as an eligibility requirement for the procurement of infrastructure projects under Section 23.1 (a) (iv) of the revised IRR of RA 9184 should be valid at the time of the deadline for the submission and opening of bids. The submission of a PCAB license with validity period after the date of the opening of the bids is a ground for the prospective bidder’s disqualification NPM

Detailed Evaluation of Bids: PCAB License for JV
FACTS: PE seeks clarification on the propriety of declaring a JV Bidder ineligible for non-submission of Joint PCAB License. JV Bidders are required to submit a Joint License issued by the PCAB in compliance with the eligibility requirement for a “valid PCAB license and registration. §38 RA 4566 prohibits 2 or more contractors from jointly submitting a bid without first securing a Joint License to engage or act in the capacity of such a joint venture. Failure of the JV Bidder to submit a Joint License may be a ground for its disqualification despite the submission of the individual licenses of each joint venture partner. NPM

Detailed Evaluation of Bids: Audited Financial Statement
Failure to submit documents or the submission of an otherwise incomplete or patently insufficient AFS will disqualify the bidder based on the non-discretionary “pass/fail” criterion under Section 30.1 of the IRR. AFS must comply with the requirements under Section 23.1(a)(v) of the IRR of RA 9184, namely, (i) showing the prospective bidder’s current assets and liabilities, (ii) stamped “received” by the BIR or its duly accredited and authorized institutions, and (iii) for the preceding calendar year which should not be earlier than two (2) years from the date of bid submission. The term “earlier” means that if the bid submission date is on 2013, an AFS for the year 2011 can be considered compliant, provided that such AFS is the most recent document that can be produced by the bidder without fault or delay on its part in filing the same with the BIR. NPM whether a newly established construction firm may be allowed to participate in the public bidding for an infrastructure project in the absence of an Audited Financial Statement (AFS) dated not earlier than two (2) years from the date of bid submission. Windfall Construction is a newly established construction firm which was issued its Philippine Contractors Accreditation Board (PCAB) License on 6 May 2013 and renewed on 1 July It has a tax clearance issued on 2 September 2013 and an AFS that is dated this year – It purchased bidding documents from the Department of Education Surigao City Division, and was told of the requirement for an AFS that should not be earlier than two (2) years from the date of bid submission. failure to submit an AFS that complies with the requirements under Section 23.1(a)(v) of the IRR of RA 9184, namely, (i) showing the prospective bidder’s current assets and liabilities, (ii) stamped “received” by the BIR or its duly accredited and authorized institutions, and (iii) for the preceding calendar year which should not be earlier than two (2) years form the date of bid submission will disqualify the bidder.

Detailed Evaluation of Bids: Equivalent Document
FACTS: PE conducted procurement of Aids to Navigation (ATON) Equipment. JV bidder was disqualified for its failure to include the foreign partner’s Mayor’s Permit and failure to satisfy the SLCC requirement. JV argues that the foreign partner’s country of origin, Singapore, does not issue Mayor’s Permit, but the equivalent document, which it included in its bid, is a Certificate of Incorporation of a Private Company. ISSUE: Whether the certificate submitted can be considered an equivalent document Foreign bidders may substitute eligibility documentary requirements with the appropriate equivalent documents in their country. BAC’s function to undertake post-qualification proceedings to look into the legal validity of each documents by conducting proper verification and validation. Only upon actual determination and confirmation of this equivalence may it be categorically resolved that the foreign documents submitted are acceptable substitutes of the required eligibility documents pursuant to §23.2 of the IRR. NPM

Detailed Evaluation of Bids: Track Record
FACTS: Bidder has been operating as a contractor since 1985 as a sole proprietorship. In 2003, it put all its assets, personnel, and resources to a newly formed corporation, and was issued PCAB license. It participated in a bidding and submitted the contracts of the sole proprietorship as its experience. ISSUE: Whether the experience of the sole proprietorship may be considered as experience of the corporation. Construction experience/track record of a sole proprietor, cannot be carried over to a corporation despite the fact that the sole proprietor’s assets, personnel and other resources have been infused into the corporation inasmuch as the latter has a separate and distinct juridical personality from the former. NPM

Detailed Evaluation of Bids: Track Record
FACTS: DPWH issued DO 195 (1992) to suspend procurement and employment of corporations as consultants for locally funded projects. Consulting corporations have formed/created professional partnerships or sole proprietorships in order to participate in the procurement of consultants for locally funded projects. A number of these professional partnerships or single proprietorships cannot be eligible due to insufficient experience. ISSUE: Whether the past experience of corporation may be credited to the newly formed joint ventures, professional partnerships, or sole proprietorships. Corporation is an artificial being created by operation of law, and has a legal personality of its own, separate and distinct from the persons composing it, as well as any other legal entity to which it may be related. JV, professional partnerships, or sole proprietorships cannot be credited with the past experiences of their corporation of origin. §§24.5.3(a) and (b) of RA 9184 IRR provides that, in case of new firms, the individual experiences of the principal and key staff, including the times when employed by other consultants, may be considered as part of the new firms’ overall experience. NPM

Detailed Evaluation of Bids: Compliance with DOLE DO 18-A
FACTS: Bidder questions the validity of the JVA submitted by another bidder in that it was defectively notarized, particularly, that the JVA was notarized before the arrival of the foreign JV partner. ISSUE: Whether the defect in notarization of JVA and SPA affects the submission. Except those that are in direct contravention to RA 9184 and its IRR, bidders are expected to comply with existing labor laws and standards as these laws are deemed incorporated in the offer, promise and responsibilities of the bidder. NPM

Detailed Evaluation of Bids: No Contact Rule
FACTS: Bidder who was disqualified and have waived its right to request for reconsideration sent the PE information affecting the technical capability of the bidder with the LCB. ISSUE: Whether by virtue of the “no contact” rule, a bidder may not submit such information. The “no contact” rule applies only to those whose bids are being evaluated by the BAC after passing the preliminary examination. No communication should be made by bidders until a decision to award a contract is made by the BAC. Bidders who waived their right to utilize the protest mechanism or those whose request for reconsideration and/or protest were subsequently denied are not covered by the prohibition under §32.1 of RA 9184 IRR. NPM

Detailed Evaluation of Bids: Sealing and Marking of Bids
ISSUE: Whether the bidder may be disqualified if it fails to submit a signed Technical Data Sheet. Since the rule and the ITB Clauses 20.1 and 20.2 use the word “shall”, connoting command and compulsion, the requirements on sealing and marking of bids are regarded as mandatory. Improper sealing and marking of bids may be a ground to disqualify a bidder. NPM

Detailed Evaluation of Bids: Discrepancies in Bid Price
Section (c) of the IRR states that where there is a discrepancy between the stated total price and the actual sum of prices of component items, the latter shall prevail. NPM

Detailed Evaluation of Bids: Nature of Bidder’s Business
ISSUE: Whether the bidder, whose Mayor’s Permit is for construction business, may submit bids for procurement of dump truck. Mayor’s Permit allows an entity to legally perform the requirements and obligations of the project and the resultant contract. It is therefore necessary for the BAC to determine whether the Mayor’s Permit issued to the construction company authorizes it to engage in the business of supplying dump trucks. A finding to the contrary would amount to non-compliance by the bidder and will result in its disqualification. NPM

Detailed Evaluation of Bids: Conflict of Interest
FACTS: PE is currently conducting the bidding process for an infrastructure project, the plans/drawings for which was prepared and made by an entity that is now participating as a bidder for the Project. ISSUE: Whether there is conflict of interest. GPM provides that the firm that has been engaged to provide consulting services for the preparation or implementation of a project, and each of its affiliates, will be disqualified from subsequently providing goods, works, or services resulting from or directly related to the firm’s consulting services for such preparation or implementation. There is conflict of interest when the entity that prepared the plans/drawings likewise participates in the ensuing procurement activities for the Project. NPM

Detailed Evaluation of Bids: Functional Testing
The product testing, during which the procuring entity may conduct the “functional test” and other test parameters is done during the post-qualification stage. Thus, before BAC could even conduct the product testing, it should first ensure that the bidder who will undergo post-qualification has submitted all the legal, technical, and financial requirements, and declared as the LCB/HRB. Subjecting all bids declared as “passed” during the bid evaluation to a “functional test” before the verification, validation, and ascertainment of the submitted documents of the Lowest Calculated Bid (LCB) runs counter to the provisions of Section 32 and 34 of RA 9184 and its IRR. NPM Technical Working Group (TWG) of PNP conducts a “functional test” for more than five (5) days depending on the equipment to be procured and the test parameters required by the PNP Directorate for Research and Development. PNP is of the view that conducting successive “functional test” after each bid is declared disqualified will entail more time; hence, is considering conducting simultaneous “functional test” in order to complete the post-qualification within the period prescribed in Section 34.8 of the revised Implementing Rules and Regulations (IRR) of Republic Act No

POST-QUALIFICATION

Post-Qualification: Requiring Additional Documents
PE may request for the submission of additional documents from the bidder in support of the information it has provided in the bidding documents. However, non-submission of the additional supporting documents requested cannot be a ground for the bidder’s post-disqualification, as a bidder may be post-disqualified only upon ascertainment, validation, and verification of its non-compliance with the legal, technical, and financial requirements of the project as provided in the bidding documents. NPM FACTS: During post-qualification, PE learned that the LCB is offering PASCO products. PE requested LCB to submit an affidavit declaring the fact that the PASCO products are genuine and authentic, including the disclosure of their source. ISSUE: Whether PE can disqualify LCB for refusing to submit the required affidavit.

Post-Qualification: Submission of Additional Requirements
The three (3) calendar day period under §34.2 of the IRR is mandatory and should not be extended. In case PE accepts the post-qualification documentary requirements beyond the reglementary period, it must show that there is a compelling, sufficient, valid, reasonable, and justifiable cause for such extension, so that penal sanction or liability will not set in. Applicable administrative and civil sanctions or liabilities may also be imposed against the concerned officials. NPM ISSUE: Whether the 3 calendar day period within which the LCB may submit the additional requirement under Sec may be extended.

Post-Qualification: Additional Eligibility Requirements
Procuring entities are proscribed from requiring additional eligibility requirements because the list of minimum eligibility requirements has been streamlined/simplified such that only those requirements enumerated in Sections 23.1, 24.1, and 25.1 of the IRR of RA 9184 are necessary for purposes of determining a bidder’s eligibility. NPM IB issued by the National Food Authority-Regional Office in Isabela (NFA) for its public bidding for the Supply and Delivery of 50-kg Capacity, Brand New, Food Grade, Tubular Type, Woven, Polypropylene Empty Sacks for Palay (Project) contains a provision that the bidder should not have been penalized by the NFA for more than four (4) times within the last five (5) years in relation to its bids or contracts with NFA, with the intention to impose additional regulation in determining a bidder’s eligibility to participate in the Project

Post-Qualification: Tax Returns
BDS Clause 29.2(b), provides that the option of allowing submission of manually filed tax returns should be exercised by the PE by specifying so in the Bidding Documents. (Amended by GPPB Resolution ) Only EFPS-filed tax returns are now allowed and accepted. NPM NOTE: Mandatory requirement for the filing of tax returns and payment of taxes through the EFPS. (GPPB Resolution ) ISSUE: Whether submission of manually filed tax returns may be allowed.

Post-Qualification: Submission of Tax Clearance
EO 398 specifically requires the submission of Tax Clearance issued by the BIR. It refers to the clearance issued by the Collection Enforcement Division of BIR attesting that the bidder has no outstanding Final Assessment Notice and/or delinquent account. Hence, submission of the enumerated documents cannot be considered as compliance. NPM FACTS: Instead of the latest Tax Clearance, the bidder submitted, among others, the following docs: Tax clearance certificate valid until 31 Dec 2009 and Application for tax clearance. ISSUE: Whether the submitted documents may be considered for purposes of compliance.

Submission of BIR receipt for renewal of Tax Clearance will not suffice in lieu of a valid Tax Clearance Requirement since substitution is not allowed under Section 34.2 of the IRR of RA 9184. The Tax Clearance must be valid and existing at the time it is submitted to BAC and must be submitted within three (3) calendar days from receipt of the notice from the BAC that the bidder has the LCB. Failure to comply with the requirement for the submission of a valid Tax Clearance shall be a ground for post-disqualification of the bidder. NPM FACTS: Instead of the latest Tax Clearance, the bidder submitted, among others, the following docs: Tax clearance certificate valid until 31 Dec 2009 and Application for tax clearance. ISSUE: Whether the submitted documents may be considered for purposes of compliance.

Submission of a Tax Clearance must be required and must be indicated in the invitation to negotiate and submitted along with the proposals or quotations; otherwise disqualification is in order. If not initially included as one of the eligibility documents in the invitation to negotiate PE could still require its mandatory submission as it is necessary in determining the legal and financial capability of the prospective suppliers, contractors, and consultants. NPM MKWD should require the submission of a Tax Clearance when it resorts to Negotiated Procurement (Two Failed Biddings) under Section 53.1 of the IRR of RA 9184, and indicate this requirement in its invitation to negotiate to prospective suppliers, contractors, and consultants, who must provide said document upon submission of their proposals or quotations;

Post-Qualification: Tax Clearance of Foreign Bidder
Under §24.1(b) of the IRR, each JV partner shall submit the legal eligibility documents under §24.1(a) and (b), and documentary legal requirements for post-qualification under §34.2 of the IRR. A Delinquency Verification Certificate issued to Non-Resident Foreign Corporations (NRFC)/Non-Resident Aliens Not Engaged in Trade or Business (NRANETB) pursuant to BIR RR , attesting to the fact that the taxpayer has no outstanding Final Assessment Notice and/or delinquent account may be submitted as a form of Tax Clearance required under Sec 34.2 of the IRR. NPM FACTS: Bidder manifested that its foreign companies transacting in the Philippines temporarily should no longer be required to submit a Tax Clearance as it is not considered “doing business”. Bidder proposes submission of equivalent documents. ISSUE: Whether foreign bidders not “doing business” may submit equivalent documents instead of the Tax Clearance issued by BIR.

Post-Qualification: Submission of Certified True Copies
The PE cannot require the submission of originals or certified true copies as even the procurement rules allow the submission of copies as sufficient compliance with the requirements. Section 25.2(a)(iv) of the IRR provides that a prospective bidder or its duly authorized representative is required to submit a Sworn Statement in the form prescribed by the GPPB, certifying under oath, among other things, that each of the documents submitted in satisfaction of the bidding requirements is an authentic copy of the original, complete, and all statements and information provided therein are true and correct. during the Opening of Bids for the procurement of security services, the BAC disqualified Odin “because although [your] first or original copy contained the original, notarized copies of the Bid Securing Declaration, Omnibus Statement, Secretary’s Certificate, etc., forming part of the bid’s Technical Documents, the BAC found the second and third copy of the same, similar documents as non-complying because they were not stamped as ‘certified true copies’.” It is in this regard that you seek our opinion on whether the BAC was correct in disqualifying you for not stamping “certified true copies” for Copy 1 and Copy 2 of the bid documents. NPM

Post-Qualification: Observers’ Participation
§13 of RA 9184 expressly states that the BAC shall, in "all stages of the procurement process", invite Observers to sit in the proceedings. BAC is mandated to invite Observers in all stages of the procurement process, including post-qualification stage. GPM enumerates the parties who are to conduct post-qualification. Although Observers do not conduct post-qualification of the bidder, they are not precluded from being invited and be present in the meeting. NPM FACTS: PE informed an organization that the BAC is not required to invite observers during post-qualification because the GPM specifies the participants to the post-qualification and does not include observers.

Post-Qualification: Submission of Sample
In the event that a sample product, indicating its brand and model, has to be submitted, this requirement must be clearly specified in the bidding documents. Absent any clear requirement regarding the matter, the procuring entity has no basis to disqualify the bidder. NPM Den-Tronix International Trading (Den-Tronix) has been participating in various bidding activities conducted by the Bureau of Fire Protection (BFP) Regional Offices (ROs). BFP-RO 4A and BFP-RO 5 required participating bidders to submit their sample as early as the pre-bid stage. In one of the bidding activities, Den-Tronix observed that a bidder submitted product samples that do not indicate the brand name and model, but only the year of manufacture and the international standard. In the same bidding, Den-Tronix was disqualified for failing to indicate the reference number of the bidding activity in its surety bond.

Post-Qualification: End User Complaint
End-user complaint is not in itself ground for post-disqualification, unless the PE determines that the bidder is not legally, technically and financially capable to complete the project based on such complaints. NPM

Post-Qualification: Tie-Breaking Method
Drawing of lots for purposes of breaking a tie should be conducted only after all the bidders that submitted the lowest calculated bids are declared post-qualified. NPM GPPB Circular No

Post-qualification Team
Neither RA 9184 nor its IRR provide for the establishment of a post-qualification team that is separate and distinct from the BAC, since the responsibility and authority of conducting the post-qualification is categorically delegated to the BAC under Section 12.1 of the IRR of RA 9184. The post-qualification team shall be the BAC, which can be assisted by the TWG, and shall be responsible in determining the compliance of the bidder with the LCB with all the requirements and conditions specified in the Bidding Documents. NPM

Post-Qualification: Internal Post-Qualification Procedures
Procuring entity may adopt internal procedures on how it will conduct the post-qualification in a manner that it deems effective in establishing the responsiveness of the bidder with the requirements, and at the same time, reliable in impressing upon the procuring entity the confidence of and certainty in declaring the bidder as having submitted the Lowest Calculated Responsive Bid. Adoption of an internal procedure on the manner of conducting post-qualification is well within the discretion and accountability of the procuring entity to undertake, and does not need the clearance or authority from the GPPB as long as it does not run counter to the provisions of RA 9184 and its IRR. NPM As represented, the GA, as established pursuant to RA 1884, is mandated, among others, to design, develop, manufacture, repair, procure, stockpile, and allocate arms, mortars and other weapons and munitions without the necessity of obtaining any permits or licenses and devise ways and means for the efficient mobilization of civilian industry to augment the production of the arsenal in times of emergency. In line with such mandate, the GA has already established a database of credible suppliers after engaging them in numerous transactions for supply and delivery of various goods and services including data as to their legal, technical, and financial capabilities, indicating that a number of suppliers have already established a good standing with the GA. Moreover, it has adopted the policy of conducting Pre-Delivery Inspection (PDI) for all procured items in order to ensure compliance to specifications. Part of the PDI is a tour of the manufacturing facility of the supplier through which the GA inspectors establish the supplier’s technical capability. It contends that the supplier’s financial capability is proven with their compliance to the contracted delivery period. The GA further explains that it can seek the assistance of its Defense and Armed Forces Attaché and/or Consular Officials to validate some data or documents that could not be done on-line. GA is requesting, first, authority to conduct post-qualification to winning proponents/suppliers, as follows: (a) mandatorily for new suppliers; and (b) an online post-qualification sans plant visit for old suppliers with good standing; provided, however, that plant visit shall be conducted every five (5) years, in the event that they are determined to be the Lowest Calculated Bid (LCB); and second, that the PDI be mandatorily conducted on all procured equipment and raw materials to ensure that all deliveries are compliant to the GA’s specifications.

Post-Qualification: Certification of Domestic Preference
PEs cannot require a bidder to submit a Certificate claiming domestic preference as this is not an eligibility requirement and not among those expressly required and enumerated by the IRR. If a bidder wishes to claim domestic preference, it should include said Certification as among the documents in the Second Envelope, forming part of the Financial Component of the bid. A bidder waives its right to claim preference as a Domestic Bidder or Domestic Entity if it does not include said Certification as among the documents to be included in the Second Envelope comprising the Financial Component of the bid. NPM

AWARD OF CONTRACT

Award of Contract: Performance Security
Submission by the winning bidder of a Performance Security in the form of a personal check after the signing of the contract could be considered as a failure to post the Performance Security in the required form under §39.2 of the IRR and in the required period for posting under § (b) of the IRR. §4.1.5 of the Guidelines provides that the refusal or failure of a contractor to post the required Performance Security within the prescribed period is one of the grounds for blacklisting. NPM FACTS: Bidder participated and won in public bidding. Bidder posted its performance security in the form of a personal check of its authorized representative. Bidder eventually delivered the items, and was issued certificate of acceptance. Blacklisting complaint was filed against the bidder for using personal check. ISSUE: Whether there is valid ground for blacklisting.

Award of Contract: Higher Approving Authority
§37.3 of RA 9184 IRR recognizes that there are decisions on procurement activities that may require further approval by higher authority. In exercising the power to approve, the approving authority is likewise deemed to have the mandate to disapprove any recommendation on the matter. To interpret that the recommending official is only required to elevate those matters it favorably recommends weakens the mandate of the higher approving authority to take full jurisdiction and cognizance of the matter. NPM FACTS: BFP conducted public bidding for the procurement of fire trucks through its BAC, which was chaired by CSupt Bearis. The BAC recommended award of contract to the JV of Kolonwel and Hubei. CSupt Perez, the OIC-BFP Chief then, brought the BAC recommendation to the SILG, with a recommendation to disapprove the BAC’s decision because Kolonwel failed to comply with the EFPS filed Tax Return. DILG Legal Service issued Memorandum opining that in case the BFP Chief disapproves the BAC Resolution, said decision need not be elevated to SILG since what is required to be elevated is a decision seeking “further approval”. ISSUE: Whether the HOPE is required to elevate the BAC Recommendations for “further approval” only when he/she favorably recommends the BAC Recommendation.

Award of Contract: Authorization from the Sangguniang Bayan
Should the appropriation ordinance already contain in sufficient detail the project and cost of a capital outlay such that all that the local chief executive needs to do after undergoing the requisite public bidding is to execute the contract, no further authorization is required, the appropriation ordinance already being sufficient. But if the appropriation ordinance describe the projects in generic terms there is an obvious need for a covering contract for every specific project that in turn requires approval by the sanggunian. (Ex. “infrastructure projects,” “inter-municipal waterworks, drainage and sewerage, flood control, and irrigation systems projects,” “reclamation projects” or “roads and bridges”) NPM Whether there is a need to secure authority from the Sangguniang Bayan to enter into contract after the issuance of award to winning contractor or supplier; and Whether there is a need to secure an authority from the Sangguniang Bayan to implement or to enter into contract in all procurements even though they are specifically identified in the annual budget such as TRAININGS, OFFICE SUPPLIES, OTHER SUPPLIES, REPAIR & MAINTENANCE OF I.T. and OFFICE EQUIPMENT. there is a need for the Mayor to secure authorization from the Sangunian to enter into contracts. Such authorization may either be given through the Appropriation Ordinance or through a separate approval if the Appropriation Ordinance describes the project in generic terms as jurisprudentially elucidated in the Quisumbing case. Sec. 37 of the IRR explicitly makes the approval of the appropriate authority which in the case of local government units, is the Sangunian.

ALTERNATIVE METHODS OF PROCUREMENT

Alternative Methods of Procurement: NGO Participation
When there is no appropriation law or ordinance that earmarks an amount for projects to be specifically contracted out to NGOs, procuring entities cannot resort to Negotiated Procurement (NGO Participation) and use the Guidelines for the selection of the supplier, contractor, or consultant that will perform the project. PE cannot limit its selection process to NGOs when the same condition for a specifically earmarked budget is wanting. The general rule on public or competitive bidding provided in Section 10 of RA 9184 and its IRR will apply, and the selection of the supplier, contractor, or consultant for the project shall be open to all entities allowed under Sections 23 and 24 of the same law and rules. DA has partnered with several NGOs in the pursuit of its mandate. These NGOs undertake specific tasks as part of some of the programs of the DA where the particular NGOs have expertise, and the DA has no capability to perform. The budgets of these programs do not indicate that they shall be specifically contracted out to NGOs and are not specifically earmarked for projects to be contracted out to NGOs. Because of the conflicting interpretations on the matter, the DA has decided to put on hold the implementation of various programs NPM

Alternative Methods of Procurement: NGO Participation
Posting of Performance Security Regardless of the category of procurement for a contract where the NGO is engaged using Negotiated Procurement (NGO Participation) under Section of the IRR of RA 9184 and Section 6 of the Guidelines, the selected NGO is required to post a performance security upon signing of the MOA. NAPC will be contracting civil society organizations as third party monitoring group in support of the Bottom-Up Budgeting Implementation. The monitoring group is composed of organized-citizens groups that will ensure performance accountability by tracking and accounting performance of the project implementors and key stakeholders based on agreed targets. It is in this context that NAPC is inquiring whether the NGOs engaged are required to post performance security after the signing of the Memorandum of Agreement (MOA). NPM

Alternative Methods of Procurement: Negotiated Procurement (Procurement Agent)
FACTS: DOTC and LRTA entered into MOA for the former to undertake procurement for the LRTA Rehabilitation Projects. COA raised concern on the authority of DOTC-BAC to conduct procurement for LRTA. DOTC requested DOJ for opinion, but DOJ referred DOTC to GPPB. ISSUE: Whether LRTA may request DOTC to be its Procurement Agent. Where a PE has determined that it lacks the proficiency or capability to undertake its rehabilitation project, which need not be based solely on the PE’s failure to constitute its BAC, the PE may request another government agency to be its Procurement Agent as Section 53.6 of the IRR may also apply in cases where a BAC is validly constituted, but due to the number of bidding activities to be undertaken by the procuring entity; magnitude and complexity of the project; experience of the members of the BAC; location and situs of both the principal and the agent; and, other valid and reasonable circumstances, the procuring entity may not have the proficiency or capability to undertake the particular procurement activity. NPM

Alternative Methods of Procurement:
Negotiated Procurement (Procurement Agent) For multi-agency joint procurement Negotiated Procurement (Procurement Agent) under Section 53.6 of the IRR of RA 9184 may be adopted as a modality to address multi-agency bulk procurement. The member-offices may agree with the procurement agent to assign its officials as part of the Technical Working Group that will assist the BAC of the procurement agent in the procurement activity in order to ensure that the views of member-offices are taken into consideration. Each member-office has the authority to approve the award of contract that will be recommended by the BAC of the procurement agent, thereby maintaining the power to make the final decision on the process. whether the Constitutional Fiscal Autonomy Group (CFAG), composed of the Supreme Court, the Commission on Elections, the Civil Service Commission, the Commission on Audit, the Office of the Ombudsman, and the Commission on Human Rights, could jointly procure bullet-resistant vehicles for key officials of the CFAG. CFAG discussed the security issues faced by its key officials in a meeting, and is now evaluating the necessity and feasibility of procuring bullet-resistant vehicles for its key officials. Its initial findings show that there will be substantial reduction in the procurement cost if the vehicles are bought in bulk instead of holding separate procurements by each of the member-offices. Hence, CFAG is contemplating of doing a joint procurement and bidding process, for which purpose, a special Bids and Awards Committee (BAC) composed of members from the CFAF member-offices will be created. The CFAG checked the guidelines on Negotiated Procurement (Agency-to-Agency) and Negotiated Procurement (Procurement Agent) but found them to be inadequate to address its concerns. It is in this context that you are seeking guidance on the validity of a multi-agency joint procurement, and the procedure that must be undertaken therefor. NPM

Alternative Methods of Procurement: Negotiated Procurement (Two-Failed Bidding)
In the implementation of this alternative modality of procurement, Section of the IRR requires that the procuring entity shall select the successful offer on the basis of the best and final offer which meets: The procuring entity’s minimum technical requirements An offer that does not exceed the ABC. Failure of a bidder to satisfy either one will result in its disqualification. NPM whether SBMA may consider the proposals of suppliers who participated in the Negotiated Procurement (Two Failed Biddings) under Section 53.1 of the revised Implementing Rules and Regulations (IRR) of Republic Act No. (RA) 9184 for the procurement of One (1) Lot Services and Materials for the Dry-Docking and Repainting Works of Two (2) Marine Vessels of SBMA (Project), even if they do not conform to SBMA’s requirements. As represented, SBMA resorted to Negotiated Procurement under Section 53.1 of the IRR of RA 9184 after public bidding for the Project failed twice. The proposals received by SBMA were within the Approved Budget for the Contract (ABC), but do not conform to its requirements for standard payment, three (3) to six (6) months warranty, and posting of performance security. It is in this context that clarification on the above-mentioned issue is being sought.

FACTS: BI procured the services for the repair of its 3M Passport Readers through Direct Contracting with Secur Links as the exclusive authorized service center of 3M Phil. In the course of the project, Secur Links informed BI that there are no more available parts for the 3M Passport Readers of BI since 3M has withdrawn it from the market. 34/46 units to be repaired entail replacement of spare parts, while 12/46 require replacement of power supply only. Secur Links proposed to replace BI’s existing 34 units with new models at the cost of the repair (PhP6,015,450), and repair the remaining 12 units (PhP127,680). ISSUE: Whether BI’s resort to Direct Contracting is valid. PE can only resort to Negotiated Procurement under Section 53.1 (Two-Failed Biddings) of the IRR of RA 9184 for the procurement of the Project if the two-failed biddings were due to circumstances enumerated under Section 35 of the same IRR. If the failure of bidding is due to the declaration by the HOPE pursuant to Section 41 of the IRR , Negotiated Procurement (Two Failed Biddings) cannot be resorted to. NPM

Minimum Number of Contractors Engaging in Negotiation Section of the IRR of RA 9184 provides that where there has been a failure of public bidding for the second time, the BAC shall invite and engage in negotiations with a sufficient number of suppliers, contractors or consultants to ensure effective negotiations. The phrase “sufficient number of suppliers, contractors or consultant” refers to the minimum number of contractors that the PE must invite for the purpose of engaging in negotiation. Accordingly, if only one bidder responded to such invitation, the PE may proceed with the Negotiated Procurement as long as it has invited contractors of a number that it deems sufficient to ensure competition in accordance with Section of the IRR of RA 9184. whether the Department of Social Welfare and Development (DSWD) Bids and Awards Committee-I (BAC-I) could evaluate a lone contractor who responded to the invitation to participate in Negotiated Procurement under Section 53.1 (Two Failed Biddings) of the revised Implementing Rules and Regulations of Republic Act (RA) No the DSWD BAC-I resorted to Negotiated Procurement under Section 53.1 of the IRR of RA 9184 after the public bidding for the Design and Construction of Sewage Treatment Plant (STP) Facility and Installation of Overhead Water Tank and Distribution Lines Project (Project) at the Golden Acres, Tanay, Rizal, failed twice. However, DSWD BAC-I has also declared the Negotiated Procurement as “failed” when it did not obtain quotations from at least two (2) bidders, which they consider as “sufficient number of suppliers, contractors or consultants” under Section of the IRR of RA Another Negotiated Procurement was conducted, but only one (1) bidder responded to the invitation. NPM

Alternative Methods of Procurement: Adjustment of ABC after Two-Failed Bidding
After two failed biddings under Section 35 of the IRR, and the PE decides to resort to Negotiated Procurement (Two-Failed Biddings), Section of the IRR requires the BAC to conduct a mandatory review of the terms, conditions, specifications, and cost estimates; and, when necessary, increase the ABC provided that it is not more than twenty percent (20%) of the ABC for the last failed bidding. NPM

Alternative Methods of Procurement: Negotiated Procurement (Adjacent or Contiguous)
The determination and the decision to resort to the alternative modality of Negotiated Procurement (Adjacent or Contiguous) under Section 53.4 of IRR of RA 9184 is subject to the prior approval of the HOPE upon favorable recommendation of the BAC, provided that the conditions set forth therein are present. The phrase “adjacent or contiguous” refers to projects that are in actual physical contact with each other in the case of infrastructure projects. Thus, the physical connection of the two (2) projects should be actual and not superficial. The objective of this policy is to take the advantage of the economy and efficiency in engaging the contractor for the on-going project, and ensure that the two structures are soundly connected. NPM NIA Region 5 should be able to establish not only the existence of the conditions under Section 53.4 of the IRR of RA 9184, but also that the Buildings 1 and 2 are in actual physical contact of each other. The determination of the existence of the conditions warranting resort to any of the alternative methods of procurement falls solely within the ambit of the authority and accountability of the Procuring Entity.

Use of the Same Prices or Lower Unit Prices Section 53.4 of the IRR stating that the contractor/consultant shall use the same or lower unit prices as in the original contract, applies only to the scopes of work that are present in both projects and should not be interpreted as a qualification that only adjacent or contiguous projects that have the exact same scopes of work shall be acceptable. If there are no similar scope of work between the two projects, compliance with such condition is not necessary. The procuring entity, however, should ensure that the unit prices are lower than or equal to the prevailing market prices. NPM As represented, while the project for one lot of supply, delivery and installation of various equipment and site renovation is being done, it was determined that there is a need to supply, deliver, and install hot air plenum system to achieve an overall increase in cooling efficiency. For this reason, PITC is considering entering into a contract with the existing contractor through Negotiated Procurement (Adjacent or Contiguous) under Section 53.4 of the IRR of RA All the conditions for Negotiated Procurement (Adjacent or Contiguous) have been met, except for Section 53.4 (d) of the IRR. It appears that the new project is not included in the original scope of work so PITC cannot determine whether the contractor is using the same or lower unit prices. It is in this context that the above-mentioned request is being made. In addition, clarification is being requested on whether it is necessary for PITC to get a formal offer for the new lot from the contractor.

Submission of Offer by the Original Contractor Although the rules are silent as to the submission by the contractor of a formal offer for the adjacent/contiguous project, it is imperative that the original contractor submits an offer that is acceptable to the procuring entity as compliant with the terms and conditions the latter has adopted for the adjacent/contiguous project, in order to establish the basis for the new contract. NPM As represented, while the project for one lot of supply, delivery and installation of various equipment and site renovation is being done, it was determined that there is a need to supply, deliver, and install hot air plenum system to achieve an overall increase in cooling efficiency. For this reason, PITC is considering entering into a contract with the existing contractor through Negotiated Procurement (Adjacent or Contiguous) under Section 53.4 of the IRR of RA All the conditions for Negotiated Procurement (Adjacent or Contiguous) have been met, except for Section 53.4 (d) of the IRR. It appears that the new project is not included in the original scope of work so PITC cannot determine whether the contractor is using the same or lower unit prices. It is in this context that the above-mentioned request is being made. In addition, clarification is being requested on whether it is necessary for PITC to get a formal offer for the new lot from the contractor.

Alternative Methods of Procurement: Negotiated Procurement (Agency-to-Agency)
Non-chartered GOCCs as Servicing Agency Non-chartered GOCCs may be engaged as Servicing Agency by procuring entities in contracts procured using Negotiated Procurement (Agency-to-Agency) under Section 53.5 of the IRR of RA 9184 starting 13 November 2013, subject to the requirements provided in the Guidelines. GPPB Resolution No removes the disqualification of non- chartered GOCCs from being engaged as Servicing Agency for projects procured through Negotiated Procurement (Agency-to-Agency). NPM requesting for exemption from the rule disqualifying non-chartered Government Owned and/or Controlled Corporations (GOCCs) from being engaged as Servicing Agency through Negotiated Procurement (Agency-to-Agency) under Section 53.5 of the revised Implementing Rules and Regulations (IRR) of Republic Act No. (RA) 9184. As represented, DBP Leasing Corp. (DLC) is a non-chartered GOCC, i.e., a GOCC incorporated under Batas Pambansa Blg. 68, otherwise known as the Corporation Code of the Philippines, and as such, is not qualified as a Servicing Agency under Section 53.5 of the IRR of RA 9184 and the Implementing Guidelines on Agency-to-Agency Agreements (Guidelines). DLC operates not only to engage in its own business, but also to contribute to the growth of the national economy and the upliftment of society as a whole. In pursuit of its business, it needs the authority to engage other government agencies by way of Negotiated Procurement (Agency-to-Agency). It is in this context that the above-mentioned request is being made. Issued by the Government Procurement Policy Board (GPPB) through GPPB Resolution No dated 31 May 2007. GPPB Resolution No dated 10 May 2013, which amends Section 53.5 of the IRR of RA 9184 and its Guidelines by removing the disqualification of non-chartered GOCCs from being engaged as Servicing Agency for projects procured through Negotiated Procurement (Agency-to-Agency), was published at the Manila Times on 12 November 2013 and took effect on 13 November 2013.

FACTS: PITC Pharma has been given the mandate to be the central agency for procurement of all agencies’ requirements for drugs and medicines. It claims that it should be exempt from Performance Security ISSUE: Whether PITC Pharma is exempt from posting Performance Security. PITC Pharma, Inc. (PPI) has been given express mandate to be the central/lead agency for procurement of all government agencies’ requirements for drugs and medicines pursuant to RA 9501. However, RA 9501 does not exempt it from the procurement policies, rules and regulations established under RA 9184 and its IRR. PPI is not exempt from posting a Performance Security under §39 of RA 9184 and its IRR when entering into a contract with other government agencies and the PE requires such security. NPM

SSS plan to procure printing services for some of its forms through public bidding. Guidelines on the Procurement of Printing Services provides that … Accountable Forms and Sensitive High Quality/Volume Requirements should be sourced from Recognized Government Printers (RGPs), through Negotiated Procurement under Section 53.5 If SSS plans to procure printing services for some of its forms through public bidding, it has to identify whether said forms are considered Accountable Forms, and therefore subject to the Guidelines. If SSS determines that said forms are not Accountable Forms, printing services for its procurement may be engaged through Competitive Bidding under RA 9184 and its IRR. NPM

Since it appears that none of the conditions under Section 50 of the IRR of RA 9184 are present in the procurement of CTC from BIR, Direct Contracting which is the proposed procurement modality of the Province of Davao Del Sur is not tenable. For the procurement of CTC, the more appropriate method to be used is A to A rather than Direct Contracting In cases where procurement from another agency of the government is more efficient and economical, Negotiated Procurement under Section 53.5 (Agency-to-Agency Agreements) may be resorted to. This rule allows a government entity to procure from another government entity without need of public bidding, subject to compliance with the prescribed conditions and procedures under existing rules and the Guidelines on Agency-to-Agency Agreements (Guidelines). NPM

Alternative Methods of Procurement: Negotiated Procurement (Emergency Cases)
GPPB Resolution No GPPB Resolution No dated 14 November 2013, has granted authority to all concerned government procuring entities to procure goods and infrastructure projects, for the purpose of providing rescue, recovery, relief, and/or rehabilitation efforts for, and to continue to provide basic services to victims in areas affected by Typhoon Yolanda, through Negotiated Procurement (Emergency Cases) under Section 53.2 of the IRR of RA 9184 with an ABC of at least Five Hundred Million Pesos (PhP500,000,000.00) for the duration of the State of Calamity until lifted by the President pursuant to Proclamation No. 682, Series of 2013. The same GPPB Resolution requires all concerned procuring entities to submit to this office a list of all transactions covered by the grant of authority at the end of every month. NPM seeking approval from the Government Procurement Policy Board (GPPB) to authorize the Province of Leyte (Province) to procure essential office equipment and supplies in Cebu or Metro Manila through Negotiated Procurement (Emergency Cases) as provided in Section 53.2 of the revised Implementing Rules and Regulations (IRR) of Republic Act No. (RA) 9184, and extend the contracts of its existing service provider for an additional period of twelve (12) months. As represented, the efforts of the Province to get back to normal operations and deliver the much needed services are hampered by the lack of basic office equipment and supplies in many of its provincial government offices. In addition, majority of commercial establishments in Tacloban City remain closed such that sourcing of supplies and equipment poses a big challenge for the day-to-day operations of the Province. It is in this context that the above-mentioned authority is being sought from the GPPB.

Alternative Methods of Procurement: Negotiated Procurement (Emergency Cases)
GPPB Resolution No The grant of authority in GPPB Resolution No is limited to the use of Negotiated Procurement under Section 53.2 of the IRR of RA Procurement activities for contracts amounting to at least Five Hundred Million Pesos using alternative method of procurement other than Negotiated Procurement under Section 53.2 of RA 9184 and its IRR are still subject to the requirement for prior GPPB approval pursuant to Section 4 of EO No. 423, s. 2005, even if the purpose is to provide rescue, recovery, relief, and/or rehabilitation efforts for, or to continue to provide basic services to victims in areas affected by Typhoon Yolanda. NPM Whether Resolution No includes in its coverage the request of the Department of Public Works and Highways (DPWH) Secretary, authorizing the DPWH Secretary to conduct Negotiated Procurement under Section 53 of Republic Act No. (RA) 9184 and its revised Implementing Rules and Regulations (IRR), without securing the opinion of the GPPB and approval from the National Economic and Development Authority (NEDA) Director-General, pursuant to the requirements under Executive Order (EO) No. 423, S EO No. 423, s. 2005, particularly Section 4 thereof, has been amended by EO No. 645, s The amendment transferred the authority to approve from the NEDA Director-General to the GPPB.

Alternative Methods of Procurement: Direct Contracting
FACTS: BI procured the services for the repair of its 3M Passport Readers through Direct Contracting with Secur Links as the exclusive authorized service center of 3M Phil. In the course of the project, Secur Links informed BI that there are no more available parts for the 3M Passport Readers of BI since 3M has withdrawn it from the market. 34/46 units to be repaired entail replacement of spare parts, while 12/46 require replacement of power supply only. Secur Links proposed to replace BI’s existing 34 units with new models at the cost of the repair (PhP6,015,450), and repair the remaining 12 units (PhP127,680). ISSUE: Whether BI’s resort to Direct Contracting is valid. Since there are other Passport Readers available in the market apart from that manufactured by 3M Corporation, Direct Contracting cannot be utilized for the acquisition of brand new passport readers. Even though 3M Passport Reader is proprietary in nature and can be obtained from the proprietary source, there may be other Passport Readers in the market, which are likewise proprietary in nature that can be obtained. NPM

Alternative Methods of Procurement: Direct Contracting
Assuming that only one supplier has been given a certification by PTRI for being compliant to RA 9242, it does not automatically provide a basis to resort to direct contracting. PE has to first provide sufficient justification and proof of the following(Section 50): Procurement of goods of proprietary nature which can be obtained only from the proprietary source When the procurement of critical components from a specific supplier is a condition precedent to hold a contractor to guarantee its project performance, in accordance with the provisions of its contract, or Those sold by an exclusive dealer or manufacturer which does not have sub-dealers selling at lower prices and for which no suitable substitute can be obtained at more advantageous terms to the government. NPM CSC MC 5, Ser identifies Asia Textile Mills (ASIATEX) as having been certified by the Philippine Textile Research Institute (PTRI) to be compliant with RA 9242 or the Act Prescribing the Use of the Philippine Tropical fabrics for Uniforms of Public Officials and Employees and for Other Purposes. However after verification, BOC was informed by PTRI has not issued any certification for RA 9242 to any fabric manufacturer/supplier. Assuming that only one supplier has been given such certification by PTRI, it does not automatically provide a basis to resort to direct contracting.

Alternative Methods of Procurement: Extension of Lease of Office Space
PE may extend the duration or effectivity of contracts of lease of office space that are about to expire, for a period not exceeding one (1) year, as an emergency measure to maintain status quo in its operations and to avoid interruption of such services that are essential, indispensable, or necessary to support the operations of PE. In the event of failure of bidding for the new contract, PE may further extend the duration of the contract provided that the aggregate period of all extensions shall not exceed one (1) year in accordance with Section 4.1 of the Guidelines. Under Section 5.2 of the Guidelines, if the proposed contract extension exceeds six (6) months, the HOPE shall immediately report to the GPPB through its TSO in writing of PCSO’s intent to extend beyond six (6) months. Can the PCSO extend/renew the lease contracts to avoid disruption in the service delivery and operations of our Branch Offices? If yes, how long should the extension be? In the event of failure of bidding, are we allowed to renew extension until the time that a contract is entered into? NPM

Alternative Methods of Procurement: Direct Transaction in Lease of Office Space
There are only two modalities that would permit direct transaction with a building owner without need of inviting other owners, i.e., Negotiated Procurement (Emergency Cases) under Section 53.2 and Negotiated Procurement (Take Over of Contracts) under Section 53.3. However, PE may resort to any of the alternative modalities if it cannot establish the conditions allowing the afore-mentioned modalities of procurement provided that it can establish and justify the existence of the conditions warranting its use. NPM whether the Home Development Mutual Fund Calapan Branch (Pag-IBIG) can directly transact with a compliant building owner without need of inviting other prospective lessors in relation to the procurement of lease of office space for its Palawan Branch. As represented, the afore-mentioned request is being made based on the following circumstances: Two (2) bid failures have already transpired resulting to lost time and resources for the government; Its existing contract has already expired since 30 June 2011, and is being renewed on a monthly basis; It will be implementing a bigger organizational structure and staffing pattern early next year, which will require a 300 square meter office, as compared to its existing rented office space of 106 square meters; Pag-IBIG already discussed with the Provincial Government of Palawan the possibility of engaging the latter for the office requirements, but the latter has not given its commitment when it could comply with all the requirements under an Agency-to-Agency Agreement.

Alternative Methods of Procurement: Repeat Order
ISSUE: Whether post-qualification is required in Repeat Order. Repeat Order under Section 51 of RA 9184 does not require post-qualification. The phrase “subject to post-qualification process described in the Bidding Documents”, as stated in the provision refers to Competitive Bidding and not to Repeat Order. NPM

Alternative Methods of Procurement: By Administration
PSHS seeks clearance and guidance on the execution of infrastructure projects through administration. Philippine Science High School - Ilocos Region Campus (PSHS-Ilocos) has programmed and funded 2014 infrastructure projects, namely, Construction of Road Networks, Parking Area, and Drainage Canals (Phase II) and Construction of the Multi-purpose Gymnasium, with allocation of Six Million and Four Million Pesos, respectively. In order to optimize its budget resources, PSHS-Ilocos is considering executing said projects by administration considering that there are adequate technical capabilities in the organization. PSHS-Ilocos intends to procure the materials through competitive bidding and engage the services of available manpower with the municipality, especially those given skills training in collaboration with the Technical Education and Skills Development Authority (TESDA) and the local government of San Ildefonso, Ilocos Sur. Clearance from GPPB is not a requirement in implementing projects by administration Undertaking infrastructure projects by administration is a decision that appropriately falls within the discretion and responsibility of the procuring entity concerned. In the same vein, it falls upon the same procuring entity to ensure that the conditions and requirements established in the Guidelines are complied with. NPM

Alternative Methods of Procurement: LSB for the Procurement of Catering Services
The National Industry Cluster Capacity Enhancement Project (NICCEP) Investment Conference is to be held at the SMX Convention Center, SM Lanang Premiere, Davao City. The management of the SMX Convention Center only allows particular service providers included in its list of accredited caterers to provide Catering Services for the events held in their venue. Considering this limitation, the DTI-RO XI seeks opinion on the applicability of Limited Source Bidding as the mode of procurement for the engagement of catering services. Catering Services does not involve highly specialized requirements, and is undoubtedly not a major plant component. Limited Source Bidding cannot be resorted to in the procurement of Catering Services. Competitive Bidding should be resorted to in the acquisition of the contemplated service. NPM

Alternative Methods of Procurement: LSB for the Procurement of Utility Motor Vehicle
DA RO2 planned to purchase of brand new utility motor vehicle through lease purchase or lease-to-own contracts; and the propriety of resorting to LSB as the mode of procurement to acquire the said vehicle. Section 49 of the IRR provides that LSB may be resorted to only under two possible conditions: procurement of highly specialized types of goods and consulting services which are known to be obtainable only from a limited number of sources; and procurement of major plant components In order to apply LSB on the subject procurement, PE should first establish that the motor vehicle sought to be procured is either a highly specialized type of goods or a major plant component; otherwise, Competitive Bidding shall apply. NPM

CONTRACT IMPLEMENTATION

Contract Implementation: Notice to Proceed
PE cannot forego the issuance of the Notice to Proceed (NTP) for the procurement of goods and services based on the claim that the issued Purchase Order or Job Order already contains the conforme of the winning supplier and indicates the delivery date, which in effect authorizes the supplier to proceed and deliver the required goods and services. RA 9184, having been enacted for the advancement of public welfare, contains mandatory provisions. Failure to follow such rules render the proceeding to which it relates illegal and void, or the violation of which makes the decision rendered therein invalid. NTP together with the approved contract should be issued by PE to the successful bidder within three (3) calendar days from the date of the approval of the contract. NPM

Contract Implementation: Advance Payment
Advance payment in case of infrastructure projects may be granted by the procuring entity upon compliance with the conditions provided in Section 4 of the Guidelines and only for the purpose of mobilization. Thus, if the contractor has already mobilized its equipment and has commenced with the required works under the contract, advance payment can no longer be provided as doing so already negates the very purpose of granting such privilege to the contractor. NPM Design and Construction/Improvement of Misamis Occidental Provincial Capitol Building (Project). As represented, as early as 14 April 2011, the Honorable Governor inquired with the National Historical Institute (NHI) whether the Provincial Capitol Building is included in the list of national historic sites and structures, and requested for the approval of plans to improve and develop the same. However, it was only on 11 November 2011 that the Provincial Government received a reply, urging the Provincial Government to preserve the building and integrate it into the new development of the government center without denying its historic features. An award of contract was nonetheless made on 28 December 2011. On 17 February 2012, acting upon the Honorable Governor’s request for the ratification of the contract for the Project, the Sangguniang Panlalawigan issued Resolution No ratifying said contract. The Notice to Proceed was thereafter issued on 22 February 2012. The NHCP, in a letter dated 20 February 2012, asked the Provincial Government to stop the demolition of the side wings of the Provincial Capitol Building and preserve the neo-classic edifice. On 29 March 2012, the National Commission for Culture and Arts (NCCA) suggested the restoration of the entire Provincial Capitol Building, including its two wings, and recommended the integration of the old and new structure as one scientific and acceptable approach to help save the building. The same letter of the NCCA stated that since Republic Act No was not considered in the approved contract and its terms of reference (TOR) in the renovation of the Provincial Capitol Building, a variation order and a reworked TOR were deemed necessary for pushing through with the Project.

Contract Implementation: Warranty Security for Janitorial Services
Interpretation and application of the clauses of the PBDs are to be read together and in accordance with RA 9184 and its IRR. GCC Clauses 17.1 to 17.5, should be read in consonance with Section 62.1 of the IRR of RA 9184 The requirement for the posting of warranty security under Section 62.1 of the IRR of RA 9184 applies only in the case of contracts involving expendable and non-expendable supplies. It excludes services from its application. NPM May warranty security requirement under Clause 17.3 of the General Conditions of Contract in the Philippine Bidding Documents (PBDs) for the Procurement of Goods be dispensed with in the procurement of security and janitorial services.

Contract Implementation: Variation Order
Deletion of Work Through Variation Order Section 1.1 of Annex E of the IRR of RA 9184 provides that the scope of works shall not be reduced so as to accommodate a Positive Variation Order. In addition, the Manual of Procedures for the Procurement of Infrastructure Projects provides that the “addition/deletion of works should be within the general scope of the project as bid and awarded, and the deletion of the work should not affect the integrity and usefulness of the structure.” It should be satisfactorily shown that the suggested deletion will not affect the integrity and usefulness of the structure, why it is no longer necessary and was not meant to accommodate a Positive Variation Order. It is also necessary to verify whether the claim was made within the applicable time required under Section 1.5 of Annex E of the IRR of RA 9184. NMP whether the whole scope of work on slope protection may be deleted by way of a Variation Order. the Office of the City Engineer of Zamboanga requested for approval for a Change Order for the Construction of Health Center at Pasonanca, Zamboanga City (Project) with a contract amount of P2,294, The requested Change Order consists of Negative and Positive Variation in the same amount of P205, As such, the resulting cumulative positive variation order is 0%. The proposed Negative Change Order, i.e., the deletion of the slope protection, was explained as necessary in order to suit actual field condition, while the proposed Positive Change Order covering the increase in quantities for embankment, reinforcing steel, structural concrete, masonry, and painting works for the Health Center was due to change in the designed floor finish elevation.

PROTEST MECHANISM

Protest Mechanism: Rationalized Protest Fee
FACTS: PE has an ongoing contract for consulting services. Consultant is requesting time extension with corresponding additional remuneration. ISSUE: Whether contract extension with remuneration may be approved. The rules on Protest, particularly §55.3 of the IRR, which requires that the verified position paper should be accompanied by a non-refundable protest fee, has been recently amended by the Government Procurement Policy Board (GPPB) through GPPB Resolution No to rationalize the amount of such fee. The rationalization of the protest fee amount is perceived to strike a balance between the institution and filing of valid protests, and the deterrence of filing vexatious and frivolous ones. NPM

Protest Mechanism: Protest Fee
FACTS: PE has an ongoing contract for consulting services. Consultant is requesting time extension with corresponding additional remuneration. ISSUE: Whether contract extension with remuneration may be approved. The posting of a surety bond as a form of non-refundable protest fee should not be countenanced. A surety bond is a contractual arrangement between the surety, the principal and the obligee whereby the surety agrees to protect the obligee if the principal defaults in performing the principal’s contractual obligations. This is not the rationale and purpose for which the protest mechanism and fee are required under the Law and rules; the purposes being to deter filing of frivolous complaints and answer for the costs of the action. NPM

Remedy Pending Protest
Protest Mechanism: Remedy Pending Protest What are remedies available to a bidder after the Head of the Procuring Entity (HOPE) disapproved the Bids and Awards Committee (BAC) resolution recommending the contact award in their favor. Himex was informed by the BAC of West Visayas State University Medical Center (WVSUMC) that its Board of Regents disapproved their recommendation to award to Himex the contract for the General X-ray Machine and Radio-Fluoroscopy X-ray Machine with Direct Radiology System, without providing the reasons for such disapproval. Although Himex has already filed a request for reconsideration on the decision and inquiry on the ground/s of the disapproval, the HOPE has not resolved the same even after the lapse of two (2) weeks. Only upon the final resolution of the protest can the aggrieved party be said to have exhausted the available remedies at the administrative level. In other words, only then can he viably avail of the remedy of certiorari before the proper courts. Non-compliance with this statutory requirement, under Section 58 of R.A. No. 9184, constitutes a ground for the dismissal of the action for lack of jurisdiction.” (Dimson (Manila), Inc. and Phesco, Inc. v. Local Water Utilities Administration) Pending a request for reconsideration or protest, the aggrieved bidder must await its resolution, unless it can establish that there is no other plain, speedy, and adequate remedy in the ordinary course of law then extraordinary remedies of certiorari and mandamus may be resorted to. NPM

BLACKLISTING

Blacklisting: Applicability
Section 2 of the Guidelines expressly provides that the Blacklisting Order shall apply to all the JV partners as they are treated collectively as one bidder. The members of the JV expectedly intend themselves to be jointly and severally responsible or liable for the obligations and civil liabilities actually incurred by the particular joint venture. NPM FACTS: JV of Company U and Company P was declared LCB. During Post-qualification, PE discovered that one of the forms submitted was falsified. PE conducted blacklisting process. ISSUE: To what extent will the blacklisting be imposed.

Affiliate Company Affiliate/sister company of a blacklisted bidder may only be considered as blacklisted upon determination by the procuring entity that the blacklisted entity has that degree of relationship or extent of representation mentioned in Section 2 of the Guidelines existing in the affiliate/sister company. If the blacklisted entity and its affiliate/sister company are sole proprietorships owned by the same person, the blacklisting order applies to the affiliate/sister company since a sole proprietorship does not have a separate juridical nor legal personality from its owner, and it is thru the individual doing business under the name and style of the sole proprietorship who would in effect be blacklisted under the Guidelines. In this regard, the blacklisted person remains blacklisted regardless of the name and number of sole proprietorships registered under her name, and shall not be allowed to participate in the bidding of all government projects during the period of disqualification unless delisted as provided for in the Guidelines. NPM Section 2 of the Uniform Guidelines for Blacklisting of Manufacturers, Suppliers, Distributors, Contractors and Consultants (Guidelines) dictates that a person/entity that is blacklisted by a procuring entity and/or included in the GPPB Consolidated Blacklisting Report shall not be allowed to participate in the bidding of all government projects during the period of disqualification unless it is delisted as provided for in the Guidelines. The same prohibition applies to a joint venture or consortium which is blacklisted or which has blacklisted member/s and/or partner/s, as well as a person/entity who is a member of a blacklisted joint venture or consortium. In the case of corporations, a single stockholder, together with his/her relatives up to the third civil degree of consanguinity or affinity, and their assignees, holding at least twenty percent (20%) of the shares therein, its chairman and president, shall be blacklisted after they have been determined to hold the same controlling interest in a previously blacklisted corporation or in two corporations which have been blacklisted; the corporations of which they are part shall also be blacklisted. Issued through GPPB Resolution , dated 20 August 2004, and published in the Official Gazette on 30 November 2004.

Forfeiture of Performance Security Prior to Award of NOA Section 7 of the Uniform Guidelines for Blacklisting states that if the Blacklisting Order is issued prior to the date of the NOA, the blacklisted entity shall not be qualified for the award, and such project or contract shall be awarded to another bidder. The performance security posted by a bidder who has been issued a Blacklisting Order prior to the issuance of NOA should not be forfeited, but instead returned in accordance with the principle of solutio indebiti under Article 2154 of the Civil Code of the Philippines. NPM Philippine Health Insurance Corporation Region VIII (PhilHealth) issued a Notice of Award (NOA) last 18 July 2013 to HLYC Trading, which thereafter posted a performance security. However, PhilHealth is unaware that the Office of the Ombudsman issued a blacklisting order against HLYC Trading effective 14 June 2013 in relation to a procurement project of the former. Considering that the NOA issued by PhilHealth has no force and effect, HLYC Trading has no obligation to post a performance security in favor of the procuring entity because there is no contract performance to guarantee in the first place. In such case, rather than forfeiting the performance security, the same may be deemed to have been mistakenly posted, and should thus be returned to HLYC Trading in accordance with the principle of solutio indebiti under Article 2154 of the Civil Code of the Philippines.

THANK YOU!! Contact us at: Unit 2506 Raffles Corporate Center
F. Ortigas Road, Ortigas Center Pasig City, Philippines 1605 TeleFax: (632) to 44

GPPB UPDATES AND LATEST ISSUANCES January 2013 – May 2014

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GPPB UPDATES AND LATEST ISSUANCES January 2013 – May 2014

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