03 BIDDING PROCEDURE FOR GOODS (1).ppt

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BIDDING PROCEDURES FOR THE PROCUREMENT

OF GOODS AND SERVICES

CAPACITY DEVELOPMENT DIVISIONGovernment Procurement Policy Board Technical Support Office (GPPB-TSO)

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GENERAL MODE OF PROCUREMENT

Procurement is done through Competitive Bidding. (Sec. 10 RA 9184; NPM 67-2012)

Exception: Alternative Methods of Procurement.

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COMPETITIVE BIDDING

WHAT IS COMPETITIVE BIDDING?

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, post-qualification, and award of contract. (Section 5(e) of RA 9184 and its IRR)

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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.”

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COMPETITIVE BIDDING

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 47-2013)

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STANDARDIZED BIDDING PROCEDURE FOR GOODS AND SERVICES

Pre-ProcurementConf.

Advertisement Pre-BidConference

Opening of1st Env. - EligibilityDocs & Technical

Proposal

Opening of 2nd Envelope – Financial

Proposal

Submission ofBids

Bid Evaluation& Ranking

Post-qualification Award ofContract

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Purpose: Determine readiness of procurement

Conducted prior to advertisement/posting of the Invitation to Bid

Mandatory for projects with ABC above PhP 2M

Attended by the following:a)BACb)BAC Secretariatc)TWGd)Consultantse)End-user unit/Other officials

I. PRE-PROCUREMENT CONFERENCE

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Section 18 of RA 9184 and its IRRApplicable only to procurement of goods

Specifications should be based on relevant characteristics and performance requirements.

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)

REFERENCE TO BRAND NAMES

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Importance:

Signals the start of the bidding process. Procurement process should be made within 3 months starting from posting and advertisement until awarding of contract. (Sec. 38.1 IRR)

Signals the availability of the bidding documents to the prospective bidders. (if not mentioned in the Invitation to Bid) (Sec. 17.3 IRR)

II. ADVERTISEMENT/POSTING OF THE INVITATION TO BID

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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.

Posted continuously for 7 calendar days – –PhilGEPS–website of the PE, if any.–website of IFI, if applicable.–At any conspicuous place in the premises of the PE.

Not required for projects with ABC of 2M and below.


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Medium Above 2M2M and below

Newspaper of General Nationwide Circulation PhilGEPS 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

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Forum where the PE’s representatives & the bidders discuss the different aspects of the project

Mandatory – ABC 1M or more; Discretionary – ABC less than 1M

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 contractb) International participation is more advantageous

At the option of procuring entity, only bidders who purchased bid documents are allowed to attend or ask questions

III. PRE-BID CONFERENCE

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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.

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)


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• 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 48-2013)


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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).

Posted in PhilGEPS and PE’s website

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

CLARIFICATION OF BIDDING DOCUMENTS

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§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.

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 46-2013)

CLARIFICATION OF BIDDING DOCUMENTS

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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 PhilGEPS’ and the PE’s website.

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 PhilGEPS’ 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)

ADDITIONAL REQUIREMENTS

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Two-Envelope System 1st Envelope – Eligibility Requirements and Technical

Component 2nd Envelope – Financial Component

Submitted to the BAC on the date, time, and place specified in the Invitation to Bid. Bids submitted after the deadline should not be accepted.

Date of submission should not be later than the following period from the last day of posting of the Invitation to Bid.

IV. SUBMISSION AND RECEIPT OF BIDS

Category Maximum Period (cd)

Goods 45

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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.

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 55-2013)

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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)

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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.

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)

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CONTENTS:

1. Eligibility requirements2. Bid Security3. Technical specifications4. Omnibus sworn statement

Non-inclusion in blacklistAuthenticity of documentsVerification authority

V. OPENING AND EVALUATION OF 1ST ENVELOPE

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CONTENTS (continuation):

4. Omnibus Sworn StatementSignatory’s authority

Disclosure of relationsResponsibilities of biddersLabor laws and standardsNon-payment (directly or indirectly)

any commission, amount, fee, or any form of consideration in relation to any procurement project or activity


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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 54-2013)


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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)


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Class A Documents1.DTI/SEC/CDA Registration2.Mayor’s permit3.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 SLCC6.Audited financial statement7.NFCC

ELIGIBILITY REQUIREMENTS

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Class B Document

•JVA or notarized statement from the partners that they will enter into joint venture if awarded the contract.

ELIGIBILITY REQUIREMENTS

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MAYOR’S PERMIT

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 for construction business issued to the construction company likewise authorizes it to engage in the business of supplying dump trucks. (NPM 36-2013)

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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)

TAX CLEARANCE

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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 tax clearance of the previous year and application for tax clearance cannot be considered as compliance. (NPM 02-2013)

TAX CLEARANCE

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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 48-2013)

TAX CLEARANCE

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

TAX CLEARANCE

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CREDIT LINE COMMITMENT

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)

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STATEMENT OF ON GOING AND COMPLETED CONTRACTS

The submission of a Statement of Ongoing Contracts should only be required if the bidder opts to submit an NFCC computation. If the bidder opts to submit a CLC, it need not submit said statement.

The Statement of Completed Contract(s) should always be required for the purpose of showing the bidder’s Single Largest Completed Contract that is similar to the contract to be bid. (Resolution 29-2012)

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In the case of foreign bidders, the foregoing eligibility requirements under Class “A” Documents may be submitted:

Equivalent documents issued by country

Accompanied by English translation certified by appropriate embassy or consulate in the Philippines

ELIGIBILITY REQUIREMENTS FOR FOREIGN BIDDERS

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Foreign bidders may substitute eligibility documentary requirements with the appropriate equivalent documents in their country.

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)


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TAX CLEARANCE FOR 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)


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Government corporate entities may be eligible to participate only if they can establish that they:

1.are legally and financially autonomous, 2.operate under commercial law, and 3.are not attached agencies of the procuring entity.

ELIGIBILITY REQUIREMENTS FOR GOVT. CORPORATE ENTITIES

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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.

ELIGIBILITY REQUIREMENTS FOR JOINT VENTURES

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SUBMISSION OF ELIGIBILITY REQUIREMENTS:

All co-venturers of the joint venture should submit legal eligibility documents.

Any of the co-venturers can submit technical and financial eligibility requirements

ELIGIBILITY REQUIREMENTS FOR JOINT VENTURES

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General rule: 60% Filipino

Foreign bidder allowed if:–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

LEGAL ELIGIBILITY CRITERIA

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TECHNICAL ELIGIBILITY CRITERIA

Previous contract

Similar to the contract to be bid out (as defined by the Bidding Documents)

Completed within a period as defined by the Bidding Documents

25% of the ABC (expendable supplies)

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.

For foreign funded procurement, a different track record may be agreed upon

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GOODS – SINGLE LARGEST CONTRACT

General Rule Exceptions Then require the ff.:

1. Expendable Supplies• 25% of the ABC

2. Services and Non-expendable supplies• 50% of the ABC

If, at the outset and after market research, applying the general rule will likely result to:

1.Failure of bidding; or

2.Monopoly

a) At least 2 similar contracts aggregate amount at least equivalent to required percentage; and

b) Largest of the similar contracts amounts to at least 50% of required percentage

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GOODS – SINGLE LARGEST CONTRACT (Illustration)Expendable Goods Non-expendable Goods

ABC = P1,000,000

GR: 25% of the ABC

THUS: Previous contract should be at least P250,000

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.

THUS: 1st contract = P100,00 2nd contract = P200,00

ABC = P1,000,000

GR: 50% of the ABC

THUS: Previous contract should be at least P500,000

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.

THUS: 1st contract = P300,000 2nd contract = P400,00[

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FINANCIAL ELIGIBILITY CRITERIA

• Audited Financial Statement (showing prospective bidder’s total and current assets and liabilities. )

• NFCC at least equal to ABC.

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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)

NFCC COMPUTATION

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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)

NFCC COMPUTATION

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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.

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

Surety Bonds must be accompanied by certification from Insurance Commission that issuer is authorized to issue such security

BID SECURITY

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BID SECURITY

Form of Bid SecurityAmount

Bid Security (% = ABC)

a) Cash or cashier’s/manager’s check 2%

b) Bank guarantee/draft or Irrevocable LC

c) Surety bond callable upon demand 5%

d) Combination of the foregoing

Proportionate to share of form with respect to the total amount of

security

e) Bid Securing Declaration

No percentage required

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BID SECURING DECLARATION

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)

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BID SECURING DECLARATION

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 LCRB/HRB with the next LCRB/HRB.

In case bidder is the LCRB/HRB, 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.

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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.Not to exceed 120 daysIf 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.

BID VALIDITY PERIOD

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Relatives within the third civil degree of the following shall be disqualified:

Head of the procuring entity Members of the BAC, Secretariat and TWG Head of the end-user unit or project

management office Project consultants

DISCLOSURE OF RELATIONS

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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 10-2013)

CONFLICT OF INTEREST

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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

VI. OPENING AND EVALUATION OF 2ND ENVELOPE

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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

A non-discretionary criterion shall be used, which shall include consideration of:

1. completeness of bids; and 2. minor arithmetical corrections

VII. DETAILED EVALUATION OF BIDS

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No Contact Rule - prohibition on communication w/ bidders from bid evaluation until award of contract.

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 07-2013)


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Bid Evaluation shall not be more than 7 cd.

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

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)


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Unless the ITB specifically allows partial bids, those not providing all required items shall be considered non-responsive

Placing no price is considered as non-responsive

Specifying a “0” or “-” means it is offered for free


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Applicable only for GOODS

Applies where the lowest bid has a foreign component (foreign bid/entity) and the next lowest bid has a domestic component (domestic bidder/entity)

Requires procuring entity to give preference to domestic bidder PROVIDED that:

1. The lowest foreign bid is increased by 15%; and

2. The lowest domestic bidder matches the lowest bid of the foreign bidder

DOMESTIC PREFERENCE

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DOMESTIC PREFERENCE

SAMPLE COMPUTATION

Lowest Calculated BidNext Lowest Calculated

Bid

Foreign Bidder Domestic Bidder/Entity

Bid 2,653,360.00 3,009,492.00

% Preference x 15%

398,004.00

+ 2,653,360.00

Bid as increased

3,051,364.00 3,009,492.00

Result

Award to Domestic Bidder/Entity at 2,653,360.00, or

Award to Foreign Bidder if Domestic Bidder/Entity refuses

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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)

A non-discretionary pass/fail criterion shall be used to “Verify, Validate and Ascertain” all statements and documents (licenses, certificates, etc.)

To be accomplished not more than 7 c.d. from determination of LCB. (Exceptional cases not to exceed 30 c.d.)

VIII. POST-QUALIFICATION

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BAC will notify the Bidder with the Lowest Calculated Bid that it was determined as such.

Within 3 c.d. from receipt of Notice, submit the ff:1. Latest Income and Business Tax Returns;2. Certificate of PhilGEPS Registration; and,3. Other appropriate Licenses and permits

required by law and stated in the Bidding Documents.


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BAC shall recommend award of contract to the LOWEST CALCULATED AND RESPONSIVE BID (LCRB) at submitted price or calculated price, whichever is lower.

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)


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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 27-2013)


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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 25-2013)


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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)


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GROUNDS:

1)No bids received2)Bids received but no one was eligible3)All bids failed to post qualify4)Someone post qualified but refused w/o justifiable cause to accept the award.

FAILURE OF BIDDING

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EFFECTS:

1)Mandatory review shall be conducted by BAC

2)Based on findings, BAC shall: Revise terms, conditions, specifications Adjust ABC, subject to required approvals

3)Re-bidding

4)Re-advertisement

FAILURE OF BIDDING

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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

Notice of Award (NOA) is issued by the HOPE

NGAs and LGUs – 7 cd GOCCs and GFIs – 15 cd

IX. AWARD OF CONTRACT

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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 PROCESSFrom Opening of Bids to Award of Contract shall

NOT EXCEED 3 MONTHS

IX. AWARD OF CONTRACT

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PERFORMANCE SECURITY

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 disqualification2.Next-ranked LCRB shall undertake post-disqualification3.Bid security shall be forfeited without prejudice to the imposition of sanctions

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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.

§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 35-2013)

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Form of Performance Security

Amount

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 30%

d) Combination of the foregoing

Proportionate to share of form with respect to the total amount of

security

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RESERVATION CLAUSE

HOPE reserves the right to:◦ Reject any and all bids;◦ Declare a failure of bidding;◦ Not award the contract.

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 necessarySource of funds for the project has been withdrawn/reduced.

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NOTICE TO PROCEED

Issued to the successful bidder together with the copy of the approved contract within 3 cd from date of approval

Contract effectivity date should be provided in the NTP, which should not be later than 7 cd from its issuance

BAC Secretariat should post a copy of the NTP and the approved contract in the PhilGEPS or PE’s website within 15 cd from issuance of NTP

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CONTRACT IMPLEMENTATION GUIDELINES FOR THE

PROCUREMENT OF GOODS, SUPPLIES AND MATERIALS

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AMENDMENT TO ORDER

Issued at any time by the procuring entity in cases of:

1. Emergency2. 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; orc) place of delivery.

2. Additional items needed and necessary for the protection of the goods, which were not included in the original contract.

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SUSPENSION OF WORK

PE may suspend the work wholly or partly by written order for a certain period of time due to force majeure or fortuitous events.

When the suspension order is lifted, or if the period of the order expires, the supplier or consultant shall resume work.

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LIQUIDATED DAMAGES

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.

Bidder shall pay an amount equal to 1/10 of 1% of the cost 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.

PE need not prove it incurred actual damages.

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LIQUIDATED DAMAGES

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,

If sum of liquidated damages reach 10% of the contract amount, PE shall automatically rescind the contract.

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ADVANCE PAYMENT

Made only after prior approval of the President. Single advance payment not to exceed 50% of

the contract for the following services:◦ 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

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ADVANCE PAYMENT

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)

NOTE: Progress payments shall first be charged against the advance payment until the latter is fully exhausted. (UNLESS otherwise approved by the President)

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THANK YOU!!

Contact us:

Unit 2506 Raffles Corporate CenterF. Ortigas Road, Ortigas CenterPasig City, Philippines 1605

TeleFax: (632)900-6741 to 44