CAPACITY DEVELOPMENT DIVISION

GOVERNMENT PROCUREMENT POLICY BOARD

TECHNICAL SUPPORT OFFICE (GPPB-TSO)

GENERAL MODE OF PROCUREMENT

Procurement is done through Competitive

Bidding. (Sec. 10 RA 9184; NPM 67-2012)

Exception:
Alternative
Procurement.

Methods

of

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)

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
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)

STANDARDIZED BIDDING PROCEDURE

FOR GOODS AND INFRA
Pre-Procurement
Conf.

Submission of
Bids

Bid Evaluation
& Ranking

Advertisement

Pre-Bid
Conference

Opening of
1st Env. - Eligibility
Docs & Technical
Proposal

Opening of 2nd
Envelope Financial
Proposal

Post-qualification

Award of
Contract

I. PRE-PROCUREMENT
CONFERENCE
Purpose: Determine readiness of procurement

Conducted prior to advertisement/posting of the

Invitation to Bid
Mandatory for projects with ABC above PhP 2M
(goods), 5M (infra projects), 1M (consulting services)
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
Applicable 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)
8

II. ADVERTISEMENT/POSTING OF
THE INVITATION TO BID
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
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.

10

II. ADVERTISEMENT/POSTING OF
THE INVITATION TO BID
Above
2M/5M

2M/5M and
below

Newspaper of General Nationwide

Circulation

PhilGEPS website

PEs Website, if available

Conspicuous Place

Medium

Website prescribed by the foreign

government/foreign or international
funding institution, in case of foreign
funded procurement

11

III. PRE-BID CONFERENCE

Forum where the PEs 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 contract
b) International participation is more advantageous

At the option of procuring entity, only bidders who

purchased bid documents are allowed to attend or ask
questions

12

III. PRE-BID CONFERENCE

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)

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 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)

14

CLARIFICATION OF BIDDING
DOCUMENTS
Supplemental/Bid Bulletins issued by BAC to answer
requests for clarification (query submitted 10 c.d.
before deadline) or interpretation, and upon BACs
initiative to clarify or modify any provision of Bidding
Docs. (at least 7 c.d. before deadline for bids).
Posted in PhilGEPS and PEs 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
15

CLARIFICATION OF BIDDING
DOCUMENTS
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 PEs website, in order to address aspects of competition and
transparency. (NPM 46-2013)

16

ADDITIONAL REQUIREMENTS
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 PEs 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)

17

IV. SUBMISSION AND RECEIPT OF

BIDS
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.
Category

Maximum Period (cd)

Goods

45

Infra (50M and below)

50

Infra (above 50M)

65
18

IV. SUBMISSION AND RECEIPT OF

BIDS
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)
19

IV. SUBMISSION AND RECEIPT OF

BIDS
The practice of pre-qualification has been abandoned
in RA 9184 and its IRR. the results of a prequalification 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
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)

21

V. OPENING AND EVALUATION OF 1ST

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

V. OPENING AND EVALUATION OF 1ST

ENVELOPE
CONTENTS (continuation):
4. Omnibus Sworn Statement
Signatorys authority
Disclosure of relations
Responsibilities of bidders
Labor laws and standards
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 1ST

ENVELOPE
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.

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
bidders capability to undertake the project. (NPM 542013)

24

V. OPENING AND EVALUATION OF 1ST

ENVELOPE
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

1. DTI/SEC/CDA
Registration

2. Mayors 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

2. Mayors permit
3. Tax clearance per
Executive Order 398, series
of 2005, as finally reviewed
and approved by the BIR.
4. Statement of ongoing
contracts.
26
5. Statement of SLCC

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

ELIGIBILITY REQUIREMENTS
Mayors 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)

28

ELIGIBILITY REQUIREMENTS
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 bidders disqualification. (NPM 71-

2013)

29

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

30

TAX CLEARANCE
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)

31

TAX CLEARANCE
FOR FOREIGN BIDDERS
A Delinquency Verification Certificate issued to NonResident 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)

32

ELIGIBILITY REQUIREMENTS FOR

FOREIGN BIDDERS
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

33

ELIGIBILITY REQUIREMENTS FOR

FOREIGN BIDDERS
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)

34

ELIGIBILITY REQUIREMENTS FOR GOVT.

CORPORATE ENTITIES
Government corporate entities 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.

35

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.

36

ELIGIBILITY REQUIREMENTS FOR

JOINT VENTURES
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

37

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)

38

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

39

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
40

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

Then require the ff.:

If, at the outset and

a) At least 2 similar
after market
contracts aggregate
research, applying the
amount at least
general rule will
equivalent to required
likely result to:
percentage; and
1. Failure of bidding;
or

2. Monopoly

b) Largest of the similar

contracts amounts to
at least 50% of
required percentage

41

TECHNICAL ELIGIBILITY CRITERIA

GOODS SINGLE LARGEST CONTRACT (Illustration)
Expendable Goods

Non-expendable Goods

ABC = P1,000,000

ABC = P1,000,000

GR: 25% of the ABC

GR: 50% of the ABC

THUS: Previous contract should be at least THUS: Previous contract should be at least
P500,000
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.

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

THUS: 1st contract = P300,000

2nd contract = P400,00[

42

TECHNICAL ELIGIBILITY CRITERIA

INFRASTRUCTURE
CONTRACT

PROJECTS

SINGLE

LARGEST

Previous contract
Similar to the contract to be bid out (having the same civil works
components)

50% of the ABC

- 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

43

TECHNICAL ELIGIBILITY CRITERIA

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)

44

FINANCIAL ELIGIBILITY CRITERIA

FOR
GOODS
PROJECTS:

AND

INFRASTRUCTURE

Audited Financial Statement

(showing
prospective bidders total and current
assets and liabilities. )
NFCC at least equal to ABC.

45

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 bidders current assets and current
liabilities shall be based on the data submitted to the BIR,
through its Electronic Filing and Payment System (EFPS)
46

NFCC COMPUTATION or CLC

AMOUNT
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)

47

BID SECURITY

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

48

BID SECURITY
Amount
Form of Bid Security

Bid Security
(% = ABC)

a) Cash or cashiers/managers
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

49

BID SECURITY
For biddings conducted by LGUs, the
Bidder may also submit bid securities in
the form of cashiers/managers check,
bank draft/guarantee, or irrevocable letter
of credit from other banks certified by the
BSP as authorized to issue such financial
statement.

50

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)

51

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.
52

BID VALIDITY PERIOD

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 days
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.

53

DISCLOSURE OF RELATIONS
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

54

CONFLICT OF INTEREST
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 firms
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)

55

VI. OPENING AND EVALUATION OF

2ND 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

56

VII. DETAILED EVALUATION

OF BIDS
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

57

VII. DETAILED EVALUATION

OF BIDS
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)

58

VII. DETAILED EVALUATION

OF BIDS
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)
59

VII. DETAILED EVALUATION

OF BIDS
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

60

DOMESTIC PREFERENCE

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.
2.

The lowest foreign bid is increased by 15%; and

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

61

DOMESTIC PREFERENCE
SAMPLE COMPUTATION
Lowest Calculated Bid

Next Lowest Calculated Bid

Foreign Bidder

Domestic Bidder/Entity

Bid

% Preference

2,653,360.00

3,009,492.00

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
62

VIII. POST-QUALIFICATION
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.)
63

VIII. POST-QUALIFICATION
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.

64

VIII. POST-QUALIFICATION
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)

65

VIII. POST-QUALIFICATION
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 272013)

66

VIII. POST-QUALIFICATION
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
bidders 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)

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VIII. POST-QUALIFICATION
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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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.

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FAILURE OF BIDDING
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

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IX. AWARD OF CONTRACT

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

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IX. AWARD OF CONTRACT

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

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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 disqualification
2. Next-ranked
LCRB
shall
undertake
postdisqualification
3. Bid security shall be forfeited without prejudice to
the imposition of sanctions

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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 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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PERFORMANCE SECURITY
Amount
Form of Performance Security

Performance Security
(% equal to the Contract Price)

a) Cash or
cashiers/managers 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

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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 necessary
Source 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
For infrastructure projects with ABC of 50M and
below, the maximum period is 2 cd
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 PEs
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.
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.

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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 manmade calamities in areas where state of calamity
has been declared

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ADVANCE PAYMENT

For goods, 10% 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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CONTRACT IMPLEMENTATION
GUIDELINES FOR THE
PROCUREMENT OF
INFRASTRUCTURE PROJECTS

85

VARIATION ORDER
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 necessary for the completion, improvement
/ protection of
the project.

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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.

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VARIATION ORDER
For an increase/decrease in quantities of work to be covered by
Variation Order, it should be:
within the general scope of the Project as bid and awarded,
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 56-2013)

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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

89

ADVANCE PAYMENT
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
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)

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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 56-2013)

91

PROGRESS PAYMENT
Payments made by the Procuring Entity to the
contractor for portions of the work done.
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.

92

PROGRESS PAYMENT
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

93

RETENTION MONEY

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.
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.

94

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

No more retention if:

- work is satisfactorily done
- work is on schedule

95

LIQUIDATED DAMAGES

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

96

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.

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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
government-furnished 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

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

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