BIDDING PROCEDURES FOR THE PROCUREMENT OF GOODS AND

BIDDING PROCEDURES FOR THE PROCUREMENT OF GOODS AND INFRASTRUCTURE PROJECTS CAPACITY DEVELOPMENT DIVISION GOVERNMENT PROCUREMENT POLICY BOARD TECHNICAL SUPPORT OFFICE (GPPB-TSO) 1

GENERAL MODE OF PROCUREMENT v Procurement is done through Competitive Bidding. (Sec. 10 RA 9184; NPM 67 -2012) v Exception: Alternative Procurement. Methods of 2

COMPETITIVE BIDDING WHAT IS COMPETITIVE BIDDING? v It is a method of procurement which is open to participation by any interested party and which consists of the following processes: eligibility screening of prospective bidders, evaluation of bids, postqualification, and award of contract. (Section 5(e) of RA 9184 and its IRR) 3

COMPETITIVE BIDDING Garcia vs. Burgos (291 SCRA 546) “By its nature and characteristics, a competitive public bidding aims to protect public interest by giving the public the best possible advantages through open competition” COA vs. RTC-NCRJR (GR NO. 85285, 7/7/89) “Purpose is to avoid/preclude suspicion of favoritism and anomalies in the execution of public contracts. ” 4

COMPETITIVE BIDDING v 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 9184 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 47 -2013) 5

STANDARDIZED BIDDING PROCEDURE FOR GOODS AND INFRA Pre-Procurement Conf. Advertisement Pre-Bid Conference Submission of Bids Opening of 1 st Env. - Eligibility Docs & Technical Proposal Opening of 2 nd Envelope – Financial Proposal Bid Evaluation & Ranking Post-qualification Award of Contract 6

I. PRE-PROCUREMENT CONFERENCE v Purpose: Determine readiness of procurement v Conducted prior to advertisement/posting of the Invitation to Bid v Mandatory for projects with ABC above Ph. P 2 M (goods), 5 M (infra projects), 1 M (consulting services) v Attended by the following: a) BAC b) BAC Secretariat c) TWG d) Consultants e) End-user unit/Other officials 7

REFERENCE TO BRAND NAMES Section 18 of RA 9184 and its IRR v Applicable only to procurement of goods v Specifications should be based on relevant characteristics and performance requirements. v Prohibition includes reference to country of origin pursuant to Section 43. 1. 1 of the IRR of RA 9184. - 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 22 -2013) 8

II. ADVERTISEMENT/POSTING OF THE INVITATION TO BID Importance: v Signals the start of the bidding process. Procurement process should be made within 3 months starting from opening of the bids until awarding of contract. (Sec. 38. 1 IRR) v Signals the availability of the bidding documents to the prospective bidders. (if not mentioned in the Invitation to Bid) (Sec. 17. 3 IRR) 9

II. ADVERTISEMENT/POSTING OF THE INVITATION TO BID v At least once in one (1) newspaper of general nationwide circulation, which has been regularly published for at least two (2) years before advertisement date. v Not required for projects with ABC of 2 M and below (Goods) or 5 M and below (Infra). v Posted continuously for 7 calendar days – – Phil. GEPS – website of the PE, if any. – website of IFI, if applicable. – At any conspicuous place in the premises of the PE. 10

II. ADVERTISEMENT/POSTING OF THE INVITATION TO BID Medium Above 2 M/5 M and below Newspaper of General Nationwide Circulation � Phil. GEPS website � � PE’s Website, if available � � Conspicuous Place � � Website prescribed by the foreign government/foreign or international funding institution, in case of foreign funded procurement 11

III. PRE-BID CONFERENCE v Forum where the PE’s representatives & the bidders discuss the different aspects of the project v Mandatory – ABC 1 M or more; Discretionary – ABC less than 1 M v Held at least 12 cd before deadline for bid submission. May be held at least 30 cd considering the following: a) Method, nature, and complexity of contract b) International participation is more advantageous v At the option of procuring entity, only bidders who purchased bid documents are allowed to attend or ask questions 12

III. PRE-BID CONFERENCE v Section 22 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. v 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 49 -2013) 13

III. 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 Ph. P 1 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 48 -2013) 14

CLARIFICATION OF BIDDING DOCUMENTS v Supplemental/Bid Bulletins– issued by BAC to answer requests for clarification (query submitted 10 c. d. before deadline) or interpretation, and upon BAC’s initiative to clarify or modify any provision of Bidding Docs. (at least 7 c. d. before deadline for bids). v Posted in Phil. GEPS and PE’s website v Bidders who have submitted bids before issuance of Supplemental/Bid Bulletin must be informed in writing and allowed to modify or withdraw their respective bids 15

CLARIFICATION OF BIDDING DOCUMENTS v § 22. 5. 2 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. v 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. v Supplemental/Bid Bulletins must be posted in the Phil. GEPS and at the PE’s website, in order to address aspects of competition and transparency. (NPM 46 -2013) 16

ADDITIONAL REQUIREMENTS v PE cannot compel prospective bidders or the winning bidder to submit or comply with requirements not initially provided in the Bidding Documents or through any Supplemental/Bid Bulletin issued by the PE for the project that must be posted at the Phil. GEPS’ and the PE’s website. v If no Supplemental/Bid Bulletin is issued to reflect changes in the Bidding Documents, or even if the same was issued but not posted at the Phil. GEPS’ and PE’s websites, the original provisions contained in the Bidding Documents remain and the prospective bidder, including the winning bidder cannot be compelled to abide or comply with the changes made by the PE. (NPM 24 -2013) 17

IV. SUBMISSION AND RECEIPT OF BIDS v Two-Envelope System � 1 st Envelope – Eligibility Requirements and Technical Component � 2 nd Envelope – Financial Component v Submitted to the BAC on the date, time, and place specified in the Invitation to Bids submitted after the deadline should not be accepted. v Date of submission should not be later than the following period from the last day of posting of the Invitation to Bid. Category Maximum Period (cd) Goods 45 Infra (50 M and below) 50 Infra (above 50 M) 65 18

IV. SUBMISSION AND RECEIPT OF BIDS v Bidders are no longer required to submit a written LOI together with their application for eligibility as previously required in IRR Part A of RA 9184. v Bidders only have to submit their bids not later than the deadline for the submission and receipt of bids, which can be extended or rescheduled together with the opening of bids as provided in Section 29 of the IRR of RA 9184. (NPM 552013) 19

IV. SUBMISSION AND RECEIPT OF BIDS v 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 54 -2013) 20

IV. SUBMISSION AND RECEIPT OF BIDS v Procuring entity cannot validly and legally refuse to accept a bid submitted before the deadline for the submission indicated the Invitation to Bid or Request for Quotation. v 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 67 -2013) 21

V. OPENING AND EVALUATION OF 1 ST ENVELOPE CONTENTS: 1. Eligibility requirements 2. Bid Security 3. Technical specifications (Goods) / Project requirements (Infra) 4. Omnibus sworn statement v. Non-inclusion in blacklist v. Authenticity of documents v. Verification authority 22

V. OPENING AND EVALUATION OF 1 ST ENVELOPE CONTENTS (continuation): 4. Omnibus Sworn Statement v. Signatory’s authority v. Disclosure of relations v. Responsibilities of bidders v. Labor laws and standards v. Non-payment (directly or indirectly) any commission, amount, fee, or any form of consideration in relation to any procurement project or activity 23

V. OPENING AND EVALUATION OF 1 ST ENVELOPE v Section 30 requires that the preliminary examination of bids be conducted by merely checking for the presence or absence of documentary requirements using a nondiscretionary “pass/fail” criterion. v 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 542013) 24

V. OPENING AND EVALUATION OF 1 ST ENVELOPE v 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 69 -2013) 25

ELIGIBILITY REQUIREMENTS GOODS INFRASTRUCTURE Class A Documents 1. DTI/SEC/CDA Registration 2. Mayor’s permit 3. Tax clearance per Executive Order 398, series of 2005, as finally reviewed and approved by the BIR. 4. Statement of ongoing contracts. 5. Statement of SLCC 26

ELIGIBILITY REQUIREMENTS GOODS INFRASTRUCTURE Class A Documents 5. Audited financial statement 5. PCAB license and registration. 6. NFCC 6. Audited financial statement 7. NFCC Class B Document JVA or notarized statement from the partners that they will enter into joint venture if awarded the contract. 27

MAYOR’S PERMIT v Mayor’s Permit allows an entity to legally perform the requirements and obligations of the project and the resultant contract. v It is therefore necessary for the BAC to determine whether the Mayor’s Permit for construction business issued to the construction company likewise authorizes it to engage in the business of supplying dump trucks. (NPM 36 -2013) 28

TAX CLEARANCE Tax Clearance is now included as part of the Class “A” legal eligibility documents to be submitted during the opening of bids. (GPPB Resolution No. 21 -2013) 29

TAX CLEARANCE v 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. v Hence, submission of tax clearance of the previous year and application for tax clearance cannot be considered as compliance. (NPM 02 -2013) 30

TAX CLEARANCE v 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. 31

TAX CLEARANCE Submission of Provisionary Tax Clearance is not considered as sufficient compliance for bidding purposes. (GPPB Resolution No. 33 -2013) 32

CREDIT LINE COMMITMENT v. Credit Line Commitment shall no longer be accepted as an alternative to the prospective bidder’s computation of Net Financial Contracting Capacity (NFCC). (Resolution 20 -2013) 33

STATEMENT OF ON GOING AND COMPLETED CONTRACTS v “Statement of the prospective bidder of all its ongoing government and private contracts, including contracts awarded but not yet started, if any, whether similar or not similar in nature and complexity to the contract to be bid, within the relevant period as provided in the Bidding Documents; and v Statement identifying the bidder’s single largest completed contract similar to the contract to be bid, except under conditions provided for in Section 23. 5. 1. 3 of this IRR, within the relevant period as provided in the Bidding Documents in the case of goods. v All of the above statements shall include all information required in the PBDs prescribed by the GPPB. ” (Resolution 29 -2012) 34

PCAB LICENSE v 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. v 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 71 -2013) 35

ELIGIBILITY REQUIREMENTS FOREIGN BIDDERS In the case of foreign bidders, the foregoing eligibility requirements under Class “A” Documents may be submitted: v Equivalent documents issued by country v Accompanied by English translation certified by appropriate embassy or consulate in the Philippines 36

ELIGIBILITY REQUIREMENTS FOREIGN BIDDERS v Foreign bidders may substitute eligibility documentary requirements with the appropriate equivalent documents in their country. v Only upon actual determination and confirmation of this equivalence through post qualification by the BAC 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 42 -2013) 37

ELIGIBILITY REQUIREMENTS FOREIGN BIDDERS v TAX CLEARANCE FOREIGN BIDDERS 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 3 -2005, 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 02 -2013) 38

ELIGIBILITY REQUIREMENTS FOR GOVT. CORPORATE ENTITIES GOCCs may be eligible to participate only if they can establish that they: 1. 2. 3. are legally and financially autonomous, operate under commercial law, and are not attached agencies of the procuring entity. 39

ELIGIBILITY REQUIREMENTS FOR JOINT VENTURES 1. WITH AN EXISTING JOINT VENTURE: submission of a valid joint venture agreement 2. WITHOUT AN EXISTING JOINT VENTURE: submission by each of the potential joint venture members of a duly notarized statement stating that they will enter into and abide by the provisions of the joint venture in case their bid is successful. 40

ELIGIBILITY REQUIREMENTS FOR JOINT VENTURES SUBMISSION OF ELIGIBILITY REQUIREMENTS: v All co-venturers of the joint venture should submit legal eligibility documents. v Any of the co-venturers can submit technical and financial eligibility requirements 41

ELIGIBILITY REQUIREMENTS FOR JOINT VENTURES • 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 17 -2013) 42

LEGAL ELIGIBILITY CRITERIA GOODS INFRASTRUCTURE • General rule: 60% Filipino • General rule: 75% Filipino • Foreign bidder allowed if: • Foreign contractors allowed if stated in treaty or international or executive agreement • Stated in treaty or international or executive agreement • National of a country offering reciprocity rights to Filipinos • Goods not available from local suppliers • To prevent situations that defeat competition or restrain trade • If joint venture, less than 75% is allowed if - • Structures to be built require techniques not possessed by 75% Filipinos • Not less than 25% Filipino 43

TECHNICAL ELIGIBILITY CRITERIA v Previous contract v Similar to the contract to be bid out (as defined by the Bidding Documents) v Completed within a period as defined by the Bidding Documents v 25% of the ABC (expendable supplies) v 50% of the ABC (non-expendable supplies) - Based on the value of the previous completed contract, as adjusted to current prices using the NSO consumer price index. v For foreign funded procurement, a different track record may be agreed upon 44

TECHNICAL ELIGIBILITY CRITERIA GOODS – SINGLE LARGEST CONTRACT General Rule 1. Expendable Supplies • 25% of the ABC 2. Services and Nonexpendable supplies • 50% of the ABC Exceptions If, at the outset and after market research, applying the general rule will likely result to: Then require the ff. : a) At least 2 similar contracts aggregate amount at least equivalent to required percentage; and 1. Failure of bidding; or 2. Monopoly b) Largest of the similar contracts amounts to at least 50% of required percentage 45

TECHNICAL ELIGIBILITY CRITERIA GOODS – SINGLE LARGEST CONTRACT (Illustration) Expendable Goods Non-expendable Goods ABC = P 1, 000, 000 GR: 25% of the ABC GR: 50% of the ABC THUS: Previous contract should be at least P 500, 000 P 250, 000 EXCEPTION: At least 2 similar contracts aggregate amount at least equivalent to required percentage; and Largest of the similar contracts amounts to at least 50% of required percentage. EXCEPTION: At least 2 similar contracts aggregate amount at least equivalent to required percentage; and Largest of the similar contracts amounts to at least 50% of required percentage. THUS: 1 st contract = P 100, 000. 00 2 nd contract = P 200, 000. 00 THUS: 1 st contract = P 300, 000. 00 2 nd contract = P 400, 000. 00 46

TECHNICAL ELIGIBILITY CRITERIA INFRASTRUCTURE PROJECTS – SINGLE LARGEST CONTRACT v Previous contract v Similar to the contract to be bid out (having the same civil works components) v 50% of the ABC - Based on the value of the previous completed contract, as adjusted to current prices using the NSO consumer price index. v For foreign funded procurement, a different track record may be agreed upon 47

TECHNICAL ELIGIBILITY CRITERIA v 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 31 -2013) 48

FINANCIAL ELIGIBILITY CRITERIA FOR GOODS PROJECTS: AND INFRASTRUCTURE • Audited Financial Statement (showing prospective bidder’s total and current assets and liabilities. ) • NFCC at least equal to ABC. 49

NFCC COMPUTATION Net Financial Contracting Capacity (NFCC) = (current assets - current liabilities) (K) MINUS (outstanding, uncompleted portions under ongoing contracts + contracts awarded but not yet started) (K) = 10 (contract is 1 year or less) 15 (contract is more than 1 year to 2 years) 20 (contract is more than 2 years) * The values of the bidder’s current assets and current liabilities shall be based on the data submitted to the BIR, through its Electronic Filing and Payment System (EFPS) 50

NFCC COMPUTATION v 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. (NPM 76 -2013) 51

BID SECURITY v Procuring entity shall indicate in the Bidding Documents at least 2 acceptable forms of bid security, one of which should be the Bid Securing Declaration. v In general, bank issued securities must be issued by a universal or commercial bank � However, in biddings conducted by LGUs, securities may be issued by banks certified by BSP as authorized to issue said instruments v Surety Bonds must be accompanied by certification from Insurance Commission that issuer is authorized to issue such security 52

BID SECURITY Amount Form of Bid Security (% = ABC) a) Cash or cashier’s/manager’s check b) Bank guarantee/draft or Irrevocable LC c) Surety bond callable upon demand d) Combination of the foregoing e) Bid Securing Declaration 2% 5% Proportionate to share of form with respect to the total amount of security No percentage required 53

BID SECURING DECLARATION v Bid Securing Declaration - an additional form of bid security - A document/undertaking signed by the bidder committing to pay the corresponding fine and be suspended for a period of time from being qualified to participate in any government activity in the event of violation of any of the conditions stated therein as required by the GPPB Guidelines. (GPPB Resolution No. 03 -2012, 27 January 2012) 54

BID SECURING DECLARATION v Penalties - Automatic blacklisting for 2 years in ALL government procurement activities, and - Payment of fine • For multiple bidders: difference between the evaluated bid prices of LCB/HRB with the next LCB/HRB. In case bidder is the HCB/LRB, the amount shall be based on the difference between the evaluated bid price and ABC. • For a single bidder: difference between the evaluated bid price and ABC. 55

BID VALIDITY PERIOD v Bids and bid securities (including bid securing declaration) shall be valid for a reasonable period as determined by the HOPE as indicated in the Bid Docs. v Not to exceed 120 days v If the period is extended, PE shall request in writing all those who submitted bids for such extension before the expiration date. NOTE: Bidders have a right to refuse to grant such extension w/o forfeiting their bid security. 56

DISCLOSURE OF RELATIONS Relatives within the third civil degree of the following shall be disqualified: v Head of the procuring entity v Members of the BAC, Secretariat and TWG v Head of the end-user unit or project management office v Project consultants 57

CONFLICT OF INTEREST v 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. v There is conflict of interest when the entity that prepared the plans/drawings likewise participates in the ensuing procurement activities for the Project. (NPM 10 -2013) 58

VI. OPENING AND EVALUATION OF 2 ND ENVELOPE CONTENTS: 1. Financial Bid Form (includes bid prices and bill of quantities, as well as applicable price schedules) 2. In case of Goods, Certification from the DTI, SEC, or CDA, if claiming preference as Domestic Bidder or Domestic Entity 3. Other documents required in the bidding documents 59

VII. DETAILED EVALUATION OF BIDS v Purpose is to determine the Lowest Calculated Bid (LCB), by: 1. Establishing correct calculated prices of bids; and 2. Ranking calculated total bid prices from lowest to highest v A non-discretionary criterion shall be used, which shall include consideration of: 1. completeness of bids; and 2. minor arithmetical corrections 60

VII. DETAILED EVALUATION OF BIDS v No Contact Rule - prohibition on communication w/ bidders from bid evaluation until award of contract. v The “no contact” rule applies only to those whose bids are being evaluated by the BAC after passing the preliminary examination. v No communication should be made by bidders until a decision to award a contract is made by the BAC. v 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 07 -2013) 61

VII. DETAILED EVALUATION OF BIDS v Bid Evaluation shall not be more than 7 cd. v In case of discrepancies, the ff. shall prevail: - words over figures - unit prices over total prices - actual sum of prices over total price - bill of quantities over detailed estimates v Section 32. 2. 3(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 51 -2013) 62

VII. DETAILED EVALUATION OF BIDS v Unless the ITB specifically allows partial bids, those not providing all required items shall be considered nonresponsive v Placing no price is considered as non-responsive v Specifying a “ 0” or “-” means it is offered for free 63

DOMESTIC PREFERENCE v Applicable only for GOODS v Applies where the lowest bid has a foreign component (foreign bid/entity) and the next lowest bid has a domestic component (domestic bidder/entity) v Requires procuring entity to give preference to domestic bidder PROVIDED that: 1. 2. The lowest foreign bid is increased by 15%; and The lowest domestic bidder matches the lowest bid of the foreign bidder 64

DOMESTIC PREFERENCE SAMPLE COMPUTATION Bid % Preference Lowest Calculated Bid Next Lowest Calculated Bid Foreign Bidder Domestic Bidder/Entity 2, 653, 360. 00 3, 009, 492. 00 x 15% 398, 004. 00 + 2, 653, 360. 00 Bid as increased Result 3, 051, 364. 00 3, 009, 492. 00 Award to Domestic Bidder/Entity at 2, 653, 360. 00, or Award to Foreign Bidder if Domestic Bidder/Entity refuses 65

VIII. POST-QUALIFICATION v To determine whether bidder with LCB complies with and is responsive to all requirements and conditions of eligibility and the bidding of the contract – to be declared the Lowest Calculated and Responsive Bid (LCRB) v A non-discretionary pass/fail criterion shall be used to “Verify, Validate and Ascertain” all statements and documents (licenses, certificates, etc. ) v To be accomplished not more than 7 c. d. from determination of LCB. (Exceptional cases not to exceed 30 c. d. ) 66

VIII. POST-QUALIFICATION v BAC will notify the Bidder with the Lowest Calculated Bid that it was determined as such. v Within 3 c. d. from receipt of Notice, submit the ff: 1. Latest Income and Business Tax Returns; 2. Certificate of Phil. GEPS Registration; and, 3. Other appropriate Licenses and permits required by law and stated in the Bidding Documents. 67

VIII. POST-QUALIFICATION v BAC shall recommend award of contract to the LOWEST CALCULATED AND RESPONSIVE BID (LCRB) at submitted price or calculated price, whichever is lower. v In case of approval by HOPE, Notice of Award should be IMMEDIATELY issued by HOPE to the LCRB. (HOPE has 7 days to decide w/n to issue NOA) 68

VIII. POST-QUALIFICATION v The three (3) calendar day period under § 34. 2 of the IRR is mandatory and should not be extended. v 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 272013) 69

VIII. POST-QUALIFICATION v PE may request for the submission of additional documents from the bidder in support of the information it has provided in the bidding documents. v However, non-submission of the additional supporting documents requested cannot be a ground for the bidder’s post-disqualification, as a bidder may be postdisqualified 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 25 -2013) 70

VIII. POST-QUALIFICATION v 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 57 -2013) 71

FAILURE OF BIDDING GROUNDS: 1) 2) 3) 4) No bids received Bids received but no one was eligible All bids failed to post qualify Someone post qualified but refused w/o justifiable cause to accept the award. 72

FAILURE OF BIDDING EFFECTS: 1) Mandatory review shall be conducted by BAC 2) Based on findings, BAC shall: v Revise terms, conditions, specifications v Adjust ABC, subject to required approvals 3) Re-bidding 4) Re-advertisement 73

IX. AWARD OF CONTRACT v Contract shall be awarded to the bidder with the Lowest Calculated and Responsive Bid (LCRB) at its submitted price or total calculated bid price, whichever is lower v Notice of Award (NOA) is issued by the HOPE v v NGAs and LGUs – 7 cd GOCCs and GFIs – 15 cd 74

IX. AWARD OF CONTRACT v NOA is subject to the following conditions: ◦ ◦ ◦ If joint venture, submission of JVA If foreign-funded and stated in treaty, international or executive agreement, PCAB License Posting of Performance Security Signing of Contract (within 10 cd) If required, approvals by higher authority PROCUREMENT PROCESS From Opening of Bids to Award of Contract shall NOT EXCEED 3 MONTHS 75

PERFORMANCE SECURITY v Posted by winning bidder upon signing of contract to guarantee performance of obligation, in such form and amount specified in the Bidding Documents. EFFECTS OF FAILURE TO POST: 1. Ground for disqualification 2. Next-ranked LCRB shall undertake post-disqualification 3. Bid security shall be forfeited without prejudice to the imposition of sanctions 76

PERFORMANCE SECURITY v 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 § 37. 1. 4(b) of the IRR. v § 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 352013) 77

PERFORMANCE SECURITY Amount Form of Performance Security (% equal to the Contract Price) a) Cash or cashier’s/manager’s check 5% (Goods ) & 10% (Infra) b) Bank guarantee/draft or Irrevocable LC c) Surety bond callable upon demand d) Combination of the foregoing 30% Proportionate to share of form with respect to the total amount of security 78

RESERVATION CLAUSE v HOPE reserves the right to: ◦ Reject any and all bids; ◦ Declare a failure of bidding; ◦ Not award the contract. v GROUNDS: 1. Prima facie evidence of collusion; 2. BAC is found to have failed in following the prescribed bidding procedures; 3. For justifiable reasons, the award of contract will not redound to the benefit of the Government: �Physical and economic conditions have significantly changed; �Project is no longer necessary �Source of funds for the project has been withdrawn/reduced. 79

NOTICE TO PROCEED v Issued to the successful bidder together with the copy of the approved contract within 3 cd from date of approval v For infrastructure projects with ABC of 50 M and below, the maximum period is 2 cd v Contract effectivity date should be provided in the NTP, which should not be later than 7 cd from its issuance v BAC Secretariat should post a copy of the NTP and the approved contract in the Phil. GEPS or PE’s website within 15 cd from issuance of NTP 80

CONTRACT IMPLEMENTATION GUIDELINES FOR THE PROCUREMENT OF GOODS, SUPPLIES AND MATERIALS 81

AMENDMENT TO ORDER v Issued at any time by the procuring entity in cases of: 1. 2. Emergency Fortuitous event REASONS FOR ISSUING: 1. Necessary adjustments within the general scope of the contract in any one or more of the following: a) drawings, design or specifications (if specifically manufactured for Government) b) method of shipment or packing; or c) place of delivery. 2. Additional items needed and necessary for the protection of the goods, which were not included in the original contract. 82

SUSPENSION OF WORK v PE may suspend the work wholly or partly by written order for a certain period of time due to force majeure or fortuitous events. v When the suspension order is lifted, or if the period of the order expires, the supplier or consultant shall resume work. 83

LIQUIDATED DAMAGES v When bidder fails to perform obligations within specified schedule, inclusive of duly granted time extensions, he shall be liable for damages and shall pay the PE liquidates damages. v Bidder shall pay an amount equal to 1/10 of 1% of the cost of delayed goods scheduled for delivery for every day of delay until such goods are finally delivered and accepted by the procuring entity. v PE need not prove it incurred actual damages. 84

LIQUIDATED DAMAGES v Whichever is convenient to the procuring entity, amount shall be deducted from: 1. any money due or which may become due to the supplier, or 2. collected from any securities or warranties posted by the supplier, v If sum of liquidated damages reach 10% of the contract amount, PE shall automatically rescind the contract. 85

ADVANCE PAYMENT v Made only after prior approval of the President. v Single advance payment not to exceed 50% of the contract for the following services: ◦ ◦ ◦ v Hotel and restaurant services Use of conference/seminar and exhibit areas Lease of office space Advance payment not to exceed 15% allowed to address contingencies arising from natural or man-made calamities in areas where “state of calamity” has been declared 86

ADVANCE PAYMENT v For goods, 15% of the contract price shall be paid within 60 days from signing of contract and upon submission of a claim and a bank guarantee. (Amended by M. O. 15, series of 2011) v NOTE: Progress payments shall first be charged against the advance payment until the latter is fully exhausted. (UNLESS otherwise approved by the President) 87

CONTRACT IMPLEMENTATION GUIDELINES FOR THE PROCUREMENT OF INFRASTRUCTURE PROJECTS 88

VARIATION ORDER v Issued in order to cover an increase/decrease in the quantities for the infrastructure project such as introduction of new work items. a) Change Order – to cover increase/decrease in quantities of original work b) Extra Work Order – to cover introduction of new work protection of the project. 89

VARIATION ORDER Conditions: 1. Does not exceed 10% of the original contract price. 2. Scope of works shall not be reduced to accommodate positive variation order. 3. Any cumulative positive variation order beyond 10% of the original contract price shall be subject of another contract to be bid out if works are separable from the original contract. 90

VARIATION ORDER For an increase/decrease in quantities of work to be covered by Variation Order, it should be: v within the general scope of the Project as bid and awarded, v due to the change of plans, design, or alignment to suit actual field conditions resulting in disparity between the preconstruction plans used for purposes of bidding and the “as staked plans” or the construction drawings prepared after the joint survey by the contractor and the government after award of contract. (NPM 562013) 91

ADVANCE PAYMENT REQUIREMENTS: 1. Written request of the contractor 2. Submission of : a. an irrevocable standby letter of credit of equivalent value from a commercial bank; b. bank guarantee, ; or c. surety bond 3. Amount not to exceed 15% of the contract price 4. Amount shall be repaid by the contractor 92

ADVANCE PAYMENT v Section 4 of the Contract Implementation Guidelines for the Procurement of Infrastructure Projects (Guidelines) under Annex “E” of the revised Implementing Rules and Regulations (IRR) of Republic Act (RA) No. 9184 v The President approved an advance payment not exceeding fifteen percent (15%) of the total contract price, provided that requirements under Section 4 of the Guidelines are complied with. (NPM 12 -2013) 93

ADVANCE PAYMENT v 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. v 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 56 -2013) 94

PROGRESS PAYMENT v Payments made by the Procuring Entity to the contractor for portions of the work done. v Contractor may submit: 1. 2. A statement of works accomplished (SWA) or progress billing Request for progress payment for the work accomplished in amounts the contractor considers itself to be entitled to. 95

PROGRESS PAYMENT v The procuring entity shall deduct the following from the certified gross amounts to be paid to the contractor as progress payment: 1. 2. 3. 4. 5. Cumulative value of the work previously certified and paid for. Portion of the advance payment to be recouped for the month. Retention money in accordance with the condition of contract. Amount to cover third party liabilities. Amount to cover uncorrected discovered defects in the works 96

RETENTION MONEY v Progress payments are subject to retention of ten percent (10%) referred to as the "retention money. “ This is to cover uncorrected defects after each progress billing. v It shall be based on the total amount due to the contractor prior to any deduction and shall be retained from every progress payment until fifty percent (50%) of the value of works, as determined by the procuring entity, are completed. 97

RETENTION MONEY SUBSTITUTE FOR RETENTION MONEY: (provided that the project is on schedule and is satisfactorily undertaken) 1. Irrevocable letter of credit from commercial bank 2. bank guarantee or surety bond callable on demand. *Valid for a duration determined by PE v No more retention if: - work is satisfactorily done - work is on schedule 98

LIQUIDATED DAMAGES v When contractor fails to perform obligations within specified contract time, inclusive of duly granted time extensions, he shall be liable for damages and shall pay the PE liquidates damages equal to at least one tenth (1/10) of one (1) percent of the cost of the unperformed portion of the works for every day . of delay v If sum of liquidated damages reach 10% of the contract amount, PE shall automatically rescind the contract. 99

SUSPENSION OF WORK Contractor or its duly authorized representative shall have the right to suspend work operation fifteen (15) calendar days from date of receipt of written notice from the contractor to the district engineer/regional director/consultant or equivalent official, due to the following: 1. There exist right-of-way problems. 2. Requisite construction plans which must be owner-furnished are not issued to the contractor. 100

SUSPENSION OF WORK 3. Peace and order conditions certified in writing by the Philippine National Police (PNP) and confirmed by the Department of Interior and Local Government (DILG) Regional Director. 4. Failure on the part of the procuring entity to deliver governmentfurnished materials and equipment 5. Delay in the payment of contractor's claim for progress billing beyond forty-five (45) calendar days from the time the contractor's claim has been certified 101

THANK YOU!! Contact us: Unit 2506 Raffles Corporate Center F. Ortigas Road, Ortigas Center Pasig City, Philippines 1605 Tele. Fax: (632)900 -6741 to 44 102