Approval of the Customized Procurement Manuals of the Bureau of Internal Revenue

May 31, 2007

GPPB RESOLUTION NO. 10-07

APPROVAL OF THE CUSTOMIZED PROCUREMENT MANUALS OF THE BUREAU OF INTERNAL REVENUE

WHEREAS, Section 6 of Republic Act No. 9184 (R.A. 9184)provides that to systematize the procurement process, avoid confusion and ensure transparency, the Government Procurement Policy Board (GPPB) shall pursue the development of generic procurement manuals and standard bidding forms for mandatory use by all government agencies; ATcaHS

WHEREAS, the GPPB, in its meeting held last 14 June 2006, approved and adopted the Generic Procurement Manual (GPM) for use by all agencies effective January 2007;

WHEREAS, agencies are encouraged to customize the provisions of the GPM to suit their organizational structure and procurement activities, subject to approval by the GPPB;

WHEREAS, the Bureau of Internal Revenue (BIR) prepared and submitted its Customized Procurement Manuals to the GPPB Technical Support Office (GPPB-TSO) last 21 March 2007;

WHEREAS, the GPPB Inter-Agency Technical Working Group (IATWG),in its meeting held last 18 May 2007, reviewed the draft of the BIR Customized Procurement Manuals, as presented by its Assistant Commissioner James H. Roldan with the assistance of Ms. Alice Tiongson, the consultant assigned to BIR;

WHEREAS, in the same meeting, the members of the IATWG unanimously resolved to recommend the approval of the Customized Procurement Manuals of the BIR, subject to the following revisions:

a) Inclusion of the manager's check in the list of allowable forms of bid security for the procurement of goods, infrastructure projects, and consulting services,

b) Incorporation of the latest amendments to the following provisions of the IRR-A of R.A. 9184:

1. Section 27.4 allowing the return of bid security to a post-disqualified bidder (GPPB Resolution No. 21-2006, dated 6 December 2006);

2. Sections 23.3 and 24.13 directing bidders found ineligible to file a request for reconsideration with the Bids and Awards Committee, within three (3) calendar days upon receipt of written notice or, if present at the time of opening of eligibility requirements, upon verbal notification. (GPPB Resolution No. 14-2006, dated 24 September 2006 and GPPB Resolution No. 05-2007, dated 4 May 2007); and THcaDA

3. Sections 54.2 (b) and (d) prescribing the methodology for the conduct of negotiated procurement (i) in case of two (2) failed biddings, and (ii) in case of calamity or emergency. (Memorandum Order No. 213 dated 8 May 2006).

c) Harmonize the prescribed period for the release of performance security in the procurement of infrastructure projects with GPPB Resolution No. 12-2005 dated 30 June 2005; and

d) Deletion in Volume IV of the following:

1. Guidelines on Contract Price Escalation; and

2. Exceptions to the eligibility criterion for the procurement of goods provided under Section 23.11.1 of the IRR-A of R.A. 9184 as amended by GPPB Resolution No. 07-2006.

WHEREAS, BIR has incorporated the foregoing revision and re-submitted the final copy of its Customized Procurement Manual to the GPPB-Technical Support Office last 24 May 2007;

NOW, THEREFORE, for and in consideration of the foregoing, WE, the Members of the GOVERNMENT PROCUREMENT POLICY BOARD, by virtue of the powers vested on US by law, hereby RESOLVE to approve, as WE hereby approve the Customized Procurement Manuals of the Bureau of Internal Revenue for its adoption and official use.

This resolution shall take effect immediately.

APPROVED this 31st day of May 2007 at Pasig City, Philippines. ATCEIc

(SGD.) ROLANDO G. ANDAYA, JR.Secretary

_____________________________________________

(SGD.) _____________________________________Department of Education

______________________________________________

(SGD.) ______________________________________Department of Public Works and Highways

(SGD.) _____________________________________Department of Trade and Industry

(SGD.) _______________________________________Department of Transportation and Communications

(SGD.) ROMULO L. NERISecretary

_____________________________________________

_____________________________________________

(SGD.) _____________________________________Department of Energy

_____________________________________________

_____________________________________________

(SGD.) ______________________________________Private Sector Representative

Attested by:

(SGD.) RUBY U. ALVAREZBoard Secretary, Government Procurement Policy Board

 

May 2007

VOLUME ONE: GUIDELINES ON ESTABLISHING PROCUREMENT SYSTEMS AND ORGANIZATIONS

TABLE OF CONTENTS

 

ABBREVIATIONS AND ACRONYMS
SECTION 1:  GENERAL PROVISIONS
	LEGAL BASIS FOR THE PROCUREMENT MANUAL
	COVERAGE, SCOPE, AND APPLICATION
	1.	Coverage
	2.	Scope
	3.	Application
	PRINCIPLES OF GOVERNMENT PROCUREMENT
	1.	Transparency
	2.	Competitiveness
	3.	Streamlining and use of technology in procurement
	4.	Accountability
	5.	Public Monitoring
SECTION 2:  PROCUREMENT ORGANIZATIONS
	THE ORGANIZATIONAL STRUCTURE
	1.	The Bureau of Internal Revenue and its Procurement Unit/Office
	2.	The Bids and Awards Committee (BAC)
	3.	BAC Members
	4.	The Technical Working Group (TWG)
	5.	Observers
	ROLES AND RESPONSIBILITIES
	1.	The Bureau of Internal Revenue and the Procurement Unit/Office
	2.	The BAC
	3.	The TWG
	4.	The Observers
	CONDITIONS FOR GRANTING HONORARIA
	PROFESSIONALIZATION OF PROCUREMENT UNITS, BAC, TWG
SECTION 3:  PROCUREMENT PLANNING
	PROCUREMENT PLANNING — PROCUREMENT PLANNING AND BUDGET LINKAGE
	PROCUREMENT PLANNING — PREPARATION OF THE PROJECT PROCUREMENT
		MANAGEMENT PLAN (PPMP)
	1.	The PPMP
	2.	Developing the Project Requirements
	3.	Writing the Technical Specifications, Scope of Work and Terms of Reference
	4.	Determining the Approved Budget for the Contract
	5.	Procurement Milestones
	6.	Method of Procurement
	7.	Format of the PPMP
	PROCUREMENT PLANNING — PREPARATION OF THE ANNUAL PROCUREMENT PLAN (APP)
	1.	The Annual Procurement Plan
	2.	Procurement Strategy
	3.	Format of the APP
	4.	Submission Timeline
SECTION 4:  VARIOUS METHODS OF PROCUREMENT
	COMPETITIVE BIDDING
	ALTERNATIVE METHODS OF PROCUREMENT
	1.	Conditions for Use of Alternative Methods of Procurement
SECTION 5:  PROCUREMENT BY ELECTRONIC MEANS AND THE PHILGEPS
	PROCUREMENT BY ELECTRONIC MEANS AND THE PHILIPPINE GOVERNMENT ELECTRONIC
		PROCUREMENT SYSTEM
	1.	The PhilGEPS
	2.	Features of the PhilGEPS
	USE OF PROCUREMENT SERVICE PROVIDERS
	1.	Minimum Requirements for Service Providers
SECTION 6:  FOREIGN-ASSISTED PROJECTS
	FOREIGN-ASSISTED PROJECTS
	1.	Anti-corruption Measures
SECTION 7:  PENAL, CIVIL AND ADMINISTRATIVE LIABILITIES AND SANCTIONS
	STANDARD OF ETHICS
	1.	Definition of Corrupt, Fraudulent, Collusive, and Coercive Practices
	2.	Applicable penalty for fraud, misrepresentation and collusion
	CONFLICT OF INTEREST
	PENAL LIABILITIES AND SANCTIONS
	1.	Penal Liabilities of Public Officers
	2.	Penal Sanctions for Public Officers
	3.	Penal Liabilities of Private Individuals
	4.	Penal Sanctions for Private Individuals
	CIVIL LIABILITY
	1.	Civil Liability in Case of Conviction
	2.	Liquidated Damages
	ADMINISTRATIVE LIABILITIES AND SANCTIONS
	1.	Administrative Liabilities
	2.	Administrative Sanctions
	BLACKLISTING GUIDELINES
	1.	Prohibition on blacklisted persons/entities to participate in the bidding of Government Projects/Contracts
	2.	Sanctions and Grounds for Blacklisting
SECTION 8:  LEGAL ASSISTANCE AND INDEMNIFICATION
	GENERAL CONDITIONS
	1.	Free Legal Assistance
	2.	Liability Insurance
	3.	Medical Assistance
	PROCEDURE FOR GRANTING LEGAL ASSISTANCE AND INDEMNIFICATION
	GLOSSARY
PROPOSE PROCUREMENT SUPPLY CHAIN STRUCTURE AND STAFFING.
FIGURE 1:  BASIC PROCUREMENT SUPPLY CHAIN ORGANIZATION
ANNEX A:	NATIONAL BUDGET CIRCULAR NO. 2004-5
ANNEX B:	NATIONAL BUDGET CIRCULAR NO. 2004-5A
ANNEX C:	REVENUE MEMORANDUM ORDER NO. 42-2004
ANNEX D:	TERMS OF REFERENCE
ANNEX E:	PROJECT PROCUREMENT MANAGEMENT PLAN

 

ABBREVIATIONS AND ACRONYMS

 

ABC	Approved Budget for the Contract
ABM	Agency Budget Matrix
ACIR	Assistant Commissioner
ADB	Asian Development Bank
AFP	Armed Forces of the Philippines
AFS	Audited Financial Statement
APP	Annual Procurement Plan
ARD	Assistant Regional Director
BAC	Bids and Awards Committee
BDS	Bid Data Sheet
BIR	Bureau of Internal Revenue
BRS	Bureau of Research and Standards
BSP	Bangko Sentral ng Pilipinas
BTr	Bureau of Treasury
CAF	Certificate of Availability of Funds
CDA	Cooperative Development Authority
CIAP	Construction Industry Authority of the Philippines
CIF	Cost, Insurance and Freight
CIP	Carriage and Insurance Paid to (named place of destination)
CIR	Commissioner of Internal Revenue
COA	Commission on Audit
COFILCO	Confederation of Filipino Consulting Organizations
CPES	Contractors Performance Evaluation System
CPESIU	Contractors Performance Evaluation System Implementing Unit
CSO	Civic Society Organization
CSC	Civil Service Commission
DBCC	Development Budget Coordination Committee
DBM	Department of Budget and Management
DBM-PS/
PS-DBM	Department of Budget and Management-Procurement Service
DCIR	Deputy Commissioner
DILG	Department of the Interior and Local Government
DND	Department of National Defense
DOST	Department of Science and Technology
DTI	Department of Trade and Industry
E.O.	Executive Order
ESAO	Engineering Supervision and Administration Overhead
EXW	Ex Works, Ex Factory or Off-the-Shelf
FAPs	Foreign-Assisted Projects
FMIS	Financial Management Information System
GAA	General Appropriations Act
GCC	General Conditions of Contract
GFI	Government Financial Institution
GOCC	Government-Owned or -Controlled Corporation
GOP	Government of the Philippines
GPPB	Government Procurement Policy Board
GPPB-TSO	Government Procurement Policy Board — Technical Support Office
GPRA	Government Procurement Reform Act
HRB	Highest Rated Bid
HRRB	Highest Rated and Responsive Bid
IAEB	Invitation to Apply for Eligibility and to Bid
ICB	International Competitive Bidding
ICT	Information and Communications Technology
IFI	International Financing Institution
IPR	Intellectual Property Rights
ITB	Instructions to Bidders
ITR	Income Tax Return
JVA	Joint Venture Agreement
JBIC	Japan Bank for International Cooperation
LC	Letter of Credit
LCB	Local Competitive Bidding
LCB	Lowest Calculated Bid
LCRB	Lowest Calculated and Responsive Bid
LGU	Local Government Unit
LIB	Limited International Bidding
LOI	Letter of Intent
MOOE	Maintenance and Other Operating Expenses
NACAP	National Constructors Association of the Philippines
NCB	National Competitive Bidding
NFCC	Net Financial Contracting Capacity
NGA	National Government Agency
NGO	Non-Government Organization
NO	National Office
NSO	National Statistics Office
NTP	Notice to Proceed
OS	Obligation Slip
PA	Professionals' Association
PAGASA	Philippine Atmospheric, Geophysical and Astronomical
	Services Administration
PBDs	Philippine Bidding Documents
PCA	Philippine Constructors Association, Incorporated
PCAB	Philippine Contractors Accreditation Board
PCCI	Philippine Chamber of Commerce and Industry
PCAB	Philippine Contractors Accreditation Board
PERT/CPM	Project Evaluation Review Technique/Critical Path Method
PhilGEPS/
G-EPS	Philippine Government Electronic Procurement System
PICE	Philippine Institute of Civil Engineers
PICPA	Philippine Institute of Certified Public Accountants
PMO	Project Management Office
PNP	Philippine National Police
PPA	Programs, Projects and Activities
PPMP	Project Procurement Management Plan
PRC	Professional Regulation Commission
PWI	Procurement Watch Incorporated
R.A.	Republic Act
R.A. 9184	Republic Act No. 9184, otherwise known as the "Government
	Procurement Reform Act"
RD	Regional Director
RIS	Requisition and Issuance Slip
RFP	Request for Proposal
RFQ	Request for Quotation
ROW	Right-of-Way
RR	Revenue Region
SARO	Special Allotment Release Order
SBD	Standard Bidding Documents
SCC	Special Conditions of Contract
SEC	Securities and Exchange Commission
SME	Small and Medium Enterprises
SOW	Scope of Work
SUC	State Universities and Colleges
SWA	Statement of Work Accomplished
TOR	Terms of Reference
TSO	Technical Support Office
TWG	Technical Working Group
UNDB	United Nations Development Business
VAT	Value-Added Tax
WB	The World Bank
WFP	Work and Financial Plan

 

SECTION 1. General Provisions. —

Legal Basis for the Procurement Manual

Section 6 of IRR-A of RA 9184 otherwise known as The Government Procurement Reform Act provides the legal basis for the development of this Procurement Manual (Manual).

This Manual aims to standardize the procurement process, in effect preventing confusion, ensuring transparency, and enabling procuring entities to conform to the principles that govern all government procurement activities. However, whenever necessary to suit the particular needs of the BIR, it may be modified subject to the approval of the GPPB.

The GPPB shall review this Manual periodically, and whenever necessary, ensure its applicability to existing conditions. The BIR may submit to the GPPB its recommendations for specific revisions to the Manual. Any such revisions must be approved by the GPPB and must be consistent with existing procurement laws, rules, regulations and policies. HESAIT

In case of an inconsistency or conflict between this Manual and R.A. 9184 and/or its IRR-A, the latter shall govern.

Coverage, Scope, and Application

Sections 1, 4, and 5 of IRR-A provide the legal reference for the coverage, scope and application of this Manual.

Coverage

This Manual must be used for all procurement activities of the BIR and its Regional Offices.

Scope

The provisions of R.A. 9184 shall apply to the procurement of goods and services, infrastructure projects, and consulting services, regardless of source of funds, whether local or foreign. However, procurement funded partly or fully by IFIs shall follow the procedures specified under the loan or grant agreement; provided that in the absence of such procurement guidelines, or if the guidelines provided are silent on specific procurement procedures, then the procurement processes and procedures provided in R.A. 9184 and its IRR-A will apply suppletorily.

In view of the above, and in due regard to the harmonization efforts among GOP, WB, ADB, and JBIC, this Manual will not only cover R.A. 9184 and its IRR-A, but the harmonized procedures found in the PBDs as well. Unless otherwise indicated herein, this Manual shall apply to foreign-assisted projects as well.

This Manual does not cover private sector infrastructure or development projects, such as the build-operate-transfer scheme and its variants. Likewise, this Manual does not cover the acquisition of right-of-way site or location for infrastructure projects, and the leasing out of government-owned buildings or spaces for private use.

For application of procurement methods needed to address peculiar situations, agencies are advised to consult the GPPB. aICHEc

Application

The procurement procedures provided in this Manual shall apply to the following:

1. Goods and Services;

2. Infrastructure Projects; and

3. Consulting Services.

This Manual shall be used together with the PBDs prescribed by the GPPB.

Principles of Government Procurement

Section 3 of IRR-A provides the legal reference for the principles of government procurement.

Government procurement shall be governed by the following principles:

Transparency

The procurement process and the implementation of procurement contracts must be transparent. Procuring entities must ensure the widest dissemination of bid opportunities and the participation of pertinent non-government organizations. Towards this end, posting in the BIR website (www.bir.gov.ph),in the PhilGEPS website, and in a conspicuous place within the premises of the BIR is required for all procurement. Moreover, in addition to the COA representative, the BAC of the BIR is required to invite observers coming from eligible and qualified PAs and NGOs to observe any or all stages of the procurement process. Finally, each procurement transaction must be properly documented and such records must be maintained and made available to proper parties.

Competitiveness

Public procurement must be competitive and, as a rule, be conducted through public bidding, except as otherwise provided for under the GPRA, its IRR-A and this Manual. A competitive bidding process treats bidders equitably and provides fair grounds for competition among themselves, thereby ensuring that no single bidder significantly influences the outcome of the bidding. Competition among bidders will urge them to offer more beneficial terms to the government. Hence, the alternative methods of procurement must only be resorted to when competitive bidding is not a feasible option, in accordance with the conditions laid down in R.A. 9184, its IRR-A and this Manual.

Streamlining and use of technology in procurement

A streamlined procurement process that will uniformly apply to all government procurement must be adopted. The procurement process must be simple and made adaptable to advances in modern technology in order to ensure an effective and efficient method. The GPPB conducts a periodic review of government procurement procedures, and whenever necessary, formulates and implements changes thereto.

Accountability

A system of accountability must be established. Thus, both the public officials directly or indirectly involved in the procurement process as well as in the implementation of procurement contracts, and the private parties that deal with government are, when warranted by circumstances, investigated and held liable for their actions relative thereto. In relation to this, the CIR/RD are responsible for establishing and maintaining a transparent, effective, and efficient procurement system in the BIR. The responsibilities of each official involved in the procurement process must be clear and legally identifiable. ScaAET

Public Monitoring

Public monitoring of the procurement process and the implementation of contracts shall guaranty that these are awarded and performed strictly according to specifications. A system of reporting to the GPPB is provided for, while eligible and qualified CSOs such as NGOs, PAs, academic institutions, and religious groups are allowed to observe and monitor the procurement process and contract implementation.

To fully abide by these principles, the BIR shall consistently follow the procedures prescribed in this Manual.

SECTION 2. Procurement Organizations. —

The Organizational Structure

Sections 5 (q), 11, 13, and 14 of IRR-A provide for the legal reference for the organizational structure.

1. The BIR and its Procurement Unit/Office

a. The BIR

The Head of the Procuring Entity shall be the CIR or his duly authorized representative/s. For Revenue Region (RR),the RD or his duly authorized representative/s shall be considered as the Head of the Procuring Entity subject to the limitations and authority delegated by the CIR.

The CIR may likewise issue the proper directives delegating various procurement related functions such as approval of notice of extension, notice of award, notice to proceed, among others. aTSEcA

b. The BAC Secretariat

The CIR shall create a permanent BAC Secretariat with the discretion to create a new office or to merely designate an existing organic office to be the BAC Secretariat. The CIR may consider designating the existing Procurement Division at the National Office as the BAC Secretariat to ensure continuity as well as professionalization of the procurement function.

For the RR, the RD may create or consider the existing Administrative Division as its BAC Secretariat.

The number of personnel comprising the BAC Secretariat is dependent on the volume of transactions involved and the level of expertise required from the procurement officers. 

The CIR/RD should consider the following factors in selecting the personnel who will be assigned to the BAC Secretariat, among others: CScTDE

i. Integrity;

ii. Procurement proficiency, as shown by experience and trainings attended;

iii. Satisfactory completion in a certification program conducted by the GPPB-TSO or its accredited institutions, if any;

iv. The appropriate Civil Service qualification standards;

v. The appropriate rank of the head of the BAC Secretariat, which should be:

• At the National Office

- At least a fifth ranking (Division Chief) permanent employee

• At the Regional Office

- At least a third ranking (Division Chief) permanent employee

In designating members of the Procurement Unit/Office and the BAC Secretariat, the CIR/RD must ensure that check and balance is maintained, and procurement personnel are not given assignments that may conflict with their designation as such.

The CIR/RD shall ensure that the Procurement Unit/Office will have a sufficient number of personnel who will provide secretariat support to the BAC and perform the other functions of the Procurement Unit/Office, as provided in this Manual. The said Unit/Office shall be strengthened through continuing procurement training and education of the staff and deployment of additional personnel, if necessary.

2. The Bids and Awards Committee (BAC)

The CIR/RD must create a single BAC in the NO/RR. However, separate BACs may be created under the following circumstances:

a. The items to be procured are complex or specialized, e.g.,ICT resources, infrastructure projects, and other specialized procurements; or

b. If, even after undergoing "jury duty",the single BAC cannot manage the procurement transactions as shown by delays beyond the allowable limits.

3. BAC Members

The CIR/RD must designate the Members of the BAC in accordance with the following rules:

i. The BAC must consist of at least five (5) members but not to exceed seven (7).Of the five (5) members, three (3) must be regular members, and the two (2) must be provisional members. Should the CIR/RD desire to create a seven (7)-member BAC, he/she may designate two (2) additional regular members, or two (2) additional provisional members, or one (1) additional regular and one (1) provisional member.

The regular members are:

• An officer, who is at least a third-ranking permanent official of the BIR, Assistant Commissioner (ACIR) (preferably from the Legal Service) at the NO, and Assistant Regional Director (ARD) at the RR, who shall be designated as the Chairman;

• An officer, who holds at least a third ranking permanent plantilla position, with knowledge, experience and/or expertise in procurement who represents the legal, operations, information system, resource management and other concerned groups at the NO, and assessment, legal and collection divisions at the RR;

• An officer, who holds at least a third ranking permanent plantilla position,with knowledge, experience and/or expertise in procurement who represents the Financial and Administrative Service (FAS) at the NO, and Administrative Division at the RR. SEACTH

The provisional members are:

• For the NO

- An Officer, who is at least a Division Chief, with technical expertise relevant to the procurement at hand, and, to the extent possible, has knowledge, experience and/or expertise in procurement;

- An Officer, who is at least a Division Chief, representing the end user unit who has knowledge of procurement laws and procedures.

• For the RR

- An Officer, who is at least an Assistant Division Chief, with technical expertise relevant to the procurement at hand, and, to the extent possible, has knowledge, experience and/or expertise in procurement; ESCacI

- An Officer, who is at least an Assistant Division Chief, representing the end user unit who has knowledge of procurement laws and procedures.

ii. The Chairman and Vice-Chairman shall be regular members of the BAC.

iii. The CIR/RD shall designate the BAC Chairman, and may likewise designate the Vice-Chairman from the remaining regular members.

iv. The BAC members shall be designated for a term of one (1) year only, reckoned from the date of designation. However, the CIR/RD may renew such designation at his discretion.

It is noted that appointment to the BAC is in the nature of a designation, in addition to the regular duties of the subject official, and is not an appointment contemplated under the Civil Service rules.

In accordance with the thrust to professionalize the procurement organization, the CIR/RD is encouraged to re-appoint BAC members who have shown efficiency and probity in the performance of their duties.

v. In case of resignation, retirement, separation, transfer, re-assignment, or removal of a BAC member, the CIR/RD may designate a replacement, who shall be similarly qualified as the official replaced. The replacement shall serve for the unexpired term. In case of leave or suspension, the replacement shall serve only for the duration of the leave or suspension.

vi. The CIR/RD may suspend or remove a member of the BAC for justifiable causes, including, but not limited to, violations of the provisions of the R.A. 9184 or its IRR-A.

vii. The following officers of the BIR are disqualified from membership in the BAC:

• CIR;

• DCIRs who approve procurement transactions;

• ACIR-FAS/ISOS;

• Regional Director;

• other officials who approve procurement transactions;

• Chief, Accounting Division (NO)/Chief, Finance Division (RR),unless the Accounting Division/Chief, Finance Division is the end-user unit, in which case the Chief, Accounting Division/Chief, Finance Division may be designated as an end-user member.

4. The Technical Working Group (TWG)

a. The BAC may create a TWG from a pool of technical (operations, resource management, information systems and other concerned groups),financial/administrative and/or legal experts to assist in the procurement process.

b. In creating the TWG, the BAC shall consider the expertise required based on the nature of the procurement. It may create several TWGs to handle different procurements, for example:

• Infrastructure Projects, whose membership shall include experts in civil works like civil engineers, an architect, an accountant or finance expert to handle the financial aspect of the procurement, etc.;

• ICT Projects, whose membership shall include experts in ICT like a computer engineer, a systems analyst, a programmer, etc.;and

• For a specific procurement, particularly if the procurement at hand is highly technical or is a major or priority project of the government.

c. In highly meritorious cases, the BIR may also engage the services of consultants in accordance with the IRR-A and Volume 4 of this Manual, subject to the availability of funds, who will assist the TWG and the BAC on the procurement at hand. For this purpose, the CIR shall certify that the in-house experts cannot provide adequate technical, financial, legal or project or contract management advice related to the procurement. These consultants, however, shall only have an advisory capacity, and may not vote during deliberations.

5. Observers

a. Purpose of the Observers. To enhance the transparency of the process, the BAC is required to invite Observers who may attend and observe all stages of the procurement, especially:

i. pre-bid conference;

ii. opening of bids;

iii. bid evaluation;

iv. post-qualification;

v. contract award; and

vi. special meetings of the BAC. DCcHAa

b. Notice to Observer/s

Observers will be informed at least two (2) days before the stages of procurement to which observer/s shall be invited: pre-bid conference; opening of bids; post qualification; and contract award; and special meetings of the BAC. The absence of observer/s will not nullify the BAC proceedings, provided that they have been duly invited in writing. (Section 13.3 of IRR-A)

c. The BAC must invite four Observers, who shall be:

i. COA representative;

ii. representative from the Internal Audit Division, Inspection Service for the National Office and a representative from the SID for the Regional Office;

iii. at least one (1) observer who shall come from a duly recognized private group in a sector or discipline relevant to the procurement at hand, for example:

• for infrastructure projects

/ National Constructors Associations duly recognized by the CIAP, such as, but not limited to, the PCA; and the NACAP; or

/ PICE

• for goods

/ A specific relevant chamber-member of the PCCI or the PICPA

• for consulting services

/ a project-related professional organization accredited or duly recognized by the PRC or the Supreme Court, such as, but not limited to, the PICE; and the PICPA; or EHScCA

/ the COFILCO

iv. at least one (1) observer who shall come from an NGO.

d. Criteria for Observers from the Private Sector. In accordance with Section 13.2 of the IRR-A,the Observers coming from the private sector (e.g.,organization of experts and NGOs) should belong to an organization duly registered with the SEC. Moreover, they should meet the following criteria:

i. knowledge, experience or expertise in procurement or in the subject matter of the contract to be bid;

ii. absence of direct or indirect financial interest in the contract to be bid out;

iii. any other criteria that may be determined by the BAC (for example, the BAC in decentralized units may require that the Observers should be based in the area to ensure their attendance during the meetings.) TaDAIS

Roles and Responsibilities

Sections 12, 13 and 14 of IRR-A provide the legal reference for the roles and responsibilities.

1. The BIR and the Procurement Unit/Office

a. Responsibilities of the CIR/RD. The CIR/RD shall have the following responsibilities in the procurement process:

i. Ensure that the APP is regularly prepared, reviewed and updated by the FAS and Administrative Division, and end-user units, for the NO and RR, respectively, in coordination with their respective BAC Secretariat, in accordance with the guidelines set forth herein. 

ii. Approve the APP or delegate the approval authority to a second-ranking official.

iii. Ensure that all procurements are in line with the approved APP.

iv. Establish the BAC and the BAC Secretariat in accordance with the foregoing guidelines.

v. Upon submission by the BAC of the recommendation for award, the CIR/RD must approve the same. Such recommendation may, however, be disapproved only on valid, reasonable and justifiable grounds to be expressed in writing, and furnished to the BAC.

vi. Ensure that the BAC and the BAC Secretariat gives utmost priority to BAC assignments over all other duties and responsibilities, until the requirements for the said assignments at hand are completed. (Section 14.3 of IRR-A) SIaHTD

vii. Ensure that the staff of the Procurement Unit/Office and the members of the BAC, BAC Secretariat and TWG are given ample training on procurement and related matters, with the end in view of professionalizing the procurement organization of the BIR.

viii. Impose the necessary administrative sanctions on errant members of the BAC Secretariat/BAC/TWG, in accordance with Section 70 of the IRR-A.

ix. Ensure that the members of the BAC and the TWG shall receive their incentives.

Under Sections 37 and 38 of R.A. 9184, in cases where the CIR is required to approve specific contracts, he shall ensure that the same are approved within the time frame indicated in the IRR-A, that is, within 10 calendar days from receipt of the transmittal to his office. Otherwise, such contracts, if not acted upon within the reglementary period, shall be deemed approved.

b. Responsibilities of the BAC Secretariat.

i. As the main support of the BAC, it shall have the following responsibilities:

• Provide administrative support to the BAC and the TWG, if necessary;

• Organize and make all necessary arrangements for the BAC meetings as well as TWG meetings, if necessary;

• Attend BAC meetings as Secretary;

• Prepare Minutes of the BAC meetings;

• Take custody of procurement documents and be responsible for the sale and distribution of bidding documents to interested bidders; aTcIEH

• Assist in managing the procurement process;

• Monitor procurement activities and milestones for proper reporting to relevant agencies and/or end-users, when required;

• Be the central depository of all procurement related information and continually update itself with the most current GPPB resolutions issuances, circulars and events, and downstream the same to all relevant officer, employees, and parties requiring information. For this purpose, all information released by the GPPB can be secured electronically from www.gppb.gov.ph;

• Consolidate PPMPs submitted by the various project proponents and end-user units of the BIR into APP, to make them available for review as indicated in Section 7 of the IRR-A;

• Make arrangements for the pre-procurement and pre-bid conferences and bid openings;

• Be the central channel of communications for the BAC with the project proponents, end-users, other government agencies, providers of goods, civil works and consulting services, and the general public;

• Assist the BAC in preparing drafts of BAC resolutions;

• Provide utmost priority to BAC assignments over all other duties and responsibilities, until the requirements for the procurement at hand are completed (Jury Duty); ACaTIc

• Create, maintain and update the registration database of suppliers, contractors, and consultants;

• Manage and undertake procurements using the following alternative methods — Repeat order and shopping — upon prior resolution of the BAC and approval by the CIR;

• Transact with the PhilGEPS in behalf of the BIR; and

• Ensure that all procurements undertaken by the BIR are properly documented, to provide an audit trail of the procurement process.

c. Responsibilities of the Procurement Division/Administrative Division

• Based on inputs from the BAC and the TWG, prepare the procurement documents, i.e.,purchase orders, job orders, contracts, and their attachments, for processing by the Budget, Accounting, Legal and Finance Offices, and routing to the signing and approving authorities;

• Monitor the status of the procurements routed for approval, and cause the correction of any formal deficiencies in the said procurement documents to facilitate action on the part of the approving authorities;

2. The BAC

a. Responsibilities of the BAC.

i. Recommend to the CIR/RD whether to use public bidding or any of the alternative methods in procuring the goods, consulting services and infrastructure projects included in the APP; aDcETC

ii. Creation of the TWG, if necessary, from a pool of technical, (operations, resource management, information systems and other concerned groups),financial and legal experts to assist in the procurement process;

iii. Advertise and/or post the invitation to bid.

iv. Conduct pre-procurement and pre-bid conferences.

v. Determine the eligibility of prospective bidders in accordance with the guidelines set forth in R.A. 9184 and its IRR-A.

vi. Issuance of Certificate of Eligibility. (refer to RMO No. 3-2007)

vii. Sole authority to receive and open bids.

viii. Conduct the evaluation of bids with the assistance of the TWG.

ix. Undertake post-qualification proceedings, with the assistance of the TWG.

x. Resolve motions for reconsideration filed by prospective bidders and other concerned parties with respect to the conduct of the bidding process.

xi. Recommend award of contracts to the CIR/RD or to the duly authorized representative.

xii. Recommend the imposition of sanctions in accordance with Rule XXIII of the IRR-A.

xiii. Prepare a procurement monitoring report that shall be approved and submitted by the CIR/RD to the GPPB on a semestral basis or whenever required.

xiv. For each procurement transaction, accomplish a checklist showing its compliance with R.A. 9184, its IRR-A and this Manual. This will be submitted to the CIR/RD and made a part of the transaction record.

xv. Invite the Observers required by law to be present during all stages of the procurement process, in accordance with the guidelines stipulated in R.A. 9184, its IRR-A and this Manual.

xvi. Furnish the Observers, upon the latter's request, with the following documents:

• Minutes of the proceedings of BAC meetings;

• Abstract of bids;

• Post-qualification summary report;

• APP and related PPMP; and

• Copies of "opened" proposals.

xvii. Recommend to the CIR/RD extensions of existing contracts, as proposed by the project proponents, for projects undergoing procurement process.

xviii. Give utmost priority to BAC assignments over all other duties and responsibilities, until the requirements for the procurement at hand are completed (Jury Duty).

xix. Perform such other related functions as may be necessary to the procurement process.

b. Quorum

The majority (one-half of membership plus one) of the BAC members shall constitute a quorum, provided that the Chairman or the Vice-Chairman should be present in all meetings and deliberations. The Chairman or, in his absence, the Vice-Chairman shall preside over the meetings. The Presiding Officer shall vote only in case of a tie. TaDSCA

It should be noted that the designation of an alternate BAC member is not provided for by R.A. 9184, and that BAC representatives are not counted for purposes of determining quorum.

All BAC decisions should be embodied in resolutions signed by all members and the Chairman or Vice-Chairman thereof, as the case may be, who are present during the deliberations/meetings.

3. The TWG

Responsibilities of the TWG.

A. Assist the BAC in the following:

i. Preparation of the bidding documents in conformity with the standards set forth by R.A. 9184, its IRR-A, PBDs and this Manual. TSEcAD

ii. Conduct of eligibility screening of prospective bidders, and in the short listing of prospective bidders in case of biddings for consulting services.

iii. Evaluation of bids and prepare the accompanying reports for the BAC's consideration and approval.

iv. Conduct of post-qualification activities and prepare the post-qualification summary report for the BAC's approval.

v. Preparation of the resolution recommending award, with regard to the technical aspect, if necessary.

B. Provide utmost priority to BAC assignments over all other duties and responsibilities, until the requirements for the procurement at hand are completed (Jury Duty). CIDTcH

4. The Observers

They represent the public and the taxpayers who are interested in seeing to it that procurement laws are observed and irregularities are averted, thus, enhance transparency of the procurement process.

Responsibilities of the Observers.

a. Preparation of the Procurement Observation Report, either jointly or separately, indicating their observations made on the bidding activity conducted by the BAC.

The report shall indicate:

i. An assessment of the extent of the BAC's compliance with the substantive and procedural requirements of R.A. 9184, its IRR-A and this Manual.

ii. The areas of improvement in the BAC's proceedings.

The report shall be submitted to the CIR/RD, and a copy thereof will be furnished the BAC Chairman, who shall forward it to the BAC Secretariat for inclusion in the procurement documents that will be submitted to the proper authorities for approval. This will be part of the official record of the bidding, and part of the audit trail. The Observer may also give a copy of the Report to the Office of the Ombudsman or the Resident Ombudsman in any of the following instances:

i. when the BAC has failed to follow the prescribed bidding procedures; or

ii. for any justifiable and reasonable ground where the award of the contract will not redound to the benefit of the Government.

b. For the purpose of preparing the report, the Observer/s may request for copies of the following documents from the BAC:

i. Minutes of related proceedings of BAC meetings;

ii. Abstract of bids;

iii. Post-qualification summary report; 

iv. Pertinent portions of the APP and related PPMP; and

v. Copies of "opened" proposals.

c. The Observer/s must sign as witness in the Abstract of Bids. If the BAC failed to correctly observe the proper procedure, the Observer/s must indicate in the Procurement Observation Report the procedural and/or substantive lapses of the BAC. This will enable the CIR/RD to be apprised of any irregularities in the bidding process, for consideration. SEAHID

d. The Observer/s shall sign as witness in the post-qualification summary report if, in their independent observation, the BAC followed the procedure described in the IRR-A of R.A. 9184 and this Manual, and that the Observer/s is amenable to the results of the post-qualification. If the Observer/s finds the post-qualification procedures irregular or the report does not match the actual findings, he shall so state in writing addressed to the BAC Chairman, and the same shall be attached to the Post-qualification Summary Report submitted to the approving authority. The Observer's written dissent will be part of the official record of the procurement.

Honoraria

Section 15 of IRR-A provides for the conditions in granting honoraria.

The BIR is authorized to grant honoraria to the members of the BAC and the TWG, provided:

1. the amount so granted does not exceed twenty-five percent (25%) of their respective basic monthly salary;

2. funds are available for the purpose; and

3. the grant of honoraria conforms to the guidelines promulgated by the DBM under Budget Circular Nos. 2004-5 and 2004-5A, as implemented by RMO No. 42-2004 dated August 24, 2004 (Annexes A, B and C).

The Circulars provide, among others, the following:

1. The chairman and members of the BAC and the TWG may be paid honoraria only for successfully completed procurement projects. In accordance with Section 7 of the IRR-A of R.A. 9184, a procurement project refers to the entire project identified, described, detailed, scheduled and budgeted for in the PPMP prepared by the BIR. Furthermore, a procurement project shall be considered successfully completed once the contract has been awarded to the winning bidder.

2. The payment of honoraria shall be limited to procurement that involves competitive bidding. Competitive bidding activities are present only in:

a. Open and competitive bidding;

b. Limited source bidding;

c. Negotiated procurement under Section 53 (a) of the IRR-A, where there has been failure of bidding for the second time; and

d. Negotiated procurement under Section 53 (b) of the IRR-A following the procedures under Section 54.2 (b) thereof, whereby the Procuring Entity shall draw up a list of at least (3) suppliers or contractors which will be invited to submit bids.

Conversely, honoraria will not be paid when procurement is thru:

a. Direct contracting;

b. Repeat order;

c. Shopping;

d. Negotiated procurement under Section 53 (b) of the IRR-A following the procedures under Section 54.2 (d) thereof, whereby the Procuring Entity directly negotiates with previous supplier, contractor or consultant; or when the project is undertaken by administration or thru the AFP, in case of infrastructure projects; and

e. Negotiated procurement under Section 53 (c) to (g) of the IRR-A.

3. To be entitled to honoraria, personnel should be duly assigned as chair or member of the BAC or the TWG by the head of the department/agency concerned.

4. The members of the BAC Secretariat who are performing the attendant functions in addition to their regular duties in other non-procurement units of the agency may likewise be paid honoraria at the same rate as the TWG chair and members, subject to the same regulations. CScTDE

The members of the BAC Secretariat whose positions are in the Procurement Unit of the agency shall not be entitled to honoraria. The payment of overtime services may be allowed, subject to existing policy on the matter.

5. In lieu of honoraria, the payment of overtime services may be allowed for the administrative staff, such as clerks, messengers and drivers supporting the BAC, the TWG and the Secretariat, for procurement activities rendered in excess of official working hours. The payment of overtime services shall be in accordance with the existing policy on the matter.

6. Those who are receiving honoraria for their participation in procurement activities shall no longer be entitled to overtime pay for procurement-related services rendered in excess of official working hours.

7. The amount necessary for the payment of the honoraria and overtime pay authorized herein shall be sourced only from the following:

a. proceeds from sale of bid documents;

b. fees from contractor/supplier registry;

c. fees charged for copies of minutes of bid openings, BAC resolutions and

d. other BAC documents;

e. protest fees;

f. liquidated damages; and

g. proceeds from bid/performance security forfeiture.

8. Pursuant to the DOF-DBM-COA Permanent Committee Resolution No. 2005-2 dated June 2005, all agencies are authorized to treat the collections from the sources identified above as trust receipts to be used exclusively for the payment of honoraria and overtime pay duly authorized. Agencies may utilize up to one hundred percent (100%) of the said collections for the payment of honoraria and overtime pay subject to the guidelines in the Budget Circular. Any excess in the amount collected shall be remitted by NGAs to the BTr. In the case of GOCCs and LGUs, the same shall form part of their corporate or local government funds, respectively. DTIaCS

Also see GPPB Resolution 21-2005 on the Guidelines for Legal Assistance and Indemnification of BAC Members and its Support Staff, which provide the general conditions, procedures and funding source for free legal assistance, liability insurance and medical assistance.

In addition, DOF-DBM-COA Permanent Committee Resolution No. 2005-2 dated June 2005, all agencies are authorized to treat the collections from the sources identified above as trust receipts to be used exclusively for the payment of honoraria and overtime pay duly authorized. Agencies may utilize up to one hundred percent (100%) of the said collections for the payment of honoraria and overtime pay subject to the guidelines in the Budget Circular. Any excess in the amount collected shall be remitted to the BTr.

Professionalization of Procurement Units, BAC, TWG

Section 16 of IRR-A provides for the professionalization of personnel of Procurement Division or Administrative Division, members of the BAC, BAC Secretariat, and the TWG, and others concerned.

It is the responsibility of the CIR/RD to ensure that all officials and employees involved in the procurement process will avail of the procurement training conducted by the GPPB and other GPPB accredited bodies offering the different modules on procurement-related training (visit www.gppb.gov.ph). The BIR must also develop and implement its own in-house training programs in accordance with the guidelines and standards prescribed by the GPPB-TSO. For this purpose, it should include provisions for such training in its annual budget proposals submitted to the DBM and Congress. cCAIES

Moreover, the CIR/RD must regularly monitor the work quality of the Procurement Division/Administrative Division and other concerned offices, through a review of the procurement monitoring reports regularly submitted by the BAC. Management Committee/Regional Meetings may likewise be conducted for this purpose.

In line with the standardization of the procurement procedures and the thrust towards strengthening the procurement function to increase operational efficiency and effectiveness, the CIR/RD must aim to consolidate or unify all procurement activities of the organization, whether locally funded or foreign assisted, and whether pertaining to goods, infrastructure projects or consulting services, subject to the provision of Section 11.1 of the IRR-A.

SECTION 3. Procurement Planning. —

Procurement Planning and Budget Linkage

Section 7 of IRR-A provides the legal reference for the procurement planning and budget linkage.

Plans may cover short-term, medium-term, or long-term periods. But in all cases, a plan involves resource allocation and scheduling. This is particularly true for procurement planning, which is a critical component of the BIR budget. Plans ensure that the overall goal of the particular project will be achieved effectively and efficiently. Through plans, the BIR is able to effectively manage and track procurement all the way to contract performance. As such, it allows managers to determine how to allocate limited cash and other appropriate resources under a given time line and identify choke-points, weaknesses, and delays in the entire activity that can be addressed or eliminated.

Every year, upon issuance of the Budget Call by the DBM, the BIR prepares the Agency Budget Proposal for the succeeding calendar year, taking into consideration the budget framework for that year. At this stage, the Project Proponent/end-user units or the different operating units of the BIR prepare their respective WFP for their different PPA, using forms provided by the DBM as annexes to the Budget Call.

The BIR's Budget Proposal embodies the agency thrusts and the resources needed to produce the key services it delivers to the public. Procurement planning should be done within this budgetary context, reflecting the BIR's priorities and objectives for the budget period. Procurement Planning therefore involves two levels: the Agency's over-all strategic plan and the project and/or operational plans that contain the details of the manner in which the strategic plan will be carried out. In the context of budget preparation, the project and/or operational plans are reflected in the WFP for each PPA. The WFP contains the initial list of projects/requirements of each Project Proponent/end-user and corresponding estimated budgetary requirement. It is submitted to the BIR's Budget Division on or about March of each year, to coincide with the submission of their respective budget proposals. These WFPs will be evaluated and, if warranted, included in the BIR's Budget Proposal. The WFPs will support the Budget Proposal submitted to DBM, and becomes basis for the proposed PPMP. The PPMP, including the Terms of Reference, shall likewise be submitted to the BAC Secretariat not later than March 31 of each year, for consolidation of the initial list of items/projects for procurement into the proposed APP. Finalization of the PPMP's and their consolidation into an APP for approval by the CIR/RD shall be done as soon as the National Expenditure Program (NEP) for a given budget year is released by the DBM, which is around July of each year. The NEP shows the DBM recommended budget for the BIR for the budget year under consideration.

The ABC referred to in R.A. 9184 and its IRR-A basically refers to the proposed budget for the project approved by the CIR/RD based on the APP, as consolidated from the various PPMP's, which is contained in the BIR Budget as reflected in the GAA and/or continuing appropriations. Thus, BIR may post and/or advertise procurement opportunities for projects proposed in the GAA even prior to its enactment but cannot award contracts until after the allotment has been released by the DBM. ACcaET

Preparation of the Project Procurement Management Plan (PPMP)

Section 7 of IRR-A provides for the preparation of the PPMP.

1. The PPMP

The PPMP serves as a guide document in the procurement and contract implementation process, as well as a vital reference in procurement monitoring. Moreover, it serves as an important tool in resource and financial management, allowing the BIR the flexibility to optimize the utilization of scarce resources. Well-planned procurement will significantly minimize the practice of doing short-cuts to ensure that the BIR is able to purchase its requirements for the delivery of public services.

A PPMP deals primarily with:

a. planning for the procurement of project requirements;

b. bidding or procurement strategy;

c. source of fund;

d. contract duration/termination;

e. delivery and payment schedules; and

f. other major milestones.

2. Developing the Project Requirements

The development of the project requirements should be done during the preparation of the proposed PPMP. At this stage of the procurement planning process, the Project Proponent/end-user must:

a. Identify their needs

What is the purpose of the procurement? What are the problem/s or needs that the project or procurement aims to address?

b. Identify the alternative solutions/products/services

What alternative solutions to the problem/s or need/s are available in the market? What are the sources of these products and services? What is the profile of the supply market? Are they easily obtainable? How much is the cost of each alternative?

The Project Proponent/end-user should conduct the market research at this point, and gather as much information about the Goods, Services or expertise required. At the end of this activity, it should know the market or the industry well enough to make an informed choice.

c. Compare the alternatives (consider qualitative and quantitative factors)

Consider how the Project Proponent/end-user would rate the various alternatives in terms of the following:

i. Value for money

The concept of value for money is not restricted to price alone. In addition to costs, other considerations are non-cost factors like suitability or fitness to the purpose, quality, among others. In comparing costs, all relevant costs should be considered, e.g.,acquisition costs, life-cycle costs (including maintenance and operating costs for goods and infrastructure, spare parts of goods, etc.).

ii. Risk assessment and management

Some risks that may be identified are the obsolescence of equipment, the availability of support services, the capacity of contractors to implement the project, among others. It is recommended, especially for high-technology, complex, or high value procurement, that the Project Proponent/end-user identifies the risks involved and come up with its own risk management plan. Or the bidders could be required to submit, as part of their technical document, a risk assessment and risk management plan.

iii. Government policies that have an impact on the project or procurement

Are there any restrictions on the procurement contemplated? What relevant government policies should be considered in determining the goods, infrastructure or consulting services that will be purchased/procured? DHAcET

iv. Other relevant factors that may be identified by the Project Proponent/end-user.

d. Choose from among the alternatives the most beneficial to the BIR, and make the necessary recommendation to the approving authority.

In developing the project requirements and TOR, the BIR shall engage the services of technical experts, whether in-house or consultants, to ensure that the requirements and the TOR are adequate to achieve the objectives of the particular procurement.

3. Writing the TOR

The TOR is the document that provides the details of the project to be procured. The TOR in standard format for all procurement by the BIR containing the Technical Specifications, Scope of Work, etc.,is shown in Annex D.

The following guidelines are, however, considered helpful in writing the TOR:

a. It is important that all stakeholders are consulted, and the actual requirements of the Project Proponent/end-user are determined and put in writing.

b. If the procurement is complex, highly technical, or high value, and the BIR does not have sufficient technical proficiency, it would be prudent to engage the services of technical experts who will serve as consultants in the preparation of the TOR. In engaging these consultants, the BIR shall follow the procedures for procurement of consulting services as laid down in Volume 4 of these Manuals. Moreover, care should be taken that possible conflict of interest is avoided; that is, the consultant/s engaged should not be connected with the prospective bidders/contractors, and are barred from being engaged by the latter for any purpose related to the procurement at hand.

c. The description should be generic and flexible, not product-specific or seemingly tailored for a particular brand, product, contractor or consultant, unless the procurement involves products or services that have intellectual property rights attached to it, or are exclusively offered by a single source, and there are no suitable substitute products or services. If the procurement involves products or services that have intellectual property rights attached, or are exclusively offered by a single source without any suitable substitute, then the Project Proponent/end-user must be able to satisfactorily justify the need for such a product or service.

d. The description should be clear and unambiguous, to avoid confusion and to facilitate the evaluation process. It is noted that the TOR is also the basis of the evaluation or, when applicable, the testing parameters.

e. Considering that planning is done sometime before actual procurement and even farther from the date of actual delivery or project implementation, changes in technology or changes in the concerned industry or field of expertise should already be taken into account in writing the TOR. This will allow the BIR to procure the latest products and/or services available in the market.

4. Determining the Approved Budget for the Contract

The ABC refers to the budget for the contract duly approved by the concerned DCIR/RD, as provided for in the GAA and/or continuing appropriations. (Section 5 of IRR-A).Thus, it refers to the proposed budget for the project as reflected in the APP duly approved by the CIR/RD. (GPPB Resolution 011-2005 dated 26 May 2005) HaAISC

In determining the ABC, the Project Proponent/end-user has to consider several factors, namely: the appropriation for the project or procurement (whether taken from the current year's appropriations or continuing appropriations),the market price of the goods and/or services being procured, inflation and cost of money which are directly related to the procurement time table.

The determination of the ABC for each type of procurement (Goods, Infrastructure Projects and Consulting Services) is discussed in Volumes 2, 3 and 4.

5. Procurement Milestones

The PPMP, like any plan, is not complete without including therein the schedule of significant activities. The procurement milestones for public bidding referred to are the following:

o Pre-procurement conference;

o Preparation of bidding documents;

o Advertisement and/or posting of the IAEB;

o LOI (for procurement of infrastructure projects and consulting services);

o Eligibility check (for procurement of infrastructure projects and consulting;

o Issuance and availability of bidding documents;

o Pre-bid conference;

• Request for clarification

• Supplemental/Bid Bulletin

o Submission and opening of bids;

o Bid evaluation;

o Notification for negotiation (for consulting services);

o Negotiation (for consulting services);

o Post-qualification and determination of LCRB or HRRB;

o Approval of resolution;

o Issuance of notice of award;

o Contract preparation and signing;

o Approval of contract by higher authority;

o Issuance of notice to proceed;

o Project implementation.

For details on the specific activities for each type of procurement, please refer to Volumes 2 (for Goods),3 (for Infrastructure Projects) and 4 (for Consulting Services).Each of these significant activities should be scheduled so as to provide the Project Proponent/end-user unit with a guide in each procurement undertaken by the BIR. This will ensure that logistical support and other requirements of the BIR are promptly addressed, hence contributing to more efficient and effective delivery of public service. TacADE

The procurement milestones for alternative modes of procurement referred to are the following:

Limited Source Bidding

o Pre-procurement conference;

o Preparation of bidding documents;

o Posting of the IAEB;

o Issuance and availability of bidding documents;

o Submission and opening of bids;

o Bid evaluation;

o Post-qualification and determination of LCRB or HRRB; ASHICc

o Notification for negotiation;

o Negotiation;

o Approval of resolution;

o Issuance of notice of award;

o Contract preparation and signing;

o Approval of contract by higher authority

o Issuance of notice to proceed;

o Project implementation.

Direct Contracting

o Pre-procurement conference;

o Preparation of request for quotation;

o Posting of the IAEB;

o Issuance of request for quotation, TOR with annexes;

o Submission and opening of financial proposal together with the latest certificate of exclusivity duly authenticated by the appropriate Philippine Consulate, Authority of the Signatory or Representative to attend and negotiate in behalf of the company and Terms of Reference signed in all pages by the authorized signatory;  

o Bid evaluation;

o Post-qualification;

o Notification for negotiation;

o Negotiation;

o Approval of resolution;

o Issuance of notice of award;

o Contract preparation and signing;

o Approval of contract by higher authority;

o Issuance of notice to proceed;

o Project implementation.

Repeat Order

o Request of Project Proponent;

o BAC Resolution and approval;

o Preparation of request for quotation;

o Posting of the IAEB;

o Issuance of request for quotation and TOR with annexes;

o Submission and opening of financial proposal and Terms of Reference signed in all pages by the authorized signatory;

o Bid evaluation;

o Post-qualification;

o Notification for negotiation;

o Negotiation;

o Approval of resolution;

o Issuance of notice of award;

o Contract preparation and signing;

o Approval of contract by higher authority;

o Issuance of notice to proceed;

o Project implementation.

Shopping

o Preparation and issuance of request for quotation;

o Submission and opening of quotations;

o Bid evaluation;

o Preparation of Purchase Order/Job Orders, Certificate of Emergency Purchase and Abstract of Canvass;

o Approval of Purchase Order/Job Order;

o Issuance of Approved Purchase Order/Job Order;

o Delivery or commencement of project.

Negotiated Procurement

o Pre-procurement conference;

o Preparation of bidding documents;

o Posting of the IAEB;

o Issuance and availability of bidding documents;

o Submission and opening of bids;

o Bid evaluation;

o Post-qualification; CTSHDI

o Notification for negotiation;

o Negotiation;

o Approval of resolution;

o Issuance of notice of award;

o Contract preparation and signing;

o Approval of contract by higher authority;

o Issuance of notice to proceed;

o Project implementation.

6. Method of Procurement

As a general rule, all procurement should be through public bidding. However, the law recognizes that certain unique circumstances require the use of alternative methods of procurement. These are discussed in Section 4 (Various Methods of Procurement) of this Volume, and in Volumes 2, 3 and 4.

7. Format of the PPMP (prepared by the Project Proponent/end-user unit) (Annex E)

The PPMP shall contain the following information:

a. Title of the project;

b. General description of the project;

c. Duration of the contract (indicate if with MYOA);

d. Mode of procurement;

e. Procurement activity schedules; and

f. ABC.

8. Submission Timeline

The PPMP for the following year shall be submitted by the respective Project proponent/end-user to the BAC Secretariat for consolidation on or before April 30 of the current year.

Preparation of the Annual Procurement Plan (APP)

1. The Annual Procurement Plan

The APP is the document that consolidates the various PPMPs submitted by the Project Proponent/end-user within the BIR. It reflects the entirety of the procurement activities that will be undertaken by the BIR within the calendar year.

The APP as consolidated by the BAC through the BAC Secretariat upon submission by the Project Proponent/end-user of their respective PPMPs, in coordination with the FAS/RMG and Budget Section/Finance Division for the latter's review and recommendation prior to the approval of the CIR/RD.

In the preparation of the APP, the following shall be considered:

a. The APP shall include projects that are considered crucial to the efficient discharge of governmental functions. Only projects listed in the APP shall be procured during the year. A project is considered crucial if:

i. it is required for the day-to-day operations of the BIR; or

ii. it is in pursuit of the principal mandate of the BIR.

b. The APP shall include provisions for foreseeable emergencies based on historical records. The BAC, through the BAC Secretariat, shall include therein a lump sum to cover for these emergencies or contingencies, which amount shall not be more than four percent (4%) of the BIR's total appropriations for MOOE.

c. Scheduling of procurement activities should be done in such a manner that the BAC in coordination with the Project Proponent/end-user and Procurement Division/Administrative Division efficiently manage the conduct of procurement activities. Moreover, it is paramount that project implementation timelines are met.

Project Proponent/end-user shall review and update of the individual PPMPs and the APP shall be done regularly, at least once every six months or as often as necessary. They may avail of the services of technical experts to review the individual PPMPs. The updated PPMPs will then be submitted to the BAC Secretariat for subsequent inclusion in the updated APP. For flexibility and to encourage advance procurement actions, the APP and PPMP should also be based on proposed budget to allow for advance planning for the succeeding budget year. ACcHIa

The APPs of the Regional Offices would have to be submitted to the RMG, Attention: FAS, copy furnished Inspection Service, Attention: Internal Audit Division for information and monitoring purposes.

2. Procurement Strategy

The procurement strategy refers to the approach that will be adopted by the BAC in the procurement of the goods, infrastructure projects and consulting services included in the APP.

Examples of PPMPs with Procurement of Mixed Types:

a. ICT project involving procurement of goods (e.g.,licenses, workstations, network equipment, internet facility and peripherals);

b. civil works (e.g.,the installation of cables might involve the repair of some offices and other related civil works);

c. consulting services (e.g.,licenses, development hardware, design and development of information systems).

In the above cases, the BAC will have to exercise judgment in determining the bid lots and contract package. There are two approaches to this case — the project could be bid out as one package, or it could be divided into several bid lots (i.e.,supply of hardware, supply and installation of cables, design and development of information systems, and repair of facilities).There are advantages and disadvantages to either approach, and the BAC, through the help of the TWG and the Secretariat as well as the technical experts (if necessary),shall determine which is the best option for the BIR.

Under Section 5 (p) of IRR-A, project involving mixed procurement, the nature of the procurement shall be determined based on the primary purpose of the project. This is helpful in determining which type of procurement procedure to apply. However, there may be instances when the Project Proponent/end-user or the BIR itself may have difficulty determining or agreeing upon the primary purpose. In these cases, ascertaining the component with the highest price may be useful as an indicator of purpose, though not necessarily as a determining factor. In the example given above, it seems that the purpose is actually to computerize the internal operations of the BIR; hence, the single most important component of the project is the design and development of information systems. This being the case, the project could be bid out as a consulting service.

3. Format of the APP

The APP shall have an Executive Summary which shall include the following information (Annex F):

a. Summary title of major categories which are similar in nature (i.e.,IT and non-IT);

b. Classification by Groups/Divisions or District Offices (e.g.,mandatory requirements, sub-major projects, etc.);and

c. ABC.

4. Submission Timeline

The APP for the following year shall be submitted by the BAC Secretariat to the CIR/RD on or before July 31 of the current year.

SECTION 4. Various Methods of Procurement. —

Competitive Bidding

Section 10 of IRR-A provides that all procurement shall be done through competitive or public bidding, except as provided in Rule XVI of the same IRR-A, on the use of the alternative modes of procurement. IcESaA

Competitive or Public Bidding refers to the method of procurement which is open to participation by any interested party and which consists of the following processes: advertisement, pre-bid conference, eligibility screening of prospective bidders, receipt and opening of bids, evaluation of bids, post-qualification, and award of contract.

Alternative Methods of Procurement

Sections 48 to 54 of IRR-A provide reference for the alternative methods of procurement.

1. Conditions for Use of Alternative Methods of Procurement

In highly exceptional cases provided for in Article XVI of R.A. 9184 and Rule XVI of its IRR-A, the BIR is allowed to resort to the alternative methods of procurement in order to promote economy and efficiency, only upon approval by the CIR/RD or his duly authorized representative of the BAC Resolution recommending the use of any of the alternative methods of procurement.

a. Limited Source Bidding, otherwise known as selective bidding, is a method of procurement of goods and consulting services that involves direct invitation to bid by the concerned entity of all pre-selected suppliers or consultants with known experience or proven capability on the requirements of the particular contract. The pre-selected suppliers or consultants shall be all those appearing in the list maintained by the relevant Government authority (e.g.,Bureau of Food and Drugs for medicines, National Telecommunications Commission for telecommunication equipment, etc.) that has expertise and experience in the type of procurement concerned, which list should have been submitted to, maintained and updated with, the GPPB. For highly specialized goods and consulting services, where no such list is being maintained by a relevant Government authority, competitive bidding shall be conducted. It is noted that the purpose of the list is to regulate the quality of goods being offered and the qualifications of consultants in the particular field of expertise.

The particular conditions under which this alternative method of procurement may be used are outlined in Section 5, Vol. 2 (for procurement of goods, and Section 4, Vol. 4 (for procurement of consulting services),of this Manual. 

b. Direct Contracting or single source procurement is a method of procurement of goods that does not require elaborate bidding documents. The supplier is simply asked to submit a price quotation or a pro-forma invoice together with the conditions of sale. The offer may be accepted immediately or after some negotiations.

The particular conditions under which this alternative method of procurement may be used are outlined in Section 5, Vol. 2 of this Manual.

c. Repeat Order is a method of procurement of goods from the previous winning bidder, whenever there is a need to replenish goods procured under a contract previously awarded through Competitive Bidding.

The particular conditions under which this alternative method of procurement may be used are outlined in Section 5, Vol. 2 of this Manual.

d. Shopping is a method of procurement of goods whereby the BIR simply requests for the submission of price quotations for readily available off-the-shelf goods or ordinary/regular equipment to be procured directly from suppliers of known qualifications.

The particular conditions under which this alternative method of procurement may be used are outlined in Section 5, Vol. 2 of this Manual.

e. Negotiated procurement is a method of procurement of goods, infrastructure projects and consulting services, whereby the BIR directly negotiates a contract with a technically, legally and financially capable supplier, contractor, consultant or, where allowed, an individual consultant, only in the cases provided for in Section 53 of R.A. 9184 and Section 53, Rule XVI of its IRR.

The particular conditions under which this alternative method of procurement may be used are outlined in Section 5, Vol. 2, Section 4, Vol. 3 and Section 4, Vol. 4 of this Manual.

SECTION 5. Procurement by Electronic Means and the PhilGEPS. —

Procurement by Electronic Means and the Philippine Government Electronic Procurement System

Section 8 of IRR-A provides the legal reference for the procurement by electronic means and the PhilGEPS.

1. The PhilGEPS

Consistent with the policies of transparency and streamlining of the procurement process, and to achieve efficiency, ICT shall be utilized in the conduct of government procurement. A two-pronged approach has been adopted to achieve this: cCaSHA

a. institutionalization of the PhilGEPS, which will be used for procurement of common-use items and as repository of all Government procurement information; and

b. use or engagement of electronic procurement service providers by the individual Procuring Entities for procurement of non-common use items.

The PS-DBM manages the PhilGEPS under the supervision of the GPPB. The PhilGEPS serves as the single portal and primary source of information on all government procurement.

All Procuring Entities shall utilize the PhilGEPS, through its Electronic Catalogue facility, for the procurement of common-use supplies. Moreover, all IAEB, notices of award, and all other procurement-related notices shall be posted in the PhilGEPS, regardless of the method of procurement used by the Bureau of Internal Revenue.

The GPPB shall issue the necessary procedural guidelines covering procurement through the PhilGEPS.

2. Features of the PhilGEPS

a. Electronic Bulletin Board

The PhilGEPS shall have a centralized electronic bulletin board.

Procuring Entities are required to post the following in the PhilGEPS Electronic Bulletin Board:

i. IAEB for competitive bidding and notices of other procurement opportunities using the alternative methods of procurement;

ii. Supplemental/Bid bulletins;

iii. Contract awards, the corresponding Notices of award, including the reasons for award of contract;

iv. Results of bidding and related information; and

v. Other notices, announcements, information for interested parties.

Failure to post a procurement opportunity will render the resulting contract null and void.

Failure to post a Notice of Award shall render the erring government official/s administratively liable in accordance with R.A. 6713 and other pertinent laws, rules and regulations, and appropriate sanctions shall be imposed.

Posting of notices and other transactions with the PhilGEPS shall be done through the BAC Secretariat of the BIR.

Posting of the IAEB shall follow the guidelines in Section 21 of the IRR-A, Section 4, Vol. 2, Section 3, Vol. 3, and Section 3, Vol. 4 of this Manual.

b. Registry of Manufacturers, Suppliers, Distributors, Contractors and Consultants

The PhilGEPS shall have a centralized electronic database of all manufacturers, suppliers, distributors, contractors and consultants registered under the system. TACEDI

Registration shall entail the submission of the requirements specified by the PS-DBM. Details of the requirements may be obtained from the PS-DBM website (www.procurementservice.org),or the PhilGEPS website (www.procurementservice.net).Submission of these requirements may be done on-line at the PhilGEPS website or physically at the PhilGEPS office. Registration shall be effective for one (1) year and may be renewed, provided that the manufacturer, supplier, distributor, contractor or consultant concerned maintains its registration current and updated at least once a year, or more frequently when needed.

Manufacturers, suppliers, distributors, contractors and consultants applying for registration must also indicate their account number with a bank duly licensed by the BSP to facilitate payment as well as the posting of bid and performance security, when applicable. SaDICE

The PhilGEPS shall deny registration to or exclude from the registry any party that is found to have willfully misrepresented any of the information provided in the application for registration or who is in the "blacklist" of the Government or any of its procuring entities from participating in any of its procurement opportunities.

A manufacturer, supplier, distributor, contractor or consultant applying for registration shall be required to provide an e-mail address to which all communications from the BAC and the BIR shall be sent. The e-mail address provided shall be considered as such applicant's information system for purposes of reckoning the date of sending or receipt of electronic messages or documents.

Once the PhilGEPS allows electronic bid submission and other on-line transactions requiring digital signatures, registered manufacturers, suppliers, distributors, contractors and consultants shall secure a digital certificate from the appropriate certification authority to be able to participate in the procurement activities of the PhilGEPS.

Registration with the PhilGEPS is not tantamount to a finding of eligibility, nor is it a guaranty that a manufacturer, supplier, distributor, contractor or consultant may participate in a public bidding without first being determined to be eligible for that particular public bidding.

c. Electronic Catalogue

The PhilGEPS features a centralized electronic catalogue of common and non-common use goods, supplies, materials and equipment.

Procuring Entities are required to procure common-use goods, supplies, materials and equipment from the PS-DBM through the Electronic Catalogue in the PhilGEPS. Once the PhilGEPS is fully operational, the procedures for transacting with the PhilGEPS shall be provided for in detail in the websites of the PhilGEPS (www.procurementservice.net) and the PS-DBM (www.procurementservice.org).

The Electronic Catalogue may also feature non-common use items that may be procured directly and without public bidding by procuring entities from suppliers: Provided, however, That for an item to be carried in the Electronic Catalogue for this purpose, the supplier thereof must have been determined as the Lowest Calculated Responsive Bidder in a previous bidding conducted by PS-DBM or by a Procuring Entity for PS-DBM: Provided, further, That such item will be featured in the Electronic Catalogue for a maximum period of six (6) months unless another supplier offers a price lower by at least five percent (5%) and such supplier is determined by the Procuring Entity that conducted the previous bidding to meet the eligibility and bidding requirements for the item, in which case the item from the latter supplier will be that featured in the Electronic Catalogue for the remainder of the six (6)-month period. IEAacT

Procuring entities without internet access may avail of the PhilGEPS Public Access Terminals which shall be installed at DBM-designated locations in the provinces and in Metro Manila.

d. Additional Features

The PhilGEPS will also feature the following:

i. A Virtual Store that will enable the ordering of common-use and non-common use items online called a virtual store. This virtual store shall be open only to registered Procuring Entities and may not be accessed by suppliers.

ii. An Electronic Payment function that will allow the system to manage the generation of purchase orders and the payment of bids processed through the system. The focus of this feature is to facilitate the electronic transfer of funds from PS-DBM to and from Procuring Entities and suppliers, and from Procuring Entities to suppliers for bids managed directly by the BIR. This system will:

• Generate purchase orders from a bid notice, award notice or contract;

• Support approval process for purchase orders before any payment or fund transfer is processed;

• Have a process to submit request for payment upon delivery of goods and/or services and the completion of the approval process; and

• Have the ability to interface with the designated bank of the BIR and suppliers to support the electronic transfer of funds.

iii. An Electronic Bid Submission that will support the implementation of e-Bid submission processes, which includes creation of electronic bid forms, creation of bid box, delivery of bid submissions, notification to supplier of receipt of bids, bid receiving and electronic bid evaluation. This facility will cover all types of procurement for goods, infrastructure projects and consulting services. 

iv. Other features that may be developed in the future under the policy guidance of the GPPB.

The PhilGEPS will also feature a Virtual Store, Electronic Payment, Electronic Bid Submission, and such other features that may be developed in the future. Procedures for the use of these features will be published once these become operational. HEcaIC

Use of Procurement Service Providers

Section 8 of IRR-A provides for the use of procurement service providers.

The BIR may hire service providers who will provide electronic procurement systems and/or services for the procurement of non-common use supplies, infrastructure projects and consulting services. The BIR shall conduct a public bidding for this service.

Minimum Requirements for Service Providers

Electronic procurement service providers must meet the following minimum requirements to qualify as a service provider to the BIR:

1. the system must comply with the provisions of R.A. 9184, its IRR-A, R.A. 8792 (Electronic Commerce Act);

2. the system must be linked to the PhilGEPS, particularly with regard to the posting of all bid opportunities and awards;

3. the system must allow parallel manual submission of bids to the BIR;

4. the system must ensure that the BAC shall have complete control of the bidding process, and that the BAC's sole authority to open bids is strictly observed;

5. the system must be virus-resilient and the infrastructure must provide sufficient security which is at least equivalent to that employed by the PhilGEPS, such as, but not limited to, firewall and encryption devices;

6. must provide for use of electronic signatures and other current electronic authentication devices;

7. the service provider must have sufficient redundant back-up facilities;

8. the system must have provisions for linkage to the BIR's Financial Management Information System, Logistics Management System, and other internal information systems that may interact with the procurement process; and

9. Electronic payment facilities, if used, shall comply with all laws, rules and regulations issued by the Government.

The GPPB shall determine and certify compliance with the above requirements. However, it may delegate this task to technically capable agencies/offices of the Government. For this purpose, it shall issue the necessary Guidelines.

SECTION 6. Foreign-Assisted Projects. —

Foreign-Assisted Projects

R.A. 9184 adopts international best practices in public procurement processes, and institutionalizes the need for a procurement manual, standard bidding documents and forms. With this, the next logical step is the harmonization of the GOP's procurement rules and those of the major and most active IFIs in the country. This activity was already initiated with ADB, JBIC and the World Bank, through the issuance of harmonized standard bidding documents. It should be noted that these harmonized standard bidding documents only affect the procurement guidelines of the aforementioned IFIs for national or local competitive bidding procedures, and that ICB procedures would have to use the standard documents of the IFI concerned. Appendix ___ shows the major procurement harmonization points normally captured in the loan or grant agreement.

The harmonization of ICB procedures is currently on-going among the IFIs, and this would naturally be a continuing process. In any case, even if procurement harmonization in the Philippines began on the level of national/local competitive bidding procedures, the entire activity also opened the doors for the possible harmonization of ICB procedures. Since the IFIs' guidelines focus primarily on procurement procedures, evaluation and review processes, this leaves much room for readily adopting the provisions of R.A. 9184 and its IRR-A, except those rules that are not acceptable to the IFIs which are normally identified in the loan or grant agreement, the bidding documents or appropriately addressed in these Manuals. These pertain to the following areas:

1. The review procedures of the IFI concerned, including thresholds for prior review, if any;

2. Thresholds for national/local competitive bidding;

3. The posting of the ABC as the ceiling of bid prices;

4. The timelines for the preparation of bids;

5. The allowance of pre-qualification for complex or large projects;

6. Eligibility criteria, which includes the participation of foreign bidders;

7. Currency requirements; and

8. Domestic and provincial preferences.

Anti-corruption Measures

The issue of governance in the Philippines presents a paradox. Despite the presence of a strong civil society, an open media and highly skilled staff working in the government, corruption remains an important barrier to the achievement of good governance. Governance indicators from a cross-country database indicate that, despite having good democratic processes, rule of law, political stability and control of corruption are lower in the Philippines than in comparable East Asian economies. (See Figure 1 below) In addition, about 35 percent of Filipino firms included in the Investment Climate Survey reported corruption as a major constraint to doing business in the Philippines, second to macroeconomic instability. 1 Corruption and collusion also pose significant challenges for government revenue administration and expenditure management. Accordingly, it is important to highlight the steps taken by the government to respond to concerns about corruption and indicate the specific strategies the project will adopt to help mitigate the risk of corruption.

 

Figure 1

Governance Indicators Among East Asian Countries

 

 

Government Efforts to Reduce Corruption

The government, with support from the Bank and other donors, has been making some progress in improving governance and combating corruption. This has been primarily supported through national level reforms, but innovative efforts have also been instituted at the local level. National level reforms are described as follows:

Office of the Ombudsman

The Office of the Ombudsman is a major anti-corruption agency of the government. As part of its functions to prevent graft, it has the power to investigate, prosecute and adjudicate cases involving government entities and employees. In 2003, the Office formally adopted the government's Lifestyle Checks Program, which allows it to undertake life-style checks on government employees and if warranted, remove them from their positions and initiate prosecution. Further, the Government has committed to doubling the Office's budget over the next two years, allowing for the hiring and training of a significant number of new investigators and prosecutors.

Procurement and Financial Management Improvements

As part of the national procurement reform that began with the government Procurement Reform Act in January 2003, the GPPB was established with the mandate to set up and monitor procurement performance benchmarks, provide for protest mechanisms, coordinate training within the government and among civil society organizations who observe on bid and evaluation committees and to issue generic and department-specific procurement manuals and related bidding documents. Concurrent with procurement reform, the government also instituted financial management improvements through the implementation of the E-NGAS accounting systems and the strengthening of internal and external audit functions.

Increased Involvement of Civil Society in Government

The Philippines has increased transparency in government processes and transactions by successfully involving the participation of civil society in these processes. This includes the active involvement of civil society observers in public bid committees, providing greater transparency in the bidding process. Civil society groups have also initiated their own activities to fight corruption. For example, Government Watch (G-Watch) monitors government projects and provides reliable independent and external information on the performance of government projects. Findings from the group have prompted the Office of the Ombudsman to initiate investigations into alleged corruption. The Transparency and Accountability Network (TAN) is another group of non-government organizations actively involved in anticorruption measures in the tax agencies. TDCcAE

World Bank Efforts to Reduce Corruption

As of July 2004, the Bank had channeled over US$5 million in grants to support improvements in governance. These grants addressed systemic issues such as procurement and judicial reform and increased the role of civil society in monitoring government transactions. The Bank has been working with the Department of Finance and the BIR in improving internal and external audit. The Bank, though the ASEM and IDF grants has supported enhancement of the Revenue Integrity Protection Service (RIPS),an anticorruption measure aimed at curbing corruption in the tax bureaus by running after corrupt revenue collectors, assessors and auditors. The grant also procured computerized audit systems to improve audit and limit opportunities for corruption. Furthermore, to guard against corruption in Bank programs, the Bank has strengthened its procurement and financial management staff in Manila. The Bank is also implementing a Judicial Reform Project that will assist the Supreme Court in undertaking institutional reforms to strengthen public confidence in the judiciary system.

BIR efforts to Reduce Corruption

The BIR has recently completed its Agency Integrity Development Assessment (IDA).The following are some recommendations of the Assessment which the BIR intends to implement to boost its anticorruption effort. The details of each recommendation can be found in "Integrity Development Review of the BIR" August 2006. Additional information can be derived from the BIR Anticorruption Action Plan dated June 2006.

On management

1. Empower senior leaders in preventing corruption [through training and the use of a senior management information system].(Supported by loan) 

2. Fix the term of the CIR.

On internal audit and control

3. Improve internal audit capacity especially at the district level via provision of equipment as supplements to field investigators, provision basic and advance internal audit and control, and risk management courses adhering to international standards for the practice of internal audit and the Code of Ethics as promulgated by the Association of Government Internal Auditors and achieving 100 percent certification of internal auditors in the bureau. (Supported by loan)

4. Develop a handbook on internal control which contains the duties and responsibilities of each and every accountable employee in the BIR. It will include basic internal control measures for proper office and personnel administration.

5. Efficient use of the bureau's Administrative Case Tracking System (ACTS) and development of an electronic databank of administrative cases decided.

6. Analyze the statements of assets, liabilities and net worth (SALN) of employees and enhance the reward system to encourage compliance with the code of conduct. SECIcT

7. Formulate an unambiguous gift policy.

8. Institutionalize corruption risk management.

9. Strengthen the whistle-blowing, internal reporting and investigation. (Supported by loan)

10. Conduct compliance audit on selected HR processes.

11. Discourage political recommendations.

On procurement

12. Enhance procurement management through formal training on project and procurement management for all staff in the Procurement Service and those involve in managing grants and technical assistance. (Supported by WB grant)

13. Adopt an agency specific procurement manual. (Supported by WB grant)

14. Facilitate free data sharing with stakeholders on blacklisted suppliers.

On external audit and legal

15. Maintain a complete record of complaints and feedback from clients.

16. Consultation in the preparation of the Audit Program. (Supported by loan)

17. Improve safekeeping mechanisms of tax returns. (Supported by loan)

18. Conduct of revalida of case dockets.

19. Make preliminary assessment notices (PAN) and final assessment notices (FAN) as accountable forms.

20. Maintain an annual list of taxpayers issued with letters of authority (LA).(Supported by loan) TAaCED

21. Improve and expand the letter of authority monitoring system (LAMS).(Supported by loan)

On taxpayer service

22. Provide taxpayers of information on their bill of rights. (Supported by loan)

23. Present taxpayers initial and final findings at the BIR premises.

24. Advocate for simpler tax laws and procedures. (Supported by loan)

On tax compliance

25. Improve taxpayer database. (Supported by loan)

26. Reforms in one-time transactions (ONETT) such as capital gains tax in the areas of control mechanism, sampling criteria for review of capital gains dockets, team rotation and the sharing of information. (Supported by IDF to BIR)

On organization and human resource

27. Improve human resource management process included checks on the Personnel Selection Board (PSB).(Supported by loan)

28. Bolster the performance management system. (Supported by loan)

29. Provide exclusive testing rooms in the national office.

30. Update test questionnaires.

31. Execute Memorandum of Agreement (MOA) with external examination providers.

32. Provide an item of a psychometrician in regional HRMUs.

33. Attach supporting documents to evaluation matrices of candidates.

34. Strictly enforce RMO 26-83 to require a shorter list of promotable employees.

35. Decentralize power to appoint employees with salary grades up to 19 to regional offices.

36. Expand personnel complement of investigation offices.

Steps to Mitigate Corruption under Proposed Program

Anchored on the Bank's five-pronged strategy of improving political accountability, civil society participation, private sector involvement, public sector management and limit on institutional power, and in complementing the broader effort at country program level, the following steps will be undertaken to help mitigate corruption in the project: TAaCED

1. Civil Society/Community Participation.

The BIR will continue its partnership with CSOs to ensure a fair and transparent process in the procurement and delivery of goods. The BIR will continue to involve CSOs as active observers throughout the bidding, evaluation, awarding, production and delivery acceptance processes. In addition, the loan shall fund external surveys with CSO partners to determine progress in public perception of BIR in the course of the reform program.

2. Public Sector Management.

Steps will be taken to enhance transparency and accountability in procurement and financial management. These include: a) strict adherence to the Procurement Reform Act and measures to ensure that bid notices and contracts are published in the eGPS where appropriate; b) full enforcement of delayed penalty provision of contracts, particularly those involving ICB and/or large contract values; c) strengthening of internal control and accountability for tax collection and expenditure management at national office and regional levels; and d) reform of BIR management in planning, monitoring and evaluation.

3. Institutional Restraints on Power.

The maze of complex tax rulings and procedures, the lack of a national audit plan and inadequate performance management system are key contributors to high discretionary powers in the tax bureau. To limit discretion in the conduct of assessment, collection and audit, the loan would finance the development of an integrated and complete taxpayer registry as well as improving taxpayer service and streamlining procedures in the collection of taxes. Internal control will also be strengthened. In collaboration with other development partners, the loan shall support the creation of a national audit plan, and the development and implementation of the Human Resource Management Information System (HRMIS) and the Performance Management System (PMS) for both office and individual levels. These activities aim to limit opportunities for discretion and abuse of power.

4. Private Sector Involvement.

Steps will be taken to ensure that private sector is involved in some areas of tax reform such as consultation with various industries (especially hard to tax industries) to enhance transparency and accountability in taxpayer service. Expertise of reputable accounting firms can also be tapped to assist formulate the national audit plans and to share advancement in the field of taxation. HEAcDC

SECTION 7. Penal, Civil and Administrative Liabilities and Sanctions. —

Standard of Ethics

Definition of Corrupt, Fraudulent, Collusive, and Coercive Practices

Procuring entities and bidders, manufacturers, suppliers or distributors are required to observe the highest standard of ethics during the procurement and execution of contract. Bidders determined to have committed corrupt, fraudulent, collusive and coercive practices by the government will not be eligible to bid in its projects. 2 For this purpose:

1. "Corrupt practice" means behavior on the part of officials in the public or private sectors by which they improperly and unlawfully enrich themselves, others, or induce others to do so, by misusing the position in which they are placed, and it includes the offering, giving, receiving, or soliciting of anything of value to influence the action of any such official in the procurement process or in contracting execution; entering, on behalf of the government, into any contract or transaction manifestly and grossly disadvantageous to the same, whether or not the public officer profited or will profit thereby.

2. "Fraudulent practice" means a misrepresentation of facts in order to influence a procurement process or the execution of a contract to the detriment of the BIR, and includes collusive practices among bidders (prior to or after bid submission) designed to establish bid prices at artificial, non-competitive levels and to deprive the BIR of the benefits of free and open competition.

3. "Collusive practice" means a scheme or arrangement between two (2) or more bidders, with or without the knowledge of the BIR, designed to establish bid prices at artificial, non-competitive levels.

4. "Coercive practice means harming or threatening to harm, directly or indirectly, persons, or their property to influence their participation in a procurement process, or affect the execution of a contract.

The pertinent provisions of the Anti-Graft and Corrupt Practices Act, or R.A. 3019, shall also be applied in determining the existence of "corrupt or fraudulent practice".

Applicable penalty for fraud, misrepresentation and collusion

If a bidder is found to have committed an act that constitutes fraud or misrepresentation or to have colluded with others for the purpose of influencing the outcome of the bidding, it will be disqualified by the BAC, its bid security will be forfeited, and, upon conviction, it will suffer the penalty of imprisonment of not less than six (6) and one (1) day and not more than fifteen (15) years. (Section 65.2 of IRR-A) Likewise, it will suffer the administrative penalties of suspension for one (1) year from participation in government procurement for the first offense, and suspension for two (2) years for the second offense. (Section 69.1 of IRR-A) ICAcHE

Conflict of Interest

A bidder that has a conflict of interest shall be disqualified to participate in the procurement at hand. A bidder would be considered as having a conflict of interest with another bidder in any of the events described in paragraphs 1 through 3 below and a general conflict of interest in any of the circumstances set out in paragraphs 4 through 6 below:

1. If the bidder is a corporation or a partnership and it has officers, directors, controlling shareholders, partners or members in common with another bidder; or if the bidder is an individual or a sole proprietorship and he is the proprietor of another bidder, or an officer, director or a controlling shareholder of another bidder; or if the bidder is a joint venture and it or any of its members has officers, directors, controlling shareholders or members in common with another bidder, or any of its members is a bidder;  

2. A bidder receives or has received any direct or indirect subsidy from another bidder;

3. A bidder has the same legal representative as any other bidder for purposes of the bidding at hand.

4. A bidder has a relationship directly or through common third parties, that puts them in a position to have access to information about or influence on the bid of another bidder, or influence the decisions of the BIR regarding the bidding process. This will include a firm or an organization that lends, or temporarily seconds, its personnel to firms or organizations which are engaged in consulting services for the preparation related to procurement for or implementation of the project, if the personnel would be involved in any capacity on the same project; DSacAE

5. A bidder submits more than one bid in the bidding process. However, this does not limit the participation of subcontractors in more than one bid; or

6. A bidder who participated as a consultant in the preparation of the design or technical specifications of the goods and related services that are the subject of the bid. CDHAcI

In accordance with Section 47 of the IRR-A, the bidder should not be related to the CIR/RD by consanguinity or affinity up to the third civil degree or any of the BIRs officers or employees having direct access to information that may substantially affect the result of the bidding, such as, but not limited to, the members of the BAC, the members of the TWG, the BAC Secretariat, the members of the PMO, and the designers of the project. This prohibition shall apply to the following persons:

1. If the bidder is an individual or a sole proprietorship, to the bidder himself;

2. If the bidder is a partnership, to all its officers and members;

3. If the bidder is a corporation, to all its officers, directors and controlling stockholders; and

4. If the bidder is a joint venture, items 1 through 3 above shall correspondingly apply to each of the members of the said joint venture, as may be appropriate.

To establish the non-existence of the above relationship, and to bind the Bidders to its representation relating to the foregoing, all bids must be accompanied by a Disclosure Affidavit of the bidder to that effect. (Sections 47 and 25.3.C.8 of IRR-A)

Penal Liabilities and Sanctions

Penal Liabilities of Public Officers

Without prejudice to the provisions of R.A. 3019 and other penal laws, public officers who commit any of the following acts shall be criminally liable:

1. Opening any sealed Bid including but not limited to Bids that may have been submitted through the electronic system and any and all documents required to be sealed or divulging their contents, prior to the appointed time for the public opening of Bids or other documents.

2. Delaying, without justifiable cause, the screening for eligibility, opening of bids, evaluation and post evaluation of bids, and awarding of contracts beyond the prescribed periods of action provided for in the IRR-A.

3. Unduly influencing or exerting undue pressure on any member of the BAC or any officer or employee of the BIR to take a particular action which favors, or tends to favor a particular bidder. EHCDSI

4. Splitting of contracts which exceed procedural purchase limits to avoid competitive bidding or to circumvent the limits of approving or procurement authority.

5. Abuse by the CIR/RD of his power to reject any and all bids as mentioned under Section 41 of R.A. 9184 and its IRR-A, with manifest preference to any bidder who is closely related to him in accordance with Section 47 of R.A. 9184 and its IRR-A.

When any of the foregoing acts is done in collusion with a private individual, the private individual shall likewise be liable for the offense.

Penal Sanctions for Public Officers

Without prejudice to the provisions of R.A. 3019 and other penal laws, public officers who commit any of the above acts shall, upon conviction, suffer the penalty of imprisonment of not less than six (6) years and one (1) day, but not more than fifteen (15) years. In addition, the public officer shall also suffer the penalty of temporary disqualification from public office, while any private individual found to have colluded with him shall be permanently disqualified from transacting business with the government.

The above penalties and offenses shall cover all types of procurement whether done manually or electronically.

When the bidder is a juridical entity, criminal liability and the accessory penalties shall be imposed on its directors, officers or employees who actually commit any of the foregoing acts. If a person previously held liable or found guilty under the provisions of R.A. 9184 and its IRR-A has a controlling interest in a prospective bidder-entity the said bidder-entity shall be disqualified to participate in any procurement activity being conducted by the Government.

Penal Liabilities of Private Individuals

Private individuals who commit any of the following acts, shall be criminally liable:

1. When two or more bidders agree and submit different bids as bona fide, bidders, all the while knowing that the bid(s) of one or more of them was so much higher than the other that the latter could not be honestly accepted and that the contract will surely be awarded to the pre-arranged lowest bid.

2. When a bidder maliciously submits different bids through two or more persons, corporations, partnerships or any other business entity in which he has an interest to create the appearance of competition that does not in fact exist so as to be adjudged as the winning bidder.

3. When two or more bidders enter into an agreement which calls upon one or more of them to refrain from bidding for procurement contracts, or which requires one or more of them to withdraw Bids already submitted, in order to secure an undue advantage to any one of them.

4. When a bidder, by himself or in connivance with others, employs schemes which tend to restrain the natural rivalry of the parties or operates to stifle or suppress competition and thus produce a result disadvantageous to the public.

5. Submitting eligibility requirements of whatever kind and nature that contain false information or falsified documents calculated to influence the outcome of the eligibility screening process or conceal such information in the eligibility requirements when the information will lead to a declaration of ineligibility from participating in public bidding.

6. Submitting Bidding Documents of whatever kind and nature that contain false information or falsified documents or conceal such information in the Bidding Documents, in order to influence the outcome of the public bidding.

7. Participating in a public bidding using the name of another or allow another to use one's name for the purpose of participating in a public bidding.

8. Withdrawing a Bid, after it shall have qualified as the Lowest Calculated Bid/Highest Rated Bid, or refuse to accept an award, without just cause or for the purpose of forcing the BIR to award the contract to another bidder. This shall include the non-submission within the prescribed time, or delaying the submission of requirements such as, but not limited to, performance security, preparatory to the final award of the contract. ICDSca

When any of the foregoing acts is done in conspiracy with a public officer, the public officer shall likewise be liable for the offense.

Penal Sanctions for Private Individuals

Private individuals who commit any of the above acts, and any public officer conspiring with them shall, upon conviction, suffer the penalty of imprisonment of not less than six (6) years and one (1) day but not more than fifteen (15) years. In addition, the public officer involved shall also suffer the penalty of temporary or perpetual disqualification from public office and the private individual shall be permanently disqualified from transacting business with the Government.

The above penalties and offenses shall cover all types of procurement whether done manually or electronically.

When the bidder is a juridical entity, criminal liability and the accessory penalties shall be imposed on its directors, officers or employees who actually commit any of the foregoing acts. If a person previously held liable or found guilty under the provisions of R.A. 9184 and its IRR-A has a controlling interest in a prospective bidder-entity the said bidder-entity shall be disqualified to participate in any procurement activity being conducted by the Government. aACEID

Civil Liability

Civil Liability in Case of Conviction

Without prejudice to administrative sanctions that may be imposed in proper cases, a conviction under R.A. 9184 and its IRR-A or R.A. 3019 shall carry with it civil liability, which may either consist of restitution for the damage done or the forfeiture in favor of the government of any unwarranted benefit derived from the act or acts in question or both, at the discretion of the courts.

Liquidated Damages

All contracts executed in accordance with R.A. 9184 and its IRR-A shall contain a provision on liquidated damages which shall be payable in case of breach thereof. For the procurement of goods and consulting services, the amount of the liquidated damages shall be at least equal to one-tenth of one percent (0.1%) of the cost of the unperformed portion for every day of delay. For the procurement of infrastructure projects, the amount of the liquidated damages shall be in accordance with Annex "E" of IRR-A, R.A. 9184. Once the cumulative amount of liquidated damages reaches ten percent (10%) of the amount of the contract, the BIR shall rescind the contract, without prejudice to other courses of action and remedies open to it.

Administrative Liabilities and Sanctions

Administrative Liabilities

The following violations shall warrant administrative sanctions:

1. Submission of eligibility requirements containing false information or falsified documents.

2. Submission of bids that contain false information or falsified documents, or the concealment of such information in the bids in order to influence the outcome of eligibility screening or any other stage of the public bidding. ASHICc 

3. Allowing the use of one's name, or using the name of another for purposes of public bidding.

4. Withdrawal of a bid, or refusal to accept an award, or enter into contract with the Government without justifiable cause, after he had been adjudged as having submitted the LCRB or HRRB.

5. Refusal or failure to post the required performance security within the prescribed time.

6. Termination of the contract due to the default of the bidder.

7. Refusal to clarify or validate in writing its Bid during post-qualification within a period of seven (7) calendar days from receipt of the request for clarification.

8. Any documented unsolicited attempt by a bidder to unduly influence the outcome of the bidding in his favor.

9. All other acts that tend to defeat the purpose of the competitive bidding, such as an eligible contractor not buying bid documents, and contractors habitually withdrawing from bidding or submitting letters of non-participation for at least three (3) times within a year, except for valid reasons. ICaDHT

Administrative Sanctions

Without prejudice to the imposition of criminal sanctions or the effects of civil liability, the CIR/RD shall impose on bidders or prospective bidders, the administrative penalty of suspension for one (1) year for the first offense, and suspension of two (2) years for the second offense from participating in the public bidding process, as well as disqualification from further participating in the public bidding being undertaken by the BIR, where applicable, for any of the above violations. In addition to the penalty of suspension, the Bid Security or the Performance Security posted by the concerned bidder or prospective bidder shall also be forfeited.

The CIR may delegate to the BAC the authority to impose the administrative penalties.

The CIR may preventively suspend any member of the TWG, the BAC Secretariat, or the BAC if there are strong reasons or prima facie evidence showing that the officials or employees concerned are guilty of committing any of the acts constituting criminal or civil liability, or for dishonesty as defined by the Civil Service Laws. In all cases, due process as mandated by the Constitution and Civil Service laws, rules and regulations, shall be strictly observed.

Lifting of preventive suspension pending administrative investigation, as well as removal of administrative penalties and disabilities shall be in accordance with the provisions of Sections 52 and 53, Chapter 6, Subtitle A (Civil Service Commission), Title I, Book V of Executive Order No. 292,otherwise known as the Administrative Code of 1987. acAESC

Blacklisting Guidelines

GPPB Resolution 09-2004 provides the guidelines that govern the blacklisting of manufacturers, suppliers, distributors, contractors and consultants involved in government procurement for offenses or violations committed during competitive bidding and contract implementation, in accordance with Section 69.4 of IRR-A, R.A. 9184.

Prohibition on blacklisted persons/entities to participate in the bidding of Government Projects/Contracts

A person/entity that is blacklisted by a BIR and/or included in the GPPB Consolidated Blacklisting Report shall not be allowed to participate in the bidding of all government projects during the period of disqualification unless it is delisted.

A joint venture or consortium which is blacklisted or which has blacklisted member/s and/or partner/s as well as a person/entity who is a member of a blacklisted joint venture or consortium are, likewise, not allowed to participate in any government procurement during the period of disqualification. acHETI

In the case of corporations, a single stockholder, together with his/her relatives up to the third civil degree of consanguinity or affinity, and their assignees, holding at least twenty percent (20%) of the shares therein, its chairman and president, shall be blacklisted after they have been determined to hold the same controlling interest in a previously blacklisted corporation or in two corporations which have been blacklisted; the corporations of which they are part shall also be blacklisted. cHSTEA

Sanctions and Grounds for Blacklisting

During the competitive bidding stage, pursuant to Section 69 of R.A. 9184, the BIR shall impose on bidders or prospective bidders the penalty of suspension for one (1) year for the first offense, suspension for two (2) years for the second offense from participating in the public bidding process, without prejudice to the imposition of additional administrative sanctions as the internal rules of the agency may provide and/or further criminal prosecution, as provided by applicable laws, for the following violations:

1. Submission of eligibility requirements containing false information or falsified documents.

2. Submission of bids that contain false information or falsified documents, or the concealment of such information in the bids in order to influence the outcome of eligibility screening or any other stage of the public bidding.

3. Unauthorized use of one's name, or using the name of the name of another for purpose of public bidding.

4. Withdrawal of a bid, or refusal to accept an award, or enter into contract with the government without justifiable cause, after he had been adjudged as having submitted the LCRB or HRRB.

5. Refusal or failure to post the required performance security within the prescribed time.

6. Refusal to clarify or validate in writing its Bid during post qualification within a period of seven (7) calendar days from receipt of the request for clarification.

7. Any documented unsolicited attempt by a bidder to unduly influence the outcome of the bidding in his favor.

8. All other acts that tend to defeat the purpose of the competitive bidding, such as but not limited to: an eligible contractor not buying bid documents or not complying with the requirements during bid evaluation, and contractors habitually withdrawing from bidding or submitting letters of non-participation for at least three (3) times within a year, except for valid reasons.

In addition to the penalty of suspension, the bid security posted by the concerned bidder or prospective bidder shall also be forfeited.

During Contract Implementation Stage, pursuant to Section 69 (6) of R.A. 9184 and without prejudice to the imposition of additional administrative sanctions as the internal rules of the agency may provide and/or further criminal prosecution as provided by applicable laws, the BIR shall impose on contractors after the termination of the contract the penalty of suspension for one (1) year for the first offense, suspension for two (2) years for the second offense from participating in the public bidding process, for violations committed during the contract implementation stage, which include but not limited to the following:

1. Failure of the contractor, due solely to his fault or negligence, to mobilize and start work or performance within the specified period in the NTP;

2. Failure by the contractor to fully and faithfully comply with its contractual obligations without valid cause, or failure by the contractor to comply with any written lawful instruction of the BIR or its representative(s) pursuant to the implementation of the contract. For the procurement of infrastructure projects or consultancy contracts, lawful instructions include but are not limited to the following:

a. Employment of competent technical personnel, competent engineers and/or work supervisors;

b. Provision of warning signs and barricades in accordance with approved plans and specifications and contract provisions;

c. Stockpiling in proper places of all materials and removal from the project site of waste and excess materials, including broken pavement and excavated debris in accordance with approved plans and specifications and contract provisions;

d. Deployment of committed equipment, facilities, support staff and manpower; and

e. Renewal of the effectivity dates of the performance security after its expiration during the course of contract implementation.

3. Assignment and subcontracting of the contract or any part thereof or substitution of key personnel named in the proposal without prior written approval by the BIR.

4. For the procurement of goods, unsatisfactory progress in the delivery of the goods by the manufacturer, supplier or distributor arising from his fault or negligence and/or unsatisfactory or inferior quality of goods, as may be provided in the contract;

5. For the procurement of consulting services, poor performance by the consultant of his services arising from his fault or negligence. Any of the following acts by the consultant shall be construed as poor performance: HcTEaA

a. Defective design resulting in substantial corrective works in design and/or construction;

b. Failure to deliver critical outputs due to consultant's fault or negligence; and

c. Specifying materials which are inappropriate, substandard, or way above acceptable standards;

d. Allowing defective workmanship or works by the contractor being supervised by the consultant.

6. For the procurement of infrastructure projects, poor performance by the contractor or unsatisfactory quality and/or progress of work arising from his fault or negligence as reflected in the Constructor's Performance Evaluation System rating sheet. In the absence of the CPES rating sheet, the existing performance monitoring system of the BIR shall be applied. Any of the following acts by the constructor shall be construed as poor performance:

a. Negative slippage of fifteen percent (15%) and above within the critical path of the project due entirely to the fault or negligence of the contractor; and

b. Quality of materials and workmanship not complying with the approved specifications arising from the contractor's fault or negligence.

7. Willful or deliberate abandonment or non-performance of the project or contract by the contractor resulting to substantial breach thereof without lawful and/or just cause. aDSTIC 

In addition to the penalty of suspension, the performance security posted by the contractor shall also be forfeited.

SECTION 8. Legal Assistance and Indemnification. —

General Conditions

Pursuant to and in accordance with Section 73 of R.A. 9184 and its IRR-A, the GPPB issued the Guidelines on Legal Assistance and Indemnification of BAC Members and its Support Staff 3 for the following purposes:

1. To prescribe the rule and procedures in granting legal assistance and indemnification of the BAC members and BAC Support Staff. 4

2. To ensure that the mandate to insulate government procurement personnel from the unnecessary loss, damage or injury arising from the lawful exercise of their functions is implemented in accordance with the provisions of R.A. 9184.

3. To establish the legal parameters for the effective implementation of the legal assistance and indemnification provided for BAC members and BAC Support Staff.

The funds to be used for the grant of the free legal assistance, liability insurance or medical assistance shall be taken from the agency's annual appropriation. Protest fees, proceeds from the sale of bidding documents, and any other additional funds derived from other income-generating activities of the agency may be used to augment the funds.

Free Legal Assistance

In order for a member of the BAC, BAC Secretariat and TWG to avail of the free legal assistance, the following considerations must be met:

1. The BIR shall, to the fullest extent permitted by the law, indemnify a BAC member and/or any of the BAC Secretariat or TWG who was or is a party to a pending or completed action, suit or proceeding whether civil, criminal or administrative in nature brought against him in the performance of his official functions as member of the BAC, BAC Secretariat or TWG.

2. The member of the BAC, BAC Secretariat or TWG concerned must have engaged the services of a private lawyer or external counsel.

3. The member of the BAC, BAC Secretariat or TWG must have not been adjudged as guilty of gross negligence, misconduct, or grave abuse of discretion.

4. The free legal assistance shall cover actual cost of suit and attorney's fees. The attorney representing the member of the BAC, BAC Secretariat or TWG shall be entitled to a maximum of Five Thousand Pesos (Php5,000.00) per appearance which shall be paid by the BIR.

5. The free legal assistance shall not cover:

a. Any action or suit initiated by a member of the BAC, BAC Secretariat or TWG in his personal capacity or in behalf of the BIR, unless such action, proceeding, or claim was authorized by the CIR/RD or the approving authority therein; or

b. Any action or suit initiated by the Government against the member of the BAC, BAC Secretariat or TWG.

6. The member of the BAC, BAC Secretariat or TWG shall be entitled to actual, moral, and exemplary damages when awarded by the court. Likewise, the attorney representing the member of the BAC, BAC Secretariat or TWG shall be entitled to attorney's fees awarded by the court.

Liability Insurance

Following are the general conditions pertaining to the liability insurance for member of the BAC, BAC Secretariat or TWG:

1. The BIR shall have the responsibility to procure and maintain adequate liability insurance for and in behalf of its members of the BAC, BAC Secretariat or TWG.

2. The liability insurance policy shall cover only those liabilities asserted against the public official and incurred by him in his capacity as such members of the BAC, BAC Secretariat or TWG as the case may be.

3. In order to avail of the liability insurance, the members of the BAC, BAC Secretariat or TWG should not be adjudged in such action or proceeding to be guilty of gross negligence, misconduct, or grave abuse of discretion or guilty of any other complaint or charges.

4. In the event of settlement or compromise, indemnification shall be confined only to matters covered by the settlement, and to which the BIR had been advised by counsel that the person to be indemnified have not committed gross negligence, misconduct, or grave abuse of discretion in the performance of their duties and functions.

5. The insurer shall pay for the loss arising from the claim or suit made against the members of the BAC, BAC Secretariat or TWG during the policy period where they serve in such capacity. For this purpose, the term "loss" shall include judgments, expenses for settlement or compromise, as well as all reasonable fees and other expenses incurred by such persons in connection with any administrative, civil, or criminal action, suit or proceeding to which they may be or have been made a party be reason of the lawful performance of their official functions and duties in such capacity.

Medical Assistance

Medical assistance should be provided to members of the BAC, BAC Secretariat or TWG for injuries/disabilities incurred in the lawful performance of their official functions and duties. The medical assistance consists of indemnification for medicines, laboratory and hospitalization expenses and granted to the claimant as a matter of right and subject to the conditions mandated by law.

Following are the general considerations pertaining to the medical assistance:

1. The claimant(s) should be entitled to indemnification for any injury or disability resulting from the performance of their official functions as defined by law and without any contributory negligence on their part; provided that they exercised due diligence to prevent harm or injury to themselves.

2. The claimant(s) or his/her relatives must notify the CIR/RD within seven (7) calendar days from the occurrence of the injury or disability.

3. The amount claimed shall not exceed the actual amount incurred, substantiated by receipts and other supporting documents. Indemnification shall only be made upon presentation of the proof of payment in connection with the injury or disability suffered. aTcHIC

Procedure for Granting Legal Assistance and Indemnification

The claimant(s) should file their respective claim(s) for legal assistance, liability insurance, or medical assistance as the case may be, with the CIR/RD; and shall secure the approval of the latter on the terms and conditions of the engagement of counsel.

The CIR/RD should be given at least fifteen (15) to thirty (30) calendar days to examine, review, verify and validate the authenticity of the documents presented by the claimant.

Upon finding that all the requirements have been duly complied with and that all the necessary documents submitted are genuine, it should then order the processing of the claims and the subsequent release of funds for the approved claims.

Any expenses incurred in advance by the claimant arising from the performance of his official functions in such capacity shall be subject to reimbursement upon submission of the necessary documents and approval thereof by the CIR/RD. IEaCDH

If the members of the BAC, BAC Secretariat or TWG is found to be not guilty for gross negligence, misconduct, or grave abuse of discretion, he shall liquidate his cash advances by presenting receipts of payment and other necessary documents. On the other hand, if the members of the BAC, BAC Secretariat or TWG is found to be guilty for gross negligence, misconduct, or grave abuse of discretion, he shall pay the cash advances made through salary deductions or reimbursement.

Glossary

Abstract of Bids — The corresponding document prepared by the BAC after all bids have been received, opened, examined, evaluated and ranked.

Abstract of Bidding Documents — A summary containing general information on the procurement at hand that is posted in the PhilGEPS.

Advance payment — Refers to any payment made prior to the delivery and acceptance of Goods, Works, or Consulting Services.

Amendment to Order — Refers to any change within the general scope of the contract, in any of the following aspects: drawings, design or specifications of the Goods; the method of shipment or packing; the place of delivery; scope of work or services to be rendered; the place of performance of the services; additional items needed and necessary for the protection of the Goods procured, which were not included in the original contract; or any other change affecting the specifications or scope of work of the Goods and/or services to be procured.

Approved Budget for the Contract — The budget for the contract duly approved by the CIR, as provided for in the General Appropriations Act (GAA) and/or continuing appropriations, in the case of national government agencies (NGAs); the corporate budget for the contract approved by the governing board, pursuant to Executive Order No. 518, series of 1979 ("E.O. 518"), in the case of GOCCs and GFIs, and Republic Act No. 8292 in the case of SUCs; and the budget approved by the Sanggunian in the case of LGUs.

BAC — The Bids and Awards Committee, established in accordance with Rule V of the IRR-A of R.A. 9184.

Bid — A signed offer or proposal to undertake a contract submitted by a bidder in response to and in consonance with the requirements of the bidding documents. Also referred to as Proposal and Tender, particularly when referring to the procurement of consulting services.

Bid Evaluation — The process of determining the Bidder with the Lowest Calculated Bid (LCB) or the Highest Rated Bid (HRB).

Bid Opening Date — The date specified in the IAEB for the opening of bids.

Bid Security — Cash, check, bank draft, letter of credit, bank guarantee, surety bond or a foreign government guarantee that serves as a guarantee that the successful bidder shall not default on his offer, and shall enter into contract with the Bureau of Internal Revenue and furnish the performance security.

Bid Validity — A reasonable period determined by the CIR, but in no case shall exceed one hundred twenty (120) calendar days from the date of the opening of bids, wherein a Bid Security is considered valid.

Bidder — An individual or entity that submits a bid. The term includes anyone acting on behalf of the individual or other entity that submits a bid, such as agents, employees, and representatives. More specifically, a contractor, manufacturer, supplier, distributor and/or consultant competing for the award of a contract in any government procurement. See Eligible bidder, Prospective bidder.

Bidding Documents — The documents issued by the BIR as the bases for bids, furnishing all information necessary for a prospective bidder to prepare a bid for the infrastructure projects, goods and/or consulting services required by the Bureau of Internal Revenue. CHTcSE

Blacklisting — To place on, or as if on, a list of persons or organizations that have incurred disapproval or suspicion or are to be boycotted or otherwise penalized.

Brand Name — A trade name or product name, which identifies a product as having been made by a particular manufacturer.

Calculated bid price — The price of a bid, after taking into account minor arithmetical corrections to consider computational errors, omissions and discounts, if allowed.

Civil Works — See Infrastructure Projects.

Collusion — An agreement between two or more persons, to commit acts to accomplish a fraudulent or deceitful purpose.

Common-Use Supplies — Goods, materials and equipment that are repetitively used in the day-to-day operations of procuring entities in the performance of their functions, which are included in the Price List of the Procurement Service (PS) of the Department of Budget and Management (DBM).

Competitiveness — A principle in Government procurement that allows broad participation by eligible and qualified suppliers, contractors, consultants to put forward offers for a project.

Competitive Bidding — A method of procurement which is open to participation by any interested party and which consists of the following processes: advertisement, pre-bid conference, eligibility screening of prospective bidders, receipt and opening of bids, evaluation of bids, post-qualification, and award of contract. Also referred to as Public Bidding.

Communication costs — mail and fax costs, plus cost of advertising, meetings, internet/web posting, and other costs incurred for the dissemination of information about the bidding.

Conference Notice — A formal written communication sent to the participants of the conference (such as the Pre-procurement, Pre-bid and Post-Award Conference) informing them when and where the conference will be held. aEcDTC

Conflict of Interest — Refers to a clash between public interest and the private pecuniary interest of the individual concerned (Black's law Dictionary, 5th ed.)

Consulting Services — Refer to services for Infrastructure Projects and other types of projects or activities of the Government requiring adequate external technical and professional expertise that are beyond the capability and/or capacity of the Government to undertake such as, but not limited to: (i) advisory and review services; (ii) pre-investment or feasibility studies; (iii) design; (iv) construction supervision; (v) management and related services; and (vi) other technical services or special studies. (IRR-A Section 5 [i])

Consolidated Blacklisting Report — A report issued by the GPPB that contains a list of people and/or organizations that are barred from participating in any Government procurement project.

Consulting Services — Services for Infrastructure Projects and other types of projects or activities of the Government requiring adequate external technical and professional expertise that are beyond the capability and/or capacity of the Government to undertake such as, but not limited to: (i) advisory and review services; (ii) pre-investment or feasibility studies; (iii) design; (iv) construction supervision; (v) management and related services; and (vi) other technical services or special studies.

Contract Completion — Project sign-off or acceptance of the project/goods by the end-user.

Contract Implementation — The execution of a contract, covering the following milestones: effectivity of the contract; contractor's performance of his contractual obligations; Bureau of Internal Revenue's performance of its contractual obligations, as specified in the Contract; final acceptance or project sign-off; all other related activities; and payment by the Bureau of Internal Revenue.

Contractor — One who undertakes to perform a work or service, or supply goods for a public or private entity.

Contract Termination — Ending of a contract prior to its completion.

Corrupt practice — the offering, giving, receiving, or soliciting of any thing of value to influence the action of a public official in the procurement process or in contract execution. Compare fraudulent practice.

Cost Recovery Component — Direct and indirect costs accounted for in determining the price of Bidding Documents to be sold to interested suppliers/contractors.

Demand Regulation Component — a positive (+) or negative (-) unit amount allocated to the bidding activity for the purpose of regulating the participation of bidders.

Development Cost — Costs incurred in developing the original content of the documents, designs, plans and specifications. The design cost may be excluded if the same is to be included in the capitalized cost of the project which is to be recovered from the usage of the completed project facility.

Direct Contracting — An alternative method of procurement of goods that does not require elaborate bidding documents. The supplier is simply asked to submit a price quotation or a pro-forma invoice together with the conditions of sale. The offer may be accepted immediately or after some negotiations. Also referred to as Single Source Procurement.

Direct Costs — Costs directly incurred such as development, reproduction, and communication costs allocated to the bidding activity. See Communication Cost, Development Cost, Reproduction Cost. Compare Indirect Costs.

Disclosure — The act of disclosing, uncovering, or revealing.

Disqualification — The act of barring a bidder from further participation in the procurement at hand, even if, in some instances, it has initially been declared eligible or post-qualified.

Domestic Bid — Any offer of unmanufactured articles, materials, or supplies of the growth or production of the Philippines, or manufactured articles, materials or supplies manufactured or to be manufactured in the Philippines,substantially from articles, materials or supplies of the growth, production or manufacture, as the case may be, of the Philippines.

Eligible Bidder — A contractor, manufacturer, supplier, distributor or consultant who meets all the eligibility requirements issued by the Bureau of Internal Revenue.

Eligibility — Refers to the status of a Bidder in relation to its legal, technical and financial competence to comply with the requirements of the contract to be bid, as shown by eligibility documents submitted to and checked by the BAC.

Eligibility Check — The process of determining the compliance of Prospective Bidders with the eligibility requirements prescribed, using a non-discretionary, "pass/fail" criteria.

Eligibility Screening — see Eligibility Check.

Financial Bid — One of two components comprising a bid, the other being the Technical Bid.

Force Majeure — see Fortuitous events.

Foreign Bid — Any offer of articles, materials or supplies not manufactured or to be manufactured in the Philippines, substantially from articles, materials or supplies of the growth, production, or manufacture, as the case may be, of the Philippines.

Foreign Supplier — A supplier who is not a local supplier.

Fortuitous events — An event which could not be foreseen, or which though foreseen, was inevitable. (Art. 1174, Civil Code)

Fraudulent practice — Misrepresentation of facts in order to influence a procurement process or the execution of a contract to the detriment of the Bureau of Internal Revenue. Compare corrupt practice.

Goods — Refer to all items, supplies, materials and general support services, except consulting services and infrastructure projects, which may be needed in the transaction of public businesses or in the pursuit of any government undertaking, project or activity, whether in the nature of equipment, furniture, stationery, materials for construction, or personal property of any kind, including non-personal or contractual services such as the repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security, and related or analogous services, as well as procurement of materials and supplies provided by the BIR for such services. The term "related" or "analogous services" shall include, but not be limited to, lease or purchase of office space, media advertisements, health maintenance services, and other services essential to the operation of the BIR. (IRR-A Section 5 [k])

Head of Procuring Entity — (i) the head of the agency or body, or his duly authorized official, for NGAs and the constitutional commissions or offices, and branches of government; (ii) the governing board or its duly authorized official, for GOCCs, GFIs and SUCs; or (iii) the local chief executive, for LGUs: Provided, however, that in an agency, department, or office where the procurement is decentralized, the Head of each decentralized unit shall be considered as the CIR subject to the limitations and authority delegated by the head of the agency, department, or office.

IAEB — Invitation to Apply for Eligibility and to Bid. This serves as the notice to the public and all interested parties of the procurement opportunity.

Incidental Services — services ancillary to the supply of the Goods, such as transportation and insurance; installation, commissioning, provision of technical assistance, training, and other such obligations of the Supplier covered under the contract, RFP, TOR, and/or bidding documents.

Indirect Costs — Costs indirectly incurred such as overhead, supervision, and administrative costs allocated to the bidding activity. Compare Direct Costs.

Ineligible Bidder — A contractor, manufacturer, supplier, distributor or consultant who fails to meet any or all of the eligibility requirements issued by the BIR.

Infrastructure Projects — Include the construction, improvement, rehabilitation, demolition, repair, restoration or maintenance of roads and bridges, railways, airports, seaports, communication facilities, civil works components of information technology projects, irrigation, flood control and drainage, water supply, sanitation, sewerage and solid waste management systems, shore protection, energy/power and electrification facilities, national buildings, school buildings, hospital buildings, and other related construction projects of the government. (IRR-A Section 5 [n]) Also referred to as civil works.

Inspection — Examination and/or testing of merchandise to determine whether it has been received in the proper quantity and condition, and to verify that it conforms to the applicable specifications.

Latent Defect — A defect that is not apparent to the buyer by reasonable observation. A latent defect is "hidden" or one that is not immediately determinable.

Limited Source Bidding — An alternative method of procurement for Goods and Consulting Services that involves direct invitation to bid by the BIR from a set of pre-selected suppliers or consultants with known experience and proven capability on the requirements of the particular contract.

Liquidated Damages – Damages agreed upon by the parties to a contract, to be paid in case of breach thereof.

Motion for Reconsideration — In procurement, it is an application made to the BAC for the purpose of obtaining a rule or order setting aside a previous decision.

Negotiated Procurement — An alternative method of procurement of goods, infrastructure projects and consulting services, whereby the BIR directly negotiates a contract with a technically, legally and financially capable supplier, contractor or consultant.

Notice of Award — The document issued by the CIR/RD to the bidder to whom the contract is awarded.

Notice of Eligibility — The document issued by the BAC to the eligible bidder/s formally informing the same that he/she/they met the eligibility requirements issued by the BIR.

Notice of Ineligibility — The document issued by the BAC to the bidder/s who failed to meet any or all of the eligibility requirements issued by the BIR. DaTISc

Notice of Post-qualification — The document issued by the BAC to the bidder with LCB whose bid is found responsive.

Notice of Post-disqualification — The document issued by the BAC to the bidder with LCB whose bid is found non-responsive.

Notice to Proceed — The document issued by the CIR/RD to the winning bidder to proceed with the implementation of the contract.

Observer — One who is invited to attend and observe all stages of the procurement, especially: the pre-bid conference; opening of bids; bid evaluation; post-qualification; contract award; and special meetings of the BAC.

Patent Defect — A defect that is apparent to the buyer on normal observation. An apparent or obvious defect.

Performance Security — A security posted by the winning bidder to guarantee the faithful performance by the same of its obligations under the contract prepared in accordance with the bidding documents.

Planning — is the act or process of making or carrying out plans; specifically: the establishment of goals, policies, and procedures for a social or economic unit.

Portal — A website that integrates a wide variety of contents for the purpose of attracting and aggregating multiple users together in a central virtual space.

Post-qualification — The process of validating and verifying the documents, information and statements made in the Eligibility Documents by the Bidder who submitted the Lowest Calculated Bid, as well as ascertaining the said Bidder's compliance with the legal, financial and technical requirements of the bid.

Post-qualification Report — The report prepared by the TWG containing the findings/results of the post-qualification conducted on the bidder with the LCB or HRB, as the case may be.

Pre-bid Conference — is the forum where the BIR's representatives and the Prospective Bidders discuss the different aspects of the procurement at hand.

Pre-procurement Conference — is the forum called by the BAC for procurements undertaken through public bidding, where all officials involved in the procurement meet and discuss all aspects of the transaction, including the technical specifications, the Approved Budget for the Contract (ABC),the applicability and appropriateness of the recommended method of procurement and the related milestones, the bidding documents, availability of the pertinent budget release for the project/contract, among others.

Procurement — The acquisition of Goods, Consulting Services, and the contracting for Infrastructure Projects by the BIR. Procurement shall also include the lease of goods and real estate. With respect to real property, its procurement shall be governed by the provisions of R.A. 8974 and other applicable laws, rules and regulations.

Procurement Observation Report — The report submitted by the Observer to the CIR/RD, based on the procurement checklist.

Procurement Unit — Refers to the organic office of the BIR that carries out the procurement function.

Bureau of Internal Revenue — Any branch, constitutional commission or office, agency, department, bureau, office, or instrumentality of the Government, including GOCC, GFI, SUC and LGU procuring Goods, Consulting Services and Infrastructure Projects. ISDCHA

Project Proponent/End-User Unit — The unit/office/department of the BIR that is primarily responsible for implementing and managing a project.

Proposal — See Bid.

Protest — A formal declaration made by a person interested or concerned in some act to be done, or already performed, whereby he expresses his dissent or disapproval, or affirms the act against his will. The object of such declaration is usually to save some right which would be lost to him if his implied anent could be made nil, or to exonerate himself from some responsibility which would attach to him unless he expressly negatived his assent. (Black's Law Dictionary, 5th Ed.)

Provincial bidder — A contractor who participates in the bidding of provincial priority programs and infrastructure projects as defined in Section 44 of the IRR-A of R.A. 9184, and whose principal office is within the same province.

Public Bidding — See Competitive Bidding.

Public Monitoring — A principle in Government procurement.

Repeat Order — An alternative method of procurement of goods from the previous winning bidder, whenever there is a need to replenish goods procured under a contract previously awarded through Competitive Bidding.

Reproduction cost — labor, supplies and equipment rental costs incurred in the reproduction of the documents.

Request for Clarification — A written request submitted by the bidder to the BAC, asking the latter to clarify a particular provision of the Bidding Documents.

Request for Proposal — A written request for proposals concerning goods or services the government intends to acquire by means of Competitive Bidding. The solicitation document used in Competitive Bidding. The procedure allows changes to be made after other proposals are opened and contemplates that the nature of the proposals and/or prices offered will be negotiated prior to award. TAECSD

Shopping — An alternative method of procurement of goods whereby the BIR simply requests for the submission of price quotations for readily available off-the-shelf goods or ordinary/regular equipment to be procured directly from suppliers of known qualifications.

Single source procurement — See Direct Contracting.

Spare parts — Refer to extra components, equipment, tools, instruments or parts of machinery or apparatus that replace the ones that are damaged or worn out.

Specification — A description of what the purchaser requires and what a bidder must offer.

Splitting of Contracts — The act of dividing or breaking up government contracts into smaller quantities and amounts. It also is the act of dividing contract implementation into artificial phases or sub-contracts. Both actions are for the purpose of evading or circumventing the requirements of law and this IRR-A, especially the necessity of public bidding and the requirements for the alternative methods of procurement. (IRR-A Section 54.1)

Standard — The established and fixed measure used in assessing quality or performance.

Subcontractor — One who takes a specific part of the work undertaken by the principal contractor. (Black's Law Dictionary, 5th Ed.)

Submitted bid price — The bid price as indicated in the financial proposal submitted by the bidder.

Supplemental/Bid bulletin — A notice issued by the BIR to Prospective Bidders with respect to any clarifications or modifications in the Bidding Documents, including those affecting the technical specifications, eligibility requirements, procurement schedule, and other similar matters.

Technical Bid — One of two components comprising a bid, the other being Financial Bid.

Tender — See Bid.

Two-Stage Competitive Bidding — Bidding process divided into two stages. In the first stage, bidders submit only the technical bids. In the second stage, when the technical specifications have already been well defined, the regular procedure for public bidding is followed. This may be employed for the procurement of Goods where, due to the nature of the requirements of the project, the required technical specifications/requirements of the contract cannot be precisely defined in advance of bidding, or where the problem of technically unequal bids is likely to occur.

Warranty – An undertaking by the supplier, manufacturer or distributor to guarantee that it will correct any manufacturing defects of the goods procured by the government.

 

Proposed Procurement Supply Chain Structure and Staffing

Figure 1. Basic Procurement Supply Chain Organizational Structure

 

Table I. Staffing of the Basic Procurement Supply Chain Organizational Structure

 

	Directorate	Division	Section
Overall	Director III	PMO IV	PMO III
Supervision
Supervision of	PMO IV (number	PMO III (number
sub-units	dependent on	dependent on
	procurement size	procurement size
	and degree of	and degree of
	specialization)	specialization)
Staffing	PMO III	PMO II	PMO II
	PMO II	PMO I	PMO I
	PMO I	Administrative	Administrative
	Administrative	Assistant	Assistant
	Assistant	Aide	Aide
	Aide

ANNEX A

NATIONAL BUDGET CIRCULAR NO. 005-04 n

ANNEX B

NATIONAL BUDGET CIRCULAR NO. 005-A-04 n

ANNEX C

Revenue Memorandum Order No. 42-04August 24, 2004

ANNEX D

TERMS OF REFERENCE ^*

ANNEX E

PROJECT PROCUREMENT MANAGEMENT PLAN ^*

 

Footnotes

1. Asian Development Bank and World Bank, 2004; 716 Philippine firms surveyed.

2. A firm declared ineligible by an IFI for engaging in corrupt, fraudulent, collusive and/or coercive practice/s, shall be ineligible to be awarded an IFI-financed contract during the period of time determined by the IFI concerned.

3. Approved and adopted by GPPB through its Resolution 021-2005, dated 07 October 2005, published at the Official Gazette on 09 January 2006.

4. Refers to the members of the BAC Secretariat and the Technical Working Group duly designated by the BIR pursuant to the provisions of Rule V of the IRR-A of R.A. 9184.

 

May 2007

VOLUME TWO: BIR MANUAL OF PROCEDURES FOR THE PROCUREMENT OF GOODS AND SERVICES

TABLE OF CONTENTS

ABBREVIATIONS AND ACRONYMS
SECTION 1:  INTRODUCTION
	SCOPE OF VOLUME 2
SECTION 2:  PREPARATIONS FOR THE PROCUREMENT OF GOODS AND SERVICES
	PREPARATIONS FOR THE PROCUREMENT OF GOODS AND SERVICES
	PROCUREMENT PLANNING
	a.	Purpose of Procurement Planning
	b.	Factors to Considered in Planning for the Procurement of Goods
	c.	Technical Specifications
	d.	Considerations in Setting the Technical Specifications of the Goods to be Procured
	e.	Approved Budget for the Contract (ABC)
	f.	Factors to Consider in Determining the ABC
	PREPARATION OF BIDDING DOCUMENTS
	a.	Bidding Documents
	b.	Contents of Bidding Documents
	c.	Other Practices that the Bureau of Internal Revenue may Observe to Ensure a Successful Procurement
	d.	Participants in the Preparation of the Bidding Documents
	e.	Schedule for the Preparation of Bidding Documents
	f.	Various Types and Sizes of Contracts Provided in the Bidding Documents
	g.	Bid Security
	h.	Forms of Bid Security and the Corresponding Amount
	i.	Period of Validity of Bid Security
	j.	Denomination of Bid Security
	k.	Condition for the Return of Bid Securities
	CONDUCT OF THE PRE-PROCUREMENT CONFERENCE
	a.	Pre-procurement Conference
	b.	Importance and Purpose of a Pre-procurement Conference
	c.	Timeline for the Conduct a Pre-procurement Conference
	d.	Participants of a Pre-procurement Conference
SECTION 3:  THE PROCUREMENT SERVICE OF THE DEPARTMENT OF BUDGET AND MANAGEMENT
	THE PS-DBM AND THE PHILGEPS
	a.	Mandate of the PS-DBM
	b.	Government Policy on the Use of the PhilGEPS for the Procurement of Goods
	c.	Features of the PhilGEPS and the PS-DBM Website of Special Relevance to the Procurement of Goods
	d.	Methodology: Steps in the Procurement Through the PS-DBM
SECTION 4:  PROCEDURES FOR THE PROCUREMENT OF GOODS AND SERVICES THROUGH
	COMPETITIVE BIDDING
	SINGLE STAGE COMPETITIVE BIDDING
	STEP 1 ADVERTISEMENT AND POSTING OF AN INVITATION TO APPLY FOR ELIGIBILITY AND TO BID
	a.	Contents of Invitation to Apply for Eligibility and to Bid
	b.	Posting an Invitation to Apply for Eligibility and to Bid
	c.	Methodology: Steps in the Advertisement and Posting of IAEBs
	STEP 2 ISSUANCE OF BIDDING DOCUMENTS
	a.	Schedule for Availability of Bidding Documents
	b.	Cost of Bidding Documents
	c.	Responsibilities of a Prospective Bidder with Regard to the Bidding Documents
	STEP 3 CONDUCT OF A PRE-BID CONFERENCE AND ISSUANCE OF SUPPLEMENTAL/BID BULLETINS
	a.	Pre-bid Conference
	b.	Schedule of Pre-bid Conference
	c.	Participants of Pre-bid Conference
	d.	Conduct of Participants During the Pre-bid Conference and Other Stages of the Procurement Process
	e.	Methodology: Steps in the Conduct of Pre-bid Conference
	f.	Issuance of Supplemental/Bid Bulletins
	g.	Participants in the Issuance of the Supplemental/Bid Bulletin
	h.	Methodology: Issuance of Supplemental/Bid Bulletin
	STEP 4 SUBMISSION, RECEIPT AND OPENING OF ELIGIBILITY AND BID ENVELOPES
	a.	Eligibility Check
	b.	Bid
	c.	Eligible Participants in Public Bidding for Goods
	d.	Minimum Eligibility Requirements
	e.	Purpose of Requiring an NFCC, a Credit Line or a Certificate of a Hold-out on Cash Deposit that is
		Equal to the ABC
	f.	Eligibility Requirements of a Prospective Foreign Bidder
	g.	Contents of the Technical Proposal
	h.	Contents of the Financial Proposal
	i.	Submission and Receipt of Bids
	j.	Participants in the Receipt and Opening of Bids
	k.	Methodology: Steps in the Opening of Bid Envelopes
	l.	Recourse of a Prospective Bidder If it is Found Ineligible or Declared NonCompliant with the Technical
		or Financial Requirements
	m.	Contents of Position Paper
	n.	Resolution of Protests
	o.	If Questions/Doubts Have Been Raised About the Eligibility of a Prospective Bidder After it Had Been
		Declared as Eligible
	p.	If Only One Bidder is Declared Eligible
	q.	Disqualification
	r.	If no Prospective Bidder is Declared Eligible
	s.	If Only One Bidder Passes the Preliminary Examination of Bids
	t.	If a Bidder Fails to Comply with the Technical and Financial Requirements of the Bid
	u.	Withdrawal of Bid
	STEP 5 BID EVALUATION
	a.	Purpose of Bid Evaluation
	b.	Timeline for Bid Evaluation
	c.	Participants in the Bid Evaluation Process
	d.	Methodology: Steps in the Bid Evaluation Process
	f.	If all Prospective Bidders are Unable to Comply with the Requirement of Having a Single Contract
		Whose Value is at Least 50% of the ABC of the Contract to be Bid
	g.	If a Bidder Does not Accept the Arithmetical Corrections Done by the BAC on its Bid
	h.	If no Bid Complies with All Bid Requirements
	i.	Application of Domestic Preference During Bid Evaluation
	k.	Rules Govern the Lease of Computers, Communications, Information and Other Equipment
	STEP 6 POST-QUALIFICATION
	a.	Post-qualification
	b.	Timeline for the Conduct of Post-qualification
	c.	Participants in the Conduct of Post-qualification
	d.	Methodology: Steps in the Conduct of Post-qualification
	e.	Post-qualification of Bidders
	f.	If All Bidders Fail Post-qualification
	g.	Reservation Clause
	h.	Right of the Bureau of Internal Revenue to Reject Bids, Declare a Failure of Bidding, or not Award the Contract
	i.	Declaration of Failure of Bidding
	STEP 7 CONTRACT AWARD
	a.	Rule on Contract Award
	b.	Timeline for Contract Award
	c.	Participants in the Award of the Contract
	d.	Methodology: Steps in the Contract Award
	e.	If the Bidder Being Considered for Award does not Accept the NOA
	f.	Performance Security
	g.	Schedule for Posting of Performance Security by the Bidder with the LCRB
	h.	Forms of Performance Security and Corresponding Amounts Required
	i.	Forms of Performance Security to be submitted by the Winning Bidder
	j.	Changes in the Amount of Performance Security in case of Amendments in the Contract Price
	k.	Schedule for the Release of Performance Security
	l.	Parties Involved in the Posting of the Performance Security
	m.	Methodology: Steps in the Posting of the Performance Security
	n.	Schedule for Release of Performance Security
	STEP 8 CONTRACT SIGNING AND APPROVAL
	a.	Timeline for Entering into a Contract
	b.	Timeline for Contract Approval by Higher Authorities
	c.	Timeline for Issuance of Notice to Proceed
	d.	Contract Effectivity
	e.	Participants in the Contract Signing, Approval and Issuance of the NTP
	f.	Contract Documents Should Include the Following
	g.	Methodology: Steps in the Contract Preparation, Signing and Approval
	h.	Rules Governing the Review and Approval of Government Contracts
	i.	If the Bidder with the LCRB or SCRB Refuses or is Unable, Through its Own Fault, to Post the
		Performance Security and Sign the Contract Within the Prescribed Period
	TWO-STAGE COMPETITIVE BIDDING
	a.	Instances that may Employ Two Stage Competitive Bidding Procedure
	b.	Timeline for the Conduct of a Two-Stage Competitive Bidding Procedure
	c.	Participants in the Two-Stage Competitive Bidding Process
	d.	Methodology: Steps in the Conduct of Two-Stage Competitive Bidding Process
	e.	If no Prospective Bidder Submits a Letter of Intent
SECTION 5:  PROCEDURES FOR THE PROCUREMENT OF GOODS AND SERVICES THROUGH
	THE ALTERNATIVE METHODS FOR THE PROCUREMENT OF GOODS AND SERVICES
	a.	Rules on the Use of Alternative Methods of Procurement
	PROCUREMENT THROUGH THE LIMITED SOURCE BIDDING
	a.	Conditions for Procurement Through Limited Source Bidding
	b.	Selection of Bidders
	c.	Participants in Procurement Through Limited Source Bidding
	d.	Methodology: Steps in the Conduct of Procurement through Limited Source Bidding
	DIRECT CONTRACTING
	a.	Conditions for Procurement Through Direct Contracting
	b.	Justification for Procurement through Direct Contracting
	c.	Participants in Procurement Through Direct Contracting
	d.	Methodology: Steps in the Conduct of Procurement through Direct Contracting
	REPEAT ORDER
	a.	Conditions for Procurement Through Repeat Order
	b.	Participants in Procurement Through Repeat Order
	c.	Methodology: Steps in the Conduct of Procurement through Repeat Order
	SHOPPING
	a.	Conditions for Procurement Through Shopping
	b.	Participants in Procurement Through Shopping
	c.	Planning for Contingency Purchase
	d.	Methodology: Steps in the Conduct of Procurement through Shopping
	NEGOTIATED PROCUREMENT
	a.	Conditions for Negotiated Procurement
	b.	Participants in Negotiated Procurement
	c.	Methodology: Steps in the Conduct of Negotiated Procurement
SECTION 6:  GUIDELINES ON IMPLEMENTATION OF CONTRACTS FOR GOODS AND SERVICES
	CONTRACT IMPLEMENTATION FOR THE PROCUREMENT OF GOODS AND SERVICES
	a.	Contract Effectivity
	AMENDMENT TO ORDER
	a.	Conditions When the Bureau of Internal Revenue Can Issue an Amendment to Order
	b.	Corresponding Adjustments in Contract Price and/or Delivery Schedules
	c.	Rules Governing Price Adjustments due to Amendment to Order
	d.	Participants in the Issuance of an Amendment to Order
	e.	Methodology: Steps in the Issuance of Amendment to Order
	f.	Commencement of Work Under an Amendment to Order
	SUSPENSION OF DELIVERY
	a.	Grounds for Suspension of Delivery or Contract Implementation
	b.	Corresponding Adjustments in Contract Price and/or Delivery Schedule
	c.	Resumption of Delivery by Supplier/Manufacturer/Distributor
	d.	Participants in the Issuance of a Suspension Order
	e.	Methodology: Steps in the Issuance of Suspension Order
	DELAYS IN DELIVERY AND LIQUIDATED DAMAGES
	a.	Rules on the Applicable Period for the Delivery of Goods or Performance of Service
	b.	Liquidated Damages
	c.	Grounds for the Imposition of Liquidated Damages
	d.	Amount of Liquidated Damages that may be Imposed Upon the Supplier
	e.	Methodology: Steps in the Imposition of Liquidated Damages
	OTHER RULES AND GUIDELINES
	I.	Incidental Services
	II.	Spare Parts
	III.	Purchaser's Responsibilities
	IV.	Information Required from the Supplier with regard to Spare Parts of Goods
	V.	Prices
	VI.	Payment
	VII.	Taxes and Duties
	VIII.	Subcontracts
	IX.	Standards to be Applied in Determining the Quantity of Goods Supplied
	X.	Packaging
	XI.	Insurance
	XII.	Transportation
	XIII.	Inspection and Tests
	XIV.	Intellectual Property Rights
	XV.	Limitations of Liability
	XVI.	Termination for Default
	XVII.	Termination for Insolvency
	XVIII.	Termination for Convenience
	XIX.	Assignment
	XX.	Blacklisting
	WARRANTY
	a.	Warranty Requirement for Goods
	b.	Defective Goods
	c.	Instances Where Partial Release or Reduction of the Required Warranty May be Done by the Bureau
		of Internal Revenue
SECTION 7:  GENERAL PROCUREMENT ACTIVITIES AND TIMELINES
ANNEX A.	Sample Forms for Goods and Services
ANNEX B.	GPPB Resolutions, Circulars and Memorandum

 

ABBREVIATIONS AND ACRONYMS

 

ABC	Approved Budget for the Contract
ADB	Asian Development Bank
AFP	Armed Forces of the Philippines
AO	Administrative Order
APP	Annual Procurement Plan
APR	Agency Procurement Request
ARD	Assistant Regional Director
BAC	Bids and Awards Committee
BDA	Battle Dress Attire
BDS	Bid Data Sheet
BFAD	Bureau of Food and Drugs
BIR	Bureau of Internal Revenue
BOC	Bureau of Customs
BSP	Bangko Sentral ng Pilipinas
CDA	Cooperative Development Authority
CAF	Certificate of Availability of Funds
CFR	Cost and Freight
CIF	Cost, Insurance and Freight
CIP	Carriage and Insurance Paid To (named place of destination)
COA	Commission on Audit
CPT	Carriage Paid To (named place of destination)
DBM	Department of Budget and Management
DBM-PS/
PS-DBM	Department of Budget and Management-Procurement Service
DDP	Delivered Duty Paid (named place of destination)
DFA	Department of Foreign Affairs
DOH	Department of Health
DOJ	Department of Justice
DTI	Department of Trade and Industry
DV	Disbursement Voucher
EFPS	Electronic Filing and Payment System
E.O.	Executive Order
EXW	Ex Works, Ex Factory or Off-the-shelf
FAP	Foreign Assisted Project
FCA	Free Carrier (named place)
FED	Firearms and Explosives Division
FOB	Free on Board
GAA	General Appropriations Act
GCC	General Conditions of Contract
GFI	Government Financial Institution
GOCC	Government-owned and/or -controlled corporation
GOP	Government of the Philippines
GPPB	Government Procurement Policy Board
GPPB-TSO	GPPB — Technical Support Office
GPRA	Government Procurement Reform Act (R.A. 9184)
IAEB	Invitation to Apply for Eligibility and to Bid
ICB	International Competitive Bidding
IFI	International Financing Institution
IPR	Intellectual Property Rights
IRR	Implementing Rules and Regulations
IRR-A	Implementing Rules and Regulations Part A of R.A. 9184
ITB	Instructions to Bidders
JBIC	Japan Bank for International Cooperation
JVA	Joint Venture Agreement
LBP	Land Bank of the Philippines
LC	Letter of Credit
LCB	Lowest Calculated Bid
LCRB	Lowest Calculated Responsive Bid (this shall have the same
	meaning as Lowest Evaluated and Responsive Bid [LERB] for IFIs)
LGU	Local Government Unit
LOI	Letter of Instructions
MDS	Modified Disbursement Scheme
MO	Memorandum Order
MYOA	Multi Year Obligation Authority
NCA	Notice of Cash Allocation
NEDA	National Economic and Development Authority
NFCC	Net Financial Contracting Capacity
NGA	National Government Agency
NGO	Non-Government Organization
NO	National Office
NOA	Notice of Award
NTC	National Telecommunications Commission
NTP	Notice to Proceed
ObR	Obligation Request
OP	Office of the President
OS	Obligation Slip
PA	Philippine Army
PBDs	Philippine Bidding Documents
P.D.	Presidential Decree
PMO	Project Management Office
PNP	Philippine National Police
PPMP	Project Procurement Management Plan
PhilGEPS/
G-EPS	Philippine Government Electronic Procurement System
PR	Purchase Request
PWI	Procurement Watch Inc.
R.A.	Republic Act
R.A. 9184	Republic Act No. 9184, otherwise known as the "Government
	Procurement Reform Act"
RIS	Requisition and Issuance Slip
RMO	Revenue Memorandum Order
RR	Revenue Region
SARO	Special Allotment Release Order
SBDs	Standard Bidding Documents
SCC	Special Conditions of Contract
SCRB	Single Calculated and Responsive Bid
SEC	Securities and Exchange Commission
SMEs	Small and Medium Enterprises
SOW	Scope of Work
SPA	Special Power of Attorney
SUCs	State Universities and Colleges
TWG	Technical Working Group
UNDB	United Nations Development Business
WB	The World Bank

 

SECTION 1. Introduction. —

Scope of Volume 2

This Manual seeks to provide BIR users including external stakeholders with clear, concise, and accurate information on the public procurement of goods and services, by discussing the steps that need to be taken to effect such procurement in the manner prescribed by R.A. 9184 and its IRR-A. It also discusses important issues that may confront BIR officials/officers in all stages of goods and services procurement, from the preparation of bid documents, to the actual bidding activity, monitoring of contract implementation and the final payment to the supplier. caCSDT

The procurement procedures are harmonized to a large extent with the IFIs and bi-lateral agencies lending to the Philippines. There are however policies which are specific to a particular lending agency or grantor and the document highlights the main differences. It should however be noted that the loan, credit or grant agreement with the relevant IFIs and/or bilateral agencies and their respective guidelines/implementing rules & regulations will be the overriding factors governing the foreign-assisted projects.

GOODS and SERVICES refer to all items, supplies, materials and general support services, except consulting services and infrastructure projects, which may be needed in the transaction of public businesses or in the pursuit of any BIR undertaking, project or activity. The term likewise refers to, among others, equipment, furniture, stationery, materials for construction, or personal property of any kind, including non-personal or contractual services such as the repair and maintenance of equipment and furniture. It also refers to trucking, hauling, janitorial, security, and related or analogous services (e.g.,rental of venues and facilities, catering services, attendance to trainings and seminars, short term services not considered as consulting services),as well as procurement of materials and supplies provided by the BIR for such services. The term "related" or "analogous services" shall include, but not be limited to, lease or purchase of office space, media advertisements, health maintenance services, and other services essential to the operation of the BIR. (Section 5 [k]of IRR-A)

Information technology goods and services include application infrastructure and architecture, application hosting, web-based system, internet services, data center hosting, software/hardware, licences and license to use, software/hardware maintenance, lease of servers/hardwares, facilities management services, system/software customization, among others. Information technology infrastructure and architecture refer to interconnecting hardware and software and other devices that supports the flow and processing of information, i.e.,transmission media, servers, storage.

The following terms are used in the manner indicated below:

1. The bidder shall be referred to differently at different stages of the procurement process. Thus, the bidder is called:

a. "prospective bidder" from the posting of the Invitation to Apply for Eligibility and to Bid (IAEB) to the submission of the Letter of Intent (LOI);

b. "eligible bidder" after the eligibility check/screening;

c. "bidder with the LCB" after evaluation;

d. "bidder with the LCRB" after post-qualification; and

e. "contractor" after the issuance of the NTP.

2. The term "bid" will be used instead of "proposal" or "offer."

3. "Eligibility Check" and "Eligibility Screening" shall be used interchangeably.

4. Eligibility Requirements are Eligibility Documents enclosed in the Eligibility Envelope.

5. The Technical Envelope contains the technical component of the bid.

6. The Financial Envelope contains the financial component of the bid.

This Manual is to be used together with the PBDs for Goods and Services prescribed by the GPPB.

SECTION 2. Preparations for the Procurement of Goods and Services.—

Preparations for the Procurement of Goods and Services

Volume I of this Manual contains an extensive discussion of Procurement Planning as a general concern for all kinds of government procurement, while this volume mainly focuses on concerns that are particular to the procurement of goods and services. As such, it is advisable for the reader to refer to the pertinent discussions in Volume I before and during the reading of this volume.

Preparation makes for higher efficiency and efficacy. It enables the procurement officers to anticipate the onset of events and, as a consequence, better calibrate their response to them. Having a better appreciation of forthcoming events gives these officials the opportunity to test a range of possible courses of action, choose the best and most feasible of these, and identify measures to put them into action. Ultimately, it would enable them to determine the best manner by which such measures are to be implemented, ensuring that their individual and collective impacts are optimized at the least cost.

Preparing for procurement basically involves three (3) activities:

1. procurement planning;

2. preparation of the bidding documents; and

3. conduct of the pre-procurement conference.

1. Procurement Planning

Purpose of Procurement Planning

The purpose of procurement planning is to schedule BIR's procurement activities in advance, consistent with the agency's Annual Procurement Plan. Under the planning stage, the following activities must be undertaken, among others:

• Preparation of the draft terms of reference by the end user;

• Determination of the mode of procurement;

• Type of goods and services; and

• Determination of the Approved Budget for the Contract (ABC).

Procurement planning entails ensuring that plans for procurement are linked to budgets, preparing the PPMP and consolidating all PPMPs (SF-GOOD-02) into the APP (BIR-PF-01).Formulating the PPMP involves identifying the procurement project requirements, writing the technical specifications, determining the ABC, identifying the schedule of milestone activities, and determining the method of procurement.

The PPMP is then transformed into the bidding documents, which ought to contain all the information a prospective bidder needs to prepare its bid. Therefore, in preparing the bidding documents, one has to ensure that these accurately and comprehensively reflect the main elements of the PPMP. One also has to make sure that the documents are of the kind and form prescribed by the IRR-A and this Manual.

Factors to Consider in Planning for the Procurement of Goods

The BIR Project Proponent or the end-user should consider the following factors which have an impact on contract packaging, the procurement method to be used, and other components of Procurement Planning as discussed in Volume 1.

1. Nature of the Goods to be Procured. Goods may be classified into different categories, such as:

a. common-use supplies;

b. inventory items;

c. non-common use supplies (which may include equipment or supplies that are project-specific);or

d. services.

"Common-use supplies" as defined in the IRR-A as those goods, materials, and equipment that are repetitively used in the day-to-day operations of procuring entities in the performance of their functions. For the purpose of the IRR-A, common-use supplies shall be those included in the Price List of the PS-DBM. (Section 5 [g]of IRR-A) Common-use supplies should be procured from the PS-DBM on a quarterly basis.

The BIR must consider the services of the PS-DBM in the procurement of all kinds of supplies. This will free it from the tediousness of attending to recurring transactions, and provide greater time for the procurement of high value, highly specialized requirements for its more significant projects.

"Inventory items" include common-use supplies, goods, materials and equipment that are not in the Price List of the PS-DBM but are regularly used and kept on stock by the BIR. Inventory items that are not "common-use supplies" may be procured from commercial sources, or suppliers other than the PS-DBM. The bulk purchase of these goods may be a good strategy to lower costs and achieve administrative efficiency. Likewise, it is a good practice to monitor the consumption of these items and identify when re-orders are necessary to ensure "round-the-clock" availability and to avoid over-the-counter purchases or purchases using petty cash funds.

"Non-common use supplies" are those goods, materials, and equipment that are neither "common-use supplies" nor "inventory items",and may include those goods, materials and equipment that are required by the BIR for a specific project only. Since these are not used regularly, and may even be highly specialized, these may be procured individually. There may be cases, however, when the APP will reveal that similar items are required for different projects, and in order to minimize costs, these may be procured under a single contract. For goods that are available off-the-shelf and are of relatively low value, shopping may be resorted to, provided the conditions for the use of this alternative mode of procurement are present.

"Services" refer to general support services, except consulting services and infrastructure projects, which may be needed in support of the transaction of public businesses or in the pursuit of any government undertaking, project or activity. These include non-personal or contractual services such as the repair and maintenance of equipment and furniture, as well as trucking, hauling, janitorial, security and related or analogous services (e.g.,rental of venues and facilities, catering services, attendance to trainings and seminars, short term services not considered as consulting services).The terms "related services" or "analogous services" shall include, but not be limited to, lease or purchase of office space, media advertisements, health maintenance services, and other services essential to the operation of the BIR.

2. Availability of the Goods or Services in the Market. The identification of the mode of procurement is sometimes dependent on the supply market. The procurement unit or office should, therefore, study the supply market to determine the availability of the goods. Goods that are universally available should be procured through public bidding. However, there are instances wherein alternative modes of procurement may be applicable.

Goods that are available seasonally, or those that are to be manufactured specially for the BIR only upon its order, would require more intensive planning in terms of timelines for procurement, taking into consideration manufacturing lead-time.

3. Obsolescence, operation, and maintenance of equipment/non-consumable Goods. In buying equipment, the BIR has to consider the operation and maintenance requirements of the goods to be procured. These refer to the availability and cost of spare parts in the local market, the skills required in operating and maintaining the equipment, and similar considerations. For example, if spare parts and maintenance services are not available locally, or, if available, are very expensive, the BIR may consider buying, instead, the substitute or equivalent product. It should be noted, however, that spare parts must be available locally. On the other hand, if the items being procured are high-technology items, or are highly specialized (e.g.,fighter jets) and cannot be satisfactorily substituted by other products, the BIR may consider including the supply of spare parts, consumables and/or maintenance services for a specified period of time, as part of the contract package.

Obsolescence could also be a factor in deciding whether to lease or to buy equipment. It may be more economical for the BIR to consider the leases of equipment that are easily rendered obsolete, like IT equipment. (Please refer to the last paragraph on bid evaluation on this Manual)

Under GPPB Resolution No. 06-2005, ordering agreements may be resorted to in situations where the BIR intends to procure non-inventory parts necessary to maintain the operational effectiveness of existing major equipment. The requirement thereof, although identified, becomes necessary only upon the happening of a fortuitous event. For this reason, the quantity and the exact time of need for said parts cannot be accurately pre-determined. Therefore, for reasons of economy, keeping in stock of said parts for possible future use or by procuring them for inventory would be disadvantageous to the government. This excludes parts required for routine maintenance, the volume and delivery time being determinable at an earlier period. TCcSDE

The BIR shall also take into consideration the warranty requirements for goods under Section 62.1 of IRR-A.

Technical Specifications

The term "technical specifications" refers to the physical description of the goods or services, as well as the BIR's requirements in terms of the functional, performance, environmental interface and design standard requirements to be met by the goods to be manufactured or supplied, or the services to be rendered. The technical specifications must include the testing parameters for goods, when such testing is required in the contract.

"Functional description" is the description of the functions for which the Goods are to be utilized. For example, a ballpen is expected to write 1.5 km of straight, continuous lines.

"Performance description" refers to the manner that the Goods are required to perform the functions expected of them. For example, a ballpen that writes at 1.5km should do so continuously and smoothly, without skipping, and with the color of the ink being consistent.

"Environmental interface" refers to the environment in which the required functions are performed at the desired level. For example, a ballpen should write continuously for 1.5km on pad paper or bond paper, but not necessarily on wood or on a white board.

"Design" refers to the technical design or drawing of the goods being procured. A design standard is particularly useful in cases where the goods procured are specially manufactured for the BIR.

Considerations in Setting the Technical Specifications of Goods to be Procured

In determining the technical specifications of the goods it will procure, the BIR Project Proponent or end-user unit must consider the objectives of the project or the procurement at hand, and identify the standards that should be met by the goods in terms of function, performance, environmental interface and/or design. It must also conduct a market survey that will include a study of the available products or services, industry developments or standards, product or service standards specified by the authorized government entity like the Bureau of Product Standards, ISO9000 or similar local or international bodies. As a rule, Philippine standards, as specified by the Bureau of Product Standards, must be followed. For products where there are no specified Philippine standards, the standards of the country of origin or other international body may be considered. Product brochures, technical publications, industry newsletters, the industry itself, as well as the Internet, are good sources of product information. The conduct of a comparative study of the options available in the market and their relevance to the requirements of the Project is highly recommended. SHECcT

In-house experts who are part of the TWG or the BIR Project Proponent or end-user unit must likewise be tapped to provide technical advice. If there are no in-house experts available to provide advice on highly technical Goods, the BIR may hire consultants to assist it in developing the technical specifications for the procurement at hand.

It is important to note that the use of brand names is prohibited by the IRR-A. Specifications for the procurement of goods shall be based on relevant characteristics and/or performance requirements. Hence, a generic description of the product or service must be used. 1

Approved Budget for the Contract (ABC)

The ABC is the budget for the contract duly approved by the CIR/RD or his duly authorized representative, as provided for in the GAA and/or continuing appropriations. Thus, the ABC referred to in R.A. 9184 and its IRR-A basically refers to the proposed budget for the project approved by the CIR/RD or his duly authorized representative based on the APP as consolidated from various PPMPs. 2

Factors to Consider in Determining the ABC

In determining the ABC, the BIR Project Proponent or end-user unit, with the assistance of technical expert/s, if necessary, must consider the different cost components, namely (SF-GOOD-01):

1. Cost or market price of the product or service itself;

2. Incidental expenses like freight, insurance, taxes/duties, installation costs, training costs, and cost of inspection;

3. Cost of money, to account for government agencies usually buying on credit terms;

4. Inflationary factor, since the planning phase is usually done one (1) year ahead of the actual procurement date;

5. Quantities, considering that buying in bulk usually means lower unit prices; and

6. Supply of spare parts and/or maintenance services, if these are part of the contract package. SHaATC

If the project or contract has a foreign component, it is also best to include a currency valuation adjustment factor, in order to address foreign exchange rate fluctuations between the planning phase and the actual procurement date. To determine the factor to be used, the BIR Project Proponent or end-user unit may request for guidance from the BSP, or refer to BSP forecasts, if available.

If the sum of the different cost components is lower than the appropriation for the procurement, then the ABC should be equal to the sum of the cost components. If the resulting sum is higher than the appropriation, it is advisable to review the technical specifications and the computation of the ABC. In any case, the ABC should not exceed the appropriation.

In case of adjustment of ABC due to failure of bidding, GPPB Resolution 07-2005 provides that the ABC may be adjusted upwards only under the following conditions:

1. There has been failure of bidding for the second time due to all bids submitted exceeding the ABC or no bids have been submitted, or failure in the negotiated procurement after two failed biddings; and

2. There has been previous modification of the terms, conditions and specifications of the project based on Section 35 of the IRR-A, except when the project is indivisible, where the technical component is an integral part of the whole that cannot be reduced, and it constitutes the minimum requirement of the BIR for which there are no substitutes.

GPPB Resolution 07-2005 further states that the ABC may be adjusted downwards if there is a need to reflect actual market prices and/or scope of work or suit actual field conditions of the project. Upon adjustment of ABC, the BIR must conduct re-bidding with re-advertisement/posting. Any succeeding adjustment of the ABC shall be in accordance with these guidelines.

2. Preparation of Bidding Documents

Bidding Documents

Bidding documents are documents issued by the BIR to provide prospective bidders all the necessary information that they need to prepare their bids. (Section 5 [f]of IRR-A) These clearly and adequately define, among others:

1. Objectives, scope and expected outputs and/or results of the proposed contract;

2. Technical specifications of Goods or Services to be procured;

3. Expected contract duration, the estimated quantity in the case of procurement of goods, delivery schedule and/or time frame;

4. Obligations, duties and/or functions of the winning bidder; and

5. Minimum eligibility requirements of bidders, such as track record to be determined by the BAC. (Section 17.2 of IRR-A)

Contents of Bidding Documents

1. IAEB;

2. ITB;

3. BDS;

4. GCC;

5. SCC;

6. Schedule of Requirements;

7. Technical Specifications;

8. Sample Forms as annexed in the PBDs;

9. Terms of Reference and annexes; and

10. Checklist of Envelopes 1, 2 and 3.

11. Additional documents/specifications, where applicable and necessary. The bidding documents, as amended, shall subsequently form an integral part of the contract. (Section 17.3 of IRR-A) Statements not made in writing at any stage of the bidding process shall not modify the bidding documents.

The specifications and other terms in the bidding documents shall reflect minimum requirements. A bidder may, therefore, be allowed to submit a superior offer. However, in the evaluation of the bids, no premium or bonus must be given as a result of this superior offer. (Section 17.4 of IRR-A) This rule is based on the nature of the procedure used to evaluate the technical proposals — a "pass/fail" method — such that the presence or absence of the technical requirements is the sole basis for determining technical compliance. After having established compliance with the technical specifications, the next factor to consider would then be the price or financial bid.

Other Practices that the BIR may Observe to Ensure Successful Procurement

1. All prospective bidders should be provided the same information, and should be assured of equal opportunities to obtain additional information on a timely basis.

2. BIR should provide reasonable access to project sites for visits by prospective bidders.

3. For complex supply contracts, particularly for those requiring refurbishing existing equipment, a pre-bid conference may be arranged whereby potential bidders may meet with the BAC, TWG, BAC Secretariat, and Project Proponent/end-user unit to seek clarifications. Minutes of the conference may be provided to a prospective bidder only upon request and payment of the corresponding fee. 

4. Supplemental/bid bulletins must be issued by the BAC in case any additional information, clarification, correction of errors, or modifications of bidding documents. It shall be the responsibility of all those who have properly secured the bidding documents to inquire and secure supplemental/bid bulletins that may be issued by the BAC. In highly exceptional cases, the deadline may be extended.

Participants in the Preparation of the Bidding Documents

1. BAC;

2. TWG;

3. Project Proponent/end-user;

4. Technical Experts/Consultants, if necessary; and

5. BAC Secretariat.

Schedule for the Preparation of the Bidding Documents

The bidding documents must be prepared in time for presentation at the pre-procurement conference. After the conference, and before advertisement and/or posting of the IAEB at the BIR website (www.bir.gov.ph) and PhilGEPS, it should be ascertained that these documents will be ready and available for issuance to prospective bidders on the day the IAEB is first advertised.

Various Types and Sizes of Contracts Provided in the Bidding Documents

The bidding documents should clearly state the type of contract to be entered into and contain the proposed contract provisions appropriate therefore. The most common types of contracts provide for payments on the basis of a lump sum, unit price, or combinations thereof. 3

The size and scope of individual contracts will depend on the magnitude, nature, and location of the project, for example:

1. For projects requiring a variety of goods and works, separate contracts may be awarded for the supply and/or installation of different items of equipment and plant ("plant" refers to installed equipment, as in a production facility) and for the works.

2. For a project requiring similar but separate items of equipment or works, bids may be invited under alternative contract options that would attract the interest of both small and large firms, which could be allowed, at their option, to bid for individual contracts (slices/items) or for a group of similar contracts (package).All bids and combinations of bids should be received by the same deadline and opened and evaluated simultaneously so as to determine the bid or combination of bids offering the lowest calculated cost to the BIR.

Bid Security

A bid security is a guarantee that the successful bidder will:

1. Not default on its offer, and

2. Enter into contract with the BIR within ten (10) calendar days, or less as indicated in the ITB, from receipt of the Notice of Award, and furnish the performance security provided for in Section 39 of R.A. 9184 and Section 27.1 of IRR-A.

A bid security must be submitted with every bid. It must be operative on the date of bid opening, and payable to the BIR.

Forms of Bid Security and the Corresponding Amount

The bid security shall be in any of the following forms, with the corresponding required amount:

 

	Form of Bid Security	Minimum Amount in % of the
		Approved Budget for the Contract
		(ABC) to be Bid
1.	Cash, certified check, cashier's	One percent (1%)
	check/manager's check, bank
	draft or irrevocable letter of credit
2.	Bank Guarantee confirmed by a	One and a half percent (1.5%)
	reputable local bank or in the case
	of a foreign bidder, bonded by a
	foreign bank;
3.	Surety Bond callable upon	Two and a half percent (2.5%)
	demand issued by a reputable
	surety or insurance company;
4.	Foreign government guarantee as	One Hundred percent (100%)
	provided in an executive, bilateral
	or multilateral agreement, as may
	be required by BIR.

 

For purposes of determining the amount of the bid security in biddings with lots or items, whereby a bidder submits a bid for more than one lot or item, the bid security shall be based upon the sum of the ABC for each of the lots or items for which bids are submitted. CASTDI

Period of Validity of Bid Security

Bid security must be valid for one hundred twenty (120) calendar days from the date of the opening of bids. (Section 28 of IRR-A)

Denomination of Bid Security

The bid security must be denominated in Philippine currency (Section 27.3 of IRR-A), except that foreign bidders which are allowed to submit foreign currency denominated bids may also submit bid securities that are denominated in a freely convertible currency allowed or specified in the bidding documents.

Condition for the Return of Bid Securities

No bid securities shall be returned to bidders after the opening of bids and before contract signing, except:

• those who were failed to comply with any of the requirements to be submitted in the first bid envelope of the bid; or

• those who were post disqualified and submitted a written waiver of its right to file a motion for reconsideration and/or protest.

However, bidders who were post-disqualified must request in writing from the BIR for the refund of their bid securities. The original copy of the Official Receipt must be attached to the request for bid securities mentioned in Section 27.2 (a) of the IRR.

Without prejudice to the provisions of the law allowing forfeiture of bid securities, bid securities shall be returned only after the bidder with the LCRB has signed the contract and furnished the performance security, but in no case later than the expiration of the bid security validity period indicated in the ITB. (Section 27.4 of IRR-A as amended by GPPB Resolution No. 021-2006)

3. Conduct of the Pre-Procurement Conference

Pre-procurement Conference

This is the forum where the participants involved in the procurement meet and discuss all aspects of a specific procurement activity, which includes the technical specifications, the ABC, the applicability and appropriateness of the recommended method of procurement and the related milestones, the draft bidding documents, and availability of the pertinent budget release for the project.

Importance and Purpose of a Pre-procurement Conference

For all projects subject to public bidding or any of the alternative modes of procurement (except shopping or negotiated procurement with other government agencies),a pre-procurement conference is conducted to determine the readiness of the BIR to procure goods and services in terms of the legal, technical and financial requirements of the project. More specifically, it ensures that the procurement will proceed in accordance with the PPMP and APP, confirms the availability of appropriations and programmed budget for the contract, and reviews all relevant documents in relation to their adherence to the law. (Section 20 of IRR-A)

A pre-procurement conference should: (Section 20.1 of IRR-A)

1. Ensure that the procurement is in accordance with the approved APP;

2. Determine the availability of the appropriations and programmed budget for the contract;

3. Review of the TOR;

4. Review, modify and agree on the criteria for eligibility screening, and ensure that the said criteria are fair, reasonable, and that they are of the "pass/fail" type and are written in such manner; (Section 20.1.3 of IRR-A)

5. Review, modify and agree on the criteria for the evaluation of bids/proposals, and ensure that the said criteria are fair, reasonable and applicable to the procurement at hand;

6. Review, modify and agree on the acceptable minimum specifications and other terms in the bidding documents;

7. Reiterate and emphasize the "no contact rule" during the bid evaluation process, and the applicable sanctions and penalties, as well as agree on measures to ensure compliance with the foregoing. (Please refer Step 5, Bid Evaluation for a discussion on the "no contact rule".);and

8. Ensure that the requirements of the goods and services to be procured are in accordance with the ABC. TaDCEc

If the BIR has to procure similar goods or services, although through different public bidding activities, it may opt to hold just one pre-procurement conference to simplify or shorten the process.

Timeline for the Conduct of Pre-procurement Conference

The pre-procurement conference must be conducted prior to the advertisement or issuance of the IAEB (SF-GOOD-05).(Section 20.1 of IRR-A) A reasonable time period should be prescribed to allow the participants to incorporate the necessary changes, amendments or revisions thereto.

Participants in the Pre-Procurement Conference

1. BAC;

2. BAC Secretariat;

3. Project Proponent/end-user;

4. Members of the TWG/s and technical experts/consultants hired by the BIR; and

5. Other officials concerned, as may be required.

Minutes of the Pre-Procurement Conference shall be prepared by the BAC Secretariat as prescribed in SF-GOOD-04.

SECTION 3. The Procurement Service of the Department of Budget and Management and the Philippine Government Electronic Procurement System. —

The PS-DBM and the PhilGEPS

Mandate of the PS-DBM

The PS-DBM was created under LOI No. 755 (Relative to the Establishment of an Integrated Procurement System for the National Government and its Instrumentalities) with the following functions, among others:

1. Identify those supplies, materials, and such other items, including equipment and construction materials, which can be economically purchased through central procurement and which it shall cover within its scope of activity;

2. Determine the technical specifications of items that it will procure for agencies of the Government;

3. Identify the sources of supply which are able to offer the best prices, terms and other conditions for the items procured by government; and

4. Purchase, warehouse and distribute items for resale to agencies of government, including GOCCs.

Moreover, it is mandated under the GPRA to administer the Government Electronic Procurement System or the G-EPS.

All procuring entities are directed to purchase common-use supplies from the PS-DBM.

Government Policy on the Use of the PhilGEPS for the Procurement of Goods

To promote transparency and efficiency, information and communications technology shall be utilized in the conduct of procurement procedures. Accordingly, there shall be a single portal that shall serve as the primary source of information on government procurement. The PhilGEPS shall serve as the primary and definitive source of information on government procurement. For this purpose, the Electronic Procurement System established in accordance with Executive Order No. 322, s. 2000 and Executive Order No. 40, s. 2001 shall be continued to be managed by the PS-DBM under the supervision of the GPPB, as the PhilGEPS in accordance with the IRR-A.

All procuring entities are required to use the PhilGEPS in all its procurement of common-use supplies. For the procurement of non-common use items, procuring entities may hire service providers through competitive bidding to undertake their electronic procurement. (Refer to the GPPB Circular 01-2005)

To fully comply with the requirement under Section 8.2.1 (a) of the IRR-A, and to promote transparency and efficiency in government procurement, all notices of awards of contract, and other related information must be posted in the bulletin board of the PhilGEPS website, being the single portal of information on all government procurement activities, in addition to the posting in the website of the BIR. The BAC of the BIR RR shall coordinate with the Corporate Communications Division for the posting access in the BIR website.

Features of the PhilGEPS and the PS-DBM Website of Special Relevance to the Procurement of Goods

As discussed in Section 6 of Volume 1, the existing PhilGEPS has two (2) features that are of special relevance to the procurement of goods, namely: (i) notification feature which includes the posting of IAEBs and other notices, as well as the matching of procurement opportunities with the appropriate supplier; and (ii) the registry of suppliers.

Additionally, the PS-DBM website (www.procurementservice.org) contains an electronic catalogue of common-use supplies that can be bought from the PS-DBM. This catalogue includes the descriptions of the items, current prices, stock positions, and other relevant information. Although this information is available online, purchasing is currently still done manually.

Methodology: Steps in the Procurement Through the PS-DBM

The following steps are undertaken in the procurement of goods through the PS-DBM:

1. The Procurement Division/Administrative Division transacts with the PS-DBM in accordance with the following guidelines:

a. For common-use supplies

• Check catalogue with the PS-DBM website (www.procurementservice.org) as to the price and specification

• Prepare APR and Obligation Request (ObR)

• Prepare Disbursement Voucher upon approval of APR and ObR

• Prepare check for payment to PS

• Forward check and certified true copy of approved APR to PS

• Receive supplies procured from PS

• Conduct inspection of delivered supplies by the Inspection and Acceptance Committee of the BIR

b. For other goods and services

• Prepare APR based on approved TOR

• Submit approved APR to PS-DBM for price monitoring

• Receive Reply Action Document (RAD) from PS-DBM

• Prepare APR (with price of goods/services) and ObR for approval

• Prepare Disbursement Voucher upon approval of APR and ObR

• Prepare check for payment to PS

• Forward check and certified true copy of approved APR to PS

• Receive goods procured from PS

• Conduct inspection of delivered goods and acceptance of services rendered by the Inspection and Acceptance Committee of the BIR together with Inspector of PS-DBM TCDHIc

2. The Procurement Division/Administrative Division authorized representative registers with the PhilGEPS. PS-DBM shall issue a certification detailing the user-name and a system-generated password of the said authorized representative.

SECTION 4. Procedures for the Procurement of Goods and Services Through Competitive Bidding. —

Competitive or Public Bidding

It is a method of procurement that is open to any interested and qualified party. All procurement shall be done through Public Bidding except as provided in Rule XVI of the IRR-A. (Section 10 of IRR-A)

Competitive Bidding consists of the following processes:

• Advertisement/Posting of IAEB;

• Issuance and availability of bidding documents;

• Pre-bid conference;

• Request for clarification

• Supplemental/Bid Bulletin

• Submission and Opening of Bids;

• Bid Evaluation;

• Post-qualification;

• Approval of Resolution/Issuance of Notice of Award;

• Contract Preparation and Signing;

• Approval of Contract by Higher Authority; and

• Issuance of Notice to Proceed

The procurement process from date of from date of advertisement and/or 1st day of posting of the IAEB up to the opening of bids should not exceed thirty (30) calendar days. (Section 21.2.2 of IRR-A as amended by GPPB Resolution No. 014-2006).The opening of bids up to the award of contract should not exceed twenty-two (22) calendar days. In case the deadline for each activity falls on a non-working day (i.e.,Saturday and Sunday),legal holiday, or special non-working holiday, the deadline shall be the next working day. (Section 38.1 of IRR-A)

There are two (2) types of Competitive Bidding procedures: Single-Stage and Two-Stage.

The Single-Stage bidding is the regular procedure used for competitive or public bidding while the two-stage bidding is employed when the required technical specifications/requirements of the contract cannot be precisely defined in advance of bidding, or where the problem of technically unequal bids is likely to occur.

Single-Stage Competitive Bidding

Step 1 Advertisement and Posting of Invitation to Apply for Eligibility and to Bid

The IAEB serves as the notice to the public and all interested parties of the procurement and bidding opportunities of the BIR. It ensures transparency of the procurement process, widest possible dissemination to increase the number of prospective bidders, and intensify competition for the procurement activity or project. Intensified competition, in turn, will ensure that the government, in general, and the BIR, in particular, will get the best possible quality and cost for the goods and services sought to be procured. The BAC is responsible for ensuring that the IAEB is advertised and posted in accordance with law.

Contents of IAEB

1. Name of the contract to be bid, and a brief description of the goods to be procured;

2. A general statement on the criteria to be used by the BIR for the:

a. eligibility check;

b. examination and evaluation of bids; and

c. post-qualification;

3. Date, time and place of the deadline for the:

a. submission and receipt of the eligibility requirements;

b. pre-bid conference if any;

c. submission and receipt of bids; and

d. opening of bids;

4. ABC;

5. Source of funding;

6. Period of availability of the bidding documents, the place where the bidding documents may be secured and, where applicable, the price of the bidding documents;

7. Contract duration or delivery schedule;

8. Name, address, telephone number, facsimile number, e-mail and website addresses of the BIR, as well as its designated contact person;

9. Reservation Clause; and

10. Such other necessary information deemed relevant by the BIR.

The IAEB should provide information that enables potential bidders to decide whether to participate or not. As such, apart from the above essential items, the IAEB should also indicate any important bid evaluation criteria (e.g.,the application of a margin of preference in bid evaluation) or qualification requirement (e.g.,a requirement for a minimum level of experience in manufacturing a similar type of product for which the invitation is issued).

The deadline for the submission of bids should be no later than thirty (30) calendar days from the date of advertisement and/or first day of posting of the IAEB.

Posting of the IAEB

The IAEB for projects with ABCs of more than Two Million Pesos (P2 Million) must be: (Section 21.2.1 of IRR-A as amended by GPPB Resolution No. 014-2006)

1. Advertised at least once within a maximum period of seven (7) calendar days in one (1) newspaper of general nationwide circulation which has been regularly published for at least two (2) years before the date of issue of the advertisement;

2. Posted Continuously on the BIR website (www.bir.gov.ph) and the PhilGEPS for seven (7) calendar days starting on date of advertisement; and

3. Posted at any conspicuous place reserved for this purpose in the premises of the BIR National Office and Regional Offices, as certified by the heads of their respective BAC Secretariats for seven (7) calendar days starting on date of advertisement;

For projects with ABCs of P2 Million and below, the IAEB should be posted: (Section 21.2.2 of IRR-A as amended by GPPB Resolution No. 014-2006)

1. Continuously on the BIR website (www.bir.gov.ph) and the PhilGEPS for seven (7) calendar days starting on date of advertisement; and

2. At any conspicuous place reserved for this purpose in the premises of the BIR National Office and Regional Offices, as certified by the heads of their respective BAC Secretariats for seven (7) calendar days.

Methodology: Steps in the Advertisement and Posting of IAEBs

The BAC Secretariat:4

a. Prepare the draft IAEB for review/approval of the BAC; and

b. Advertise and post the IAEB.

For alternative methods of procurement, advertisement in a newspaper may be dispensed with, provided, however, that posting shall be made at the BIR website, the PhilGEPS and at any conspicuous place reserved for this purpose in the premises of the BIR NO and RR, as certified by the heads of their respective BAC Secretariat during the same period.

Step 2 Issuance of Bidding Documents

Schedule for Availability of Bidding Documents

The BAC Secretariat shall make available the bidding documents to the prospective bidders from the time the IAEB is first advertised until immediately before the deadline for submission of bids upon payment of non-refundable fee. (Section 17.5 of IRR-A) The BIR must ensure that prospective bidders are given ample time to examine the bidding documents and to prepare their respective bids. A maximum period of twenty (20) calendar days from the date of advertisement and/or 1st day of posting of the IAEB up to opening of bids is provided by Section 21.2.2 of the IRR-A, as amended by GPPB Resolution No. 014-2006, which means that there is a maximum period of twenty (20) calendar days for which the bidding documents may be available for purchase.

The bidding documents are strictly confidential and shall not be divulged or released to any person prior to its official release. The BIR shall post an abstract or a summary of the bidding documents, containing general information about the procurement at hand, e.g.,refer to the contents of the IAEB, in the PhilGEPS website, the BIR website (www.bir.gov.ph),and the website of its electronic procurement system service provider, if any. This abstract may then be viewed even by non-registered users of the PhilGEPS or of the other websites mentioned.

Cost of Bidding Documents

The BAC must consider the cost recovery component in determining the price which interested suppliers would have to pay for the bidding documents to ensure that the same would not have an effect of discouraging competition.

The cost recovery component may include the following:

1. Direct costs, which includes:

a. Development costs, which are incurred in developing the original content of the documents, designs, plans and specifications. However, the design cost may be excluded if it is to be included in the capitalized cost of the project, or the project cost, which is to be recovered from the use of the completed project facility;

b. Reproduction costs, which are labor, supplies and equipment rental costs incurred in the reproduction of the documents; and

c. Communication costs, which include mail and fax costs, plus costs of advertising, meetings, internet/web posting, and other costs incurred for the dissemination of information about the bidding. DSAEIT

2. Indirect costs, such as overhead, supervision, and administrative costs, allocated to the bidding activity. This may include the costs of paying honoraria to the members of the BAC, TWG and other officers and personnel of the BIR who are entitled thereto under the law.

Responsibilities of a Prospective Bidder with Regard to the Bidding Documents

A prospective bidder must be responsible for having: (Section 17.7.1 of IRR-A)

1. Taken steps to carefully examine all of the bidding documents;

2. Acknowledged all conditions, local or otherwise, affecting the implementation of the contract;

3. Made an estimate of the facilities available and needed for the contract to be bid, if any; and

4. Complied with his responsibility as provided for under Section 22.5.1, which provides that it shall be the responsibility of all those who have properly secured the bidding documents to inquire and secure supplemental/bid bulletins that may be issued by the BAC.

Failure to observe any of the above responsibilities shall be at the risk of the prospective or eligible bidder concerned. For this purpose, one of the contents of the Technical proposal would have to be a sworn statement executed by the bidder attesting to these responsibilities.

The BIR shall not be responsible for any erroneous interpretation or conclusions by the prospective or eligible bidders of the data it furnished. (Section 17.7.3 of IRR-A)

Moreover, the bidders are deemed to have become familiar with all existing Philippine laws, decrees, ordinances, acts and regulations that may affect the contract in any way. However, if the contract is affected by new laws, ordinances, regulations or other acts of government promulgated after the date of the bidding, a contract price adjustment shall be made or appropriate relief shall be applied on a no loss-no gain basis, provided such is not covered by the contract provisions on price adjustment. (Section 17.7.4 of IRR-A)

Step 3 Conduct of Pre-Bid Conference and Issuance of Supplemental/Bid Bulletins

Pre-bid Conference

The pre-bid conference is the initial forum where the participants discuss the different aspects of the procurement at hand.

The ground rules that will govern the procurement are discussed during the conference. In particular, the participants discuss the legal, technical and financial components of the contract to be bid. This is also an opportunity for the prospective bidders to request for clarifications about the bidding documents. However, it should be noted that any statement made at the pre-bid conference would not modify the terms of the bidding documents, unless such statement is specifically identified in writing as an amendment of the documents and issued as a supplemental/bid bulletin. (Section 22.4 of IRR-A)

It is important that responsible and knowledgeable officials attend the conference. The persons who actually formulated the scope of work, plans and technical specifications for the project should be present and among those representing the Bureau of Internal Revenue. Prospective bidders, on the other hand, should be encouraged to send representatives who are legally and technically knowledgeable about the requirements of the procurement at hand. It is also important that the prospective bidders are given ample time to review the bidding documents prior to the pre-bid conference.

Schedule for the conduct of Pre-bid Conference

A pre-bid conference must be held for contracts with ABCs of at least One Million Pesos (P1 Million).For contracts with ABCs of less than P1 million, pre-bid conferences may or may not be held at the discretion of the BAC. The BAC may also decide to hold a pre-bid conference upon the written request of a prospective bidder. (Section 22.1 of IRR-A)

The pre-bid conference must be held at least twelve (12) calendar days before the deadline for the submission and receipt of bids. (Section 22.2 of IRR-A) In addition to this, it is suggested that the pre-bid conference should not be held earlier than seven (7) calendar days after the last day of the advertisement/posting the IAEB. If the pre-bid conference is held less than twelve (12) calendar days before the deadline for the submission and receipt of bids, that deadline should be moved to a later date. A supplemental/bid bulletin shall be issued for this reason. Note that these periods are all within the maximum period of thirty (30) calendar days from the date of advertisement and/or 1st day of posting of the IAEB up to the opening of the bid, as provided under Section 21.2.2 (i) of IRR-A as amended by GPPB Resolution No. 014-2006.

Participants of a Pre-bid Conference

1. BAC;

2. BAC Secretariat/Procurement Unit;

3. TWG members and technical experts/consultants, if necessary;

4. Project Proponent/end-user;

5. Prospective bidders; and

6. Observers.

The attendance of the prospective bidders shall not be mandatory.

Conduct of Participants During the Pre-bid Conference and Other Stages of the Procurement Process

The BAC, BAC Secretariat, TWG, and other officials involved in procurement are expected to act in an impartial, courteous and professional manner in all their dealings and interactions with the bidders during all stages of the procurement. The bidders' representatives are likewise enjoined to adopt the same professional manner in their dealings with the BIR officials and employees. Communications between the parties must, as much as possible, be made in writing, except during the pre-bid conference when verbal clarifications may be allowed — keeping in mind, however, that any statement made at the pre-bid conference would not modify the terms of the bidding documents, unless such statement is specifically identified in writing as an amendment of the documents and issued as a supplemental/bid bulletin.

Methodology: Steps in the Conduct of Pre-bid Conference

1. The presentation by the BAC of the eligibility requirements as well as the technical and financial components of the contract to be bid, the evaluation procedure, evaluation criteria, and possible causes of failure of the bidding.

2. The BAC shall also discuss the requirements in the ITB, the replies to the bidders' queries about the requirements, specifications and other conditions of the project, the bid evaluation of all bidders and post-qualification evaluation of the lowest calculated bidder. Emphasis should also be given to the warranty requirement of the project and the different offenses and penalties provided for in the IRR-A of R.A. 9184.

The BAC must initiate discussions on contentious issues, most especially if the participating prospective bidders have no ready questions. It is probable that there are issues that may not be apparent in the bidding documents but are known to the representatives of the BIR.

If these issues are brought out and openly discussed, prospective bidders will be able to prepare responsive bids, thus avoiding situations that may give rise to a failure of bidding due to lack of bids received or failure of bids to comply with all the bid requirements.

3. The recording by the BAC Secretariat of minutes of the pre-bid conference (SF-GOOD-28),and its availability to all participants, only upon payment of the corresponding fee, not later than three (3) calendar days after the pre-bid conference. (Section 22.3 of IRR-A)

Issuance of Supplemental/Bid Bulletins

A supplemental/bid bulletin (SF-GOOD-30) may be issued by the BAC upon the request of the prospective bidders or upon the initiative of BIR. Any statement made at the pre-bid conference shall not modify the terms of the bidding documents unless such statement is specifically identified in writing as amendment thereto and issued as a supplemental/bid bulletin.

1. Clarification or Interpretation on the Bidding Documents as Supplemental/Bid Bulletins

Clarification or interpretation on any part of the bidding documents may be requested by prospective bidders provided that the request is made in writing and submitted to the BAC at least ten (10) calendar days before the deadline for the submission and receipt of bids. In this case, the BAC shall issue its response by issuing a supplemental/bid bulletin, to be made available to all those who have properly secured the bidding documents at least seven (7) calendar days before the deadline for the submission and receipt of bids. (Section 22.5.1 of IRR-A)

2. Supplemental/Bid Bulletins Issued at the Initiative of the BIR

The BIR may, at its own initiative, issue supplemental/bid bulletins for purposes of clarifying or modifying any provision of the bidding documents not later than seven (7) calendar days before the deadline for the submission and receipt of bids. Any modification to the bidding documents must be identified as an "AMENDMENT." (Section 22.5.2 of IRR-A)

3. Posting of Supplemental/Bid Bulletins

The BAC shall also post the supplemental/bid bulletin on the BIR website (www.bir.gov.ph) or the website of its electronic procurement system provider, if any, and on the PhilGEPS, within seven calendar days before the deadline for the submission and receipt of bids. It will be the prospective bidders' responsibility to ask for, and secure, these bulletins; however the BAC should ensure that all prospective bidders receive the bid bulletins.

4. Notice to Bidders

Bidders who have submitted bids before a supplemental/bid bulletin is issued have to be informed in writing and allowed to modify or withdraw their respective bids before the deadline for the opening of the bids. (Section 22.5.2 of IRR-A)

Participants in the Issuance of the Supplemental/Bid Bulletin

1. BAC;

2. BAC Secretariat;

3. Project proponent/end-user;

4. TWG members; and

5. Prospective bidders.

Methodology: Steps in the Issuance of Supplemental/Bid Bulletin

If the supplemental/bid bulletin is being issued in response to a request for clarification submitted by a prospective bidder, the following steps are observed:

1. Prospective bidder submits to the BAC, through the BAC Secretariat, a written request for clarification, within the prescribed period.

2. BAC directs the BAC Secretariat and/or TWG to study the request for clarification.

3. BAC Secretariat and/or the TWG and/or the project proponent/end-user draft the supplemental/bid bulletin for discussion of BAC.

4. BAC approves the supplemental/bid bulletin and the BAC chairman signs it. aCcADT

5. BAC Secretariat posts the supplemental/bid bulletin (SF-GOOD-30) in the PhilGEPS, the BIR website (www.bir.gov.ph) or the website of its electronic procurement system provider, if any and likewise sends copies of the supplemental/bid bulletin to all prospective bidders who have properly secured or purchased the bidding documents within seven (7) calendar days prior to the date of bidding.

If the supplemental/bid bulletin is being issued upon the initiative of the BIR, the process goes as follows:

1. BAC Secretariat and/or the TWG and/or the project proponent/end-user drafts the supplemental/bid bulletin for discussion of BAC.

2. BAC approves the supplemental/bid bulletin and the BAC chairman signs it.

3. BAC Secretariat posts the supplemental/bid bulletin in the PhilGEPS, the BIR website (www.bir.gov.ph) or the website of its electronic procurement system provider, if any and likewise sends copies of the supplemental/bid bulletin to all prospective bidders who have properly secured or purchased the bidding documents, within seven (7) calendar days prior to the date of bidding.

Step 4 Submission, Receipt and Opening of the Eligibility and Bid Envelopes

Eligibility Check

It is a procedure to determine if a prospective bidder is eligible to participate in the bidding at hand. In determining a prospective bidder's eligibility, the BAC shall use non-discretionary "pass/fail" criteria, as stated in the IAEB and the ITB. Essentially, this means that the absence, incompleteness or insufficiency of a document shall make a prospective bidder ineligible to bid for the particular procurement. 5(Section 23.2 of IRR-A)

Bid

A "Bid" refers to a signed offer or proposal to undertake a contract submitted by a bidder in response to, and in consonance with, the requirements stated in the bidding documents. The term "Bid" is also equivalent to and may be used interchangeably with "Proposal" and "Tender". A Bid has two components, the Technical Proposal/Bid, and the Financial Proposal/Bid. The Technical and Financial Bids must each be contained in separate sealed bid envelopes.

Eligible Participants in Public Bidding for Goods6

The following manufacturers, suppliers and/or distributors, service providers shall be eligible to participate in the bidding for the supply of goods: (Section 23.11.1.1 of IRR-A)

1. Duly licensed Filipino citizens/sole proprietorships;

2. Partnerships duly organized under the laws of the Philippines and of which at least sixty percent (60%) of the interest belongs to citizens of the Philippines;

3. Corporations duly organized under the laws of the Philippines, and of which at least sixty percent (60%) of the outstanding capital stock belongs to citizens of the Philippines;

4. Joint ventures of manufacturers, suppliers and/or distributors, i.e.,a group of two (2) or more manufacturers, suppliers and/or distributors that intend to be jointly and severally responsible or liable for a particular contract, provided that: 7

a. Filipino ownership or interest of the joint venture concerned must be at least sixty percent (60%);and

b. In determining the eligibility of the joint venture, the principle of "collective compliance" will be applied to its members/principals in the sense that each of the entities of the joint venture must submit all of the documents that are required to establish eligibility, although the non-compliance of one member/principal may be compensated by the compliance of another member/principal, however, in the case of incorporated/registered joint ventures only one (1) set of documents is required to be submitted unless otherwise required by the BAC, e.g.,newly incorporated/registered joint venture;

5. Cooperatives duly registered with the CDA.

All of these entities must have:

1. The experience of having completed within the period specified in the IAEB concerned, a single contract that is similar to the contract to be bid, and whose value, adjusted to current prices using the wholesale consumer price index, must be at least fifty percent (50%) of the approved budget for the contract to be bid (Section 23.11.1.2 of IRR-A);and

This is done to assure the BAC that the prospective bidder has the technical and financial capability to undertake the contract to be bid.

A contract is similar to the contract to be bid if it involves goods or related services of the same nature and complexity as those which are the subject of the public bidding concerned; for example, if it has the same major categories of goods, such as computers and network equipment.

2. Any of the following:

An NFCC that is at least equal to the approved budget for the contract to be bid, calculated as follows:

NFCC = [(Current assets minus current liabilities) (K)] minus the value of all outstanding projects under ongoing contracts, including awarded contracts yet to be started.

Where:

K = 10 for a contract duration of one year or less, 15 for a contract duration of more than one year up to two years, and 20 for a contract duration of more than two years.

or

a commitment from a licensed bank to extend to it a credit line if awarded the contract to be bid — such commitment being specific to the contract to be bid;

or

a hold out on cash deposits issued by a licensed bank, which shall also be specific to the contract to be bid, and which must be in an amount not lower than that set by the BIR in the Bidding Documents, which shall be at least equal to ten percent (10%) of the ABC of the contract to be bid.

Foreign suppliers, manufacturers, and/or distributors may be invited to participate in the bidding for the procurement of goods, when:

1. The goods are not available from domestic sources at the prescribed minimum specifications of the appropriate government authority and/or ABC of the BIR, as certified by the CIR/RD, confirmed by the DTI. (Section 23.11.1 of IRR-A)

Under GPPB Resolution 18-2005, goods are not available from Local Suppliers when, at any time before advertisement for their procurement, it is determined that no Local Supplier is capable to supply the required goods to the Government, in which case, foreign suppliers, manufacturers and/or distributors may be invited to participate in the bidding. Therefore, the CIR/RD or his duly authorized representative shall certify that, after diligent market research conducted by the BIR, the goods sought to be procured are not available from Local Suppliers. In addition, when applicable, the BIR shall secure a certification from the appropriate Government regulatory body, such as, but not limited to, the Bureau of Product Standards (BPS) of the DTI for electrical products, mechanical/building & construction materials, chemicals, foods and other consumer products, and the BFAD of the DOH for drugs, medicine, and other related medical devices, that based on its available records, the goods sought to be procured are not available from Local Suppliers.

If despite the availability of the goods sought to be procured, no local supplier is interested to participate in the procurement process, the CIR/RD shall certify that it has advertised the same for public bidding and shall make a statement that no local supplier participated in the bidding and that the same is due to reasons not attributable to the BIR. For purposes of inviting foreign suppliers, the bidding requirements and conditions, as advertised, shall not be modified or changed. Otherwise, modifications and/or changes in the requirements and conditions of the bidding shall disallow the BIR to resort to invitation of foreign bidders.

The procurement of unavailable goods must be through competitive or public bidding unless conditions prescribed under R.A. 9184 and its IRR-A warrant resort to alternative methods of procurement.

2. There is a need to prevent situations that defeat competition or restrain trade. (Section 23.11.1 of IRR-A)

Under Section 6.1 of GPPB Resolution 18-2005, in cases where the BIR intends to procure goods from an exclusive local manufacturer, supplier, distributor, or dealer through direct contracting under Section 50 (c) of the IRR-A, when said method is recommended by the BAC and approved by the CIR/RD, and reflected in the approved APP, it shall, before commencing any negotiations with a local supplier, post through the BIR website (www.bir.gov.ph),if any, and in the PhilGEPS, an invitation to foreign manufacturers to submit a manifestation of its intention to participate. Should any foreign manufacturer submit such manifestation within the period prescribed in the invitation, the BIR shall commence the conduct of public bidding. If no foreign manufacturer submits such manifestation within the said period, the BIR may proceed with the intended procurement through direct contracting with the said exclusive local manufacturer, supplier, distributor, or dealer.

3. The foreign citizen/entity who/that wishes to participate in the procurement of goods is able to prove that the laws, rules and regulations of his/its country of origin grants reciprocal rights and privileges to Filipino citizens with respect to the procurement of goods by his/its own government. (R.A. 5183)

A bidder shall be deemed to have the nationality of a country if the bidder is a citizen or is constituted, or incorporated, and operates in conformity with the provisions of the laws of that country.

This criterion shall also apply to the determination of the nationality of proposed subcontractors or suppliers for any part of the contract, including related services.

Under Section 7.2 of GPPB Resolution 18-2005, the BIR shall confirm from the DFA countries with which the Philippines enjoys reciprocal rights on matters of eligibility of its nationals in public procurement abroad. If the country of the prospective foreign bidder is not in the list, the BIR shall require from the said bidder the submission of a sworn statement that the country of which he is a citizen or in which the corporation or partnership is organized and registered grants reciprocal rights or privileges to Filipino citizens, corporations or associations, citing its country's relevant laws.

The sworn statements mentioned above shall be validated during post-qualification of bidders.

4. When provided for under any treaty or international or executive agreement. 8

Minimum Eligibility Requirements

A prospective bidder is eligible to bid for the procurement of goods if it complies with the eligibility requirements prescribed for the competitive bidding, within the period stated in the invitation to bid.

Section 23.6 of IRR-A requires bidders to submit the following eligibility requirements contained in a separate envelope, together with the technical and financial bid envelopes, to wit (SF-GOOD-31, SF-GOOD-14):

1. Class "A" Documents

a. Legal Documents

For Single/Sole Proprietorship

• DTI registration certificate

For Partnership

• DTI registration certificate;

• SEC registration certificate;

• Articles of Partnership; and

• List of Partners and Percentage of Interest duly certified by the Managing Partner;

For Corporation

• DTI registration certificate;

• SEC registration certificate;

• Articles of Incorporation;

• By laws;

• Latest General Information Sheet (GIS) duly stamped received by SEC

For Cooperatives

• DTI or Cooperative Development Authority (CDA) registration certificate;

• Articles of Cooperation; and

• By laws;

i. Valid and current Mayor's permit/municipal license, if applicable;

ii. Taxpayer's Identification Number (TIN);

iii. Sworn statement of the prospective bidder that it is not "blacklisted" or barred from bidding by the government or any of its agencies, offices, corporations or LGUs, and that it is not included in the Consolidated Blacklisting Report issued by the GPPB, once released in accordance with the guidelines to be issued by the GPPB as provided in Section 69.4 of the IRR-A (SF-GOOD-11);

iv. BIR Registration Certification (BIR Form 2303) and proof of payment of current annual registration fee (BIR Form 0605); AaECSH

v. Other appropriate licenses as may be required by the BIR.

vi. Tax Clearance from BIR issued by the Collection Enforcement Division, BIR National Office attesting that the taxpayer has no outstanding Final Assessment Notice and/or delinquent account. (As provided for under E.O. 398 or RR# 3-2005);

vii. Latest Annual Income Tax and Business Tax Returns (VAT or Percentage Tax) duly filed thru Electronic Filing and Payment System (eFPS) of the BIR and duly validated confirmation evidencing the tax payments made. (Filing Reference Number)

Latest Annual Income Tax Return (ITR) shall refer to the ITR for the preceding Taxable Year be it on calendar or fiscal year.

Latest Business Tax Return (BTR) refers to Valued Added Tax (VAT),and/or Percentage Tax Returns, whichever is applicable, covering six (6) months immediately prior to the submission of the Bid Proposal. Bidders filing both the VAT and Percentage Tax Returns must submit both returns.

b. Technical Documents

1. Sworn statement attached with duly accomplished BIR Revised Form based on GPPB Standard Form: SF-GOOD-13a and 13b of the prospective bidder of all its ongoing and completed government and private contracts for the last three (3) years, including contracts awarded but not yet started if any. The statement shall state for each contract whether said contract is: Ongoing, Completed or Awarded, but not yet started for the last three (3) years. The statement shall include, for each contract, the following: (Section 23.6f, IRR of R.A. 9184)

i. Name of the contract;

ii. Date of the contract and contract duration (start date and end date);

iii. Kinds of goods sold/services rendered;

iv. Amount of contract and value of outstanding contracts;

v. Date of delivery;

vi. End user's acceptance, if completed;

vii. Specification whether the prospective bidder is a manufacturer, supplier or distributor, or service provider; and

viii. Similar or not similar in nature in complexity to the contract to be bid.

2. Sworn statement that the prospective bidder has an experience of having completed within the last three (3) years a single contract that is similar to the contract to be bid, and whose value, adjusted to current prices using the wholesale consumer price index, must be at least 50% of the ABC to be bid. (Sec. 23.11.1.2 of GPPB Res. 07-2006)

c. Financial Documents

i. Audited financial statements, stamped "received" by the BIR or its duly accredited and authorized institutions, for the immediately preceding calendar year, showing, among others, the prospective bidder's total and current assets and liabilities;

ii. Prospective bidder's computation of its NFCC, or at the Bidder's option, a commitment from a licensed bank to extend to it a credit line; in the event of an award in the Bidder's favor, or at the Bidder's option a cash deposit certificate, in an amount not lower than that set by the BIR in the bidding documents, which shall be at least equal to ten percent (10%) of the approved budget for the contract to be bid; EHDCAI

To facilitate eligibility checking, the BAC may maintain a file of the foregoing Class "A" documents submitted by manufacturers, suppliers and distributors. When such file is required by the BIR, a manufacturer, supplier or distributor who wishes to participate in a public bidding for non-common Goods should maintain this file current and updated at least once a year, or more frequently when needed. A manufacturer, supplier or distributor who maintains a current and updated file of his Class "A" documents will be issued a certification by the BAC to that effect, which certification may be submitted to the BIR in lieu of the foregoing Class "A" documents. (Section 23.6.1 of IRR-A and RMO No. 3-2007)

2. Class "B" Documents

a. Valid JVA, if the prospective bidder is a joint venture, with the agreement containing a statement on who the joint venture has constituted and appointed as the lawful attorney-in-fact to sign the contract, if awarded the project, and on which among the members/principals is the lead representative of the joint venture (SF-GOOD-17).

All members of the joint venture shall submit Class A eligibility documents, but for technical and financial documents, compliance by one of the joint venture members will suffice.

b. Letter authorizing the BAC or its duly authorized representative/s to verify any or all of the documents submitted for the eligibility check (SF-GOOD-18).

3. Other Eligibility Documents

a. Certification under oath that each of the documents submitted in satisfaction of eligibility requirements is an authentic and original copy or a true and faithful reproduction or copy of the original, complete, and that all statements and information provided therein are true and correct.

b. Sworn statement from the bidder denying the circumstances specified under item 4.1 (a-f) of the Instructions to Bidders.

c. Certification from the Corporate Secretary as to the list of stockholders, number of shares owned and percentage of share holdings as of the date of the bidding.

d. Sworn statement of the bidder that it is not related to the head of the BIR by consanguinity or affinity up to the third civil degree or any of the BIR's officers and employees having direct access to information that they may substantially affect the result bidding such as, but not limited to the members of the BAC, TWG, Secretariat, Project Proponent/end-user unit.

e. Sworn statement from the bidder attesting to its eligibility and qualification to perform the contract, if its bid is accepted, as specified under items 8.1.a, 8.1.b and 8.1.c of the ITB, and attaching thereto documentary evidence to support and substantiate such statement.

The BAC requires the bidder's authorized representative to initial all pages of the bid including attachments thereto such as brochures to ensure that the documents reviewed by the BAC are authentic, and to protect the BAC from any insinuation of tampering with the said documents.

Purpose of Requiring an NFCC, a Credit line or a Certificate of a Hold-out on Cash Deposit that is Equal to the ABC

The NFCC, a credit line and a certificate of a hold-out on cash deposit establish the bidder's liquidity, its capacity to absorb the additional obligations in connection with the contract to be bid and to finance its implementation/completion. Compliance with this eligibility requirement may be done on the alternative, such that submission of any of the three (3) is acceptable for purposes of determining a bidder's eligibility.

Eligibility Requirements of a Prospective Foreign Bidder

Foreign manufacturers, suppliers and distributors, when allowed to bid under the circumstances mentioned in Sec. 23.11.1 of IRR-A and R.A. 5183, must submit the same eligibility requirements as domestic entities. However, the legal documents and the audited financial statements under the Class "A" documents may be substituted by the appropriate equivalent documents issued by the country of the foreign manufacturer, supplier or distributor. (Section 23.7 of IRR-A) These documents must be duly acknowledged and authenticated by the Philippine consulate located in that country.

Contents of the Technical Proposal

The technical proposal should contain, at the minimum, the following technical information/documents (SF-GOOD-31):

1. Bid Security as to form, amount and validity period;

2. Authority of the signatory, which must be contained in a Board Resolution if the bidder is a corporation or a cooperative, a Joint Venture Resolution if the same is a Joint Venture, a Partnership Resolution if the bidder is a Partnership, or a Special Power of Attorney (SPA) issued by the General Manager or Proprietor if the bidder is a sole proprietor;

3. Production/delivery schedule;

4. Manpower requirements;

5. After-sales service/parts and documents that the bidders will be supported by their principal in terms of parts and service, if applicable;

6. Bidder's Technical Proposal signed the duly authorized signatory;

7. Duly accomplished Technical Specifications Form, with reference column properly filled-up and signed by the duly authorized signatory; DTcHaA

8. Commitment from a licensed bank to extend to the bidder a credit line if awarded the contract to be bid, or a hold out on cash deposit, in an amount not lower than that set by the BIR in the Bidding Documents, which shall be at least equal to ten percent (10%) of the ABC to be bid, provided that if the bidder previously submitted this document as an eligibility requirement, the said previously submitted document shall suffice;

9. Certificate from the bidder under oath of its compliance with existing labor laws and standards, in the case of procurement of services;

10. Sworn statement of the bidder that he has taken steps to carefully examine all of the bidding documents, acknowledged all conditions, local or otherwise, affecting the implementation of the contract, made an estimate of the facilities available and needed for the contract to be bid, and complies with the bidder's responsibility as provided for under Section 17.7 of the IRR-A of R.A. 9184( per Sec. 25.3.9 of MO No. 176 dated June 27, 2005);

11. Sworn affidavit of compliance with the Disclosure Provision under Section 47 of R.A. 9184 and its IRR-A in relation to other provisions of R.A. 3019;

Contents of the Financial Proposal

The financial proposal shall contain the following financial information/documents, at the least:

1. Three (3) copies of Bid Prices and the bill of quantities with signature of the authorized signatory of the contractor; and

2. Recurring and the maintenance costs, if applicable.

3. VAT and all other taxes included in the Bid Price;

4. Bid valid for One Hundred Twenty (120) calendar days, after the date of the opening of bids as prescribed by the BIR pursuant to the bid price form;

5. Price quotation in Philippine Currency;

6. Price Quotation in an amount that is certain and definite;

7. Bid within the Approved Budget for the Contract (ABC)

Submission and Receipt of Bids

The eligibility envelope must be submitted, together with the technical and financial bid envelopes, enclosed in an outer sealed envelope or any such appropriate container, to the BAC on or before the deadline specified in the IAEB. For purposes of synchronizing the time, the BAC may identify an official timepiece that will be referred to for purposes of determining timely submission. The official timepiece must be indicated in the bidding documents and announced during the pre-bid conference, to ensure that all prospective bidders are aware of this information.

Bids should be submitted on or before the specified time and date of the deadline for its submission as stated in the IAEB. Bids submitted after the specified deadline shall not be received or accepted by the BAC.

Participants in the Receipt and Opening of Bids

1. BAC;

2. TWG;

3. BAC Secretariat;

4. Prospective Bidders;

5. Project Proponents/end-users;

6. Technical Experts/Consultants, if necessary; and

7. Observers.

Methodology: Steps in the Opening of Bid Envelopes9

A. Preparatory to the Bid Opening

1. BAC receives Eligibility, Technical and Financial envelopes.

2. BAC Secretariat stamps "RECEIVED" the envelopes, with date and time of receipt.

3. BAC initials the bid envelope/s on the sealed portion.

B. Opening of Bid Envelopes

1. Eligibility Envelope

i. BAC opens in public the eligibility envelope on the schedule day of the bid. (Section 23.1 of IRR-A)

ii BAC reads in public the contents of the eligibility envelope, and examines each prospective bidder's eligibility requirements or statements.

The BAC may request the prospective bidders to identify an individual who shall act as a third party witness and countercheck the eligibility documents being examined by the BAC. This is especially important if there are no observers present during the Bid Opening.

Alternatively, the BAC may use any device (i.e.,document camera, opaque projector, etc.) that will enable all attendees to view the document being examined.

iii. BAC records the presence or absence of the required eligibility requirements in a checklist using a non-discretionary "pass/fail" criteria.

iv. BAC declares prospective bidders as either "eligible" or "ineligible",based on the findings in number 5 above, and inform them accordingly. TaDCEc

v. BAC chairman or vice-chairman marks either "eligible" or "ineligible" the eligibility envelopes and correspondingly countersigned by him/her. (Section 23.2 of IRR-A)

vi. BAC prepares a pro-forma Notice of Eligibility (SF-GOOD-22) and a Notice of Ineligibility (SF-GOOD-23),which will be duly accomplished by the BAC Secretariat and signed by the BAC members present during the Eligibility Check. In case a prospective bidder is declared ineligible, the Notice of Ineligibility shall state the reason for such ineligibility.

vii. BAC sends the Notice of Eligibility or Ineligibility to the bidder/s or his/their authorized representative who shall officially receive the same. Those found ineligible have three (3) calendar days upon written notice or, if present at the time of opening of eligibility requirements, upon verbal notification, within which to file a request for reconsideration with the BAC.

viii. BAC inquires from ineligible bidders who are present during the eligibility check whether or not they intend to file a request for reconsideration; if in the positive, the BAC shall keep the eligibility envelopes and re-seal the same in the presence of all the participants to be kept in a designated secured place, together with the unopened Technical and Financial envelopes (Sec. 23.3 of IRR-A)

If in the negative, considering that it may decide to exercise its right to file one during the mandated three (3) calendar day period therefore, it would be advisable for the BAC to place its own seal over the Technical and Financial envelopes of the said ineligible bidder — which BAC seal shall be over the existing seal of the ineligible bidder — to ensure that no tampering of these documents may be committed while in possession of the ineligible bidder before resubmission. In any case, with or without any indication on the part of the prospective bidder of its intention to file a request for reconsideration, it would be advisable for the BAC to hold on to the Eligibility envelopes containing the eligibility requirements, duly re-sealed and deposited, including the technical and financial bid envelopes, until the expiration of the period for filing a request for reconsideration, to ensure the integrity of these documents; unless if the said prospective bidder waives its right to file a request for reconsideration.

The BAC must decide on a request for reconsideration within seven (7) calendar days from receipt thereof.

ix. BAC returns the unopened Technical and Financial envelopes of a prospective bidder if it is declared "ineligible" and it does not signify its intention to file a request for reconsideration or expressly waives its right to file a motion for reconsideration (SF-GOOD-25).In the latter case, such waiver shall be made in writing to be executed by the authorized representative of the ineligible bidder.

2. Technical Envelopes

x. BAC opens the technical envelopes to determine each bidder's compliance and records in the Checklist (SF-GOOD-31) using the non-discretionary "pass/fail" criteria. (Section 30.1 of IRR-A)

xi. In case one or more of the requirements is missing, incomplete or patently insufficient, the bid shall be declared as "failed" and immediately returned to the bidder concerned the unopened financial envelope.

A bidder determined as "failed" has three (3) calendar days upon written notice or, if present at the time of bid opening, upon verbal notification, within which to file a request for a reconsideration with the BAC. (Section 30.3 of IRR-A as amended by GPPB Resolution No. 014-2006) The BAC shall follow the procedures provided for under 2.viii and ix above.

3. Financial Envelopes

xii. BAC opens the financial envelopes to determine each bidder's compliance and records in the Checklist (SF-GOOD-39) using the non-discretionary "pass/fail" criteria. (Section 30.2 of IRR-A)

xiii. Bids that exceed the ABC will automatically be disqualified. In the case of foreign currency denominated bids, where allowed by the law and rules, the same shall be converted to Philippine currency based on the exchange rate prevailing on the day of the bid opening. The BSP reference rate as of the date of the bid opening shall be used.

C. Conclusion

All members of the BAC shall initial every page of the original copies of all bids received and opened. (Section 29 of IRR-A)

The BAC Secretariat shall record the proceedings using a tape recorder, or a video recorder or any device that may facilitate the recording. The minutes of the bid opening (SF-GOOD-41) should be prepared within three (3) calendar days after the bid opening date, so that copies thereof could immediately be sent to the BAC members, Observers, and bidders and other interested parties. Copies of the minutes shall also be made available to the public upon written request and payment of a specified fee to recover cost of materials.

NOTE:

Even if only one bidder submits its eligibility, technical and financial envelopes, the bidding process continues. If the bidder is declared eligible and its bid is found to be responsive to the bidding requirements, its bid will be declared as a SCRB and considered for contract award. (Section 36 of IRR-A)

Recourse of a Bidder Found Ineligible or Declared Non-Compliant with the Technical or Financial Requirements

The BAC shall inform a prospective bidder if it has been found ineligible to participate in the bidding or was declared non-compliant with the technical and financial requirements. A bidder found ineligible has three (3) calendar days upon receipt of the Notice of Ineligibility/Failure, or, if present at the time of opening of eligibility requirements, upon verbal notification, within which to file a written request for reconsideration before the BAC. (Section 23.3 of IRR-A as amended by GPPB Resolution No. 014-2006) Notifications to bidders should state the grounds for their ineligibility.

The BAC should decide on the request for reconsideration within seven (7) calendar days from receipt thereof. In the meantime, BAC will hold on to the Eligibility, Technical and Financial envelopes of the prospective bidder until the request for reconsideration is resolved. In so doing, it can request the prospective bidder to clarify its eligibility documents, if necessary. The BAC may return the Eligibility, Technical and Financial envelopes if the prospective bidder is declared "ineligible" and expressly waives his right to file a request for reconsideration. Such waiver shall be made in writing, to be executed by the authorized representative of the ineligible bidder.

If its request for reconsideration is denied, the ineligible bidder may protest the decision by a filing a verified position paper with the CIR within seven (7) calendar days from receipt of the resolution. The protest should be accompanied by the payment of a non-refundable protest fee in an amount equivalent to no less than one percent (1%) of the ABC. (Section 55.1 of IRR-A)

Contents of a Verified Position Paper

1. Name of bidder;

2. Office address of the bidder;

3. Name of project/contract;

4. Implementing office (BIR-NO/RR);

5. Brief statement of facts;

6. Issue to be resolved; and

7. Such other matters and information pertinent and relevant to the proper resolution of the protest.

The position paper is verified by an affidavit that the affiant has read and understood the contents thereof and that the allegations therein are true and correct of his personal knowledge or based on authentic records. An unverified position paper shall be considered unsigned, produces no legal effect, and results in the outright dismissal of the protest. (Section 55.2 of IRR-A)

Resolution of Protests

The protests shall be resolved strictly based on records of the BAC. The CIR/RD shall resolve a protest within seven (7) calendar days from receipt thereof. Subject to the provisions of existing laws on the authority of Department Secretaries and the heads of agencies, branches, constitutional commissions or instrumentalities of the Government to approve contracts, the decisions of the CIR/RD shall be final up to the limit of his contract approving authority. (Section 56 of IRR-A)

If Questions/Doubts have been Raised About the Eligibility of a Prospective Bidder After It had been Declared as Eligible

Notwithstanding the eligibility of a prospective bidder, the BIR reserves the right to review its qualifications at any stage of the procurement process if it has reasonable grounds to believe that a misrepresentation has been made by the said prospective bidder, or that there has been a change in the prospective bidder's capability to undertake the project from the time it submitted its eligibility requirements. Should such review uncover any misrepresentation made in the eligibility requirements, statements or documents, or any changes in the situation of the prospective bidder which will affect the capability of the bidder to undertake the project so that it fails the preset eligibility criteria, the BIR shall consider the said prospective bidder as ineligible and shall disqualify it from submitting a bid or from obtaining an award or contract. (Section 23.4 of IRR-A) A prospective bidder found guilty of false information faces imprisonment of not less than six (6) years and one (1) day but not more than 15 years. (Section 65.3 of IRR-A)

If Only One Prospective Bidder is Declared Eligible

The procurement process also proceeds with the Preliminary Examination of Bids. Again, if the eligible bidder submits a bid that is found to be responsive to the bidding requirements, its bid shall be declared as a SCRB and considered for contract award. (Section 36 of IRR-A)

Disqualification

Disqualification is a distinct concept from ineligibility and post-disqualification. When a Bidder is disqualified, it is barred from further participating in the procurement at hand, even if, in some instances, it has initially been declared eligible. Even if a Bidder is Post-qualified, if after such Post-qualification, the BIR has found grounds for disqualification, the latter may declare such Bidder disqualified, hence, the BIR shall not award the contract to the former.

Aside from those who are not eligible to bid for the procurement of goods, a bidder that has a conflict of interest shall be disqualified to participate in the procurement at hand. A Bidder would be considered as having a conflict of interest with another bidder in any of the events described in paragraphs 1 to 3 below and a general conflict of interest in any of the circumstances set out in paragraphs 4 to 6 below:

1. If the bidder is a corporation or a partnership and it has officers, directors, controlling shareholders, partners or members in common with another bidder; or if the bidder is an individual or a sole proprietorship and he is the proprietor of another bidder, or an officer, director or a controlling shareholder of another bidder; or if the bidder is a joint venture and it or any of its members has officers, directors, controlling shareholders or members in common with another bidder, or any of its members is a bidder;

2. A bidder receives or has received any direct or indirect subsidy from another bidder; cTEICD

3. A bidder has the same legal representative as any other bidder for purposes of the bidding at hand;

4. A bidder has a relationship directly or through common third parties, that puts them in a position to have access to information about or influence on the bid of another bidder, or influence the decisions of the BIR regarding the bidding process. This will include a firm or an organization that lends, or temporarily seconds, its personnel to firms or organizations which are engaged in consulting services for the preparation related to procurement for or implementation of the project, if the personnel would be involved in any capacity on the same project;

5. A bidder submits more than one bid in the bidding process. However, this does not limit the participation of subcontractors in more than one bid subject to prior approval by the BIR; or

6. A bidder who participated as a consultant in the preparation of the design or technical specifications of the goods and related services that are the subject of the bid.

In accordance with Section 47 of IRR-A, the bidder should not be related to the CIR/RD by consanguinity or affinity up to the third civil degree or any of the BIR's officers or employees having direct access to information that may substantially affect the result of the bidding, such as, but not limited to, the members of the BAC, the members of the TWG, the BAC Secretariat, and the project proponents/end-users. This prohibition shall apply to the following persons:

1. If the bidder is an individual or a sole proprietorship, to the bidder himself;

2. If the bidder is a partnership, to all its officers and members;

3. If the bidder is a corporation, to all its officers, directors and controlling stockholders; and

4. If the bidder is a joint venture, items 1 to 3 above shall correspondingly apply to each of the members of the said joint venture, as may be appropriate.

To establish the non-existence of the above relationship, and to bind the bidders to its representation relating to the foregoing, all bids must be accompanied by a Disclosure Affidavit of the bidder to that effect. (Section 47 and Section 25.3.A.9 of IRR-A as amended by Section 25.3.A.10 of MO 176)

A bidder may seek a reconsideration of BAC's decision declaring another bidder eligible by filing a Motion for Reconsideration (SF-GOOD-25) with the BAC in accordance with the procedures set forth in Section 23.3 IRR-A.

If no Prospective Bidder is Declared Eligible

If no prospective bidder is found to be eligible, the BAC should declare the bidding a failure. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding. cSIHCA

If Only One Bidder Passes the Preliminary Examination of Bids

The procurement process also proceeds with the subsequent step of Bid Evaluation. Again, if the eligible bidder submits a bid that is found to be responsive to the bidding requirements, its bid shall be declared as SCRB and considered for contract award. (Section 36 of IRR-A)

If a Bidder Fails to Comply with the Technical and Financial Requirements of the Bid

The bidder that fails to comply with any of the Technical or Financial requirements of the Bid will be disqualified by the BAC. Similar to ineligible bidders, it may file a written request for reconsideration within three (3) calendar days from receipt of the communication regarding its bid's deficiency. (Section 30.3 of IRR-A as amended by GPPB Resolution No. 014-2006) aDcEIH

Withdrawal of Bid

A bidder may, through a Letter of Withdrawal, withdraw its bid, before the deadline for the receipt of bids. A bidder may also express its intention not to participate in the bidding through a letter which should reach and be stamped received by the BAC before the deadline for the receipt of bids. A bidder that withdraws its bid shall not be permitted to submit another bid, directly or indirectly, for the same contract. It should be noted however that the act of habitually withdrawing from bidding or submitting letter of non-participation for at least three (3) times within a year is a ground for the imposition of administrative penalties, except when done for a valid reason.

The bidder that withdraws its bid beyond the deadline for the submission of bids will forfeit its bid security and will be subject to applicable administrative, civil and/or criminal sanctions prescribed in R.A. 9184 and its IRR-A.

Step 5 Bid Evaluation

Purpose of Bid Evaluation

The purpose of bid evaluation is to determine the LCRB (Section 32.1 of IRR-A) by:

1. Establishing the correct calculated prices of the bids, through a detailed evaluation of the financial component of the bids; and

2. Ranking of the total bid prices as so calculated from the lowest to the highest. The bid with the lowest price shall be identified as the LCRB.

Timeline for Bid Evaluation

The entire evaluation process for the bids for the procurement of goods must be completed within seven (7) calendar days from receipt of proposals. (Section 32.3 of IRR-A as amended by GPPB Resolution No. 014-2006) However, the BAC should exert effort to complete the Bid Evaluation even before the lapse of the 7-day period, as this will expedite the procurement process.

Participants in the Bid Evaluation Process

1. BAC;

2. TWG; and

3. BAC Secretariat.

Methodology: Steps in the Bid Evaluation Process10

1. After the preliminary examination of bids, the BAC through the TWG, shall immediately conduct a detailed evaluation of all bids rated "passed," using a non-discretionary pass/fail criteria, as stated in the IAEB and the ITB, which shall include a consideration of the following: (Section 32.4.1 of IRR-A)

a. The bid must be complete. Unless the ITB specifically allows partial bids, bids not addressing or providing all of the required items in the bidding documents including, where applicable, those requirements pertaining to the civil works components of Goods procured, shall be considered non-responsive and, thus, automatically disqualified. In this regard, where a required item is provided, but no price is indicated, the same shall be considered as non-responsive, but specifying a "0" (zero) for the said item would mean that it is being offered for free to the Government.

b. Minor arithmetical corrections to consider computational errors, omissions and discounts, if allowed in the bidding documents, to enable proper comparison of all eligible bids. Any adjustment shall be calculated in monetary terms to determine the calculated prices. (Section 32.4.1 [b] of IRR-A) For evaluation purposes, in allowed instances, the bid must be converted into Philippine currency based on the exchange rate prevailing on the day of the bid opening. (Section 61.1 of IRR-A) The BSP reference rate as of the date of the bid opening shall be used.

c. In the evaluation of bids, all bids shall be evaluated on an equal footing to ensure fair and competitive bid evaluation. For this purpose, all bidders shall be required to include the cost of all taxes, such as, but not limited to, value added tax (VAT),income tax, local taxes, and other fiscal levies and duties which shall be itemized in the bid form and reflected in the detailed estimates. Such bids, including said taxes, shall be the basis for bid evaluation and comparison. (Sections 32.4.2 of IRR-A) Moreover, applicable custom duties, as well as other costs of acquisition such as freight, insurance, and bank charges, must be incorporated in the bid.

d. In case of discrepancies between: (a) bid prices in figures and in words, the latter shall prevail; (b) total prices and unit prices, the latter shall prevail; (c) unit cost in the detailed estimate and unit cost in the bill of quantities, the latter shall prevail. (Sections 32.4.3 of IRR-A)

2. Based on the detailed evaluation of bids, those that comply with the above-mentioned requirements shall be ranked in the ascending order of their total calculated bid prices, as evaluated and corrected for computational errors, discounts and other modifications, to identify the LCB. Total calculated bid prices, as evaluated and corrected for computational errors, discounts and other modifications, which exceed the ABC shall be disqualified. (Sections 32.4.4 of IRR-A)

During the bid evaluation stage, the BAC, BAC Secretariat and the TWG shall not entertain clarifications from Bidders, neither shall they initiate communication with the Bidders, regarding the evaluation of the bids. There are two reasons for this rule:

1. There is no need for clarifications of technical issues since the evaluation is focused on arithmetical computations which are determined from the face of the bid itself; and

2. Communications with the Bidders might lead to possible collusion or the Bidder might try to influence the outcome of the bidding process.

3. After all bids have been received, opened, examined, evaluated and ranked, the BAC shall prepare the corresponding Abstract of Bids. All members of the BAC shall sign the Abstract of Bids and attach thereto all the bids with their corresponding Bid Securities and the minutes or proceedings of the bidding. (Section 32.5 of IRR-A) The Observers shall also sign the Abstract of Bids if, in their independent observation, the bidding activity conducted by the BAC followed the correct procedure indicated under R.A. 9184 and its IRR-A. The Abstract of Bids shall contain the following:

a. Name of the contract and its location, if applicable;

b. Time, date and place of bid opening; and

c. Names of bidders and their corresponding calculated bid prices arranged from lowest to highest, the amount of bid security and the name of the issuing entity.

4. The TWG, with the assistance of the BAC Secretariat, when directed by the BAC, should prepare the Evaluation Report, containing the details of the evaluation conducted, preferably within three (3) calendar days from the date the evaluation was concluded.

If all Prospective Bidders are Unable to Comply with the Requirement of Having a Single Contract Whose Value is at Least 50% of the ABC of the Contract to be Bid

When failure of bidding has resulted because no single bidder has complied with the requirement of having a single contract whose value is at least fifty percent (50%) of the ABC of the contract to be bid, the BIR may have to review the packaging of the project or procurement concerned, taking into account the technical and financial capabilities and experience in the domestic and international market, as well as the most logical and practical approach/scope of work to complete a project. However, the BIR must ensure that this will not result in a splitting of contracts that is committed for the purpose of evading or circumventing the requirements of law and existing rules and regulations.

In lieu of the 50% threshold requirement, the BIR may instead require prospective bidders to have:

• at least three (3) similar completed contracts the aggregate of which should be equivalent to at least fifty percent (50%) of the ABC of the project to be bid;

• the largest of these similar contracts must be equivalent to at least twenty-five percent (25%) of the ABC of the project to be bid; and

• the business/company of the prospective bidder willing to participate in the bidding has been in existence for at least three (3) consecutive years prior to the advertisement and/or posting of the IAEB.

Furthermore, when the item/good to be procured is novel or its procurement is otherwise unprecedented or is unusual, and compliance to the requirement on a largest single similar contract is impracticable, the prospective bidder will only have to comply with the above-mentioned required period for the existence of a business/company. TAIcaD

This scheme may also be applied when requiring a single contract that is at least fifty percent (50%) of the ABC will likely result to a monopoly that will defeat the purpose of public bidding. (GPPB Resolution 007-2006 dated 20 January 2006)

The BIR can clarify in the bidding documents the similar projects that can be considered in the bidding, which projects or contracts must have been completed within the period specified in the IAEB. All other conditions of the contract must be the same as provided for in the bidding documents. 11

If a Bidder Does not Accept the Arithmetical Corrections Done by the BAC on its Bid

The BAC must disqualify the bid and forfeit the bid security of the bidder.

If no Bid Complies with all Bid Requirements

If no bid complies with all bid requirements, the BAC should declare the bidding a failure. In such a case the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding.

Application of Domestic Preference during Bid Evaluation

The BIR shall apply domestic preference in the procurement of goods as long as it complies with the provisions of IRR-A and R.A. 5183, and this shall be expressly mentioned in the bidding documents.

In applying domestic preference, the BIR shall be guided by the provisions of C.A. No. 138, to wit:

1. When the LCRB including taxes and customs duties, is a "foreign bid" as defined in C.A. No. 138 (see definition below), the award shall be made to the bidder who submitted the lowest "domestic bid", provided that:

a. the domestic bid is not more than fifteen per centum (15%) in excess of the LCB. (Section 3 [e] C.A. No. 138);and

b. the bidder who submitted the lowest domestic bid must pass the post-qualification.

An illustrative case is as follows: Foreign Bidder A submitted a bid of P15M which was declared as the LCB. Domestic preference was specified in the bidding documents. The lowest Domestic Bidder B submitted a bid of P16.5M, which is 10% in excess of the LCB. If Bidder B is post-qualified, and the items offered pass the necessary quality assurance tests, it shall be awarded the contract. However, if it is post-disqualified, or if the goods it offered do not meet the standard of quality specified in the Bidding Documents, the award shall be made to Bidder A.

An illustrative case is as follows: Foreign Bidder A submitted a bid of P15M which was declared as the LCB. Domestic preference was specified in the bidding documents. The lowest Domestic Bidder B submitted a bid of P17.4M, which is 16% in excess of the LCB. If Bidder A is post-qualified, and the items offered pass the necessary quality assurance tests, it shall be awarded the contract, despite the domestic preference.

A "foreign bid" means any offer of articles, materials or supplies not manufactured or to be manufactured in the Philippines, substantially from articles, materials or supplies of the growth, production, or manufacture, as the case may be, of the Philippines. (Section 2 [d], C.A. No. 138) Conversely, a "domestic bid" means any offer of unmanufactured articles, materials, or supplies of the growth or production of the Philippines, or manufactured articles, materials or supplies manufactured or to be manufactured in the Philippines, substantially from articles, materials or supplies of the growth, production or manufacture, as the case may be, of the Philippines. (Section 2 [c] C.A. No. 138) In US jurisprudence, the term "substantially" was construed to mean "more than 75%." Thus, even if a product is manufactured in the Philippines, it may not be considered within the ambit of the preference if its raw materials are not substantially sourced from the Philippines.

2. When several bidders participate in a public bidding for the supply of articles, materials and equipment for a BIR, including public buildings or public works, and the LCB is submitted by one other than a "domestic entity" (see definition below),the award should be made to the domestic entity making the lowest bid, provided that:

a. the bid of the domestic entity is not more than 15% in excess of the LCB; and

b. the same domestic entity must pass the post-qualification.

A "domestic entity" means any citizen of the Philippines habitually established in business and engaged in the manufacture or sale of the merchandise covered by his bid, or any corporate body or commercial company duly organized and registered under the laws of the Philippines of whose capital 75% is owned by citizens of the Philippines, or both. (Section 2 [b] C.A. No. 138) Applying C.A. No. 138, in the case of Asbestos Integrated Manufacturing, Inc. v. Metropolitan Waterworks and Sewerage System (G.R. No. L-45515. October 29, 1987), the term "domestic entity" was interpreted to mean citizens of the Philippines or corporate bodies or commercial companies, duly organized and registered under the laws of the Philippines, 75% of whose capital is owned by citizens of the Philippines, and who are habitually established in business engaged in the manufacture or sale of merchandise covered by their bid.

3. In the case of FAPs or procurement undertaken by virtue of international treaties or agreements, when there is no provision disallowing the application of domestic preference, in compliance with Section 43 of R.A. 9184, the preference in item (a) above for domestically-produced and manufactured goods, supplies and materials that meet the specified or desired quality may further be allowed in the interest of:

a. Availability, that is, the domestically-produced goods are more readily available in the market, like off-the-shelf items;

b. Efficiency; and

c. Timely delivery of goods.

4. In the case of FAPs undertaken through IFI funding, at the request of the BIR, and under conditions to be agreed under the loan agreement and set forth in the bidding documents, a margin of preference may be provided in the evaluation of bids for:

a. Goods manufactured in the country of the BIR when comparing bids offering such goods with those offering goods manufactured abroad; and

b. Works in member countries below a specified threshold of Gross National Product (GNP) per capita, when comparing bids from eligible domestic contractors with those from foreign firms.

5. Where preference for domestically manufactured goods or for domestic contractors is allowed, the methods and stages set forth in the loan agreement should be followed.

Rules Governing the Lease of Computers, Communications, Information and Other Equipment

Contracts for lease of construction and office equipment, including computers, communication and information technology equipment, are subject to the same public bidding and procurement procedures as prescribed in R.A. 9184, its IRR-A and this Volume 2. (Please refer also to Joint Memorandum Circular No. 2002-01 issued by the National Computer Center (NCC) and the DBM, which provides the policies, rules and regulations on lease of IT equipment. Also, reference may be made to Department Order No. 188 (dated September 28,1999) and Department Order No. 219 (dated August 14, 2003), issued by the Department of Public Works and Highways, governing the lease of construction equipment.

Step 6 Post-qualification

Post-qualification

Post-qualification is the process of verifying, validating and ascertaining all the statements made and documents submitted by the bidder with the LCB, which includes ascertaining the said bidder's compliance with the legal, financial and technical requirements of the bid.

If its eligibility documents had been validated and verified, and its compliance with the legal, financial, and technical requirements of the bid had been ascertained, the bidder must be declared the bidder with the "Lowest Calculated Responsive Bid" (LCRB).(Section 34.1 of IRR-A)

Post-qualification involves the BAC verifying, validating and ascertaining that the bidder satisfies the following criteria: (Section 34.2 of IRR-A)

1. Legal Requirements. The post-qualification process under this criterion involves the verification, validation and ascertaining of the supplier's claim that it is not included in any government "blacklist," as well as all the licenses, permits and other documents it submitted. The legal requirements refer to the Legal Documents submitted by the bidder as part of the eligibility requirements, e.g.,SEC registration, DTI business name registration, Mayor's permit, TIN, etc. The bidder's status with regard to "blacklisting" may be verified by checking the Consolidated Blacklisting Report issued by the GPPB, or the "blacklist" of any government agency, corporation or LGU.

2. Technical Requirements. Post-qualification under this criterion means that the BAC would have to validate, verify, and ascertain the veracity of the documents submitted by a supplier to prove compliance of the goods and services offered with the requirements of the contract and bidding documents. This involves the following processes:

a. Verification and validation of the bidder's stated competence and experience;

b. Verification and/or inspection and testing of the goods/products, after-sales and/or maintenance capabilities, in applicable cases; or inspection of the plant/factory of a manufacturer, to determine production capacity; and

c. Ascertainment of the authenticity and sufficiency of the Bid Security as to type, amount, form and wording, and validity period.

3. Financial Requirements. Under this criterion, the BAC ought to verify, validate and ascertain the bid price proposal of the bidder and, whenever applicable, its computation of the NFCC, the required bank commitment to provide a credit line to the bidder, or the hold out on deposit status of the cash deposit certificate, in the amount specified and over the period stipulated in the ITB. This is to ensure that the bidder can sustain the operating cash flow of the transaction.

Timeline for the Conduct of Post-qualification

The post-qualification process must be conducted and completed within seven (7) calendar days from the determination of the LCB. However, in exceptional cases, the CIR/RD may extend the post-qualification period, but in no case shall the extension exceed an aggregate period of thirty (30) calendar days. (Section 34.1 of IRR-A as amended by GPPB Resolution #014-2006)

Participants in the Conduct of Post-qualification

1. BAC;

2. TWG; and

3. BAC Secretariat.

Methodology: Steps in the Conduct of Post-qualification

1. The BAC, through the TWG, verifies, validates, and ascertains the genuineness, validity and accuracy of the legal, technical and financial documents submitted by the bidder with the LCB, using the non-discretionary criteria described above.

In verifying the information contained in such documents, the BAC, through the TWG, may make inquiries with appropriate government agencies and examine the original documents kept in the bidder's place of business. The use of other means for verification and validation of such documents may be resorted to by the BAC, through the TWG, such as the internet and other research methods that yield the same results.

2. The BAC, through the TWG, conducts a site inspection of the bidder's place of business and/or plant/factory, where applicable.

3. The BAC, through the TWG, tests samples for compliance with specifications and performance levels, where applicable.

4. The BAC, through the TWG, inquires about the bidder's performance in relation with other contracts/transactions as indicated in its eligibility statement (statement of on-going, completed or awarded contracts).

5. For every conduct of post-qualification, TWG prepares a Post-qualification Report (SF-GOOD-44) to be submitted and reported to the BAC. The Report shall contain, among others, the activities undertaken with regard to the post-qualification process, feedback from inquiries conducted, and the results of any tests conducted by the TWG or an accredited government testing center, where applicable. TWG, with the assistance of BAC Secretariat also prepares the Bid Evaluation Report (SF-GOOD-45) containing the details of the evaluation conducted as well as the minutes of the proceedings. AHSaTI

6. The BAC reviews the Post-qualification Report submitted by the TWG.

7. The BAC determines whether the bidder with the LCB passes all the criteria for post-qualification.

8. If the LCB passes the post-qualification, the BAC declares it as the LCRB.

9. After the BAC has determined the LCRB, the Secretariat, with the assistance of the TWG, if necessary, prepares the BAC Resolution declaring the LCRB and the corresponding Notice to the said bidder informing it of its post-qualification.

Post-disqualification of Bidders

If the bidder with the LCB fails to pass post qualification, the BAC shall immediately notify the said bidder in writing of its post-disqualification and the grounds for it. The post-disqualified bidder shall have three (3) calendar days from receipt of the said notification to request from the BAC, if it so wishes, a reconsideration of its decision. The BAC shall evaluate the request for reconsideration, if any, using the same non-discretionary criteria, and shall issue its final determination of the said request within seven (7) calendar days from receipt thereof. (Section 34.4 of IRR-A as amended by GPPB Resolution No. 014-2006) Similar to the cases of bidders deemed to be ineligible and whose bids are rated "failed," the bidder with the LCB who fails to pass post-qualification may likewise file a protest with the payment of the corresponding fee in case the BAC denies its request for reconsideration. (Please refer to Step 4, Submission, Receipt and Opening of Eligibility Envelopes and Bids for further discussions on filing a protest.)

Immediately after the BAC has notified the first bidder of its post-disqualification, and notwithstanding any pending request for reconsideration thereof, the BAC shall initiate and complete the same post-qualification process on the bidder with the second LCB. If the second bidder passes the post-qualification, and provided that the request for reconsideration of the first bidder has been denied, the BAC shall declare the second bidder as the bidder with the LCRB. The CIR shall then award the contract to it. (Section 34.5 of IRR-A)

If the second bidder, however, fails the post-qualification, the procedure for post-qualification shall be repeated for the bidder with the next LCB, and so on until the LCRB, is determined for award. (Section 34.7 of IRR-A)

If all Bidders Fail Post-qualification

If no bidder passes post-qualification, the BAC shall issue a Resolution declaring a failure of bidding. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding.

Reservation Clause

The Reservation Clause declares that the BIR reserves the right to reject any and all bids, to declare a failure of bidding, or not to award the contract. (Section 41 of IRR-A)

The CIR/RD should be prudent in the use of the Reservation Clause because once abused in rejecting any and all bids with manifest preference to any bidder who is closely related to him in accordance with Section 47 of IRR-A, or if it is proven that he exerted undue influence or undue pressure on any member of the BAC or any officer or employee of the BIR to take such action, and the same favors or tends to favor a particular bidder, he shall be meted with the penalties provided in Section 65 of IRR-A.

Right to Reject Bids, Declare a Failure of Bidding, or not to Award the Contract

The BIR may exercise the right to reject any and all bids, to declare a failure of bidding, or not to award the contract in any of the following situations (Section 41.1 of IRR-A):

1. If there is prima facie evidence of collusion between appropriate public officers or employees of the Bureau of Internal Revenue, or between the BAC and any of the bidders, or between or among the bidders themselves, or between a bidder and a third party, including any act which restricts, suppresses or nullifies or tends to restrict, suppress or nullify competition;

2. If the BAC is found to have failed in following the prescribed bidding procedures, for which the applicable sanctions shall be applied to the erring officers, as provided in Section 65 of IRR-A;

3. For any justifiable and reasonable ground where the award of the contract will not redound to the benefit of the government as follows:

a. If the physical and economic conditions have significantly changed so as to render the project no longer economically, financially or technically feasible as determined by the CIR;

b. If the project is no longer necessary as determined by the CIR; and

c. If the source of funds for the project has been withheld or reduced through no fault of the BIR.

Declaration of Failure of Bidding

In case of failure of bidding, the BAC shall issue a resolution declaring the same. The BAC then reviews the terms and conditions stated in the IAEB. If warranted, it changes any of the terms and conditions, including the quantities or specifications, provided that the ABC is left unchanged. It must, thereafter, conduct a re-bidding, in the process formulating a new IAEB and posting and publishing this as required. (Section 35 of IRR-A) All bidders that have initially responded to the IAEB in the first bidding shall be allowed to submit new bids. cDECIA

If the original estimate is found to be inadequate on reassessment to meet the objectives of the project, it is may be necessary to reduce the scope of the project.

Should a second failure of bidding occur, the BIR may conduct another public bidding or enter into negotiated procurement. The conduct of another public bidding is warranted if revision is made to the ABC. In such case, the BIR should comply with requirements of re-advertisement and/or posting. On the other hand, negotiated procurement is resorted to if there are no changes to the ABC, and the terms, conditions and specifications of the project.

Step 7 Contract Award

Rule on Contract Award

The contract shall be awarded to the bidder with the LCRB at its submitted bid price or its calculated bid price, whichever is lower. (Section 37.1 of IRR-A)

The BAC shall issue a Resolution recommending to the CIR award of the contract to the bidder with the LCRB at its submitted bid price or its calculated bid price, whichever is lower.

Prior to the expiration of the period of bid validity, the BIR should notify the successful bidder in writing that its bid has been accepted, through a Notice of Award (SF-GOOD-49) received personally or sent by registered mail or electronically. It is important that, in case the Notice of Award is not received personally, its receipt must be confirmed in writing within two (2) days by the successful bidder and submitted personally or sent by registered mail or electronically to the BIR (this particular instruction must be included in the ITB so that the bidder may be guided accordingly).

The NOA does not give effectivity to the contract.

Timeline for Contract Award

The CIR/RD or his duly authorized representative should approve or disapprove the recommendation of award within seven (7) calendar days from the date of determination and declaration by the BAC of the LCRB. (Section 37.2 of IRR-A as amended by GPPB Resolution No. 014-2006)

The Notice of Award (SF-GOOD-49) shall be given to the bidder with the LCRB immediately after approval of the recommendation. Simultaneously, a copy of the Notification of Bidding Result (SF-GOOD-50) shall be furnished to all losing bidders, and posted in the website of the PhilGEPS, as well as the websites of the BIR (www.bir.gov.ph) and its electronic procurement service provider, if any.

Contract award must be made within eighty (80) calendar days from the date of bid opening but not to exceed the bid validity period as specified in the bidding documents. (Section 37.2.2 of IRR-A) If award cannot be made within the said period, the bid validity period should be extended. (Please refer to Step on Preparation of the Bidding Documents for the discussion on extension of the bid validity period.)

Participants in the Award of the Contract

1. CIR/RD;

2. DCIRs/ACIR;

3. BAC;

4. Financial and Administrative Service/Procurement Division (NO) or Administrative Division/Finance Division (RR);

5. BAC Secretariat;

6. Project Proponent/end-user; and

7. Bidder who submitted the LCRB/SCRB (for conforme).

Methodology: Steps in the Contract Award

1. BAC Secretariat collates all the documents and/or records of the proceedings of the BAC with regard to the procurement at hand, and attaches the same to the BAC Resolution.

2. BAC Secretariat drafts the BAC Resolution recommending award.

3. BAC approves and signs the Resolution recommending award, and transmits the same to the CIR/RD or his duly authorized representative. DHIaTS

4. CIR/RD or his duly authorized representative acts on the recommendation for award within seven (7) calendar days from the date of determination and declaration by the BAC of the LCRB/SCRB.

5. In case of approval of the recommendation, the CIR/RD or his duly authorized representative, through the BAC Secretariat, issues the NOA to the bidder with the LCRB/SCRB, while the BAC accordingly notifies the losing bidders. In case of a disapproval of the recommendation of award, the CIR/RD or his duly authorized representative shall state the reason(s) for disapproval and instruct the BAC on the subsequent steps to be adopted.

6. The bidder with the LCRB/SCRB accepts the NOA.

If the Bidder Being Considered for Award does not Accept the NOA

If the bidder refuses to accept the award within the bid validity period, the BAC shall forfeit the bid security of the bidder and shall initiate the blacklisting proceedings in accordance with the Uniform Guidelines for Blacklisting (GPPB Resolution No. 09-2004).It then initiates and completes the post-qualification of the bidder with the second lowest calculated bid. If found qualified, the said bidder shall be awarded the contract. This procedure is repeated until the LCRB is determined. Should all eligible bidders fail post-qualification, the BAC must declare the bidding a failure. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this Manual on the declaration of failure of bidding.

Refusal to accept the award, without just cause or for the purpose of forcing the BIR to award the contract to another bidder, if proven, is meted with a penalty of imprisonment of not less than six (6) years and one (1) day but not more than fifteen (15) years. (Section 65.3.4 of IRR-A) Additional penalties of suspension for one (1) year from participation in government procurement for the first offense, and suspension for two (2) years for the second offense shall also be imposed on the bidder. (Section 69.1 of IRR-A)

Performance Security

It is a guarantee that the winning bidder will faithfully perform its obligations under the contract prepared in accordance with the bidding documents. (Section 39.1 of IRR-A) It must be posted in favor of the BIR, and will be forfeited in the latter's favor in the event it is established that the winning bidder is in default in any of its obligations under the contract. (Section 39.2 of IRR-A)

Schedule for Posting of Performance Security by the Bidder with the LCRB

Within a maximum period of ten (10) calendar days from the receipt of the NOA, and in all cases upon the signing of the contract, the successful bidder should furnish the BIR with the performance security in accordance with the Conditions of Contract, and in the Form prescribed in the Bidding Documents. (Section 39.1 of IRR-A) The performance security forms part of the contract. (Section 37.2.3 of IRR-A)

Forms of Performance Security and the Corresponding Amounts Required

The performance security must be in any of the following forms with the corresponding required amounts: 12

 

Form of Performance Security	Maximum Amount in % of the
		Total Contract Price
1.	Cash, certified check, cashier's	Five Percent (5%)
	check/manager's, bank draft or
	irrevocable letter of credit
2.	Bank Guarantee confirmed by a	Ten Percent (10%)
	reputable local bank or in the case
	of a foreign bidder, bonded by a
	foreign bank;
3.	Surety Bond callable upon	Thirty Percent (30%)
	demand issued by a reputable
	surety or insurance company;
4.	Foreign government guarantee as	One Hundred percent (100%)
	provided in an executive, bilateral
	or multilateral agreement, as may
	be required by BIR.

 

To monitor the issuance of bidding documents, the BAC through the BAC Secretariat shall account for the number of copies sold to prospective bidders and distributed to all concerned by recording such in an official logbook. The BAC Secretariat may choose a numbering or labeling system that is appropriate for the BIR.

Forms of Performance Security to be submitted by the winning bidder

The BIR must specify in the bidding documents the preferred forms of performance security and the respective amounts thereof. The winning bidder must choose which among the preferred forms it shall submit.

For projects with Multi-Year Obligation Authority (MYOA) approved by the DBM, the performance security shall be computed based on the whole duration of the project. However, the BIR has the option to pro-rate the performance security based on the contract period and shall be renewed every year thereafter.

Changes in the Amount of Performance Security in Case of Amendments in the Contract Price

The winning bidder shall post an additional performance security following the schedule above to cover any cumulative increase of more than ten percent (10%) over the original value of the contract as a result of amendments to order. (Section 1.4 Annex "D" of IRR-A, as amended by Section 1.4 OP MO 176, s. 2005) The percentages in the schedule above must be applied to increases in the original value of the contract. The winning bidder must also cause the extension of the validity of the performance security to cover approved contract time extensions.

If the contract value is reduced because part of the goods or services under the contract had already been delivered or completed, and accepted by the government, the BIR shall allow a proportional reduction in the original performance security. However, this proportional reduction in the value of the performance security is allowed only when the contract allows for partial deliveries or performance. Moreover, the reductions must be more than ten percent (10%),and the aggregate of such reductions must not be more than fifty percent (50%) of the original performance security. (Section 39.6 of IRR-A)

Parties Involved in the Posting of the Performance Security

a) Bidder with the LCRB;

b) BIR; and

c) Issuer of the security, e.g.,the banking/financial institution or the insurance company.

Methodology: Steps in the Posting of Performance Security

1. The bidder with the LCRB posts a performance security by complying with the following conditions:

a. The performance security must be executed in the form prescribed by the BIR in the ITB; and

b. The performance security must at least be co-terminus with the period of completion of the contract.

2. The Procurement Division/Administrative Division accepts the performance security and indicates such posting and acceptance by attaching the appropriate form to the contract.

Schedule for Release of Performance Security

Subject to the conditions of the contract, the BIR may release the performance security to the winning bidder after the issuance of the Certificate of Acceptance of the goods, provided that there are no claims filed against the contract awardee or the surety company. However, it must ensure that the performance security is replaced by a warranty covering the defects liability period in accordance with Section 62 of IRR-A.

Step 8 Contract Signing and Approval

Timeline for Entering into a Contract

The winning bidder and the BIR must enter into a contract immediately after the former has submitted the performance security and all other documentary requirements within the period specified in the IRR-A. The parties and their respective witnesses must sign the contract within ten (10) calendar days from receipt by the winning bidder of the NOA. (Section 37.3 of IRR-A as amended by OP MO No. 176)

The Chief of the Accounting Division at the NO or the Chief of the Disbursement Section, Finance Division at the RR shall sign the contract as a witness to the contract pursuant to COA Circular No. 79-122.

The CIR/RD or duly authorized representative is encouraged to sign within the same day as the signing of the bidder as there are penalties against delaying, without justifiable cause, the award of the contract. (Section 65.1 of IRR-A) Moreover, it would be best for both parties to sign/execute the contract together — provided that all contract documents and requirements are complete — so that both may personally appear before a Notary Public.

Section 38.2 of IRR-A is designed to remove the cause for delay in the contract signing. This provision mandate that if no action is taken by CIR/RD or his duly authorized representative within the period specified in Section 37.4 of IRR-A, the contract concerned shall be deemed approved. Provided, however, that where further approval by the OP is required, the contract shall not be deemed approved unless and until the OP gives actual approval to the contract concerned.

Timeline for Contract Approval by Higher Authorities

When, after contract signing, further approval of higher authorities is required, the approving authority for the contract, or his duly authorized representative, shall be given a maximum of fifteen (15) calendar days from receipt thereof, together with all documentary requirements to perfect the said contract, to approve or disapprove it. (Section 37.4 of IRR-A as amended by GPPB Resolution No. 014-2006)

Timeline for Issuance of NTP

The NTP (SF-GOOD-56) must be issued together with a copy of the approved contract to the successful bidder within three (3) calendar days from the date of approval of the contract by the CIR/RD or his duly authorized representative. (Section 37.5 of IRR-A as amended by GPPB Resolution No. 014-2006)

Contract Effectivity

Unless otherwise specified in the contract, a contract is effective upon receipt of the NTP. If an effectivity date is provided in the NTP, all notices called for by the terms of the approved contract shall be effective only from such effectivity date, but such effectivity date shall not be later than seven (7) calendar days from the issuance of the NTP. (Section 37.5 of IRR-A as amended by GPPB Resolution No. 014-2006)

Participants in Contract Signing and Approval and Issuance of the NTP

1. CIR/RD;

2. DCIRs/ACIR;

3. ACIR FAS/Procurement Division (NO) or Administrative Division/Finance Division (RR);

4. ACIR Legal Service(NO) or Chief Legal Division(RR)

5. Project Proponent/end-user;

6. Witnesses;

7. Winning bidder; and

8. Higher Authority

Contract Documents should include the following:

1. Contract Agreement;

2. Bid form including all the documents/statements contained in the winning bidder's two bidding envelopes, as annexes;

3. Schedule of Requirements;

4. Technical Specifications and the bidder's technical proposal;

5. IAEB;

6. General Conditions of the contract;

7. Special Conditions of the contract;

8. Performance Security;

9. NOA with winning bidder's "Conforme" thereto;

10. Addenda and/or Supplemental/Bid Bulletins, if any;

11. TOR with annexes, if any; and

12. Other contract documents that may be required by existing laws and/or the BIR.

Methodology: Steps in the Contract Preparation, Signing and Approval

1. Procurement Division/Administrative Division prepares the draft contract together with the documentary requirement mentioned above.

2. Procurement Division/Administrative Division transmits the draft contract and its attachments to the Legal Service/Legal Division for review and comment;

3. Legal Service/Legal Division returns the draft contract and its attachment to the Procurement Division/Administrative Division for finalization;

4. Procurement Division/Administrative Division prepares the final contract for signature of the winning bidder.

5. Procurement Division/Administrative Division prepares and transmits the ObR, together with the final contract as signed by the winning bidder, to the CIR/RD or duly authorized representative for signature of ObR;

6. Procurement Division/Administrative Division transmit the ObR and the final contract to the Budget Division (NO)/Finance Division (RR) for certification of availability of allotment; HTASIa

7. Accounting Division (NO)/Finance Division(RR) issues Certificate of Availability of Fund (CAF) and signs as witness to the final contract pursuant to COA Circular No. 79-122

8. Procurement Division/Administrative Division transmits the contract with the following documents to the CIR/RD or duly authorized representative for signature:

a. Duly approved delivery schedule and cost estimates or the PPMP;

b. ObR;

c. CAF;

d. Abstract of Bids;

e. Resolution of the BAC recommending award;

f. Approval of award by the appropriate approving authority; and

g. Other pertinent documents that may be required by existing laws and/or the BIR. DTEAHI

9. CIR/RD or his duly authorized representative acts on the contract.

10. If higher approval is required (e.g.,approval of the Office of the President),or a review by another government body is necessary (e.g.,NEDA or DOJ review),the CIR transmits the contract documents to the appropriate approving authority or reviewing body. The periods indicated above for approval of contracts still apply, except if the approving authority is the Office of the President. 

11. Procurement Division/Administrative Division prepares and transmit NTP to CIR/RD or his duly authorized representative for signature.

12. Procurement Division/Administrative Division issues NTP to the winning bidder.

Rules Governing the Review and Approval of Government Contracts

Executive Order 423, s. 2005, prescribes the rules and regulations on the review and approval of government contracts. Essentially, E.O. 423 provides that, except for government contracts required by law to be acted upon and/or approved by the President, the CIR shall have full authority to give final approval and/or enter into all government contracts of his respective government agency, awarded through public bidding, regardless of amount. Provided, that the CIR certifies under oath that the contract has been entered into in faithful compliance with all applicable laws and regulations. The Head of the BIR may also delegate in writing this full authority to give final approval and/or enter into government contracts awarded through public bidding as circumstances may warrant (i.e.,to decentralization of procurement in a government agency),subject to such limitations as he may impose. For procurement undertaken through any of the alternative methods allowed by law, where the government contract involves an amount less than P500 Million, except where action or approval of the President is required, the CIR shall have full authority to give final approval and/or enter into such contract, provided that the Department Secretary concerned certifies under oath that the contract has been entered into in faithful compliance with all applicable laws and regulations. He may delegate in writing this authority, as circumstances may warrant (i.e.,to decentralize procurement),subject to such limitations as he may impose. aTcSID

Where the CIR has made a determination that a Government contract, including Government contracts required by law to be acted upon and/or approved by the President, involving an amount of at least P500 Million falls under any of the exceptions from public bidding allowed by law, the CIR shall, before proceeding with the alternative methods of procurement provided by law and applicable rules and regulations, obtain the following requirements:

1. An opinion from the GPPB that said Government contract falls within the exceptions from public bidding; and

2. Approval from the Director-General of NEDA to proceed with a specific alternative method of procurement under the exceptional cases provided by law and applicable rules and regulations.

Except for Government contracts required by law to be acted upon and/or approved by the President, the CIR, after obtaining the foregoing requirements, shall have full contracts of their his respective agency, entered into through alternative methods of procurement allowed by law. Provided, that the head of the procurement entity certifies under oath that the contract has been entered into in faithful compliance with all applicable laws and regulations.

If the Bidder with the LCRB or SCRB Refuses or is Unable, Through its Own Fault, to Post the Performance Security and Sign the Contract Within the Prescribed Period

1. The bid security is forfeited;

2. The bidder is disqualified from further participating in the bidding at hand; and

3. The BIR shall impose appropriate sanctions.

4. Upon determination of administrative liability, it will suffer the administrative penalties of suspension for one (1) year from participation in government procurement for the first offense, and suspension for two (2) years for the second offense. This is without prejudice to the blacklisting proceedings undertaken in accordance with the Uniform Guidelines for Blacklisting (GPPB Resolution 09-2004).

For its part, the BAC must initiate and complete the post-qualification of the bidder with the second LCRB. This procedure must be repeated until the LCRB is determined for award. If no bidder passes post-qualification, the BAC declares the bidding a failure and conducts a re-bidding with re-posting and re-advertisement. Should there be another failure of bidding after the conduct of the re-bidding, the BIR may enter into a negotiated procurement. (Section 40.2 of IRR-A)

If the bidder that fails to post the performance security and sign the contract happens to be one with the SCRB, the BAC must declare the bidding a failure. It then conducts a re-bidding with re-posting and re-advertisement. Should there be another failure of bidding after the conduct of the re-bidding, the BIR may enter into a negotiated procurement. (Section 40.3 of IRR-A)

The BAC shall initiate the process of blacklisting. The Uniform Guidelines for Blacklisting of manufacturers, suppliers, distributors, and contractors shall be used.

However, the foregoing sanctions shall not be imposed if the failure, refusal or inability of the bidder with the LCRB or SCRB to sign the contract within the prescribed period is not due to its fault. (Section 40.1 of IRR-A)

Two-Stage Competitive Bidding

The Two-Stage Bidding procedure is one where the bidding process is divided in two (2) stages. The first stage involves the issuance by the BIR of bidding documents, including the technical specification in the form of performance criteria only. The prospective bidders shall be requested at the first stage to submit their respective LOI, eligibility requirements, if needed, and initial Technical Proposals only without price tenders. The BAC shall then evaluate the technical merits of the proposals received vis-à-vis the required performance standards. A meeting/discussion shall then be held by the BAC with the eligible bidders whose technical tenders meet the minimum required standards, for purposes of drawing up the final revised technical specifications/requirements of the contract. The second stage involves the release of the final technical specifications by the BAC, followed by the conduct of the regular procedure for public bidding with all the bidders identified during the first stage, who shall then be required to submit their respective revised Technical Proposals including their Financial Proposals. (Section 30.4 of IRR-A)

Instances that may employ the Two Stage Competitive Bidding Procedure

The Two-Stage Bidding Procedure may be employed for the procurement of goods when:

1. Due to the nature of the project requirements (e.g.,complex information and communications technology),the required technical specifications/requirements of the contract cannot be precisely defined in advance of bidding, or it may be undesirable or impractical to prepare complete technical specifications in advance.

BIR may consider it undesirable or impractical to compare complete technical specifications in advance under any of the following circumstances:

a. In the case of turnkey contracts;

b. Contracts for large complex facilities;

c. Complex information and communication technology; or

d. Works of a special nature.

2. The problem of technically unequal bids is likely to occur.

The purpose of the bidding procedure is to come up with well-defined, standardized technical specifications, with inputs from all stakeholders, including the bidders themselves. aEIcHA

Timeline for the Conduct of a Two-Stage Bidding Procedure

The timeline for the conduct of a Two-Stage Bidding Procedure will depend on several variables:

1. Project timelines as defined by the Project Proponent or end-user;

2. Technical complexity of the project; and

3. Time required for drawing up the final technical specifications.

These variables, however, affect only the first stage of the bidding, as well as the drawing up of the final technical specifications. Thus, while the timelines for the first stage may not be definite, the second stage shall follow the timelines prescribed for the regular bidding procedure. In setting the timelines, the BIR should ensure that the time periods involved are reasonable and that there is no undue delay of the entire procurement procedure and project implementation.

Participants in the Two-Stage Bidding Process

1. BAC;

2. TWG;

3. BAC Secretariat;

4. Project Proponent/end-user;

5. Technical Experts/Consultants, if necessary; and

6. Observers.

Methodology: Steps in the Conduct of Two-Stage Bidding Process

1. The TWG and BAC Secretariat, with the assistance of the Project Proponent/end-user, prepare the bidding documents in accordance with the usual procedures.

2. BAC calls for pre-procurement conference.

3. BAC issues bidding documents requesting the prospective bidders to submit:

(a) LOI,

(b) eligibility requirements, if needed; and

(c) initial technical proposals only (no price tenders).

4. The BAC, with the assistance of TWG, conducts the eligibility as conducted in a single competitive bidding procedures.

5. The TWG evaluates the technical merits of the technical proposal received from eligible bidders vis-à-vis the required performance standards, and determines the proposals that meet the minimum standards.

6. The TWG and BAC meet/discuss with the eligible bidders whose technical proposals meet the minimum required standards stipulated in the bidding documents.

The purpose of this meeting is to draw up the final revised technical specifications/requirements of the project.

7. Once the final revised technical specifications are completed and duly approved by the BAC, copies of the same shall be provided to all eligible bidders that meet the minimum technical standards.

The latter are then required to submit their revised Technical Proposals, including their financial proposals in two separate sealed envelopes, at specified deadline, after which time no more bids shall be received.

8. BAC proceeds with the bid evaluation, post-qualification, award of contract and contract signing in accordance with the procedure and timelines prescribed for competitive bidding.

If no Prospective Bidder Submits a LOI

If no prospective bidder submits a LOI, the BAC shall declare a failure of bidding. In such a case the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding.

SECTION 5. Procedures for the Procurement of Goods and Services Through Alternative Methods. —

The Alternative Methods for the Procurement of Goods and Services

Rules on the Use of Alternative Methods of Procurement

Generally, procurement should be through competitive bidding. In preparing the APP, the BIR must ensure that there is sufficient time to undertake competitive bidding. However, the law allows the use of alternative methods of procurement in some exceptional instances, provided:

1. There is prior approval of the CIR/RD on the use of alternative methods of procurement, as recommended by the BAC; and

2. The conditions required by law for the use of alternative methods are present. aCSEcA

In resorting to any of the alternative methods of procurement, the BIR must ensure that the method chosen promotes economy and efficiency, and that the most advantageous price for the government is obtained. 13

For the procurement of goods, the following alternative methods of procurement may be resorted to:

1. Limited Source Bidding

2. Direct Contracting

3. Repeat Order

4. Shopping

5. Negotiated Procurement

Procurement through the Limited Source Bidding

LIMITED SOURCE BIDDING, otherwise known as SELECTIVE BIDDING, is a method of procurement of goods and services that involves the issuance of a direct invitation to bid by the BAC to a set of pre-selected suppliers with known experience and proven capability on the requirements of the particular contract. (Section 49 of IRR-A)

Conditions for Procurement Through Limited Source Bidding

Limited Source Bidding may be employed by the BIR under any of the following conditions:

1. If only a few suppliers of the goods to be procured are known to be available, such that resorting to public bidding method will not likely result in any additional suppliers participating in the bidding; or

2. In the procurement of major plant components where it is deemed advantageous to limit the bidding to known qualified bidders in order to maintain uniform quality and performance of the plant as a whole.

Selection of Bidders

In choosing the Bidders, the BIR shall consider only those suppliers appearing in a list maintained by the relevant government authority that has expertise in the type of procurement concerned. This list should have been submitted to, maintained and updated with the GPPB and posted in the PhilGEPS.

Participants in Procurement Through Limited Source Bidding

1. CIR/RD;

2. BAC;

3. TWG;

4. BAC Secretariat;

5. Project Proponent/end-user;

6. Technical experts/consultants, if necessary;

7. Invited suppliers; and

8. Observers.

Methodology: Steps in the Conduct of Procurement through Limited Source Bidding

1. BAC, through the TWG and the BAC Secretariat, prepares the bidding documents, including the IAEB (indicating therein the method of procurement to be used) and the technical specifications, in accordance with the procedures laid down in the IRR-A, this Manual and the PBDs. cCSDaI

2. BAC, through the BAC Secretariat, gets the list of pre-selected suppliers from the government authority that has expertise in the type of procurement at hand. It may also access the PhilGEPS website as a secondary source of information.

3. BAC calls for a pre-procurement conference.

4. BAC, through the BAC Secretariat, posts for information purposes the IAEB in:

a. PhilGEPS;

b. BIR website (www.bir.gov.ph);and

c. Any conspicuous place in the premises of the BIR NO/RR;

for a maximum period of seven (7) calendar days prior to the opening of the bids.

5. BAC Secretariat sends the IAEB to the pre-selected suppliers in the list.

6. BAC proceeds with the pre-bid conference, eligibility check, bid evaluation, post-qualification and succeeding activities up to contract award, signing and approval, following the procedures for Competitive Bidding.

Bid and performance securities are required and should be posted in accordance with procedures for competitive bidding.

Direct Contracting

DIRECT CONTRACTING or SINGLE SOURCE PROCUREMENT is a method of procurement of Goods that does not require elaborate bidding documents. The supplier is simply asked to submit a price quotation or a pro-forma invoice together with the conditions of sale. The offer may be accepted immediately or after some negotiations. (Section 50 of IRR-A)

Conditions for Procurement Through Direct Contracting

Direct Contracting may be resorted to by the BIR under any of the following conditions:

1. Procurement of items of proprietary nature which can be obtained only from the proprietary source, i.e.,when patents, trade secrets and copyrights prohibit others from manufacturing the same item.

Under the Intellectual Property Code of the Philippines (R.A. No. 8293), the registered owner of a patent, a copyright or any other form of intellectual property has exclusive rights over the product, design or process covered by such patent, copyright or registration. Such exclusive right includes the right to use, manufacture, sell, or otherwise to derive economic benefit from the item, design or process.

2. When the procurement of critical plant components from a specific manufacturer, supplier or distributor is a condition precedent to hold a contractor to guarantee its project performance in accordance with the provisions of its contract.

This is applicable when there is a contract for an infrastructure project consisting of the construction/repair/renovation of a plant, and critical components of such plant are prescribed by the contractor for it to guarantee its contract performance. For example, in the construction of a power generation plant, the contractor may require the use of certain components manufactured by a specific manufacturer, whose products have been found to meet certain standards and are compatible with the technology used by the contractor. In this instance, Direct Contracting may be resorted to in the procurement of such critical plant components. However, the BAC must require technical proof that such critical plant components are the ONLY products compatible with the plant.

3. Those sold by an exclusive dealer or manufacturer that does not have sub-dealers selling at lower prices and for which no suitable substitute can be obtained at more advantageous terms to the Government. Exclusive dealership does not per se give rise to the use of direct contracting as an alternative mode. The supplier/contractor/manufacturer must prove, through proper documentation, that it is the sole source of the said the goods, equipment, or services required. THCSEA

This condition anticipates a situation where the goods are sold by an exclusive dealer or distributor, or directly sold by the manufacturer. In this instance, it is highly unlikely that sub-dealers can sell the same at lower prices. Further, the BIR has not identified a suitable substitute for the product that can be procured at terms more advantageous to the government.

Justification for Procurement Through Direct Contracting

To justify the need to procure through the Direct Contracting method, the BAC should conduct a survey of the industry and determine the supply source. This survey should confirm the exclusivity of the source of goods or services to be procured. In all cases where Direct Contracting is contemplated, the survey must be conducted prior to the commencement of the procurement process. Moreover, the BIR must justify the necessity for an item that may only be procured through Direct Contracting, and it must be able to prove that there is no suitable substitute in the market that can be obtained at more advantageous terms.

Participants in Procurement Through Direct Contracting

1. CIR/RD;

2. BAC;

3. TWG;

4. BAC Secretariat;

5. Project Proponent/end-user;

6. Technical experts/consultants, if necessary; and

7. Supplier/Manufacturer.

Methodology: Steps in the Conduct of Procurement Through Direct Contracting

1. For information purposes, the BAC, through the BAC Secretariat shall post the notice for direct contracting in the following:

a. BIR website (www.bir.gov.ph);

b. PhilGEPS; and

c. Any conspicuous place in the premises of the BIR NO/RR.

2. The BAC, through the TWG and the BAC Secretariat, prepares the Request for Quotation (SF-GOOD-60), technical specifications and draft contract in accordance with the procedures laid down in this Manual, in the IRR-A and in the PBDs.

3. The BAC, through the Secretariat, identifies the supplier from whom the goods will be procured.

4. The BAC calls for a pre-procurement conference.

5. The BAC, through the Secretariat, posts for information purposes the Request for Quotation (SF-GOOD-60) for a maximum period of seven (7) calendar days prior to sending the Request for Quotation, in:

d. BIR website (www.bir.gov.ph);

e. PhilGEPS; and

f. Any conspicuous place in the premises of the BIR NO/RR.

6. The BAC sends the Request for Quotation to the selected supplier. If necessary, negotiations are conducted to ensure that the Government is able to procure the goods at the most advantageous terms.

7. BAC proceeds with eligibility check, evaluation of proposal, post-qualification and succeeding activities up to issuance of NOA.

8. The procedures for contract preparation, signing and approval under the competitive bidding shall be followed.

Performance security must be posted for this type of procurement.

Repeat Order

REPEAT ORDER is a method of procurement of goods from the previous winning bidder, whenever there is a need to replenish goods procured under a contract previously awarded through Competitive Bidding. The procurement should be covered by the contingency provided for in the APP. (Section 51 of IRR-A)

Repeat Orders from the previous winning bidder may be resorted to by the BIR only in cases where the procured item is clearly superior to the other bids. This superiority must exist, not only in the price quoted but also in equipment reliability, availability of spare parts, after-sales service and delivery period, among others. The bid should not have been so closely contested, such that if a bidding would be conducted again, the previous winning bidder would still have a high probability of winning.

Conditions for Procurement Through Repeat Order

1. The original contract must have been procured through competitive bidding;

2. Contract prices of the repeat order must be the same as or lower than those in the original contract, provided that such prices are still the most advantageous to the government after price verification;

3. The repeat order will not result in splitting of contracts, requisitions or purchase orders, as provided for in Section 54.1 of IRR-A;

Splitting of contracts is the act of dividing or breaking up government contracts into smaller quantities and amounts. It also is the act of dividing contract implementation into artificial phases or sub-contracts. Both actions are for the purpose of evading or circumventing the requirements of law and the IRR-A of R.A. 9184, especially the necessity of public bidding and the requirements for the alternative methods of procurement. (Section 54.1 of IRR-A)

If the BIR is found to have resorted to this mechanism to subvert the law, those responsible for this act shall suffer the penalty of imprisonment of not less than six (6) years and one (1) day, but not more than fifteen (15) years. This penalty is without prejudice to the imposition of other sanctions provided for in RA 3019 and other penal laws. (Section 65.1.4 of IRR-A)

4. Except in cases duly approved by the GPPB, the repeat order shall be availed of only within six (6) months from the date of the NTP arising from the original contract; and

5. The repeat order should not exceed twenty-five percent (25%) of the quantity of each item in the original contract, and must be part of the contingency provided for in the APP.

Participants in Procurement Through Repeat Order

1. CIR/RD;

2. BAC;

3. TWG;

4. BAC Secretariat;

5. Project Proponent/end-user;

6. Technical experts/consultants, if necessary; and

7. Supplier who won in the previous public bidding.

Methodology: Steps in the Conduct of Procurement Through Repeat Order

1. For information purposes, the BAC, through the BAC Secretariat shall post the notice requesting for repeat order of additional units of goods previously procured in the following:

a. BIR website (www.bir.gov.ph);

b. PhilGEPS; and

c. Any conspicuous place in the premises of the BIR NO/RR.

2. BAC, through its Secretariat, conducts a canvass of the prevailing market price of the goods to be procured and compares this with the price of the goods in the original contract.

3. BAC confirms the price with the supplier that won the previous public bidding.

4. BAC, through its Secretariat, confirms the Repeat Order with the previous supplier.

5. The procedures for contract preparation, signing and approval under the competitive bidding shall be followed.

Performance security shall be posted for this type of procurement.

Shopping

It is a method of procurement of goods whereby the BIR simply requests for the submission of price quotations for readily available off-the-shelf Goods or ordinary/regular equipment to be procured directly from suppliers of known qualifications. (Section 52 of IRR-A)

With respect to the procurement of ordinary/regular supplies/equipment not available in the PS-DBM, the suppliers from whom goods are procured should be in good standing, and have not committed any breach of contract (e.g.,short deliveries, unreasonable delays in delivery of goods, delivery of defective goods, or similar acts) in previous transactions with the BIR or other government entity. It is the responsibility of the BIR, through the procurement office, to monitor contract implementation as well as constantly coordinate with the GPPB-TSO for updates on blacklisted suppliers.

The term "ordinary or regular office supplies" should be understood to include those supplies, commodities or materials which, depending on the procuring entity's mandate and nature of operations, are necessary in the transaction of its official businesses; and consumed in the day-to-day operations of said procuring entity.

Conditions for Procurement Through Shopping

1. When there is an unforeseen contingency requiring the immediate purchase of goods. However, the amount must not exceed Fifty Thousand Pesos (P50,000.00) per transaction, and the aggregate amount of such purchases must not exceed the maximum allowed by the GAA.

2. When ordinary or regular office supplies and equipment not available in the PS-DBM needs to be procured, the price of such purchase not exceeding Two Hundred Fifty Thousand Pesos (P250,000.00). However, it must be ensured that the procurement does not result in splitting of contracts, as provided in Section 54.1 of IRR-A. At least three (3) price quotations from bona fide suppliers must likewise be obtained. (Section 52 [b] of IRR-A)

The contract ceiling for procurement through Shopping is subject to periodic review by the GPPB, and may be increased or decreased to reflect changes in economic conditions or for other justifiable reasons. (Section 52 of IRR-A)

Participants in Procurement Through Shopping

1. DCIR-RMG or ACIR-FAS/ARD;

2. Procurement Division/Administrative Division;

3. Project Proponent/end-user; and

4. Supplier/s.

Planning for Contingency Purchases

Section 7.1 of IRR-A requires all procurement to be in accordance with the APP, and all procuring entities are not allowed to procure anything unless it is included in the APP. The requirement extends to those immediate purchases of readily available off-the-shelf goods and to contingencies. These purchases include those charged against cash advances, or the so-called "over-the-counter" purchases. Procuring entities are not allowed to procure anything unless it is included in the APP. cDCEHa

Contingencies must therefore be provided for in the APP based on historical data. (Section 7.3 of IRR-A) This can be done by allocating for such purchases a percentage of the total procurement budget as reflected in the BIR's APP. However, it would be advisable for this allocation not to be more than four percent (4%) of the total appropriations for Maintenance and Other Operating Expenses (MOOE) as provided for in the GAA.

To enable it to plan its purchases more efficiently, and consequently approximate realistic levels for the amount that it would need for its contingency purchases or its small purchases of ordinary/regular office supplies/equipment, the BIR must conduct a regular study of its "over-the-counter purchases".Based on this study, the BIR would be able to identify recurring expenses that could more reasonably be included in the APP, and thus determine a more realistic allocation for contingencies.

Methodology: Steps in the Conduct of Procurement Through Shopping

1. The method of procurement to be used must always be as indicated in the approved APP. In other words, there has to be an allocation for items or contingencies wherein procurement through Shopping has been identified. Otherwise, the APP would have to be amended or updated in accordance with Section 7 of IRR-A. If the original mode of procurement recommended in the APP was Public Bidding but cannot be ultimately pursued, the BAC, through a resolution shall justify and recommend the change in the mode of procurement to be approved by the CIR/RD.

2. For information purposes, the BAC, through the BAC Secretariat shall post the notice of procurement for a maximum of fourteen (14) calendar days, through shopping in the following:

a. BIR website (www.bir.gov.ph);

b. PhilGEPS; and

c. Any conspicuous place in the premises of the BIR NO/RR.

If the procurement is due to an unforeseen contingency, the period for posting may be waived, so that the procurement activity may be posted by the BAC Secretariat after the same has been conducted for information purposes only. (Section 54.2 [h] of IRR-A) Otherwise, the need for an immediate purchase brought about by an unforeseen contingency may be negated.

3. The Project Proponent/end-user submits a PR (SF-GOOD-59) to the procurement unit indicating therein the urgency of the requirement. In case an immediate purchase is needed, brought about by an unforeseen contingency, the same may be undertaken directly with a supplier and charged against cash advances.

4. The BAC, through the Secretariat, posts for information purposes the procurement opportunity, for a period of seven (7) calendar days, in:

a. BIR website (www.bir.gov.ph);

b. PhilGEPS; and

c. Any conspicuous place in the premises of the BIR NO/RR.

If the procurement is due to an unforeseen contingency, the period for posting may be waived, so that the procurement activity may be posted by the BAC Secretariat after the same has been conducted for information purposes only. (Section 54.2 [h] of IRR-A) Otherwise, the need for an immediate purchase brought about by an unforeseen contingency may be negated.

5. The Procurement Division/Administrative Division issues Requests for Quotation (SF-GOOD-60) to at least three (3) suppliers in good standing. (Note: this may not apply in the case of unforeseen contingencies)

6. The suppliers submit the Price Quotations. (Note: this may not apply in the case of unforeseen contingencies)

7. For shopping under Section 52 (b) of IRR-A, award shall be made by the Procurement Division/Administrative Division to the supplier with the lowest price quotation. For shopping under Section 52 (a) of IRR-A, award shall be made to the supplier with the lowest price quotation by the appropriate authority duly designated by the CIR/RD.

Considering the small value of procurement through Shopping, the ACIR-FAS or ARD approves the requests to lower level officials, provided the aggregate amount of such procurement transactions still falls within the amount allowed for contingencies in the APP. If the aggregate amount of these transactions exceed the amount provided for in the APP, it could indicate either of two things:

1. the APP does not reflect a realistic percentage of contingent procurements, requiring a more thorough study of past procurement data; or

2. there is a tendency to purchase indiscriminately, possibly to avoid competitive bidding. 

In either case, the ACIR-FAS/ARD should step in and ensure that proper measures are carried out to correct the situation.

Another alternative would be for the BAC to include in the APP a general recommendation for Shopping as an alternative method to be employed in case of an occurrence of a contingency, so that the approval of the APP by the CIR/RD would necessarily cover an approval of such recommendation; provided, of course, that the limits indicated for contingencies are not exceeded.

In cases when shopping is employed in case of an unforeseen contingency where the compliance of the supplier's obligation to deliver or perform is immediate such that there is no more delivery or performance to be guaranteed, suppliers may be exempted from posting a performance security provided that the goods procured are delivered upon purchase. However, for purchases of ordinary or regular office supplies or equipment not available in the PS-DBM, the BIR should require the posting of performance securities.

Negotiated Procurement

NEGOTIATED PROCUREMENT is a method of procurement of Goods whereby the BIR directly negotiates a contract with a technically, legally and financially capable supplier. (Section 53 of IRR-A)

Conditions for Negotiated Procurement

For the procurement of goods, negotiated procurement is employed only in any of the following cases:

1. Where there has been failure of public bidding for the second time provided in Section 35 of R.A. 9184;

2. In case of imminent danger to life or property during a state of calamity, or when time is of the essence arising from actual or man-made calamities or other causes where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities;

3. Take-over of contracts, which have been rescinded or terminated for causes provided for in the contract and existing laws, where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities;

4. The project is adjacent or contiguous to another on-going consulting services project, provided, however, that the:

a. Original contract is the result of a competitive bidding;

b. Subject contract to be negotiated has a scope of work that is similar or related to that of the original contract;

c. Consultant uses the same prices or lower unit prices as in the original contract less mobilization cost;

d. Amount involved does not exceed the amount of the ongoing project; and

e. The contractor has no negative slippage in its on-going contracts.

In such instances, negotiations for the procurement must be commenced before the expiry of the original contract. (Section 53 [d] of IRR-A) This negotiated contract can only be undertaken once for a particular ongoing project.

The prospective bidder should issue a statement that it is not "blacklisted" or barred from bidding by the government or any of its agencies, offices, corporations or LGUs, and that it is not included in the Consolidated Blacklisting Report issued by the GPPB, once released in accordance with the guidelines to be issued by the GPPB.

5. Purchases of goods from another agency of the government, such as the PS-DBM.

6. Where the amount involved is fifty thousand pesos (P50,000) and below, does not result in splitting of contracts and does not fall under shopping in Section 52 of the IRR-A. (GPPB Resolution No. 04-2006)

Participants in Negotiated Procurement

1. CIR/RD;

2. BAC;

3. BAC Secretariat;

4. TWG;

5. Project Proponent/end-user;

6. Technical experts/consultants, if necessary;

7. Observer; and

8. Suppliers.

Methodology: Steps in the Conduct of Negotiated Procurement

1. If the original mode of procurement recommended in the APP was competitive bidding, the BAC recommends the change in the mode of procurement to negotiated through a Resolution to be approved by the CIR/RD.

2. BAC, through the TWG and the BAC Secretariat, prepares the bidding documents, including the IAEB (indicating therein the method of procurement to be used) and the technical specifications, in accordance with the procedures laid down in the IRR-A, this Manual and the PBDs.

3. BAC calls for a pre-procurement conference, if necessary.

4. BAC, through the BAC Secretariat, posts for information purposes the IAEB in:

a. BIR website (www.bir.gov.ph);

b. PhilGEPS; and

c. Any conspicuous place in the premises of the BIR NO/RR.

The posting shall be done for a maximum period of seven (7) calendar days prior to opening of the proposal. The BIR, however, may waive the period for posting in cases when:

a. There is imminent danger to life and property;

b. Time is of the essence arising from actual or man-made calamities or other causes, where immediate action is necessary to prevent damage to, or loss of, life or property; or

c. To restore vital public services, infrastructure facilities and other public utilities. At any rate, the award must be posted in the aforementioned websites. (Section 54.2 [d] of IRR-A)

5. BAC, through the BAC Secretariat, shall draw a list of at least three (3) suppliers in good standing which will be invited to submit bids and negotiate with the bidder who submitted the lowest calculated bid or highest rated bid, whichever is applicable. If the offer of the bidder who submitted the lowest calculated bid or highest rated bid, whichever is applicable, is not responsive to the original specifications and ABC, negotiation shall be made in ascending order starting from the lowest offer. The bidder whose bid is found to be responsive to the original specifications and ABC shall be considered for award. In all cases, the award of contract shall be posted at the PhilGEPS website, BIR website (www.bir.gov.ph) and in conspicuous place within the premises of the BIR NO/RR. (Section 54.2 [e] of IRR-A as amended by M.O. 213)

The negotiation may be made with a previous supplier of good standing of the BIR, or a supplier of good standing situated within the vicinity where the calamity or emergency occurred. The award of contract shall be posted at the PhilGEPS website, BIR website (www.bir.gov.ph) and in conspicuous place within the premises of the BIR NO/RR. (Section 53 (a) of IRR-A as amended by M.O. 213)

6. The suppliers submit their proposals in a sealed envelope duly marked.

7. The BAC, with the assistance of the TWG, evaluates the price tenders of the bidders. The BAC shall issue a resolution recommending to the CIR/RD or his duly authorized representative of the award of the contract to the LCRB for approval.

8. The Procurement Division/Administrative Division prepares the contract, Purchase Order or Job Order for approval of the CIR/RD or his duly authorized representative ,and serves the same to the winning contractor.

Performance security is required for purchases made through Negotiated Procurement.

SECTION 6. Guidelines on Implementation of Contracts for Goods and Services. —

Contract Implementation for the Procurement of Goods and Services

Contract implementation covers the following milestones:

1. Effectivity of the contract;

2. Contractor's performance of its contractual obligation;

3. BIR's performance of its contractual obligation, as specified in the contract;

4. Inspection and Final acceptance or project sign-off;

5. All other related activities; and

6. Payment by the BIR.

The Project Proponent/end-user should determine the period of contract implementation during the procurement planning stage, and include it in the PPMP. In determining the contract implementation period, it must ensure that the supplier is given ample time to undertake any preparatory activity/ies necessary for it to comply with the conditions of the contract.

Contract Effectivity

A contract becomes effective either on the date of the receipt by the winning bidder of the NTP, otherwise, on the effectivity date provided in the NTP. (Section 37.5 of IRR-A)

Amendment to Order

It refers to any necessary adjustment in the general scope of the contract in any of the following aspects in order to fully meet the requirements of the project:

1. Drawings, design or specifications of the goods, provided that:

a. The goods to be furnished are to be specifically manufactured in accordance with the requirements of the BIR;

b. The change is an improvement of the goods and advantageous to the BIR;

c. It is done at no extra cost; and

d. It is not prejudicial to the losing Bidders in the sense that such change/s could not have been foreseen during the conduct of the bidding and would have significantly affected the other bidders' bids;

2. Method of shipment or packing;

3. Place of delivery of goods or performance of the service/s;

4. Additional items needed and necessary for the protection of the goods procured, which were not included in the original contract; or

5. Any other change affecting the specifications or scope of work of the goods and/or services to be procured.

Any such amendment may or may not result in an increase or a decrease of the contract price, and/or an extension or reduction of the delivery period. However, the amendment should not have the result of changing of the subject matter of the contract or the specifications of the goods or services, in any material aspect and to such an extent that, if introduced during the bidding stage, may have had a significant effect on other bidders' bids, because this situation would actually require another bidding activity, except if the original procurement was done through an alternative method that did not involve a bidding.

Conditions When the BIR can Issue an Amendment to Order

BIR may issue at any time during contract implementation an Amendment to Order provided, that such adjustment is required to fully meet the requirements of the project. Any of the following circumstances may serve as basis for such amendment/s:

1. Emergency cases, fortuitous events or unforeseen contingencies arising during project/contract implementation, and such contingencies have an impact on the procurement at hand, such as: 

a. Changes in the conditions affecting the project, e.g.,a change in the place of delivery;

b. Time is of the essence in the implementation of the project, and any changes require immediate implementation; and

c. Additional requirements have been identified as necessary for the protection of the goods procured, such as changes in the packaging of the goods, or additional items have become necessary to ensure that the goods are sufficiently protected from the elements;

2. When the contract does not reflect the real intention of the parties due to mistake or accident, and the amendment is necessary to reflect the parties' intention; and

3. Other analogous circumstances that could affect the conditions of the procurement at hand.

Corresponding Adjustments in Contract Price and/or Delivery Schedules

If an Amendment to Order increases or decreases the cost of, or the time required for executing any part of the work under the original contract, an equitable adjustment in contract price and/or delivery schedule should be mutually agreed upon between the parties concerned, and the contract should be modified in writing. It is required, however, that any increase in contract price must not exceed ten percent (10%) of the original contract price. Otherwise, the procurement should be subject to another bidding, unless the original procurement was done using any of the alternative methods that did not involve bidding.

Moreover, in the adjustment of the price, the supplier and the BIR must ensure that the principle of "no loss, no gain" is applied, such that neither party gains nor loses anything from the resulting price adjustment.

Rules Governing Price Adjustments due to Amendment to Order

If the amendment to order consists of additional items, the price adjustment shall be based on the unit prices in the original contract for items of goods similar to those in the original contract. If the contract does not contain any rate applicable to the additional items, then suitable prices shall be mutually agreed upon between the parties, based on prevailing market prices.

Any request for payment by the supplier for additional items must be accompanied by a statement with the approved supporting forms, giving a detailed accounting and record of the amount for which it claims payment.

If the amendment to order consists of a change in drawings, design or specifications of the goods, method of shipment or packing, or place of delivery, the price adjustment shall be equivalent to the corresponding value of the change, based on prevailing market prices.

Participants in the Issuance of an Amendment to Order

1. CIR/RD or his duly authorized representative;

2. Project Proponent/end-user;

3. Supplier/manufacturer/distributor;

4. DCIR-RMG/ACIR-FAS; and

5. Procurement Division/Administrative Division.

Methodology: Steps in the Issuance of Amendment to Order

1. Project Proponent/end-user determines and justifies the existence of condition/s that requires an amendment to order for approval of CIR/RD.

2. Project Proponent/end-user discusses with the supplier/manufacturer/distributor regarding the adjustments in contract price and/or delivery schedule, if necessary.

3. The procedures in contract preparation, signing and approval under the competitive bidding shall be followed.

4. The supplier/manufacturer/distributor shall post an additional performance security to cover any cumulative increase of more than ten percent (10%) over the original value of the contract as a result of the amendment to order. In case of a reduction in the contract value, the BIR shall allow a proportional reduction in the original performance security, provided that any such reduction is more than ten percent (10%) and that the aggregate of such reductions is not more than fifty percent (50%) of the original performance security. In case of approved contract time extensions, the supplier/manufacturer/distributor shall cause the extension of the validity of the performance security.

5. The procurement unit/office posts the Amendment to Order in the PhilGEPS, the website of the BIR, and the latter's electronic procurement service provider, if any.

6. The supplier/manufacturer/distributor proceeds with the work/delivery of items in accordance with the amended contract.

Commencement of Work under an Amendment to Order

Under no circumstances shall a supplier proceed to commence work under any amendment to order unless the same has been approved by the CIR/RD.

As an exception to the rule, the CIR/RD may authorize the immediate start of work under any Amendment to Order in the event of emergencies to avoid detriment to public service, or damage to life and/or property, or when time is of the essence. His authorization, however, is valid only up to the point where the cumulative increase in the contract cost which has not yet been fully approved by the CIR/RD does not exceed five percent (5%) of the original contract cost. Moreover, the corresponding Amendment to Order must immediately be prepared and submitted for approval to the CIR/RD. For an Amendment to Order involving a cumulative amount exceeding five percent (5%) of the original contract price, no work thereon shall be commenced unless the same has been approved by the CIR/RD. However, the said cumulative amount should not exceed ten percent (10%) of the original contract price. (Annex "D" of IRR-A as amended by OP-MO No. 176)

Payment for any work or delivery done in accordance with an Amendment to Order shall not be made unless the approval of the CIR/RD has been secured.

Suspension of Delivery

Grounds for Suspension of Delivery or Contract Implementation

The CIR/RD or his duly authorized representative may suspend the delivery or contract implementation, wholly or partly, upon his written order as recommended by the Project Proponent/end-user unit for a certain period of time, as it deems necessary due to force majeure or any fortuitous event as defined in the contract.

Corresponding Adjustments in Contract Price and/or Delivery Schedule

Appropriate adjustments shall be made in the delivery or contract schedule, or contract price, or both, and the contract shall be modified accordingly. (Annex "D" of IRR-A)

When warranted, price adjustments may be made in accordance with the guidelines previously discussed in the immediately preceding section on Amendment to Order.

Resumption of Delivery by Supplier/Manufacturer/Distributor

Work must be resumed or delivery made either upon the lifting or the expiration of the suspension order. However, if the BIR terminates the contract covered by such order, resumption of work cannot be done.

The CIR/RD or his duly authorized representative must either lift the suspension order or terminate the contract before the expiration of the suspension period. If the period of the order is allowed to expire, the supplier/manufacturer/distributor shall automatically have the right to resume work.

Participants in the Issuance of a Suspension Order

1. CIR/RD or his duly authorized representative;

2. Project Proponent/end-user;

3. DCIR-RMG/ACIR-FAS;

4. Procurement Division/Administrative Division; and

5. Supplier/manufacturer/distributor.

Methodology: Steps in the Issuance of Suspension Order

1. Project Proponent/end-user determines the existence of a force majeure or fortuitous event that will be the basis for the issuance of a suspension order.

2. Based upon the findings and recommendation of the Project Proponent/end-user, the CIR/RD issues a written order suspending the order or work, wholly or partly, for a certain period of time.

3. The supplier/manufacturer/distributor shall take all reasonable steps to minimize the costs allocable to the order or work covered by the order during the suspension.

4. Project Proponent/end-user discusses with the supplier/manufacturer/distributor any need for adjustments in the delivery or contract schedule and/or contract price, including any need to modify contract.

5. Prior to the expiration of the suspension order, the Project Proponent/end-user determines whether or not the grounds for suspension are still existent. If such grounds continue to exist, or if it is no longer practicable to complete the delivery or continue with the work, it shall cancel the delivery of the items subject of the suspension order, or terminate the work subject of the order, by written notice.

If, however, the grounds for suspension no longer exist, and completion of delivery or continuation of the work may already be done, the CIR/RD, upon recommendation of the Project Proponent/end-user, shall lift the suspension order by written notice, thereby instructing the supplier/manufacturer/distributor to proceed with the delivery or work in accordance with the amendments to the contract.

Delays in Delivery and Liquidated Damages

Rules on the Applicable Period for the Delivery of Goods or Performance of Service/s

The supplier/manufacturer/distributor must deliver the goods or perform the service/s procured within the period prescribed by the BIR, as specified in the Contract.

If delays are likely to be incurred, the supplier/manufacturer/distributor must notify the BIR in writing within fifteen (15) days before the due date of the delivery. It must state therein the cause/s and duration of the expected delay. The BIR may grant time extensions, at its discretion, if based on meritorious grounds, with or without liquidated damages.

In all cases, the request for extension should be submitted before the lapse of the original delivery date. The maximum allowable extension shall not be longer than the initial delivery period as stated in the original contract.

Liquidated Damages

Section 68 and Annex "D" of IRR-A, and Art. 2226 of the Civil Code of the Philippines provide the rules on liquidated damages.

Liquidated damages are damages agreed upon by the parties to a contract, to be paid in case of breach thereof. (Art. 2226 of the Civil Code of the Philippines)

Grounds for the Imposition of Liquidated Damages

When the supplier fails to satisfactorily deliver the goods or services under the contract within the specified delivery schedule or project implementation schedule, inclusive of duly granted time extensions, if any, the supplier shall be liable for damages for the delay and shall pay the BIR the liquidated damages, not by way of penalty, for every day of delay until such goods or services are finally delivered or performed and accepted by the BIR. The BIR need not prove that it has incurred actual damages to be entitled to liquidated damages.

Amount of Liquidated Damages that may be Imposed Upon the Supplier

The supplier must pay the BIR liquidated damages, not by way of penalty, an amount equal to one-tenth (1/10) of one percent (1%) of the cost of the delayed goods or services scheduled for delivery or performance for every day of delay. The liquidated damages will be imposed until such goods or services are finally delivered or performed and accepted by the BIR.

In no case shall the sum of liquidated damages reach ten percent (10%) of the contract amount. If it does, the contract shall automatically be rescinded by the BIR, without prejudice to other courses of action and remedies open to it. The BIR may also take over the contract or award the same to a qualified supplier through negotiation. In addition to the liquidated damages, the erring supplier's performance security shall also be forfeited.

Methodology: Steps in the Imposition of Liquidated Damages

1. Supplier/manufacturer/distributor submits a written request to the Project Proponent/end-user for an extension of the delivery or performance period, citing the reason/s for such delay.

2. CIR/RD, upon the recommendation of the Project Proponent/end-user, either approves or disapproves the request for extension. Such recommendation shall cover whether or not to impose the corresponding liquidated damages.

3. If the extension is granted, the liquidated damages may or may not be imposed and the supplier/manufacturer/distributor is informed of this in writing. The supplier/manufacturer/distributor is then asked to extend the validity of the performance bond, to conform to the extended period. ITHADC

4. If, however, the request for extension is denied, the Procurement Division/Administrative Division informs in writing the supplier/manufacturer/distributor of such denial, and ensures that the said notice or communication is received by the latter within five (5) working days from receipt of denial. In this case, the BIR imposes the liquidated damages in accordance with the provisions of the contract and the procedures outlined below.

5. If the supplier/manufacturer/distributor incurs delay and it does not request for an extension

a. Project Proponent/end-user demands in writing the delivery of the goods/performance from the supplier/manufacturer/distributor the day immediately following the delivery date for purposes of imposing the liquidated damages agreed upon by the parties.

b. Upon delivery, the Procurement Division/Administrative Division and the Inspection and Acceptance Committee record the delay in the inspection documents, noting therein the amount of the liquidated damages imposable on the supplier.

c. Upon payment, the amount of liquidated damages due is deducted from the total amount payable to the supplier, and the same shall be reflected in the Disbursement Vouchers (DVs) otherwise, if the contract provides that the liquidated damages is to be collected from securities or warranties posted by the supplier, the Project Proponent/end-user informs the official authorized to call on the securities or warranties about the delay and the corresponding liquidated damages imposable.

Other Rules and Guidelines

I. Incidental Services

Incidental Services are those services ancillary to the supply of the goods, such as transportation and insurance, installation, commissioning, provision of technical assistance, training, and other such obligations of the supplier specified in the Contract and the bidding documents. In particular, these services may refer to any of the following:

1. Performance or supervision of on-site assembly and/or start-up of the supplied goods;

2. Furnishing of tools required for assembly and/or maintenance of the supplied goods;

3. Furnishing of a detailed operations and maintenance manual for each appropriate unit of the supplied goods;

4. Performance or supervision or maintenance and/or repair of the supplied goods, for a period of time agreed by the parties, provided that this service shall not relieve the supplier of any warranty obligations under the Contract; ECHSDc

5. Training of the BIR's personnel, at the supplier's plant and/or on-site, on assembly, start-up, operation, maintenance, and/or repair of the supplied goods; and

6. Any other related services necessary for completion of the project and indicated in the contract.

The Incidental Services must be clearly specified in the Terms of Reference, and identified as separate components from the goods to be supplied or services to be rendered, so that prices indicated on the price schedule shall be entered separately, in accordance with the ITB. The cost thereof should also be indicated in the contract.

II. Spare Parts

Spare parts refer to extra components, equipment, tools, instruments or parts of machinery or apparatus that replace the ones that are damaged or worn out.

Information Required from the Supplier with Regard to Spare Parts of Goods

The supplier may be required to provide any or all of the following materials, notifications, and information pertaining to spare parts manufactured or distributed by the Supplier:

1. Such spare parts as the BIR may elect to purchase from the supplier, provided that this election shall not relieve the supplier of any warranty obligations under the contract;

2. Such spare parts that the BIR may be able to purchase from other suppliers/manufacturers but are compatible with the goods procured; and

3. In the event of termination of production of the spare parts:

a. Advance notification to the BIR of the pending termination, in sufficient time to permit the BIR to procure needed requirements; and

b. Following such termination, furnishing at no cost to the BIR the blueprints, drawings, and specifications of the spare parts, if requested.

The supplier may likewise be required to issue a Certification that spare parts, particularly those that are product-specific, shall continue to be manufactured by them within a period of time, e.g.,five (5) years, after the bidding date.

The above information shall be included in the Technical Bid.

III. Purchaser's Responsibilities

Whenever the supply of goods and related services requires that the supplier/manufacturer/distributor obtain permits, approvals, and import and other licenses from local public authorities, the BIR may, upon request by the supplier/manufacturer/distributor, assist the latter in complying with such requirements in a timely and expeditious manner. However, the supplier/manufacturer/distributor shall bear the costs of such permits and/or licenses. On the other hand, the BIR shall pay all costs involved in the performance of its responsibilities, in accordance with the contract.

IV. Prices

Contract Price

The contract price must not vary from the price quoted by the supplier in its bid. This is based on the rule that the contract, as awarded, should not differ in any material aspect from the terms stipulated in the bidding documents, considering that these terms were the basis for the comparison of bids. Otherwise, the purpose bidding process would have been defeated.

Denomination of Contract Price

For goods and services that will be supplied from within the Philippines, the price in the contract shall be denominated and payable in Philippine currency, and this shall be stated in the bidding documents.

For goods and services that will be supplied from outside the Philippines, such as in the case of goods with a high import content, i.e.,more than fifty percent (50%) of the contract cost, the BIR may disaggregate the cost components into foreign and local costs, and may denominate and pay contract prices in foreign and Philippine currencies, as stipulated in the bidding documents. For this purpose, the ITB may provide that the prices for goods and services supplied from outside the Philippines may be quoted either in Philippine Pesos or United States Dollars, at the discretion of the bidder. DTSaHI

Unless otherwise provided, payment of the contract price shall be made in Philippine Pesos. In instances where the BIR is allowed to receive bids denominated in foreign currency, the same shall be converted to Philippine currency based on the exchange rate officially prescribed for similar transactions as established by the BSP on the date of the bid opening. However, this conversion rate shall only be for purposes of bid evaluation. The contract must state the foreign currency denominated amount and the peso equivalent on the date of bid opening.

Price Escalation During Contract Implementation

Price escalation is generally not allowed. 14 For the given scope of work in the contract as awarded, the price must be considered as a fixed price, except under extraordinary circumstances as determined by the NEDA in accordance with the Civil Code of the Philippines, upon recommendation of the BIR, and upon prior approval of the GPPB. Any request for price escalation under extraordinary circumstances should be submitted by the concerned entity to the NEDA with the endorsement of the BIR. The burden of proving the occurrence of extraordinary circumstances that will allow for price escalation shall rest with the entity requesting for such escalation. NEDA shall only respond to such request after receiving the proof and the necessary documentation.

"Extraordinary circumstances" shall refer to events defined in the Civil Code of the Philippines, consistent with the guidelines issued by the GPPB. In particular, the Guidelines for Contract Price Escalation approved by the GPPB in Resolution No. 07-2004, dated July 22, 2004, provides that the term "extraordinary circumstances" shall refer to the following Articles of the Civil Code of the Philippines:

1. Article 1174, as it pertains to Ordinary Fortuitous Events or those events which ordinarily happen to which could be reasonable foreseen but are inevitable, such as, but not limited to the following: (a) typhoons; (b) thunderstorms; (c) flooding of lowly areas; and (d) vehicular accidents; provided that the following are present:

a. The cause of the extraordinary circumstances must be independent of the will of the parties;

b. The event must be either unforeseeable or unavoidable;

c. The event must be such as to render it difficult but not impossible for the supplier to fulfill his obligation in a normal manner or within the contemplation of the parties; cEASTa

d. The supplier must be free from any participation in or aggravation of the injury to the BIR; and

e. The allowance for price escalation, should an ordinary fortuitous event occur, is stipulated by the parties or the nature of the obligation requires the assumption of risk.

2. Article 1250, as it pertains to Extraordinary Inflation or Deflation, which may refer to the decrease or increase of the purchasing power of the Philippine currency which is unusual or beyond the common fluctuation in the value of said currency, in accordance with the two (2) standard deviation rule computed in accordance with the Guidelines for Contract Price Escalation, and such decrease or increase could not have been reasonably foreseen or was manifestly beyond the contemplation of the parties at the time of the establishment of the obligation.

3. Article 1680, as it enumerated Extraordinary Fortuitous Events or those events which do not usually happen, such as, but not limited to the following: (a) fire; (b) war; (c) pestilence; (d) unusual flood; (e) locusts; and (f) earthquake; provided that the circumstances before, during and after the event shall be taken into consideration.

Steps in Requesting for Approval of Claims for Price Escalation

In the review and approval of a request for price escalation, the BIR should comply with the following conditions detailed in the Guidelines for Contract Price Escalation (GPPB Resolution No. 07-2004),before the same can be acted upon:

1. Request for Price Escalation. Supplier/manufacturer/distributor shall file a written request for price escalation to the CIR/RD, through the Project Proponent/end-user, stating clearly therein the grounds for escalation.

2. Endorsement. The CIR/RD shall endorse the request for price escalation to the NEDA, through its Director-General, accompanied by several documentary requirements.

3. Two-Stage Review Process. The review process shall commence only after the NEDA has acknowledged the completeness of the request. A request for price escalation shall only be granted if it satisfies both the First Stage (Legal Parameters) and Second Stage (Technical Parameters) reviews of the NEDA.

4. Amount of Price Escalation to be Granted. The amount of escalation to be granted in the case of goods should only be the remaining amount over and above the thresholds as computed under the Second Stage review process.

5. Period and Frequency of Requests for Price Escalation. Requests for price escalation shall only be made for cost items already incurred by the supplier. No request for price escalation shall be made for prospective application. Further, price escalation shall only be granted to those items included in a specific request. Provided further, that requests for price escalation shall be made not shorter than six (6) months reckoned from the start of the contract implementation, and not shorter than six (6)-month period thereafter. For contracts wherein the duration is shorter than six (6) months, the request for contract price escalation shall be made after the completion of the contract.

6. Misrepresentation. Any misrepresentation made by the BIR or the supplier in any stage of the processing of a particular request for price escalation shall cause the automatic denial/disapproval of said claim.

7. Recommendation/Approval. The NEDA shall, upon completion of its review pursuant to the Guidelines for Contract Price Escalation, submit its recommendation to the GPPB for appropriate action. The GPPB shall then approve/act upon the request for price escalation during one of its meetings, to be attended by the CIR/RD or his duly authorized representative/s.

V. Payment

Methods in Payment for Contracts for the Procurement of Goods

The method and conditions of payment must be specified in the contract. However, the following guidelines may be considered by the BIR in preparing the contract provisions regarding payment:

1. As a general rule, no advance payment, or any payment made prior to the delivery and acceptance of goods, shall be made to any supplier/manufacturer/distributor, subject to the following exceptions:

a. When there is prior approval by the President; or

b. When the procurement is made from another government agency.

2. Partial payment of the contract price will only be allowed if the contract provides/allows for partial or staggered delivery of goods procured, and such partial payment must correspond to the value of the goods delivered and accepted;

3. Payment must only be made after the appropriate inspection and acceptance procedures, as mandated by existing government rules and regulations, have been complied with by the BIR; and

4. Payment must be made in accordance with prevailing accounting and auditing rules and regulations. STHAaD

On payments upon termination of contract

Quantum meruit means "as much as he deserves." It is an equitable doctrine, based on the concept that no one who benefits by the labor and materials of another should be unjustly enriched thereby; under these circumstances, the law implies a promise to pay a reasonable amount for the labor and materials furnished. (Black's Law Dictionary, Fifth Edition)

Recovery by quantum meruit is allowed in cases where there is no contract executed between the supplier and BIR or the contract entered into is null and void, and where the BIR benefited from the goods delivered/services rendered.

In order to provide some safeguards in the application of quantum meruit on the recovery by the supplier, the conditions set forth in COA Resolution No. 86-58 dated November 15, 1986 should be strictly followed.

Conditions for Advance Payment to a Private Supplier/Manufacturer/Distributor

In accordance with P.D. No. 1445, advance payment may be made only after prior approval of the President, and it should not exceed fifteen percent (15%) of the contract amount, unless otherwise directed by the President. Prior approval by the President is not necessary in the following cases:

a. In contracts entered into by the BIR for the following services where requirement of down payment is a standard industry practice: (i) hotel and restaurant services; (ii) use of conference/seminar and exhibit areas; and (iii) lease of office space; and

b. For procurement of goods required to address contingencies arising from natural or man-made calamities in areas where a "State of Calamity" has been declared by appropriate authorities.

In the case of item (a) above, a single advance payment not exceeding fifty percent (50%) of the contract amount is allowed. In the case of item (b) above, an advance payment not exceeding fifteen percent (15%) of the contract amount is allowed, unless otherwise directed by the President.

All progress payments should first be charged against the advance payment until the latter has been fully exhausted, unless otherwise approved by the President. (Memorandum Order No. 172 dated 19 May 2005)

Timeline for Payments

Payments must be made promptly by the BIR, but in no case later than forty-five (45) days after submission of the following documents which should be attached to the ObR and DV:

A. Supplier/manufacturer/distributor

a) billing statement/invoice;

b) delivery receipt/s;

c) other requirements stipulated in the contract.

B. Project Proponent/end-user

a) request for inspection;

b) technical inspection and acceptance report;

c) certificate of performance for services rendered;

d) certificate of operationability;

e) other certifications as required in the contract.

C. Inspection and Acceptance Committee

a) inspection and acceptance report

Such payment shall be subject to all accounting and auditing requirements.

Currency for Payments

As a general rule, payment must be made in Philippine currency. 15

For goods and services that will be supplied from within the Philippines, the price in the contract shall be denominated and payable in Philippine currency, and this shall be stated in the bidding documents.

For goods and services that will be supplied from outside the Philippines, such as in the case of goods with a high import content, i.e.,more than fifty percent (50%) of the contract cost, the BIR may disaggregate the cost components into foreign and local costs, and may denominate and pay contract prices in foreign and Philippine currencies, as stipulated in the bidding documents.

If a foreign currency denominated contract is payable in Philippine currency, the contract may contain a provision allowing the BSP reference rate at the time of payment or on the date of opening of the Letter of Credit to be used to convert the foreign currency denominated amount to Philippine Pesos, but the same should in no case exceed the ABC. This will be the basis for the payment in pesos. Furthermore, if the amount payable in Philippine currency is greater than the Peso value of the contract price, such increase must not be more than the allowable variance mandated by GPPB guidelines, reckoned as a percentage of the peso amount as of bid opening date. Projected exchange rate fluctuations based on BSP forecasts must be factored in by the BIR in determining the ABC, to ensure that the project cost reflects currency values at the time of project implementation.

Incentive Bonus

No incentive bonus, in whatever form or for whatever purpose, must be allowed. 16(Section 42.4 of IRR-A)

VI. Taxes and Duties

Responsibility for the Payment of Taxes and Other Duties

All supplier/manufacturer/distributor must be entirely responsible for all taxes, stamp duties, license fees, other related expenses, and other such levies imposed up to the delivery of the goods to the BIR Project Site as specified in the contract.

VII. Subcontracts

Generally, a supplier may be allowed to subcontract a portion of the contract or project. However, the supplier should not be allowed to subcontract a material or significant portion of the contract or project, which portion must not exceed twenty percent (20%) of the total project cost. The bidding documents must specify what are considered as significant/material component/s of the project.

All subcontracting arrangements must be disclosed at the time of bidding, and subcontractors must be identified in the bid submitted by the supplier.

Any subcontracting arrangements made during project implementation and not disclosed at the time of the bidding shall not be allowed. The subcontracting arrangement shall not relieve the supplier of any liability or obligation under the contract. Moreover, subcontractors are obliged to comply with the provisions of the contract and shall be jointly and severally liable with the principal supplier, in case of breach thereof, in so far as the portion of the contract subcontracted to it is concerned. AHDTIE

Subcontractors are also bound by the same nationality requirement that applies to the principal suppliers.

VIII.  Standards

Standards to be Applied in Determining the Quality of the Goods Supplied

The goods supplied under the contract must conform to the standards mentioned in the technical specifications, which must preferably be Philippine standards, or standards specified by the Bureau of Product Standards of the DTI. If there is no Philippine standard applicable, the goods must conform to the authoritative standards appropriate to the goods' country of origin. Such standards must be the latest issued by the concerned institution.

IX. Packaging

Manner of Packaging to be Followed by the Supplier

The supplier must provide such packaging of the goods as is required to prevent their damage or deterioration during transit to their final destination, as indicated in the contract and in accordance with existing industry standards. The packaging must be sufficient to withstand, without limitation, rough handling during transit and exposure to extreme temperatures, salt and precipitation during transit, and open storage. Packaging case size and weights must take into consideration, where appropriate, the distance and remoteness of the goods' final destination and the absence of heavy handling facilities at all points in transit.

The packaging, marking, and documentation within and outside the packages must comply strictly with such special requirements as must be expressly provided for in the contract, including additional requirements, if any, and in any subsequent instructions ordered by the BIR. Moreover, the outer packaging must contain a "Packing List" which must reflect the actual contents of the package.

X. Insurance

Extent of Insurance Coverage for Goods

The goods procured must be fully insured by the supplier in a freely convertible currency against loss or damage incidental to their manufacture or acquisition, transportation, storage, and delivery in the manner specified in the Contract.

XI. Transportation

Responsibility for the Transportation, Insurance and Duties of Goods Procured

The contract must contain provisions on who will bear the cost of transportation and insurance (as well as customs duties in case of importation).For this purpose, the specific Incoterm must be used and identified in the contract. The Incoterm also defines the point at which the risk of loss or damage to the goods passes from the seller to the buyer. The BIR shall identify which terms are most responsive to the requirements of the project.

If the supplier is required under the Contract to deliver the goods CIF, CIP or DDP, it shall arrange and pay for the transport of the goods to the port of destination or such other named place of destination in the Philippines, as shall be specified in the contract. It will also have to pay for the cost that will be incurred in the transport of these goods, the cost to be included in the contract price.

If the supplier is required under the contract to transport the Goods to a specified place of destination within the Philippines, defined as the Project Site, it will arrange and pay for the transport of the goods to such place of destination. It must also pay for insurance and storage, and related costs. These costs must be included in the Contract Price.

The BIR is encouraged to enlist the assistance of an accredited customs broker or forwarder in all importation.

Rules on Transportation and Insurance in Foreign-Assisted Projects

Bidding documents should permit suppliers to arrange transportation and insurance from any eligible source. Bidding documents should state the types and terms of insurance to be provided by the bidder. The indemnity payable under transportation insurance should be at least one hundred ten percent (110%) of the contract amount in the currency of the contract or in a freely convertible currency to enable prompt replacement of lost or damaged goods.

If the BIR wishes to reserve transportation and insurance for the import of goods to national companies or other designated sources, bidders should be asked to quote FCA (named place) or CPT (named place of destination) prices in addition to the CIP (place of destination) price. Selection of the lowest evaluated bid should be on the basis of the CIP (place of destination) price, but the BIR may sign the contract on FCA or CPT terms and make its own arrangement for transportation and/or insurance. Under such circumstances, the contract should be limited to the FCA or CPT cost. If the BIR does not wish to obtain insurance coverage in the market, evidence should be provided to the IFI that resources are readily available for prompt payment in a freely convertible currency of the indemnities required to replace lost or damaged goods.

XII. Inspection and Tests

Scope of the BIR's Right to Inspect and Test the Goods Procured

The BIR or its representative has the right to inspect and/or to test the goods to confirm their conformity to the contract specifications at no extra cost to it. The bidding documents and the contract must specify what inspections and tests are required by the BIR, and where these are to be conducted. The BIR must notify the supplier in writing, in a timely manner, of the identity of any representatives retained for these purposes.

The Project Proponent/end-user must request in writing for the inspection of goods delivered or services rendered with the Inspection and Acceptance Committee of the BIR within twenty-four (24) hours, and the latter shall complete the conduct of inspection as soon as practicable depending on the nature of the goods/services to be inspected.

Pertinent COA regulations on technical inspection and acceptance procedures shall be considered in the conduct of such inspection and acceptance by the BIR's authorized technical inspectors. HSIADc

The inspections and tests may be conducted on the premises of the supplier or its subcontractor(s),at point of delivery, and/or at the goods' final destination. If conducted on the premises of the supplier or its subcontractor(s),all reasonable facilities and assistance, including access to drawings and production data, must be provided by the supplier to the inspectors at no charge to the BIR.

The BIR must bear its own costs and expenses incurred in connection with its attendance at inspections, including, but not limited to, all traveling and board and lodging expenses.

The BIR may require the supplier to carry out any test and/or inspection not required by the contract but deemed necessary to verify that the characteristics and performance of the goods comply with the technical specifications, codes and standards under the contract. However, the reasonable costs and expenses incurred by the supplier in the carrying out of such test and/or inspection will be added to the contract price. Furthermore, if such test and/or inspection impedes the progress of manufacturing and/or the supplier's performance of its other obligations under the contract, due allowance will be made in respect of the delivery dates and completion dates and the other obligations so affected. These tests shall be conducted by a government testing laboratory, or, where there is none for the particular item being procured, in any testing laboratory accredited by the DTI. The supplier must provide the BIR with a report of the results of any such test and/or inspection. These results will be conclusive of the quality of the items and not subject to further dispute between the parties.

The BIR may reject any goods or any part thereof that fail to pass any test and/or inspection or do not conform to the specifications. The supplier should either rectify or replace such rejected goods or parts thereof or make alterations necessary to meet the specifications at no cost to the BIR, and shall repeat the test and/or inspection, at no cost to the BIR, upon giving a notice pursuant to the contract. DaEATc

The supplier should agree in the contract that neither the execution of a test and/or inspection of the goods or any part thereof, nor the attendance by the BIR or its representative, shall release the supplier from any warranties or other obligations under the contract.

XIII.  Intellectual Property Rights

The BIR should not be liable for any infringement of intellectual property rights arising from the use of the goods procured. In case there are third-party claims of such infringement of patent, trademark, or industrial design rights, the supplier must hold the BIR free and harmless against such claims. These terms should be expressed in the contract.

XIV.  Limitations of Liability

Extent of Supplier's Liability for Damages

Except in cases of criminal negligence or willful misconduct, and in the case of infringement of intellectual property rights, and unless otherwise specified in the contract, the supplier is generally not liable to the BIR, whether in contract, tort or otherwise, for any indirect or consequential loss or damage, loss of use, loss of production, or loss of profits or interest costs, provided that this exclusion does not apply to any obligation of the supplier to pay liquidated damages to the BIR. This is without prejudice to any other liability, penalty or appropriate sanction that may be imposed upon the supplier under R.A. 9184 and other applicable laws.

XV. Termination for Default

Grounds for Termination due to Default

Any of the following conditions shall constitute as a ground for termination of the contract for default:

1. There being no force majeure, the supplier fails to deliver any or all of the goods within the period(s) specified in the contract, or within any extension thereof granted by the BIR pursuant to a request made by the supplier prior to the delay, and such failure amounts to at least ten percent (10%) of the contract price;

2. As a result of force majeure, the supplier is unable to deliver or perform any or all of the goods or services, amounting to at least ten percent (10%) of the contract price, for a period of not less than sixty (60) calendar days after the receipt of the notice from the BIR stating that the circumstance of force majeure is deemed to have ceased;

3. The supplier fails to perform any other obligation(s) under the contract; or

4. The supplier, in the judgment of the BIR, has engaged in corrupt, fraudulent, collusive or coercive practices in competing for or in executing the contract.

Termination of a contract for default is without prejudice to other remedies available to the BIR for breach of contract, such as payment of liquidated and other damages, if there are grounds for the latter.

If the contract is not wholly terminated, the supplier shall continue to deliver the remaining goods or to perform the remaining services contracted.

Procurement in Case of Contract Termination due to Default

If the BIR terminates the contract in whole or in part, due to default, it may procure from third parties, through the appropriate alternative method of procurement of goods or services similar to those undelivered. The supplier that defaulted will be liable to the BIR for any excess costs for such similar goods or services.

XVI.  Termination for Insolvency

Remedy of the BIR When a Supplier is Unable to Perform his Obligations due to Bankruptcy or Insolvency

The BIR may at any time terminate the contract by giving written notice to the supplier, if the supplier is declared bankrupt or insolvent as determined with finality by a court of competent jurisdiction. In this event, termination will be without compensation to the supplier, provided that such termination will not prejudice or affect any right of action or remedy which has accrued or will accrue thereafter to the BIR and/or the supplier.

XVII. Termination for Convenience

The BIR, by written notice sent to the supplier, may terminate the contract, in whole or in part, at any time for its convenience. The notice of termination shall specify that the termination is for the BIR's convenience, the extent to which performance of the supplier under the contract is terminated, and the date upon which such termination becomes effective.

Grounds for Terminating a Contract for Convenience

Any of the following circumstances may constitute sufficient grounds to terminate a contract for convenience:

1. If physical and economic conditions have significantly changed so as to render the project no longer economically, financially or technically feasible, as determined by the CIR/RD;

2. The CIR/RD has determined the existence of conditions that make project implementation impractical and/or unnecessary, such as, but not limited to, fortuitous event/s, changes in laws and government policies;

3. Funding for the project has been withheld or reduced by higher authorities through no fault of the BIR; or

4. Any circumstance analogous to the foregoing.

Refer also to the Guidelines on Termination of Contracts approved by the GPPB in Resolution No. 018-2004 dated December 22, 2004.

Effect of Termination for Convenience on Pending Deliveries

The goods that are complete and ready for shipment within thirty (30) days after the supplier's receipt of notice of termination shall be accepted by the BIR at the contract terms and prices. For the remaining goods, the BIR may elect:

1. To have any portion completed and delivered at the contract terms and prices; and/or

2. To cancel the remainder and pay to the supplier an agreed amount for partially completed goods and services and for materials and parts previously procured by the supplier.

If the Supplier suffers loss in its initial performance of the terminated contract, such as purchase of raw materials for Goods specially manufactured for the BIR which cannot be sold in the open market, it shall be allowed to recover partially from the contract, on a quantum meruit basis. The fact of loss must be established before recovery may be made.

Procedures for Contract Termination

The following steps are undertaken in the termination of contracts:

1. Upon receipt of a written report of acts or causes which may constitute grounds for contract termination, or upon its own initiative, the Project Proponent/end-user shall verify the existence of such grounds and cause the execution of a Verified Report.

2. The CIR/RD shall issue a written notice to terminate the contract upon recommendation of the Project Proponent/end-user. The written notice shall include the following information: grounds for termination, extent of termination, action to be taken by the Supplier/Contractor and special instructions to the Project Proponent/end-user.

3. Upon receipt of the Notice of Termination, the Supplier/Contractor shall submit to the CIR/RD a verified position paper stating why the contract should not be terminated.

4. The CIR/RD shall decide whether or not to terminate the contract upon receipt of the verified position paper. He may create a Contract Termination Review Committee (CTRC) to assist in the discharge of his functions. All decisions recommended by the CTRC shall be subject to the approval of the CIR/RD. The CIR/RD shall serve a written notice to the Supplier/Contractor of his decision.

5. If the BIR terminates the contract due to default, insolvency, or for cause, it may enter into a negotiated procurement pursuant to Section 53 (c) of R.A. 9184 and its IRR-A.

6. In case of termination for convenience in contracts for goods, the goods that have been performed or are ready for delivery within thirty (30) calendar days after the Supplier's receipt of Notice to Terminate shall be accepted by the BIR at the contract terms and prices. For goods not yet performed or ready for delivery, it may elect: to have any portion delivered or performed and paid at the contract terms and prices; and/or to cancel the remainder and pay to the Supplier an agreed amount for partially completed or performed goods and for materials and parts previously procured by the Supplier.

If the Supplier suffers loss in its initial performance of the terminated contract, such as purchase of raw materials for goods specially manufactured for the BIR which cannot be sold in open market, it shall be allowed to recover partially from the contract, on a quantum meruit basis. Before recovery may be made, the fact of loss must be established under oath by the Supplier to the satisfaction of the BIR before recovery may be made.

7. In case of contract termination by the Contractor, the Contractor must serve a written notice to the BIR at least thirty (30) days prior to intended date of termination. The Contract is deemed terminated if the said notice is not acted upon by the BIR within the thirty-day period. IDSaTE

Please refer to the Guidelines on Termination of Contracts approved by the GPPB in Resolution No. 018-2004, dated December 22, 2004.

XVIII. Assignment

As a general rule, the supplier may not assign the contract, or any of its rights or obligations arising from the contract, to a third party, except with the CIR/RD's prior written consent.

Assignment of contractual obligations or the contract itself may generally not be done because this will enable a non-bidder to become a party to the contract. This arrangement will make a mockery of the public bidding process, so that one who was not declared eligible to bid and did not participate in the bidding process will end up as the contract awardee, although indirectly.

Moreover, assignors will only add to the number of parties that the BIR has to deal with, thereby complicating contract implementation. This could also be a problem if litigation becomes necessary to enforce the contract.

XIX.  Blacklisting

The blacklisting of suppliers must conform to the GPPB Guidelines issued for this purpose. As such, reference should be made to the Uniform Guidelines for Blacklisting of Manufacturers, Suppliers, Distributors, Contractors and Consultants, approved by the GPPB in Resolution 09-2004 dated August 20, 2004.

Warranty

A warranty is required in the procurement of goods to ensure that the supplier, manufacturer or distributor, as the case may be, will correct any manufacturing defect. The rules regarding warranty for goods is provided under Section 62.1 of IRR-A.

Warranty Requirement for Goods

For the procurement of goods, a warranty shall be required from the contract awardee for a minimum period of three (3) months, in the case of supplies, and one (1) year, in the case of equipment, after the acceptance by the BIR of the goods and/or equipment.

The obligation for the warranty shall be covered by either retention money in an amount equivalent to at least ten percent (10%) of every progress payment, or a special bank guarantee equivalent to at least ten percent (10%) of the total contract price. The special bank guarantee must be contract specific, that is, it shall be executed for the special purpose of covering the warranty for the subject procurement contract. If the warranty period is longer than the minimum period of three (3) months for supplies and one (1) year for equipment, the period beyond the minimum period need not be covered by retention money or special bank guarantee. The warranty security shall be returned only after the lapse of the said warranty period provided, that the goods supplied are free from patent and latent defects and all the conditions imposed under the contract have been fully met.

Defective Goods

Goods are considered defective when they are "unfit for the use for which it is intended," or "its fitness for such use is diminished to such an extent that, had the vendee been aware thereof, he would not have acquired it or would have given a lower price for it ...." (Article 1561 of the Civil Code of the Philippines).A defect can either be:

1. A patent defect, which is one that is apparent to the buyer on normal observation. It is an apparent or obvious defect. For example, a ballpen that does not write is patently defective.

2. A latent defect, which is one that is not apparent to the buyer by reasonable observation. A latent defect is "hidden" or one that is not immediately determinable. For example, a ballpen that writes .75 kilometers instead of the expected 1.5 kilometers, has a latent defect.

Both latent and patent defects are covered by the warranty expressly required in R.A. 9184 and its IRR-A. This means that the BIR may proceed against the warranty security whenever any of these defects are determined to be present in the goods procured, and the same are determined within the period covered by the warranty. However, wear and tear due to normal usage of the goods is excluded from the coverage of the warranty.

The BIR, through the Procurement Division in coordination with the project proponent/end-user, should promptly notify the supplier in writing of any claims arising under the warranty. Upon receipt of such notice, the supplier should, within the period specified in the contract and with all reasonable speed, repair or replace the defective goods or parts thereof, without costs to the BIR. If the supplier, having been notified, fails to remedy the defects within the period specified in the contract, the BIR may then proceed to call upon the warranty security, without prejudice to any other rights which it may have against the supplier under the contract and under the applicable law.

Instances Where Partial Release or Reduction of the Required Warranty Security may be Done by the BIR

A partial release or reduction of the warranty security may be allowed in the case of partial deliveries. In this case, the warranty periods will vary among the various lots. The warranty for goods delivered ahead will lapse earlier than the succeeding deliveries. The retention money or a portion of the special bank guarantee covering the warranty for goods received or delivered ahead may thus be released. The effect is that there will be partial releases of the retention money or special bank guarantee to coincide with the lapse of the warranty period for each delivered lot.

SECTION 7. General Procurement Activities and Timelines for the Procurement of Goods and Services. —

ANNEX A

Sample Forms for Goods and Services ^*

ANNEX B

GPPB Resolutions, Circulars and Memorandum ^*

 

GENERAL FLOW CHART OF PROCEDURES FOR THE PROCUREMENT OF GOODS AND SERVICES

 

 

PERIOD OF ACTION OF PROCUREMENT ACTIVITIES

 

NOTE: The periods indicated in the boxes are the maximum periods to be observed from the day of advertisement and/or 1st day of the Invitation of Apply for Eligibility and to Bid up to opening of bids.

 

			EARLIEST POSSIBLE TIME
Stage	Activities	Deadline	Goods	Civil Works	Consulting
					Services
1	Advertisement/posting		7 cd	7 cd	7 cd
	of IAEB
2	Letter of Intent	Within 7 cd from	na	7 cd	7 cd
		the last day of
		posting
3	Eligibility Check for		Refer to stage 6	1 cd	3 cd (1 cd for
	civil works and				eligibility, 1 cd for
	consulting services/				shortlisting and 1
	Shortlisting for				cd for notification)
	consulting services
	Issuance and	Available for	Refer to stage 1	7 cd	7 cd
	availability of bidding	at least 7 cd
	documents	from the date of
		the issuance
4	Pre-bid conference	12 days before	1 cd (12 days	1 cd (12 days	1 cd (12 days
	(Note: for goods, the	the deadline of	before the	before the	before the
	pre-bid conference	submission of	submission of	submission of	submission of
	is conducted prior to	bids	bids)	bids)	bids)
	eligibility check.)
	Request for	10 days before
	clarification	deadline of
		submission
	Supplemental/Bid	7 days before
	bulletin	the deadline of
		submission of
		bids
6 n	Submission and		1 cd	1 cd	1 cd
	Opening of Bids
7	Bid Evaluation		1 cd	1 cd	1 cd + 1 cd for
					approval of
					ranking
8	Notification for		n/a	n/a	1 cd
	Negotiation
9	Negotiation		n/a	n/a	1 cd
10	Post Qualification		1 cd	1 cd	1 cd
11	Approval of		2 cd (1 cd	2 cd (1 cd	2 cd (1 cd
	Resolution/Issuance		for BAC	for BAC	for BAC
	of Notice of Award		Resolution	Resolution	Resolution
			and 1 cd for	and 1 cd for	and 1 cd for
			issuance of	issuance of	issuance of
			NOA)	NOA)	NOA)
12	Contract Preparation		2 cd (1 cd	2 cd (1 cd	2 cd (1 cd
	and Signing		for contract	for contract	for contract
			preparation	preparation	preparation
			and 1 cd	and 1 cd	and 1 cd
			for contract	for contract	for contract
			signing)	signing)	signing)
13	Approval of Contract		1 cd	1 cd	1 cd
	by Higher Authority
14	Issuance of Notice		1 cd	1 cd	1 cd
	to Proceed
Total Estimated Earliest Possible Time	28 cd	43 cd	48 cd

 

NOTE: The procurement process from the opening of bids up to the award of contract shall not exceed three (3) months, or a shorter period to be determined by the procuring entity concerned. All members of the BAC shall be on a "jury duty" type of assignment until the Notice of Award is issued by the head of procuring entity in order to complete the entire procurement process at the earliest possible time.

 

Footnotes

1. FAPs guidelines generally require the Procuring Entity to specify internationally accepted standards such as those issued by the International Standards Organization with which the equipment or materials or workmanship should comply, except that where such international standards are unavailable or are inappropriate, national standards may be specified. For this reason, the Procuring Entities should refer to the pertinent provisions of the applicable standard bidding documents for the project. For example, although specifications should be based on relevant characteristics and/or performance requirements, and references to brand names, catalog numbers, or similar classifications should be avoided, in certain instances, it may be necessary to quote a brand name or catalog number of a particular manufacturer to clarify an otherwise incomplete specification, the words "or its equivalent" should be added after such reference. The specifications shall then permit the acceptance of offers for goods which have similar characteristics and which provide performance at least substantially equivalent to those specified.

2. For FAPs, reference to the standard bidding documents for the project should be made to determine the applicability of the ABC.

3. Reimbursable cost contracts are acceptable to IFIs only in exceptional circumstances such as conditions of high risk or where costs cannot be determined in advanced with sufficient accuracy. Such contracts should include appropriate incentives to limit costs.

4. FAPs may have additional publication requirements. For this reason, reference should be made to the appropriate standard bidding documents for the project.

5. Generally, FAPs do not utilize the eligibility check system of the GOP, unless so required by the pertinent IFI/bilateral lending agency. Moreover, pre-qualification may be utilized for circumstances in which the high costs of preparing detailed bids could discourage competition such as custom designed equipment, industrial plant, specialized services, some complex information and technology, and contracts to be let under turnkey, design and build, or management contracting.

6. For FAPs, reference should be made to the appropriate standard bidding documents for the project to determine the appropriate qualification requirements of a bidder. aTcIAS

7. For FAPs, any firm may bid independently or in joint venture confirming joint and several liability, either with domestic firms and/or with foreign firms, but the IFIs generally do not accept conditions of bidding which require mandatory joint ventures or other forms of mandatory association between firms.

8. Under FAPs, to foster competition, IFIs permit firms and individuals from eligible countries to offer goods, works, and services. Any conditions for participation should be limited to those that are essential to ensure the firm's capability to fulfill the contract in question. In connection with any contract to be financed in whole or in part from an IFI loan, the IFI generally does not permit the BIR to deny pre- or post-qualification to a firm for reasons unrelated to its capability and resources to successfully perform the contract; nor does it permit the BIR to disqualify any bidder for such reasons. Consequently, procuring entities should carry out due diligence on the technical and financial qualifications of bidders to be assured of their capabilities in relation to the specific contract.

9. The eligibility and bid opening methodology may vary for FAPs. Reference should be made to the appropriate standard bidding documents for the project.

10. For FAPs, the rules on evaluation will depend on the standard bidding documents for the project.

11. The experience requirement may vary for FAPs. As such, reference should be made to the appropriate standard bidding documents for the project.

12. For FAPs, reference should be made to the appropriate standard bidding documents for the project in order to determine the applicable amount and form of the performance security.

13. For FAPs, different rules of procedures apply for procurement of commodities, because the market prices of commodities — such as grain, animal feed, cooking oil, fuel, fertilizer and metals — fluctuate depending upon the demand and supply at any particular time. Many are quoted in established commodity markets.

14. For FAPs, the bidding documents would have to state whether the bid prices will be fixed or whether price adjustments would be made to reflect any changes (upwards or downwards) in major cost components of the contract, such as labor, equipment, materials, and fuel. Price adjustment provisions are usually not necessary in simple contracts involving completion of works generally within twelve (12) months in the case of JBIC, or eighteen (18) months in the case of World Bank-funded projects, but should be included in contracts which extend beyond eighteen (18) months. Prices may be adjusted by the use of a prescribed formula (or formulae) which breaks down the total price into components that are adjusted by price indices specified for each component or, alternatively, on the basis of documentary evidence (including actual invoices) provided by the contractor. The use of the formula method of price adjustment is preferable to that of documentary evidence. The method to be used, the formula (if applicable),and the base date for application shall be clearly defined in the bidding documents. If the payment currency is different from the source of the input and corresponding index, a correction factor shall be applied in the formula, to avoid incorrect adjustment. 

15. For FAPs, Payment of the contract price should be made in the currency or currencies in which the bid price is expressed in the bid of the successful bidder. When the bid price is required to be stated in local currency but the bidder has requested payment in foreign currencies expressed as a percentage of the bid price, the exchange rates to be used for purposes of payments should be those specified by the bidder in the bid, so as to ensure that the value of the foreign currency portions of the bid is maintained without any loss or gain. At any rate, where the price is to be paid, wholly or partly, in a currency or currencies other than the currency of the bid, the exchange risk should not be borne by the supplier or contractor and, to this end, the contract should provide that amounts payable in a currency or currencies other than that of the bid should be calculated at the rates of exchange between these currencies specified for the purpose in the bidding documents.

16. For FAPs, provision may be made for a bonus to be paid to suppliers or contractors for completion of works or delivery of goods ahead of the times specified in the contract when such earlier completion or delivery would be of benefit to the Bureau of Internal Revenue. The option to grant incentive bonus is given by the IFIs to the Bureau of Internal Revenue. HIACEa

 

May 2007

TABLE OF CONTENTS

 

ABBREVIATIONS AND ACRONYMS
SECTION 1:  INTRODUCTION
SCOPE OF VOLUME
SECTION 2:  PREPARATIONS FOR THE PROCUREMENT OF INFRASTRUCTURE PROJECTS
	PREPARATIONS FOR THE PROCUREMENT OF INFRASTRUCTURE PROTECTS
	PROCUREMENT PLANNING
		Purpose of Procurement Planning
		Importance of Detailed Engineering
		Feasibility or Preliminary Engineering Study
		Activities Covered by Detailed Engineering
		Considerations on Setting the Standards and Technical Specifications
		Approved Budget for the Contract (ABC)
		Factors to Consider in Determining the ABC
	PREPARATION OF THE BIDDING DOCUMENTS
		Bidding Documents
		Contents of Bidding Documents
		Other Practices that the BIR may Observe to Ensure Successful Procurement
		Participants in the Preparation of the Bidding Documents
		Schedule for the Preparation of Bidding Documents
		Various Types and Sizes of Contracts that may be Provided in the Bidding Documents
		Bid Security
		Forms of Bid Security and the Corresponding Amounts Required
		Period of Validity of Bids
		Denomination of Bid Security
		Condition for the Return of Bid Securities
	CONDUCT OF THE PRE-PROCUREMENT CONFERENCE
		Pre-Procurement Conference
		Importance and Purpose of a Pre-Procurement Conference
		Schedule for the Conduct of a Pre-Procurement Conference
		Participants of a Pre-Procurement Conference
SECTION 3:  PROCEDURES FOR THE PROCUREMENT OF INFRASTRUCTURE PROJECTS THROUGH
	COMPETITIVE BIDDING
	STEP 1 ADVERTISEMENT AND POSTING OF IAEB
		Contents of an IAEB
		Posting of IAEB
		Methodology: Steps in the Advertisement and Posting of IAEBs
	STEP 2 ACCEPTANCE OF LOIs, ISSUANCE OF ELIGIBILITY
	DOCUMENTS, AND CONDUCT OF ELIGIBILITY CHECK
		Submission of LOI and Application for Eligibility
		Schedule for Release of Eligibility Forms
		If Only One Bidder Submits a LOI
		If no Prospective Bidder Submits a LOI
		Eligibility check
		Determining the Eligibility of the Prospective Bidder
		Eligibility Requirements for Public Bidding of Infrastructure Projects
		Minimum Eligibility Requirements
		Purpose of Requiring an NFCC, a Credit line or a Certificate of a Hold-out on Cash Deposit that is
		Participation of Entities with a Majority of Foreign Ownership in the Bidding Process
		Submission of Eligibility Requirements
		Duration of Eligibility Check/Screening
		Participants in the Receipt and Opening of the Eligibility Envelope
		Methodology: Steps in the Opening of Eligibility Envelope
		Recourse of an Absentee Bidder Found Ineligible
		Contents of a Verified Position Paper
		Resolution of Protests
		If Questions/Doubts Have Been Raised About the Eligibility of a Prospective Bidder After it had been
		If Only One Prospective Bidder is Declared Eligible
		Disqualification
		If no prospective Bidder is Declared Eligible
		If Only One Bidder Passes the Preliminary Examination of Bids
		If a Bidder Fails to Comply with the Technical and Financial Requirements of the Bid
		Withdrawal of Bid
	STEP 3 ISSUANCE OF BIDDING DOCUMENTS
		Schedule for Availability of Bidding Documents
		Cost of Bidding Documents
		Responsibilities of an Eligible Bidder with Regard to the Bidding Documents
	STEP 4 CONDUCT OF PRE-BID CONFERENCE AND ISSUANCE OF SUPPLEMENTAL/BID BULLETINS
		Pre-Bid Conference
		Schedule for Conduct of a Pre-Bid Conference
		Participants of a Pre-Bid Conference
		Conduct of Participants During the Pre-Bid Conference and Other Stages of the Procurement Process
		Methodology: Steps in the Conduct of Pre-bid Conference
		Issuance of Supplemental/Bid Bulletins
		Participants in the Issuance of the Supplemental/Bid Bulletin
		Methodology: Steps in the Issuance of Supplemental/Bid Bulletin
	STEP 5 SUBMISSION, RECEIPT AND OPENING OF TECHNICAL AND FINANCIAL ENVELOPES
		Bid
		Contents of the Technical Proposal
		Contents of the Financial Proposal
		Schedule for Submission of Bids (Technical and Financial)
		If Only One Eligible Bidder Submits a Bid Envelope
		If No Eligible Bidder Submits a Bid
		Participants in the Receipt, Opening and Preliminary Examination of the Bids
		Methodology: Steps in the Receipt, Opening and Preliminarily Examination of Bids
		Withdrawal of Bids
		Failure to Comply with the Technical and Financial Requirements of the Bid
		Allowable Extent of Subcontract Work
		Schedule for Notification of Subcontracting Arrangements
	STEP 6 BID EVALUATION
		Purpose of Bid Evaluation
		Timeline for Bid Evaluation
		Participants in Bid Evaluation
		Methodology: Steps in the Bid Evaluation Process
		If No Bid Complies with all Bid Requirements
	STEP 7 POST-QUALIFICATION
		Post-qualification
		Post-qualification Requirements
		Timeline for the Conduct of Post-qualification
		Participants in the Conduct of Post-qualification
		Methodology: Steps in the Conduct of Post-qualification
		Grounds for the Disqualification of Bidders
		If the Bidder with the LCB Fails Post-qualification
		If All Qualified Bidders Fall Post-qualification
		Reservation Clause
		Rights to Reject Bids, Declare a Failure of Bidding, or not Award the Contract in any of the
		Declaration of Failure of Bidding
	STEP 8 CONTRACT AWARD
		Rule on Contract Award
		Timeline for Contract Award
		Participants in the Award of Contract
		Methodology: Steps in the Contract Award
		If the Bidder Being Considered for Award Does not Accept the NOA
		Performance Security
		Schedule for Posting of Performance Security by the Bidder with the LCRB
		Forms of Performance Security and the Corresponding Amounts Required
		Forms of Performance Security to be submitted by the winning bidder
		Changes in the amount of Performance Security in Case of Amendments in the Contract Price
		Parties Involved in the Posting of the Performance Security
		Methodology: Steps in the Posting of the Performance Security
		Schedule for Release of Performance Security
	STEP 9 CONTRACT SIGNING AND APPROVAL
		Timelines for Entering into a Contract
		Timelines for Contract Approval by Higher Authorities
		Timeline for Issuance of NTP
		Contract Effectivity
		Participants in Contract Signing and Approval and Issuance of the NTP
		Contract Documents
		Methodology: Steps in Contract Preparation, Signing and Approval
		Rules Governing the Review and Approval of Government Contracts
		If the Bidder with the LCRB or SCRB Refuses or is Unable, Through its Own Fault, to Post the Performance
SECTION 4: PROCEDURES FOR THE PROCUREMENT OF INFRASTRUCTURE PROJECTS THROUGH
	THE ALTERNATIVE METHODS FOR THE PROCUREMENT OF INFRASTRUCTURE PROJECTS
	NEGOTIATED PROCUREMENT
		Conditions for Negotiated Procurement
		Contractors to be Invited for Negotiations
		Participants in Negotiated Procurement
		Methodology: Steps in the Conduct of Negotiated Procurement
SECTION 5:  GUIDELINES ON CONTRACT IMPLEMENTATION FOR INFRASTRUCTURE PROJECTS
	CONTRACT IMPLEMENTATION FOR THE PROCUREMENT OF INFRASTRUCTURE PROJECTS
		Contract Effectivity
		BIR's Responsibilities
		Subcontracting
		Inspection and Tests
		Dayworks
		The Use of Accredited Testing Laboratories
		Evaluation of Contractor's Performance
		Measurement of Works
		Impact of Infrastructure Projects on Traffic and Adjoining Properties
		Responsibilities of the Contractor as Far as the Project Site
		Materials and Equipment Paid for by the BIR
	CONTRACT PRICE AND PAYMENT
		Price Escalation During Contract Implementation
		Methodology: Steps in Requesting for Approval of Claims for Price Escalation
		Denomination of Contract Prices
		Method of Payment for Works in the Contract
		Manner of Payments
		Request for Advance Payment for Mobilization
		Recovery of Advance Payment
		Incentive Bonus
		Progress Payment
		Retention Money
		Final Payment
		On payments upon termination of contract
		Timeline for Payments
	VARIATION ORDERS
		Issuance of Variation Order
		Conditions Under Which a Contractor May Start Work under Variation Orders and Receive Payments
		Rules Governing Price Adjustments Due to a Variation
		Participants in the Issuance of a Variation Order
		Methodology: Steps in the Issuance of Variation Order
	SUSPENSION OF WORK
		Conditions for the Suspension of Work by the BIR
		Conditions for the Suspension of Work by the Contractor
		Participants in the Issuance of a Suspension Order
		Methodology: Steps in the Issuance of Suspension Order
	CONTRACT TIME EXTENSION
		Conditions for Contract Time Extension
		Special Circumstances to be Considered for Contract Time Extension
		Circumstances When the BIR can Automatically Disapprove a Request for Contract Extension
		Methodology: Steps in the Request for Time Extension
	DELAYS IN WORK COMPLETION AND LIQUIDATED DAMAGES
		Rule on the Applicable Period for the Completion of Work
		Liquidated Damages
		Grounds for the Imposition of Liquidated Damages
		Formula for Computing Liquidated Damages
		Methodology: Steps in the Imposition of Liquidated Damages
	CONTRACT TERMINATION FOR DEFAULT, UNLAWFUL ACTS OR INSOLVENCY
		Conditions for Contract Termination for Default by the BIR
		Grounds for Contract Termination Due to Unlawful Acts
		Grounds for Contract Termination Due to Insolvency
		Conditions for Contract Termination by Contractor
	CONTRACT TERMINATION FOR CONVENIENCE
		Conditions for Termination of Contract for Convenience
		Procedures for Contract Termination
	CONTRACT COMPLETION
	WARRANTY
		Purpose of a Warranty
		Arrangements During the Warranty Period
		Responsibility for Defects/Failures During the Warranty Period
ANNEX A:	General Procurement Procedures and Timelines for Infrastructure Project
ANNEX B:	Sample Forms for Infrastructure Projects
ANNEX C:	GPPB Resolutions, Circulars and Memorandum

 

ABBREVIATIONS AND ACRONYMS

 

ABC	Approved Budget for the Contract
ABM	Agency Budget Matrix
ADB	Asian Development Bank
AFP	Armed Forces of the Philippines
AO	Administrative Order
APP	Annual Procurement Plan
APR	Agency Procurement Request
ARCC	Allowable Range of Contract Cost
ARD	Assistant Regional Director
BAC	Bids and Awards Committee
BDS	Bid Data Sheet
BIR	Bureau of Internal Revenue
BOC	Bureau of Customs
BRS	Bureau of Research and Standards
BSP	Bangko Sentral ng Pilipinas
CAF	Certificate of Availability of Funds
CARI	Contractor's All-Risk Insurance
CDA	Cooperative Development Authority
CIAP	Construction Industry Authority of the Philippines
CIR	Commissioner of Internal Revenue
CPE	Constructors Performance Evaluators
CPES	Constructors Performance Evaluation System
DBCC	Development Budget Coordination Committee
DBM	Department of Budget and Management
DBM-PS/	Department of Budget and
PS-DBM	Management-Procurement Service
DND	Department of National Defense
D.O.	Department Order
DOJ	Department of Justice
DOLE	Department of Labor and Employment
DOST	Department of Science and Technology
DPWH	Department of Public Works and Highways
DENR	Department of Environment and Natural Resources
DILG	Department of the Interior and Local Government
DTI	Department of Trade and Industry
DV	Disbursement Voucher
EFPS	Electronic Filing and Payment System
E.O.	Executive Order
ESAO	Engineering Supervision and Administrative Overhead
FAP	Foreign Assisted Project
GAA	General Appropriations Act
GCC	General Conditions of Contract
GFI	Government Financial Institution
GOCC	Government-owned and/or -controlled corporation
GOP	Government of the Philippines
GPPB	Government Procurement Policy Board
GPPB-TSO	GPPB-Technical Support Office
GPRA	Government Procurement Reform Act
GSIS	Government Service Insurance System
IAEB	Invitation to Apply for Eligibility and to Bid
ICB	International Competitive Bidding
IFI	International Financing Institution
IPR	Intellectual Property Rights
IRR	Implementing Rules and Regulations
IRR-A	Implementing Rules and Regulations Part A of R.A. 9184
ITB	Instructions to Bidders
IU	Implementing Unit
JCOC	Joint Congressional Oversight Committee
JVA	Joint Venture Agreement
LBP	Land Bank of the Philippines
LC	Letter of Credit
LCB	Lowest Calculated Bid
LCRB	Lowest Calculated Responsive Bid
LGU	Local Government Unit
LOI	May refer to Letter of Intent or Letter of Instructions, depending on
	the manner of usage
MDS	Modified Disbursement Scheme
MO	Memorandum Order
MYOA	Multi Year Obligation Authority
NCA	Notice of Cash Allocation
NEDA	National Economic and Development Authority
NFCC	Net Financial Contracting Capacity
NGA	National Government Agency
NGO	Non-Government Organization
NO	National Office
NSO	National Statistics Office
NTP	Notice to Proceed
ObR	Obligation Request
OP	Office of the President
PBD	Philippine Bidding Documents
PCAB	Philippine Contractors Accreditation Board
P.D.	Presidential Decree
PERT/CPM	Program Evaluation and Review Technique/Critical Path Method
PHILGEPS/
G-EPS	Philippine Government Electronic Procurement System
PMO	Project Management Office
PNP	Philippine National Police
PPMP	Project Procurement Management Plan
PWI	Procurement Watch Inc.
R.A.	Republic Act
R.A. 9184	Republic Act No. 9184, otherwise known as the "Government
	Procurement Reform Act of 2003"
ROW	Right-of-way
RR	Revenue Region
SARO	Special Allotment Release Order
SBDs	Standard Bidding Documents (of IFIs and bilateral agencies)
SCC	Special Conditions of Contract
SCRB	Single Calculated and Responsive Bid
SOW	Scope of Work
SPA	Special Power of Attorney
SUCs	State Universities and Colleges
TWG	Technical Working Group
TOR	Terms of Reference
UNDB	United Nations Development Business
WB	The World Bank

 

SECTION 1. Introduction. —

Scope of Volume 3

This Manual seeks to provide BIR users including external stakeholders clear, concise, and accurate information on the public procurement of infrastructure projects, by discussing the steps that need to be taken to effect such procurement in the manner prescribed by R.A. 9184 and its IRR-A. It also discusses important issues that may confront BIR officials and employees in all stages of infrastructure procurement, from the preparation of bid documents, to the actual bidding activity, monitoring of contract implementation and the final payment to the contractor. TaISEH

The procurement procedures are harmonized to a large extent with the IFIs and bilateral agencies lending to the Philippines. There are however policies which are specific to a particular lending agency or grantor which the main differences are highlighted in this Manual. It should however be noted that the loan, credit or grant agreement with the relevant IFIs and/or bilateral agencies and their respective guidelines/implementing rules and regulations will be the overriding factors governing the foreign-assisted projects.

Infrastructure projects, in general, are undertakings to construct, improve, rehabilitate, demolish, repair, restore, or maintain roads and bridges, railways, airports, seaports, communication facilities, civil works components of information technology projects. It also encompasses such infrastructures as irrigation, flood control and drainage, water supply, sanitation, sewerage and solid waste management systems, shore protection, energy/power and electrification facilities, national buildings, school buildings, hospital buildings, and other related construction projects of the government. Under R.A. 9184 and its IRR-A, the term "infrastructure projects" has the same meaning as and is used interchangeably with the term "civil works." (Section 5 [n] of IRR-A) HIESTA

Civil works components of information technology projects refer to the network/cabling requirements of communication facilities.

In addition, the following terms are used in the manner indicated below:

1. The bidder shall be referred to differently at different stages of the procurement process. Thus, the bidder is called:

a. "prospective bidder" from the posting of the IAEB to the submission of the LOI;

b. "eligible bidder" after the eligibility check/screening;

c. "bidder with the LCB" after evaluation;

d. "bidder with the LCRB" after post-qualification; and

e. "contractor" after the issuance of the NTP.

2. The term "bid" will be used instead of "proposal" or "offer".

3. "Eligibility Check" and "Eligibility Screening" shall be used interchangeably.

4. Eligibility Requirements are Eligibility Documents enclosed in the Eligibility Envelope.

5. The Technical Envelope contains the technical component of the bid.

6. The Financial Envelope contains the financial component of the bid.

Finally, this Manual is to be used together with the PBDs for Infrastructure Projects prescribed by the GPPB.

SECTION 2. Preparations for the Procurement of Infrastructure Projects. —

Volume I of this Manual contains an extensive discussion of Procurement Planning as a general concern for all kinds of government procurement, while this volume mainly focuses on procurement concerns particular to the procurement of infrastructure projects. As such, the reader is advised to refer to the pertinent discussions in Volume I before and during the reading of this volume.

Preparation makes for higher efficiency and efficacy. It enables the procurement officers to anticipate the onset of events and, as a consequence, better calibrate their response to them. Having a better appreciation of forthcoming events gives these officials the opportunity to test a range of possible courses of action, choose the best and most feasible of these, and identify measures to put them into action. Ultimately, it would enable them to determine the best manner by which such measures are to be implemented, ensuring that their individual and collective impacts are optimized at the least cost. TICaEc

Preparing for procurement basically involves three (3) activities:

1) procurement planning;

2) preparation of bidding documents; and

3) conduct of pre-procurement conference. HSaIET

1. Procurement Planning

Purpose of Procurement Planning

The purpose of procurement planning is to schedule BIR's procurement activities in advance, consistent with the agency's APP. Under the planning stage, the following activities must be undertaken, among others:

• Preparation of the draft TOR by the project proponent/end user;

• Determination of the mode of procurement;

• Type of infrastructure (e.g., civil works and information and communication technology);and

• Determination of the ABC.

Procurement planning entails ensuring that plans for procurement are linked to budgets, preparing the PPMP (SF-INFR-02) and consolidating all PPMPs into the APP (BIR-PF-01).Formulating the PPMP involves identifying the procurement project requirements, writing the TOR, determining the ABC, identifying the schedule of milestone activities, and determining the method of procurement. aTCAcI

The PPMP is then transformed into the bidding documents, which ought to contain all the information a prospective bidder needs to prepare its bid. Therefore, in preparing the bidding documents, one has to ensure that these accurately and comprehensively reflect the main elements of the PPMP. One also has to make sure that the documents are of the kind and form prescribed by the IRR-A and these Manuals.

Importance of Detailed Engineering

No bidding and award of contract shall be made unless the detailed engineering investigations, surveys and designs including the acquisition of the ROW for the project have been sufficiently carried out. These investigations must then be duly approved in accordance with the standards and specifications prescribed by the CIR/RD or his duly authorized representative, and in accordance with the provisions of Annex "A" of IRR-A except that when the detailed engineering designs and build schemes are required to form part of their bid documents. (Section 17.6 of IRR-A)

Feasibility or Preliminary Engineering Study

Prior to the conduct of the detailed engineering investigations, surveys and designs, the project proponent/end-user should draw a feasibility or preliminary engineering study which establishes the technical viability of the project and conformance to land use and zoning guidelines prescribed by existing laws.

The findings contained in the feasibility study, if undertaken for the project, should be examined. If, in the course of this exercise, it is found that changes would be desirable in the design standards of principal features, as proposed, specific recommendations for such changes should be supported by detailed justifications, including their effects on the cost, and, if necessary, the economic justification.

Activities Covered by Detailed Engineering

Only after the acceptance and approval of the feasibility study that detailed engineering investigations shall be conducted. Detailed engineering activities shall include the following: cTIESa

1. Survey;

2. Site Investigation;

3. Soils and Foundation Investigation;

4. Construction Materials Investigation;

5. Preparation of Design Plans and Design Analysis;

6. Preparation of Technical Specifications;

7. Preparation of Quantity and Cost Estimates;

8. Preparation of Program of Work;

9. Preparation of Proposed Construction Schedule and estimated Cash Flow for projects with Schedule over six (6) Months;

10. Preparation of Site or Right-of-Way Plans including Schedule of Acquisition;

11. Preparation of Utility Relocation Plan;

12. Preparation and Submission of Design Report;

13. Environmental Impact Statement for critical project or project in a critical area, as defined by the DENR;

14. Preparation of minimum requirements for a Construction Safety and Health Program for the project being considered; and

15. Preparation of Bidding Documents. ATaDHC

Furthermore, work under detailed engineering shall include, but not necessarily be limited to, the following:

1. Design Standards — These shall be in accordance with appropriate standards and accepted detailed engineering practice adopted by the agency concerned. Design standards for structures shall take into account, among other things, the seismicity of the area to determine the optimum safety of structures and to minimize possible earthquake damage.

2. Field Surveys and Investigations — Necessary field surveys and investigations which may include aerial, hydrographic, topographic, hydrologic, sub-surface, monumenting and other surveys shall be carried out in accordance with the design guidelines, criteria and standards adopted by the agency concerned. All survey and investigation works shall be prepared in a manner satisfactory to carry out accurate design and production of plans. EDSHcT

3. Contract Plans — The following plans shall be prepared for each construction contract in accordance with guidelines and standards adopted by the BIR, incorporating at least the following:

a. Site development plan;

b. Plans and profile sheet;

c. Typical sections and details;

d. Drainage details where applicable;

e. Structural plans at appropriate scales indicating all details necessary in order that the complete structure can be set out and constructed; and

f. Other details which may be required by the BIR.

4. Quantities — All construction quantities shall be computed to a reasonable accuracy of plus or minus ten percent (10%).

5. Special Provisions — Specifications shall be prepared for specific items of work or methods of construction, measurement and payment under each contract, which are not covered by standard construction and material specifications adopted by the BIR.

6. Unit Prices — These shall be prepared for each contract using costs based on reasonable approved current prices as projected over the proposed construction period, divided into local and foreign exchange costs, as the case may be. DHSACT

7. ABC — The approved budget for the contract to be bid shall be prepared by official/s duly designated by the CIR/RD or by his duly authorized representative. It shall be approved by the CIR/RD or his duly designated official.

Since the contracts are fixed price contracts, the approved budget for the contract to be bid must provide for the projected movements in construction costs over the construction period. It thus has to consider the projected inflation and foreign exchange rates as issued by the DBCC or other authorized agencies (NSO, BSP, others),as well as the cost of money. It must also show the local and foreign currency requirements, as the case may be.

The approved budget for the contract to be bid must also specify for each major work item, such as earthwork, roadwork, and massive concreting. It must also specify the components for equipment rentals, fuel, labor, materials and overhead, including the cost of the approved construction safety and health program and security premiums, taxes, profit, cost of money, inflation, contingencies, etc. CIAcSa

For infrastructure contract packages projects, the ABC shall cover the individual cost components of civil works only. The other components of the project such as ROW, consulting services and ESAO, shall comply with the applicable provisions of law or agency guidelines. (Section 7.1 of IRR-A)

8. Preparation of bidding documents.

The Project Proponent/end-user must estimate the actual number of working days required to complete the project through a PERT/CPM analysis of the project activities and corrected for holidays and weekends. It must also estimate the number of rainy/unworkable days considered unfavorable for the prosecution of the works at the site. These considerations must be indicated in the bidding documents, incorporated in the corrected actual number of working days determined above, and made the basis of the total contract time. The estimated number of rainy/unworkable days considered unfavorable for the prosecution of the works at the site shall be made known before the date of bidding through the ITB for the purpose of guiding both the government and winning contractors in the request for an approval of time extensions. Without the estimated number of rainy/unworkable days established before the bidding date and known to all participating bidders, the contract time is presumed to have excluded the unfavorable conditions. The number of rainy/unworkable days may be taken from the records of PAGASA. ITCHSa

Likewise, the bidding documents should specify the type of project and the corresponding warranty period required by the BIR.

9. Program of Work — The program of work must include, among other things, estimates of the work, items, quantities and costs and a PERT/CPM network of the project activities. The program of work must cover at least a usable portion of the project and no construction shall be started for portions of the project that are less than usable, except projects requiring stage construction. In projects requiring stage construction, continuity of construction up to the completion of a usable portion must be assured.

The above rules shall apply to the implementation of infrastructure projects under normal or ordinary conditions. However, under emergency or extraordinary cases involving major calamities and disasters as declared by the President of the Philippines, where time is of the essence to save lives and properties and restore damaged infrastructures, detailed engineering works shall be conducted in accordance with the guidelines and procedures, as prescribed by the head of the appropriate infrastructure agency and approved by the Infrastructure Committee of the NEDA Board. This ought to enable quick response to said cases, while maintaining the safety and integrity of the structure. DETcAH

Considerations on Setting the Standards and Technical Specifications

1. Standards and technical specifications quoted in bidding documents should promote the broadest possible competition, while assuring the critical performance or other requirements for the goods and/or works under procurement;

2. As far as possible, the BIR should specify internationally accepted standards such as those issued by the International Standards Organization with which the equipment or materials or workmanship should comply, except that where such international standards are unavailable or are inappropriate, national standards may be specified; and

3. In all cases, the bidding documents should state that equipment, material or workmanship meeting other standards, which promise at least substantial equivalent, should also be accepted.

Approved Budget for the Contract (ABC)

It is the budget for the contract duly approved by the CIR/RD or his duly authorized representative, as provided for in the GAA and/or continuing appropriations. Thus, the ABC referred to in R.A. 9184 and its IRR-A basically refers to the proposed budget for the project approved by the CIR/RD based on the APP as consolidated from various PPMPs. 1

Factors to Consider in Determining the ABC

In determining the ABC, the Project Proponent/end-user, with the assistance of the technical expert/s, if necessary, must consider the different cost components, namely:

1. Cost or market price of the product or service itself;

2. Incidental expenses like freight, insurance, taxes/duties, installation costs, training costs and cost of inspection; 

3. Cost of money, to account for government agencies usually buying on credit terms; and

4. Inflationary factor, since the planning phase is usually done one (1) year ahead of the actual procurement date.

If the project or contract has a foreign component, it is also best to include a currency valuation adjustment factor, in order to hedge against any foreign exchange rate fluctuations between the planning phase and the actual procurement date. To determine the factor to be used, the Project Proponent/end-user may request for guidance from the BSP, or refer to BSP forecasts, if available. IHSTDE

If the sum of the different cost components is lower than the appropriation for the procurement, then the ABC should be equal to the sum of the cost components. If the resulting sum is higher than the appropriation, it is advisable to review the technical specifications and the computation of the ABC. In any case, the ABC should not exceed the appropriation.

In case of adjustment of ABC due to failure of bidding, GPPB Resolution 07-2005 provides that the ABC may be adjusted upwards only under the following conditions:

1. There has been failure of bidding for the second time due to all bids submitted exceeding the ABC or no bids have been submitted, or failure in the negotiated procurement after two failed biddings; and

2. There has been previous modification of the terms, conditions and specifications of the project based on Section 35 of the IRR-A, except when the project is indivisible, where the technical component is an integral part of the whole that cannot be reduced, and it constitutes the minimum requirement of the BIR for which there are no substitutes.

It further states that the ABC may be adjusted downwards if there is a need to reflect actual market prices and/or scope of work or suit actual field conditions of the project. Upon adjustment of ABC, the BIR must conduct re-bidding with re-advertisement/posting. Any succeeding adjustment of the ABC shall be in accordance with these guidelines.

2. Preparation of Bidding Documents

Bidding Documents

Bidding documents are documents issued by the BIR to provide the prospective bidders all the necessary information that they need to prepare their bids. (Section 5 [f] of IRR-A) These clearly and adequately define, among others:

1. Objectives, scope and expected outputs and/or results of the proposed contract;

2. Expected contract duration;

3. Obligations, duties and/or functions of the winning bidder; and

4. Minimum eligibility requirements of bidders, such as track record to be determined by the BAC. (Section 17.2 of IRR-A)

Contents of Bidding Documents

1. IAEB;

2. ITB;

3. BDS;

4. GCC;

5. SCC;

6. Technical Specifications;

7. Schedule of requirements;

8. Sample Forms as annexed in the PBDs;

9. TOR and annexes;

10. Drawings;

11. Bill of Quantities; and

12. Checklist of Envelopes 1, 2, and 3; and

13. Additional document requirements or specifications where applicable and necessary. The bidding documents, as amended, shall subsequently form an integral part of the contract. (Section 17.3 of IRR-A) Statements not made in writing at any stage of the bidding process shall not modify the bidding documents.

The ITB should contain all necessary information that would help consultants prepare responsive proposals, and shall bring as much transparency as possible to the selection procedure by providing information on the evaluation process and by indicating the evaluation criteria and factors and their respective weights and the minimum passing quality score. The ITB should indicate an estimate of the level of key staff inputs (in staff time) required of the consultants or the total budget. TIDHCc

The specifications and other terms in the bidding documents shall reflect minimum requirements. A bidder may, therefore, be allowed to submit a superior offer. However, in the evaluation of the bids, no premium or bonus must be given as a result of this superior offer. (Section 17.4 of IRR-A) This rule is based on the nature of the procedure used to evaluate the technical proposals — a "pass/fail" method — such that the presence or absence of the technical requirements is the sole basis for determining technical compliance. After having established compliance with the technical specifications, the next factor to consider would then be the price or financial bid.

Other practices that the BIR may Observe to Ensure a Successful Procurement

1. All prospective bidders should be provided the same information, and should be assured of equal opportunities to obtain additional information on a timely basis.

2. BIR should provide reasonable access to project sites for visits by prospective bidders.

3. For works, particularly for those requiring refurbishing existing works, a pre-bid conference must be arranged whereby potential bidders meet with the BAC, TWG, BAC Secretariat and Project Proponent/end-user to seek clarifications. Minutes of the conference may be provided to a prospective bidder only upon request and payment of corresponding fee. SITCcE

4. Supplemental/bid bulletins must be issued by the BAC in case any additional information, clarification, correction of errors, or modifications of bidding documents. It shall be the responsibility of all those who have properly secured the bidding documents to inquire and secure supplemental/bid bulletins that may be issued by the BAC. In highly exceptional cases, the deadline may be extended.

Participants in the preparation of the Bidding Documents

1. BAC;

2. TWG;

3. Project Proponent/end-user unit;

4. Technical experts/consultants, if necessary; and

5. BAC Secretariat.

Schedule for the Preparation of Bidding Documents

The bidding documents must be prepared in time for presentation at the pre-procurement conference. After the conference, and before advertisement and/or posting of the IAEB at BIR website (www.bir.gov.ph) and PhilGEPS, it should be ascertained that these documents will be ready and available for issuance to prospective bidders on the day the IAEB is first advertised.

Various Types and Sizes of Contracts provided in the Bidding Documents

The bidding documents should clearly state the type of contract to be entered into and contain the proposed contract provisions appropriate therefore. The most common types of contracts provide for payments on the basis of a lump sum, unit price, or combinations thereof. 2

The size and scope of individual contracts will depend on the magnitude, nature, and location of the project, for example:

1. For projects requiring a variety of goods and works, separate contracts may be awarded for the supply and/or installation of different items of equipment and plant ("plant" refers to installed equipment, as in a production facility) and for the works.

2. For a project requiring similar but separate items of equipment or works, bids may be invited under alternative contract options that would attract the interest of both small and large firms, which could be allowed, at their option, to bid for individual contracts (slices/items) or for a group of similar contracts (package).All bids and combinations of bids should be received by the same deadline and opened and evaluated simultaneously so as to determine the bid or combination of bids offering the lowest calculated cost to the BIR.

3. In certain cases, the BIR may require a turnkey contract under which the design and engineering, the supply and installation of equipment, and the construction of a complete facility or works are provided under one (1) contract. Alternatively, the BIR may remain responsible for the design and engineering, and invite bids for a single responsibility contract for the supply and installation of all goods and works required for the project component. Also acceptable where appropriate are contracts such as, but not limited to: (a) design and build; (b) design, build and operate; (c) design, build and lease; and (d) management contract. CSDTac

Bid Security

A bid security is a guarantee that the successful bidder will:

1. Not default on its offer, and

2. Enter into contract with the BIR within ten (10) calendar days, or less as indicated in the ITB, from receipt of the Notice of Award, and furnish the performance security provided for in Section 39 of RA 9184 and Section 27.1 of IRR-A.

A bid security must be submitted with every bid. It must be operative on the date of bid opening, and payable to the BIR.

Forms of Bid Security and the Corresponding Amount

The bid security shall be in any of the following forms, with the corresponding required amount: ASHaDT

 

Form of Bid Security	Minimum Amount in % of the
		Approved Budget for the Contract
		(ABC) to be Bid
1.	Cash, certified check, cashier's	One percent (1%)
	check/manager's check, bank
	draft or irrevocable letter of credit
2.	Bank Guarantee confirmed by a	One and a half percent (1.5%)
	reputable local bank or in the case
	of a foreign bidder, bonded by a
	foreign bank;
3.	Surety Bond callable upon	Two and a half percent (2.5%)
	demand issued by a reputable
	surety or insurance company;
4.	Foreign government guarantee as	One Hundred percent (100%)
	provided in an executive, bilateral
	or multilateral agreement, as may
	be required by BIR.

 

For purposes of determining the amount of the bid security in biddings with lots or items, whereby a bidder submits a bid for more than one lot or item, the bid security shall be based upon the sum of the ABC for each of the lots or items for which bids are submitted.

Period of Validity of Bid Security

Bid security must be valid for one hundred twenty (120) calendar days from the date of the opening of bids. (Section 28 of IRR-A)

Denomination of Bid Security

The bid security must be denominated in Philippine currency (Section 27.3 of IRR-A),except that foreign bidders which are allowed to submit foreign currency denominated bids may also submit bid securities that are denominated in a freely convertible currency allowed or specified in the bidding documents. TICAcD

Condition for the Return of Bid Securities

No bid securities shall be returned to bidders after the opening of bids and before contract signing, except:

• those who failed to comply with any of the requirements to be submitted in the first bid envelope of the bid; or

• those who were post-disqualified and submitted a written waiver of its right to file a motion for reconsideration and/or protest.

However, bidders who were post-disqualified must request in writing from the BIR for the refund of their bid securities. The original copy of the Official Receipt must be attached to the request for bid securities mentioned in Section 27.2 (a) of the IRR.

Without prejudice to the provisions of the law allowing forfeiture of bid securities, bid securities shall be returned only after the bidder with the LCRB has signed the contract and furnished the performance security, but in no case later than the expiration of the bid security validity period indicated in the ITB. (Section 27.4 of IRR-A as amended by GPPB Resolution No. 021-2006)

3. Conduct of the Pre-Procurement Conference

Pre-Procurement Conference

It is the forum where the participants involved in the procurement meet and discuss all aspects of specific procurement activities, which includes the scope of work, the ABC, the applicability and appropriateness of the recommended method of procurement and the related milestones, the draft bidding documents, and availability of the pertinent budget release for the project. ATcEDS

Importance and Purpose of Pre-Procurement Conference

For all projects subject to public bidding or any of the alternative modes of procurement, a pre-procurement conference is conducted to determine the readiness of the BIR to procure infrastructure projects in terms of the legal, technical and financial requirements. More specifically, it ensures that the procurement will proceed in accordance with the PPMP and APP, confirms the availability of appropriations and programmed budget for the contract, and reviews all relevant documents in relation to their adherence to the law. (Section 20 of IRR-A)

A pre-procurement conference should: (Section 20.1 of IRR-A)

1. Ensure that the procurement is in accordance with the approved APP;

2. Determine the availability of the appropriations and programmed budget for the contract;

3. Determine the state of readiness of the pertinent budget release (e.g., ABM or SARO);

4. Determine the state of readiness of the procurement at hand by checking, among others the following:

a. Availability of the ROW;

b. Detailed engineering investigations, surveys and designs;

c. Ownership of affected properties; and

d. Adherence of the bidding documents, technical plans, specifications, and scope of work to relevant general procurement guidelines.

5. Review the TOR;

6. Review, modify and agree on the criteria for eligibility check/screening, and ensure that the said criteria are fair, reasonable, and that they are of the "pass/fail" type and are written in such manner; (Section 20.1.3 of IRR-A)

7. Review, modify and agree on the criteria for the evaluation of bids, and ensure that the said criteria are fair, reasonable and applicable to the procurement at hand, are of the "pass-fail" type for the evaluation of the technical component, pertain to the price for the evaluation of the financial component, and includes those which will affect the completeness of the bids in the bill of quantities and any minor arithmetical correction in getting the correct calculated price;

8. Clarify that the specifications and other terms in the bidding documents are minimum requirements and that the bidder may submit an offer which provides for superior specifications, better terms and conditions to the government at no extra cost, without any bonus, credit or premium in the bid evaluation. For example, the bidding documents shall emphasize that the bidder shall provide information on the minimum equipment required for the project — with the corresponding engine numbers, chassis numbers and/or serial numbers. Additionally, the bidding documents shall clearly state the minimum required experiences of the bidders' personnel, such as project managers, project engineers, material engineers and foreman; and SAcaDE

9. Reiterate and emphasize the "no contact rule" during the bid evaluation process, and the applicable sanctions and penalties, as well as agree on measures to ensure compliance with the foregoing;

10. Ensure that the requirements are in accordance with the ABC;

11. Finalize and approve the IAEB.

Schedule for the Conduct of Pre-Procurement Conference

The pre-procurement conference must be conducted prior to the advertisement or issuance of the IAEB (SF-INFR-05). (Section 20.1 of IRR-A) A reasonable time period should be prescribed to allow the participants to incorporate the necessary changes, amendments or revisions thereto. DECcAS

Participants of a Pre-Procurement Conference

1. BAC;

2. Secretariat;

3. Project Proponent/end-user;

4. Members of the TWG;

5. Technical experts/consultants hired by the BIR; and

6. Other officials concerned, as may be required.

Minutes of the Pre-Procurement Conference (SF-INFR-04) shall be prepared by the BAC Secretariat as prescribed.

SECTION 3. Procedures for the Procurement of Infrastructure Projects Through Competitive Bidding. —

Competitive Bidding

It is a method of procurement that is open to any interested and qualified party. All procurement shall be done through public bidding except as provided in Rule XVI of IRR-A (Section 10 of IRR-A). IacHAE

Competitive Bidding consists of the following processes:

• Advertisement/posting of IAEB;

• LOI;

• Eligibility check/screening of prospective bidders;

• Issuance and availability of bidding documents;

• Pre-bid conference;

- request for clarification/s

- supplemental/bid bulletin

• Submission and opening of bids;

• Bid evaluation;

• Post-qualification;

• Approval of resolution/issuance of NOA;

• Contract preparation and signing;

• Approval of contract by Higher authority; and

• Issuance of NTP. (Section 5 [h] of IRR-A)

The procurement process from the date of advertisement and/or first day of posting of the IAEB up to the opening of bids should not exceed sixty (60) calendar days, (Section 21.2.2 of IRR-A as amended by GPPB Resolution No. 014-2006). The opening of bids up to the award of contract should not exceed fifty-one (51) calendar days. In case the deadline for each activity falls on a non-working day (i.e., Saturday and Sunday),legal holiday, or special non-working holiday, the deadline shall be the next working day. (Section 38.1 of IRR-A) ITEcAD

Step 1 Advertisement and Posting of IAEB

The IAEB serves as the notice to the public and all interested parties of the procurement and bidding opportunities of the BIR. It ensures transparency of the procurement process, widest possible dissemination to increase the number of prospective bidders and intensify competition for the procurement activity or project. Intensified competition, in turn, will ensure that the government, in general, and the BIR, in particular, will get the best possible proposals as to quality and cost for the infrastructure projects sought to be procured. The BAC is responsible for ensuring that the IAEB is advertised and posted in accordance with law.

Contents of an IAEB

1. Name and location of the contract to be bid;

2. Project background and other relevant information regarding the proposed contract works, including a brief description of the type, size, major items, and other important or relevant features of the works;

3. General statement on the criteria to be used by the BIR for the:

a. Eligibility check/screening;

b. Preliminary examination and detailed evaluation of bids; and

c. Post-qualification;

4. Date, time and place of the deadline for the:

a. Submission and receipt of the LOI together with the application for eligibility;

b. Submission and receipt of the eligibility requirements;

c. Notification of results of eligibility check/screening;

d. Pre-bid conference;

e. Submission and receipt of bids; and

f. Opening of bids;

5. ABC;

6. Source of funding;

7. Period of availability of the eligibility documents, the place where the bidding documents may be secured and, where applicable, the price of the bidding documents;

8. Contract duration;

9. Name, address, telephone number, facsimile number, e-mail and website addresses of the concerned BIR, as well as its designated contact person; CSHcDT

10. Reservation Clause; and

11. Such other necessary information deemed relevant by the BIR.

The IAEB should provide information that enables potential bidders to decide whether to participate or not. As such, apart from the above essential items, the IAEB should also indicate any important bid evaluation criteria (e.g., the application of a margin of preference in bid evaluation) or qualification requirement.

The deadline for the submission of bids indicated in the IAEB should be no later than thirty (30) calendar days from the last day of the period of its advertisement and/or posting. ASEIDH

Posting of the IAEB

The IAEB for projects with ABCs of more than Five Million Pesos (P5 million) must be advertised and posted as follows: (Section 21.2.2 of IRR-A as amended by the GPPB Resolution No. 014-2006)

1. At least once within a maximum period of seven (7) calendar days in one (1) newspaper of general nationwide circulation which has been regularly published for at least two (2) years before the date of issue of the advertisement;

2. Continuously on BIR website (www.bir.gov.ph),and the PhilGEPS for seven (7) calendar days starting on date of advertisement; and

3. At any conspicuous place reserved for this purpose in the premises of the BIR National Office and Regional Offices, as certified by the heads of the respective BAC Secretariats, for seven (7) calendar days.

For projects with ABCs of P5 million and below, the IAEB should be posted:

1. Continuously on the BIR website (www.bir.gov.ph),and the PhilGEPS for seven (7) calendar days starting on date of advertisement, if applicable; and 

2. At any conspicuous place reserved for this purpose in the premises of the BIR National Office and Regional Offices, as certified by the heads of the respective BAC Secretariats, for seven (7) calendar days. SCaEcD

Methodology: Steps in the Advertisement and Posting of IAEBs

The BAC Secretariat:

a. Prepare the draft for review/approval of the BAC;

b. Advertise and post the IAEB.

For alternative methods of procurement, advertisement in a newspaper may be dispensed with, provided, however, that posting shall be made at the BIR website (www.bir.gov.ph), the PhilGEPS and at any conspicuous place reserved for this purpose in the premises of the BIR NO and RR, as certified by the heads of their respective BAC Secretariats during the same periods. SHacCD

Step 2 Acceptance of LOIs, Issuance of Eligibility Documents, and Conduct of Eligibility Check

Submission of LOI and Applications for Eligibility

Prospective bidders should submit their written LOIs and Applications for Eligibility to the BAC and have these received not later than seven (7) calendar days after the last date posting of the IAEB. (Section 21.3.1 of IRR-A) Upon receipt of these documents, the BAC must give the prospective bidders the list of eligibility requirements, and inform them in writing of the date, time, and venue for the submission of such requirements. (Section 21.3 of IRR-A)

Once the PhilGEPS is fully established, prospective bidders may also submit their LOIs and Applications for Eligibility electronically to the BIR through the PhilGEPS, likewise within the deadline set for the submission of the written form of the documents.

Schedule for Release of Eligibility Forms

The eligibility forms must be released by the BAC to a prospective bidder immediately upon its receipt of the LOIs and Applications for Eligibility.

If Only One Bidder Submits a LOI

Even if only one prospective bidder submits an LOI, the bidding process continues. If it is later declared eligible and its bid is found to be responsive to the bidding requirements, its bid will be declared as a SRRB, and considered for contract award. (Section 36 of IRR-A) EaISDC

If no Prospective Bidder Submits a LOI

If no prospective bidder submits a LOI, the BAC shall issue a resolution declaring a failure of bidding. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding.

Eligibility Check

It is a procedure to determine if a prospective bidder is eligible to participate in the bidding at hand. The BAC shall use non-discretionary "pass/fail" criteria in determining a prospective bidder's eligibility stated in the IAEB and the ITB. Essentially, this means that the absence, incompleteness or insufficiency of a document shall make a prospective bidder ineligible to bid for the particular procurement. 3(Section 23.2 of IRR-A)

Determining the Eligibility of the Prospective Bidder

A prospective bidder is eligible to bid for a particular project if it complies with the eligibility requirements prescribed for the competitive bidding within such period as may be required by the BIR and stated in the invitation to bid. The eligibility requirements shall provide for fair and equal access to all prospective bidders.

Eligibility Requirements for Public Bidding of Infrastructure Projects 4

The following persons/entities shall be allowed to participate in the bidding: (Section 23.11.2.1 of IRR-A)

1. Duly licensed Filipino citizens/sole proprietorships;

2. Partnerships duly organized under the laws of the Philippines and of which at least seventy-five percent (75%) of the interest belongs to citizens of the Philippines;

3. Corporations duly organized under the laws of the Philippines and of which at least seventy-five percent (75%) of the outstanding capital stock belongs to citizens of the Philippines;

4. Persons/entities forming themselves into a joint venture, i.e.,a group of two (2) or more persons/entities that intend to be jointly and severally responsible or liable for a particular contract, provided that: 5 DHITcS

a. In accordance with Letter of Instructions No. 630 (LOI 630),Filipino ownership or interest in the joint venture concerned shall be at least seventy-five percent (75%);and

b. In determining the eligibility of the joint venture, the principle of "collective compliance" will be applied to its members/principals in the sense that each of the entities of the joint venture must submit all of the documents that are required to establish eligibility, although the non-compliance of one member/principal may be compensated by the compliance of another member/principal. However, in the case of incorporated joint venture, only one (1) set of documents is required to be submitted unless otherwise required by the BAC, e.g.,newly incorporated/registered joint venture; aHSCcE

5. Cooperatives duly registered with CDA.

All these entities must have:

1. A license by the PCAB, in accordance with the provisions of R.A. 4566. (IRR-A Section 23.11.2.2)

2. The experience of having completed within the period specified in the IAEB concerned, a single contract that is similar to the contract to be bid, and whose value, adjusted to current prices using the wholesale consumer price index, must be at least fifty percent (50%) of the approved budget for the contract to be bid. (Section 23.11.1.2 of IRR-A) AIcaDC

This is done to assure the BAC that the prospective bidder has the technical and financial capability to undertake the contract to be bid.

A contract is similar to the contract to be bid if it involves goods or related services of the same nature and complexity as those which are the subject of the public bidding concerned.

Note, however, that Small A and Small B contractors without similar experience on the contract to be bid may be allowed to bid if the cost of such contract is not more than fifty percent (50%) of the range of contract cost allowed for them. The ARCC per PCAB registration of contractor, as provided in PCAB Board Resolution No. 001, series of 2004 and, GPPB Resolution No. 012-2004, dated August 20, 2004, is as follows:

Registration Particulars
Allowable Range of Contract Cost (in Million Pesos)
Category	Prior and up to	CFYs 2004-2005	CFYs 2006-2007	CFYs 2008-2009
	CFY 2003-2004	& 2005-2006	& 2007-2008	& 2009-2010
	(For projects	(For projects	(For projects	(For projects
	advertised for	advertised for	advertised for	advertised for
	bidding prior and	bidding from July	bidding from July	bidding from July
	to June 30, 2004)	1, 2004 to June	1, 2006 to June	1, 2008 to June
		30, 2006)	30, 2008)	30, 2010)
Small A	Up to 0.5	Up to 0.5	Up to 0.5	Up to 0.5
Small B	Up to 3	Up to 10	Up to 20	Up to 30
Medium A	Up to 15	Up to 50	Up to 100	Up to 150
Medium B	Up to 30	Up to 100	Up to 200	Up to 300
Large A	Up to 50	Up to 150	Up to 300	Up to 500
Large B	Less than or	Less than or	Less than or	Less than or
	above 50	above 150	above 300	above 500

By virtue of an amendment to IRR-A Section 23.11.2, the ARCC per PCAB registration of contractor is no longer found in IRR-A but shall rather be based on the guidelines prescribed by PCAB. aTADcH

3. Any of the following:

An NFCC that is at least equal to the approved budget for the contract to be bid, calculated as follows:

NFCC = [(Current assets minus current liabilities) (K)] minus the value of all outstanding projects under ongoing contracts, including awarded contracts yet to be started.

Where:

K = 10 for a contract duration of one year or less, 15 for a contract duration of more than one year up to two years, and 20 for a contract duration of more than two years.

or

a commitment from a licensed bank to extend to it a credit line if awarded the contract to be bid — such commitment being specific to the contract to be bid;

or

a hold out on cash deposits issued by a licensed bank, which shall also be specific to the contract to be bid, and which must be in an amount not lower than that set by the BIR in the Bidding Documents, which shall be at least equal to ten percent (10%) of the ABC of the contract to be bid. IASTDE

4. A Constructors' Performance Evaluation System (CPES) rating that is satisfactory and/or a certificate of completion and owner's acceptance of the contract. (Section 23.11.2.4 of IRR-A) The CPES is a rating system, approved by the NEDA Infrastructure Committee, to evaluate the past performance of the contractors.

Minimum Eligibility Requirements

The eligibility of a prospective bidder that is a Filipino contractor is determined based on its submission to the BAC of the following documents, using the forms prepared by the BAC: (Section 23.6 of IRR-A) (SF-INFR-07): cITaCS

1. Class "A" Documents

a. Legal Documents

For Single/Sole Proprietorship

• DTI registration certificate

For Partnership

• DTI registration certificate;

• SEC registration certificate;

• Articles of Partnership; and

• List of Partners and Percentage of Interest duly certified by the Managing Partner;

For Corporation

• DTI registration certificate; LibLex

• SEC registration certificate;

• Articles of Incorporation;

• By laws; and

• Latest General Information Sheet (GIS) duly stamped received by SEC

For Cooperatives

• DTI or Cooperative Development Authority (CDA) registration certificate;

• Articles of Cooperation; and

• By laws;

i. Valid and current Mayor's permit/municipal license, if applicable;

ii. Taxpayer's Identification Number (TIN);

iii. Sworn statement of the prospective bidder that it is not "blacklisted" or barred from bidding by the government or any of its agencies, offices, corporations or LGUs, and that it is not included in the Consolidated Blacklisting Report issued by the GPPB, once released in accordance with the guidelines to be issued by the GPPB as provided in Section 69.4 of the IRR-A (SF-INFR-13);

iv. BIR Registration Certification (BIR Form 2303) and proof of payment of current annual registration fee (BIR Form 0605); 

v. Other appropriate licenses as may be required by the BIR;

vi. Tax Clearance from BIR issued by the Collection Enforcement Division, BIR National Office attesting that the taxpayer has no outstanding Final Assessment Notice and/or delinquent account. (As provided for under E.O. 398 or RR# 3-2005);

vii. Latest Annual Income Tax and Business Tax Returns (VAT or Percentage Tax) duly filed thru Electronic Filing and Payment System (eFPS) of the BIR and duly validated confirmation evidencing the tax payments made. (Filing Reference Number) IHTASa

Latest Annual Income Tax Return (ITR) shall refer to the ITR for the preceding Taxable Year be it on calendar or fiscal year.

Latest Business Tax Return (BTR) refers to Valued Added Tax (VAT),and/or Percentage Tax Returns, whichever is applicable, covering six (6) months immediately prior to the submission of the Bid Proposal. Bidders filing both the VAT and Percentage Tax Returns must submit both returns.

b. Technical Documents

1. Sworn statement attached with duly accomplished BIR Revised Form based on GPPB Standard Form: SF-INFR-15 and 16 of the prospective bidder of all its ongoing and completed government and private contracts for the last three (3) years, including contracts awarded but not yet started if any. The statement shall state for each contract whether said contract is: Ongoing, Completed or Awarded, but not yet started for the last three (3) years. The statement shall include, for each contract, the following: (Section 23.6f, IRR of RA 9184) ECTIcS

i. Name and location of the contract;

ii. Date of award of the contract;

iii. Types of Infrastructure projects;

iv. Amount of contract;

v. Contract duration;

vi. Certificate of Satisfactory Completion issued by the client, in case of a completed contract;

vii. Date of Completion or estimated completion time;

viii. Total Contract Value at completion, if applicable;

ix. Percentages of planned and actual accomplishments, if applicable;

x. Value of outstanding works, if applicable;

xi. Supporting notices of award and/or notices to proceed issued by the owners;

xii. Supporting CPES rating sheets, and/or certificate of completion and owner's acceptance, if applicable; and

xiii. Whether the contract is similar or not in nature and complexity with the contract to be bid. IaECcH

2. Valid PCAB license and registration for the type and cost of contract to be bid;

(In case of joint venture, the license and registration must be those of the joint venture, not any of its members.)

3. A statement on the:

• Availability of key personnel, such as project managers, project engineers, materials engineers and foremen, that may be used for construction contracts; and

• Availability of equipment that it owns, has under lease, and/or has under purchase agreements, that may be used for construction contracts, provided that ownership of equipment is not a requisite for eligibility;

c. Financial Documents

1. Audited financial statements, stamped "received" by the BIR or its duly accredited and authorized institutions, for the immediately preceding calendar year, showing, among others, the prospective bidder's total and current assets and liabilities;

2. Prospective bidder's computation of its NFCC, or at the Bidder's option, a commitment from a licensed bank to extend to it a credit line; in the event of an award in the Bidder's favor, or at the Bidder's option a cash deposit certificate, in an amount not lower than that set by the BIR in the bidding documents, which shall be at least equal to ten percent (10%) of the approved budget for the contract to be bid; IScaAE

To facilitate eligibility checking, the BAC may maintain a file of Class "A" documents submitted by manufacturers, suppliers and distributors. When such file is required by the BIR, a manufacturer, supplier or distributor who wishes to participate in a public bidding for non-common Goods should maintain this file current and updated at least once a year, or more frequently when needed. A manufacturer, supplier or distributor who maintains a current and updated file of his Class "A" documents will be issued a certification by the BAC to that effect, which certification may be submitted to the Bureau of Internal Revenue in lieu of the foregoing Class "A" documents. (IRR-A Section 23.6.1 and RMO No. 3-2007) aAHTDS

2. Class "B" Documents

a. Valid JVA, if the prospective bidder is a joint venture, with the agreement containing a statement on who the joint venture has constituted and appointed as the lawful attorney-in-fact to sign the contract, if awarded the project, and on which among the members/principals is the lead representative of the joint venture (SF-INFR-22).

All members of the joint venture shall submit Class A eligibility documents, but for technical and financial documents, compliance by one of the joint venture members will suffice.

b. Letter authorizing the BAC or its duly authorized representative/s to verify any or all of the documents submitted for the eligibility check (SF-INFR-23).

3. Other Eligibility Documents

a. In case of prospective foreign bidder, if eligible as described in ITB Clause 5, the eligibility requirements described in ITB Clauses 13.2 (a.1) to 13.2 (a.5) and 13.2 (a.7) may be substituted with the appropriate equivalent documents issued by the country of the prospective bidder concerned, such documents must be duly acknowledged or authenticated by the appropriate Philippine Consulate therein. TaCDIc

b. Certification under oath that each of the documents submitted in satisfaction of eligibility requirements is an authentic and original copy or a true and faithful reproduction or copy of the original, complete, and that all statements and information provided therein are true and correct.

c. Sworn statement from the bidder denying the circumstances specified under item 3.1 (a-g) of the Instructions to Bidders, under PBDs.

d. Certification from the Corporate Secretary as to the list of stockholders, number of shares owned and percentage of share holdings as of the date of the bidding.

e. Sworn statement of the bidder that it is not related to the head of the BIR by consanguinity or affinity up to the third civil degree or any of the BIR's officers and employees having direct access to information that they may substantially affect the result bidding such as, but not limited to the members of the BAC, TWG, Secretariat, and project proponent/end-user unit/s.

The BAC requires the bidder's authorized representative to initial all pages of the bid including attachments thereto such as brochures to ensure that the documents reviewed by the BAC are authentic, and to protect the BAC from any insinuation of tampering with the said documents.

To facilitate eligibility checking, the BAC of a BIR may maintain a file of Class "A" documents submitted by contractors. When such file is required by the procuring entity, a contractor who wishes to participate in a public bidding for infrastructure projects should maintain this file current and updated at least once a year, or more frequently when needed. A contractor who maintains a current and updated file of his Class "A" documents will be issued a certification by the BAC to that effect, which certification may be submitted to the BIR in lieu of the foregoing Class "A" documents. (Section 23.6.1 of IRR-A)

Purpose of Requiring an NFCC, a Credit line or a Certificate of a Hold-out on Cash Deposit that is Equal to the ABC

The NFCC, a credit line and a certificate of a hold-out on cash deposit establish the bidder's liquidity, its capacity to absorb the additional obligations in connection with the contract to be bid and to finance its implementation/completion. Compliance with this eligibility requirement may be done on the alternative, such that submission of any of the three (3) is acceptable for purposes of determining a bidder's eligibility. HSacEI

Participation of Entities with a Majority of Foreign Ownership in the Bidding Process

Entities with majority of foreign ownership may participate in the bidding for infrastructure projects provided that the structures to be built require the application of techniques and/or technologies which are not adequately possessed by a person/entity meeting the seventy-five percent (75%) Filipino ownership requirement, as determined by the CIR/RD. These foreign entities have to form a joint venture with a Filipino entity, and the Filipino ownership or interest should not be less than twenty-five percent (25%).The Filipino ownership or interest must be based on the contributions of each of the members of the joint venture, as specified in the joint venture agreement (JVA). (Section 23.11.2.1 [d] of IRR-A)

Foreign contractors, when allowed to bid under the circumstances mentioned in Section 23.11.2 of IRR-A, must submit the same eligibility requirements as domestic entities. However, the legal documents and the audited financial statements under the Class "A" documents may be substituted by the appropriate equivalent documents issued by the country of the foreign contractor. (Section 23.7 of IRR-A) These documents must be duly acknowledged and authenticated by the Philippine consulate located in that country. 6 TAaHIE

Submission of Eligibility Requirements

The eligibility envelope must be submitted, together with the technical and financial bid envelopes, enclosed in an outer sealed envelope or any such appropriate container, to the BAC on or before the deadline specified in the IAEB. For purposes of synchronizing the time, the BAC may identify an official timepiece that will be referred to for purposes of determining timely submission. The official timepiece must be indicated in the bidding documents and announced during the pre-bid conference, to ensure that all prospective bidders are aware of this information.

Eligibility requirements should be submitted on or before the specified time and date of the deadline for its submission as stated in the IAEB. Eligibility requirements submitted after the specified deadline shall not be received or accepted by the BAC.

Duration of Eligibility Check/Screening

The entire process of eligibility check/screening shall be completed in not more than three (3) calendar days from submission of LOI. (Section 23.10 of IRR-A) cAHIaE

Participants in the Receipt and Opening of the Eligibility Envelope

1. BAC;

2. TWG;

3. BAC Secretariat;

4. Project Proponent/end-user;

5. Technical experts/Consultants, if necessary;

6. Prospective Bidders; and

7. Observers.

Methodology: Steps in the Opening of Eligibility Envelope

A. Preparatory to the Bid opening

1. BAC receives Eligibility envelopes.

2. BAC Secretariat stamps "RECEIVED" the envelopes, with date and time of receipt.

3. BAC initials the bid envelope/s on the sealed portion.

B. Eligibility Check/Screening

1. BAC opens in public the eligibility envelope on the scheduled day of submission. (Section 23.1 of IRR-A)

2. BAC reads in public the contents of the eligibility envelopes, and shall examine each prospective bidder's eligibility requirements or statements. DHESca

3. BAC records the presence or absence of the required eligibility requirements in a checklist to ascertain that they are all present using a non-discretionary "pass/fail" criteria.

BAC may requests the prospective bidders to identify an individual who shall act as a third party witness and countercheck the eligibility documents being examined by the BAC. This is especially important if there are no observers present during the eligibility check.

Alternatively, the BAC may use any devise (i.e., digital camera, projector, etc.) that will enable all attendees to view the document being examined.

4. BAC declares prospective bidders as either "eligible" or "ineligible",based on the findings in Number 2 above, and inform them accordingly.

5. BAC chairman or vice-chairman marks either "eligible" or "ineligible" the eligibility envelopes and correspondingly countersigned by him or her. (Section 23.2 of IRRA)

6. BAC prepares a pro-forma Notice of Eligibility (SF-INFR-27) and a Notice of Ineligibility (SF-INFR-28) which will be duly accomplished by the BAC Secretariat and signed by the BAC members present during the Eligibility Check/Screening. In case a prospective bidder is declared ineligible, the Notice of Ineligibility shall state the reason for such ineligibility.

7. BAC sends the Notice of Eligibility or Ineligibility to the bidder/s or his authorized representative who shall officially receive the same. Those found ineligible have seven (7) calendar days upon written notice or, if present at the time of opening of eligibility requirements, upon verbal notification, within which to file a request for reconsideration with the BAC.

8. BAC inquires from ineligible bidders who are present during the eligibility check whether or not they intend to file a request for reconsideration (SF-INFR-29); if in the positive, the BAC shall keep the eligibility envelopes and re-seal the same in the presence of all the participants to be kept in a designated secured place, together with the unopened technical and financial envelopes. (Section 23.3 of IRR-A)

If in the negative, considering that it may decide to exercise its right to file one within the mandated seven (7) calendar day period, it will be advisable for the BAC to hold on to the eligibility envelopes duly resealed and deposited, until the expiration of the period for filing such request to ensure integrity of these documents unless if the said bidder waives its right to file such request.

The BAC must decide on a request for reconsideration within seven (7) calendar days from receipt thereof.

Recourse of an Absentee Bidder Found Ineligible

The BAC shall inform a prospective bidder if it has been found ineligible to participate in the bidding or was declared non-compliant with the technical and financial requirements. A bidder found ineligible has three (3) calendar days upon receipt of the Notice of Ineligibility/Failure, or, if present at the time of opening of eligibility requirements, upon verbal notification, within which to file a written request for reconsideration before the BAC. (Section 23.3 of IRR-A as amended By GPPB Resolution no. 014-2006) Notifications to bidders should state the grounds for their ineligibility.

The BAC should decide on the request for reconsideration within seven (7) calendar days from receipt thereof. In the meantime, BAC will hold on to the Eligibility, Technical and Financial envelopes of the prospective bidder until the request for reconsideration is resolved. In so doing, it can request the prospective bidder to clarify its eligibility documents, if necessary. The BAC may return the Eligibility, Technical and Financial envelopes if the prospective bidder is declared "ineligible" and expressly waives his right to file a request for reconsideration. Such waiver shall be made in writing, and to be executed by the authorized representative of the ineligible bidder.

If its request for reconsideration is denied, the ineligible bidder may protest the decision by a filing a verified position paper with the CIR within seven (7) calendar days from receipt of the resolution. The protest should be accompanied by the payment of a non-refundable protest fee in an amount equivalent to no less than one percent (1%) of the ABC. (Section 55.1 of IRR-A)

Contents of a Verified Position Paper

1. Name of bidder;

2. Office address of the bidder;

3. Name of project/contract;

4. BIR NO/Revenue Region;

5. Brief statement of facts;

6. Issue/s to be resolved; and

7. Such other matters and information pertinent and relevant to the proper resolution of the protest. CScTED

The position paper is verified by an affidavit that the affiant has read and understood the contents thereof and that the allegations therein are true and correct of his personal knowledge or based on authentic records. An unverified position paper shall be considered unsigned, produces no legal effect, and results to the outright dismissal of the protest. (Section 55.2 of IRR-A)

Resolution of Protests

The protests shall be resolved strictly based on records of the BAC. The CIR/RD shall resolve a protest within seven (7) calendar days from receipt thereof. Subject to the provisions of existing laws on the authority of Department Secretaries and the heads of agencies, branches, constitutional commissions or instrumentalities of the Government to approve contracts, the decisions of the CIR/RD shall be final up to the limit of his contract approving authority. (Section 56 of IRR-A)

If Questions/Doubts Have Been Raised About the Eligibility of a Prospective Bidder After it had been Declared as Eligible

Notwithstanding the eligibility of a prospective bidder, the BIR reserves the right to review its qualifications at any stage of the procurement process if it has reasonable grounds to believe that a misrepresentation has been made by the said prospective bidder, or that there has been a change in the prospective bidder's capability to undertake the project from the time it submitted its eligibility requirements. Should such review uncover any misrepresentation made in the eligibility requirements, statements or documents, or any changes in the situation of the prospective bidder which will affect the capability of the bidder to undertake the project so that it fails the preset eligibility criteria, the BIR shall consider the said prospective bidder as ineligible and shall disqualify it from submitting a bid or from obtaining an award or contract. (Section 23.4 of IRR-A) A prospective bidder found guilty of false information faces imprisonment of not less than six (6) years and one (1) day but not more than 15 years. (Section 65.3 of IRR-A) cDHAES

If Only One Prospective Bidder is Declared Eligible

The procurement process also proceeds with the Preliminary Examination of Bids. Again, if the eligible bidder submits a bid that is found to be responsive to the bidding requirements, its bid shall be declared as a SCRB and considered for contract award. (Section 36 of IRR-A)

Disqualification

Disqualification is a distinct concept from ineligibility and post-disqualification. When a Bidder is disqualified, it is barred from further participating in the procurement at hand, even if, in some instances, it has initially been declared eligible. Even if a Bidder is Post-qualified, if after such Post-qualification, the BIR has found grounds for disqualification, the latter may declare such Bidder disqualified, hence, the BIR shall not award the contract to the former. DTAIaH

Aside from those who are not eligible to bid for the procurement of goods, a bidder that has a conflict of interest shall be disqualified to participate in the procurement at hand. A Bidder would be considered as having a conflict of interest with another bidder in any of the events described in paragraphs 1 to 3 below and a general conflict of interest in any of the circumstances set out in paragraphs 4 to 6 below:

1. If the bidder is a corporation or a partnership and it has officers, directors, controlling shareholders, partners or members in common with another bidder; or if the bidder is an individual or a sole proprietorship and he is the proprietor of another bidder, or an officer, director or a controlling shareholder of another bidder; or if the bidder is a joint venture and it or any of its members has officers, directors, controlling shareholders or members in common with another bidder, or any of its members is a bidder; HIDCTA

2. A bidder receives or has received any direct or indirect subsidy from another bidder;

3. A bidder has the same legal representative as any other bidder for purposes of the bidding at hand;

4. A bidder has a relationship directly or through common third parties, that puts them in a position to have access to information about or influence on the bid of another bidder, or influence the decisions of the BIR regarding the bidding process. This will include a firm or an organization that lends, or temporarily seconds, its personnel to firms or organizations which are engaged in consulting services for the preparation related to procurement for or implementation of the project, if the personnel would be involved in any capacity on the same project; 

5. A bidder submits more than one bid in the bidding process. However, this does not limit the participation of subcontractors in more than one bid subject to prior approval by the BIR; or

6. A bidder who participated as a consultant in the preparation of the design or technical specifications of the goods and related services that are the subject of the bid.

In accordance with Section 47 of IRR-A, the bidder should not be related to the CIR/RD by consanguinity or affinity up to the third civil degree or any of the BIR's officers or employees having direct access to information that may substantially affect the result of the bidding, such as, but not limited to, the members of the BAC, the members of the TWG, the BAC Secretariat, and the project proponents/end-users. This prohibition shall apply to the following persons: IATHaS

1. If the bidder is an individual or a sole proprietorship, to the bidder himself;

2. If the bidder is a partnership, to all its officers and members;

3. If the bidder is a corporation, to all its officers, directors and controlling stockholders; and

4. If the bidder is a joint venture, items 1 to 3 above shall correspondingly apply to each of the members of the said joint venture, as may be appropriate.

To establish the non-existence of the above relationship, and to bind the bidders to its representation relating to the foregoing, all bids must be accompanied by a Disclosure Affidavit of the bidder to that effect. (Section 47 and Section 25.3.A.9 of IRR-A as amended by Memorandum Order 176)

A bidder may seek a reconsideration of BAC's decision declaring another bidder eligible by filing a Motion for Reconsideration (SF-INFR-29) with the BAC in accordance with the procedures set forth in Section 23.3 of IRR-A.

If no Prospective Bidder is Declared Eligible

If no prospective bidder is found to be eligible, the BAC should declare a failure of bidding. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding.

If Only One Bidder Passes the Preliminary Examination of Bids

The procurement process also proceeds with the subsequent step of Bid Evaluation. Again, if the eligible bidder submits a bid that is found to be responsive to the bidding requirements, its bid shall be declared as SCRB and considered for contract award. (Section 36 of IRR-A)

If a Bidder Fails to Comply with the Technical and Financial Requirements of the Bid

The bidder that fails to comply with any of the Technical or Financial requirements of the Bid will be disqualified by the BAC. Similar to ineligible bidders, it may file a written request for reconsideration within three (3) calendar days from receipt of the communication regarding its bid's deficiency. (Section 30.3 of IRR-A as amended by GPPB Resolution #014-2006)

Withdrawal of Bid

A bidder may, through a Letter of Withdrawal, withdraw its bid, before the deadline for the receipt of bids. A bidder may also express its intention not to participate in the bidding through a letter which should reach and be stamped received by the BAC before the deadline for the receipt of bids. A bidder that withdraws its bid shall not be permitted to submit another bid, directly or indirectly, for the same contract. It should be noted however that the act of habitually withdrawing from bidding or submitting letter of non-participation for at least three (3) times within a year is a ground for the imposition of administrative penalties, except when done for a valid reason.

The bidder that withdraws its bid beyond the deadline for the submission of bids will forfeit its bid security and will be subject to applicable administrative, civil and/or criminal sanctions prescribed in R.A. 9184 and its IRR-A.

Step 3 Issuance of Bidding Documents

Schedule for Availability of Bidding Documents

The BAC secretariat shall make available the bidding documents to the prospective bidders from the time the IAEB is first advertised until immediately before the deadline for submission of bids upon payment of non-refundable fee. (Section 17.5 of IRR-A) The BIR must ensure that the prospective bidders are given ample time to examine the bidding documents and to prepare their respective bids. A maximum period of thirty six (36) calendar day from the last day of the period of advertisement and/or posting of the IAEB for projects with an ABC costing P50M and below and fifty (50) calendar day for ABC costing above P50M. (Section 21.2.2 [ii] of IRR-A)

Prospective bidders must be allowed to acquire or purchase the bidding documents as soon as they are found eligible to participate in the bidding; (Section 23.1 of IRR-A) and in no case shall the bidding documents be issued beyond. HDaACI

The bidding documents are strictly confidential and may not be divulged or released to any person prior to its official release, except to those officially authorized in the handling of the documents. However, after its official release, it shall be made available to the public, unless the procurement at hand affects national security.

Cost of Bidding Documents

The BAC must consider the cost recovery component in determining the price which interested contractors would have to pay for the bidding documents ensure that the same would not have an effect of discouraging competition.

The cost recovery component may include the following:

1. Direct costs, which includes:

a. Development costs, which are incurred in developing the original content of the documents, designs, plans and specifications. However, the design cost may be excluded if it is to be included in the capitalized cost of the project, or the project cost, which is to be recovered from the use of the completed project facility;

b. Reproduction costs, which are labor, supplies and equipment rental costs incurred in the reproduction of the documents; and

c. Communication costs, which include mail and fax costs, plus costs of advertising, meetings, internet/web posting, and other costs incurred for the dissemination of information about the bidding.

2. Indirect costs, such as overhead, supervision, and administrative costs, allocated to the bidding activity. This may include the costs of paying honoraria to the officers and personnel of the BIR who are entitled thereto under the law.

Responsibilities of an Eligible Bidder with Regard to the Bidding Documents (Section 17.7.1 of IRR-A)

1. Taken steps to carefully examine all of the bidding documents;

It means determining and satisfying itself with the following:

a. Location and nature of the project;

b. Climatic conditions;

c. Transportation facilities;

d. Nature and condition of the terrain, geological conditions of the site; communication facilities; requirements, location and availability of construction aggregates and other materials, labor, water, electric power, and access roads; and

e. Other factors that may affect the cost, duration and execution or implementation of the project. (Section 17.7.2 of IRR-A) EcaDCI

2. Acknowledged all conditions, local or otherwise, affecting the implementation of the contract;

3. Made an estimate of the facilities available and needed for the contract to be bid, if any; and

4. Complied with his responsibility as provided for under Section 22.5.1 of IRR-A, which provides that it shall be the responsibility of all those who have properly secured the bidding documents to inquire and secure supplemental/bid bulletins that may be issued by the BAC. IcADSE

Failure to observe any of the above responsibilities shall be at the risk of the eligible bidder concerned. For this purpose, one of the contents of the Technical proposal

The BIR shall not be responsible for any erroneous interpretation or conclusions by the prospective or eligible bidders of the data it furnished. (Section 17.7.3 of IRR-A)

Moreover, the eligible bidders are deemed to have become familiar with all existing Philippine laws, decrees, ordinances, acts and regulations that may affect the contract in any way. However, if the contract is affected by new laws, ordinances, regulations or other acts of government promulgated after the date of the bidding, a contract price adjustment shall be made or appropriate relief shall be applied on a no loss-no gain basis, provided such is not covered by the contract provisions on price adjustment. (Section 17.7.4 of IRR-A)

Step 4 Conduct of Pre-Bid Conference and Issuance of Supplemental/Bid Bulletins

Pre-Bid Conference

The pre-bid conference is the initial forum where participants discuss the different aspects of the procurement at hand.

The ground rules that will govern the procurement are discussed. In particular, the participants discuss the technical and financial components of the contract to be bid. This is also an opportunity for the eligible bidders to request for clarifications about the bidding documents. However, it should be noted that any statement made at the pre-bid conference would not modify the terms of the bidding documents, unless such statement is specifically identified in writing as an amendment of the documents and issued as a supplemental/bid bulletin. (Sec. 22.4 of IRR-A) ScAIaT

It is important that responsible and knowledgeable officials attend the conference. The persons who actually formulated the scope of work, plans and technical specifications for the project should be present and among those representing the BIR. Eligible bidders, on the other hand, should be encouraged to send representatives who are legally and technically knowledgeable about the requirements of the procurement at hand. It is also important that the eligible bidders are given ample time to review the bidding documents prior to the pre-bid conference.

Schedule for the Conduct of a Pre-Bid Conference

A pre-bid conference must be held for all contracts with ABCs of at least One Million Pesos (P1 Million) and above. For contracts with ABCs of less than P1 million, pre-bid conferences may or may not be held at the discretion of the BAC. The BAC may also decide to hold such a pre-bid conference upon the written request of a prospective bidder. (Section 22.1 of IRR-A) IEHSDA

The pre-bid conference must be held at least twelve (12) calendar days before the deadline for the submission and receipt of bids. (Section 22.2 of IRR-A) In addition to this, it is suggested that the pre-bid conference should not be held earlier than seven (7) calendar days after the last day of the advertisement/posting the IAEB. If the pre-bid conference is held less than twelve (12) calendar days before the deadline for the submission and receipt of bids, that deadline should be moved to a later date. A supplemental/bid bulletin shall be issued for this reason. Note that these periods are all within the maximum period of twenty-four (24) calendar days from the date of advertising and/or first day of posting of the IAEB up to the opening of bids, as provided under Section 21.2.2(i) of IRR-A as amended by GPPB Resolution No. 014-2006.

Participants of a Pre-Bid Conference

1. BAC;

2. BAC Secretariat;

3. TWG members;

4. Technical experts/consultants, if necessary;

5. Project Proponent/end-user;

6. Prospective bidders; and

7. Observers.

The attendance of the prospective bidders shall not be mandatory.

Conduct of Participants During the Pre-Bid Conference and Other Stages of the Procurement Process

The BAC, BAC Secretariat, TWG, and other officials involved in procurement are expected to act in an impartial, courteous and professional manner in all their dealings and interactions with the bidders during all stages of the procurement. The bidders' representatives are likewise enjoined to adopt the same professional manner in their dealings with the BIR Officials and employees. Communications between the parties must, as much as possible, be made in writing, except during the pre-bid conference when verbal clarifications may be allowed — keeping in mind, however, that any statement made at the pre-bid conference would not modify the terms of the bidding documents, unless such statement is specifically identified in writing as an amendment of the documents and issued as a supplemental/bid bulletin. AaITCS

Methodology: Steps in the Conduct of Pre-bid Conference

1. The presentation by the BAC of the eligibility requirements as well as the technical and financial components of the contract to be bid, the evaluation procedure, evaluation criteria, and possible causes of the bidding.

2. The BAC shall also discuss the requirements in the ITB, the replies to the bidders' queries about the requirements, specifications and other conditions of the project, the bid evaluation of all bidders and post-qualification evaluation of the lowest calculated bidder. Emphasis should also be given to the warranty requirement of the project and the different offenses and penalties provided for in IRR-A of R.A. 9184.

The BAC must initiate discussions on contentious issues, most especially if the participating prospective bidders have no ready questions. It is probable that there are issues that may not be apparent in the bidding documents but are known to the representatives of the BIR. If these issues are brought out and openly discussed, prospective bidders will be able to prepare responsive bids, thus avoiding situations that may give rise to a failure of bidding due to lack of bids received or failure of bids to comply with all the bid requirements. CHDAEc

3. The recording, by the BAC Secretariat of minutes of the pre-bid conference (SF-INFR-32),and its availability to all participants not later than three (3) calendar days after the pre-bid conference. (Section 22.3 of IRR-A)

Issuance of Supplemental/Bid Bulletins

A supplemental/bid bulletin (SF-INFR-34) may be issued by the BAC upon the request of the prospective bidders or upon the initiative of BIR. Any statement made at the pre-bid conference shall not modify the terms of the bidding documents unless such statement is specifically identified in writing as amendment thereto and issued as a supplemental/bid bulletin. cDSaEH

1. Clarification or Interpretation on the Bidding Documents as Supplemental/Bid Bulletins

Clarification or interpretation (SF-INFR-33) on any part of the bidding documents may be requested by prospective bidders provided that the request is made in writing and submitted to the BAC at least ten (10) calendar days before the deadline for the submission and receipt of bids. In this case, the BAC shall issue its response by issuing a supplemental/bid bulletin, to be made available to all those who have properly secured the bidding documents at least seven (7) calendar days before the deadline for the submission and receipt of bids. (Section 22.5.1 of IRR-A)

2. Supplemental/Bid Bulletins Issued at the Initiative of the BIR

The BIR may, at its own initiative, issue supplemental/bid bulletins for purposes of clarifying or modifying any provision of the bidding documents not later than seven (7) calendar days before the deadline for the submission and receipt of bids. Any modification to the bidding documents must be identified as an "AMENDMENT".(Section 22.5.2 of IRR-A) CHDAaS

3. Posting of Supplemental/Bid Bulletins

The BAC shall also post the supplemental/bid bulletin on the BIR website (www.bir.gov.ph) or the website of its electronic procurement system provider, if any, and on the PhilGEPS, within seven calendar days before the deadline for the submission and receipt of bids. It will be the prospective bidders' responsibility to ask for, and secure, these bulletins; however the BAC should ensure that all prospective bidders receive the bid bulletins.

4. Notice to Bidders

Bidders who have submitted bids before a supplemental/bid bulletin is issued have to be informed in writing and allowed to modify or withdraw their respective bids before the deadline for the opening of the bids. (Section 22.5.2 of IRR-A)

Participants in the Issuance of the Supplemental/Bid Bulletin

1. BAC;

2. BAC Secretariat;

3. TWG members;

4. Project Proponent/end-user; and

5. Eligible bidders.

Methodology: Steps in the Issuance of Supplemental/Bid Bulletin

If the supplemental/bid bulletin is being issued upon the initiative of the BAC, the following steps are followed:

1. BAC Secretariat, TWG and Project Proponent/end-user, and technical experts/consultants, if necessary, drafts the supplemental/bid bulletin for approval by the BAC.

2. BAC approves the supplemental/bid bulletin and the BAC Chairman signs it.

3. BAC Secretariat posts the supplemental/bid bulletin in the BIR website (www.bir.gov.ph) and in the PhilGEPS, and likewise sends copies of the supplemental/bid bulletin to all prospective bidders who have properly secured or purchased the bidding documents, within seven (7) calendar days prior to the date of bidding.

If the supplemental/bid bulletin is being issued in response to a request for clarification submitted by an eligible bidder, on the other hand, the process goes as follows:

1. The eligible bidder submits to the BAC, through the BAC Secretariat, a written request for clarification, within the period prescribed above.

2. The BAC directs the BAC Secretariat and/or the TWG to study the request for clarification.

3. The BAC Secretariat, TWG and Project Proponent/end-user, and technical experts/consultants, if necessary, drafts the supplemental/bid bulletin for approval by the BAC.

4. The BAC approves the supplemental/bid bulletin for the signature of the BAC Chairman.

5. The BAC Secretariat posts the supplemental/bid bulletin in the BIR website (www.bir.gov.ph) and in the PhilGEPS.

6. It is shall be the responsibility of all those who have properly secured the bidding documents to inquire and secure supplemental/bid bulletin that may be issued by the BAC.

Step 5 Submission, Receipt and Opening of Technical and Financial Envelopes

Bid

A "Bid" refers to a signed offer or proposal to undertake a contract submitted by a bidder in response to, and in consonance with, the requirements stated in the bidding documents. "Bid" is also equivalent to and may be used interchangeably with "Proposal" and "Tender". A Bid has two components, the Technical Proposal or the Technical Bid, and the Financial Proposal or the Financial Bid. The Technical and Financial Bids must each be contained in separate sealed bid envelopes.

A prospective bidder is eligible to bid for the procurement of infrastructure projects if it complies with the eligibility requirements prescribed for the competitive bidding, within the period stated in the IAEB. The eligibility requirements shall provide for fair and equal access to all prospective bidders.

Contents of the Technical Proposal

The Technical Proposal should contain, at the minimum, the following technical information/documents for the contract to be bid (SF-INFR-30):

1. The bid security in its required form, amount and validity period (SF-INFR-36; SF-INFR-37; SF-INFR-38);

2. Authority of the signatory to sign on behalf of the bidder, all documents pertaining to the bid and the contract, which must be contained in a Board Resolution if the bidder is a corporation or a cooperative, a Joint Venture Resolution if the same is a Joint Venture, a Partnership Resolution if the bidder is a Partnership (SF-INFR-22),or a Special Power of Attorney (SPA) issued by the General Manager or Proprietor if the bidder is a sole proprietor; HAaDTE

3. Construction schedule (bar chart for the construction activities) and S-curve (for financial requirements); HTSIEa

4. Manpower schedule (weekly or monthly scheduling of skilled and unskilled workers, including the Project Manager, Project Engineers, Materials Engineers, and Foremen) (SF-INFR-42);

5. Construction methods (narrative description of how the contractor will undertake the works under the contract),including arrangements for subcontracting portions of the works, if any (SF-INFR-43);

6. Organizational chart for the contract to be bid (not of the firm),with the subcontracting arrangements, if any, to be reflected in this chart (SF-INFR-44);

7. List of contractor's key personnel (viz. the Project Manager, Project Engineers, Materials Engineers, and Foremen),to be assigned to the contract to be bid, their complete qualification and experience data, and the key personnel's signed written commitment to work on the contract once awarded to the contractor (SF-INFR-47); 

8. List of contractor's equipment units pledged for the contract to be bid, which are owned (supported by proof/s of ownership),leased, and/or under purchase agreements (with corresponding engine numbers, chassis numbers and/or serial numbers),supported by certification of availability of equipment from the equipment lessor/vendor for the duration of the contract (SF-INFR-49);

9. Equipment utilization schedule (weekly or monthly scheduling of the minimum equipment required for the contract) (SF-INFR-50);

10. Affidavit of site inspection from the contractor, despite the fact that by the act of submitting its bid, the bidder shall be deemed to have inspected the site and determined the general characteristics of the contract works (SF-INFR-51);

11. Written commitment from a licensed bank to extend to the bidder a credit line specific to the contract at hand if awarded the contract, or a cash deposit certificate, in an amount not lower than that set by the BIR in the Bidding Documents, which shall be at least equal to ten percent (10%) of the ABC, provided that if the bidder previously submitted this document as an eligibility requirement, the said previously submitted document shall suffice;

12. Construction safety and health program of the contractor. (This refers to a narrative description of the safety and health program of the contractor in accordance with DOLE D.O. No. 13. This program shall then be submitted by the winning bidder to the Bureau of Working Condition of the DOLE before any project will be allowed to start);

13. Certificate from the bidder under oath of its compliance with existing labor laws and standards (SF-INFR-52);

14. A sworn affidavit of compliance with the Disclosure Provision under Section 47 of R.A. 9184 and its IRR-A in relation to other provisions of R.A. 3019;

15. A sworn statement by the bidder attesting to have complied with the responsibilities enumerated under Section 17.7.1 of IRR-A, particularly that the bidder has taken steps to carefully examine all of the bidding documents, has acknowledged all conditions, local or otherwise, affecting the implementation of the contract, has made an estimate of the facilities available and needed for the contract to be bid, and has complied with its responsibility of inquiring and securing all supplemental/bid bulletins issued by the BAC (SF-INFR-53); and ADScCE

16. Documents/materials to comply with other non-discretionary criteria and requirements as stated in the ITB.

Contents of the Financial Proposal

1. Bid prices in the Bill of Quantities in the prescribed Bid Form;

2. Detailed estimates including a summary sheet indicating the unit prices of construction materials, labor rates and equipment rentals used, indicating also the direct and indirect costs, in coming up with the bid;

3. Cash flow by the quarter and payments schedule.

Schedule for Submission of Bids (Technical and Financial)

Bids should be submitted on or before the specified time and date of the deadline for submission of bids, as stated in the IAEB (Section 29 of IRR-A), and within the following periods from the last day of the issuance of the bidding documents: (Section 21.2.2 [ii] of IRR-A).

Approved Budget for the Contract	Period
(in pesos)
Up to twenty five (25) million	15 to 30 calendar days
Above twenty five (25) million up to fifty	15 to 45 calendar days
(50) million
Above fifty (50) million up to two hundred	30 to 60 calendar days
(200) million
Above two hundred (200) million	60 to 90 calendar days

 

Bids submitted after the specified deadline shall not be received or accepted by the BAC. (Section 25.2 of IRR-A)

If Only One Eligible Bidder Submits a Bid Envelope

Even if only one eligible bidder submits a bid envelope, the bidding process may proceed. If its bid is found to be responsive to the bidding requirements, its bid will be declared as a SCRB and considered for contract award. (Section 36 of IRR-A) DHEaTS

If no Eligible Bidder Submits a Bid

If no eligible bidder submits a bid, the BAC should declare a failure of bidding. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual in the declaration of failure of bidding.

Participants in the Receipt, Opening and Preliminary Examination of the Bids

1. BAC;

2. TWG;

3. BAC Secretariat;

4. Project Proponent/end-user;

5. Technical experts/consultants, if necessary;

6. Observers; and

7. Eligible bidders. ESCTIA

Methodology: Steps in the Receipt, Opening and Preliminary Examination of Bids 7

1. Eligible bidders submit their bids through their respective authorized managing officers or representatives (Section 25.1 of IRR-A) in two (2) separate sealed bid envelopes, the first containing the Technical Proposal, and the second containing the Financial Proposal. The two envelopes shall be placed in an outer envelope or any appropriate container, which shall be sealed and addressed to the BAC and marked as specified in the ITB.

2. BAC convenes on the Bid Opening Date. The presence of the majority of the BAC members shall constitute a quorum, provided that the chairperson or the vice chairperson is present.

3. BAC receives the bids at the time, date and place specified in the bidding documents. Upon receipt of the bid envelope or container containing the Technical and Financial Proposals, the BAC Secretariat must stamp the face of the outer envelope/container as "RECEIVED",indicating thereon the date and time of receipt, and have the stamp countersigned by an authorized representative.

4. BAC then proceeds with the opening and preliminary examination of bids in public, following the same procedure as the eligibility check. For each bid, the BAC first opens the envelope containing the Technical Proposal to determine its compliance with the required documents for the technical bid. The BAC checks the submitted documents in the Technical Proposal of each bidder against a checklist of required documents to ascertain if they are all present, using non-discretionary "pass/fail" criteria. (Section 30.1 of IRR-A)

For a document, to be deemed "complete" and "sufficient",it must be complete on its face, that is, contain all the information required, and must comply with the requirements set out in the bidding documents.

5. In case one or more of the above-required documents in the Technical Proposal is missing, incomplete or insufficient, the BAC rates the bid "failed" and immediately returns the Technical Proposal to the bidder concerned, together with the unopened envelope containing the Financial Proposal. Otherwise, the BAC rates the Technical Proposal "passed". IaSCTE

6. BAC then immediately opens the envelope containing the Financial Proposal of each remaining bidder whose Technical Proposal (first envelope) was rated "passed".The Financial envelope of each complying bidder shall be opened within the same day. The BAC determines whether all the requirements/documents required for the Financial Proposal are complete and sufficient, and if the total bid price does not exceed the ABC. If so, the BAC rates the bid "passed".If not, then the BAC rates the bid "failed".Only bids that are rated "passed" for both the Technical and Financial Proposals shall be considered for the next stage of the procurement process, i.e., detailed evaluation and comparison of bids. (Sections 30.2 of IRR-A)

In the case of foreign currency denominated bids, where allowed by the law and rules, the same shall be converted to Philippine currency, based on the exchange rate prevailing on the day of the bid opening. The BSP reference rate as of the date of the bid opening shall be used. ACETID

7. BAC reads the total bid prices of the bidders that are rated "passed".

8. All members of the BAC or their duly authorized representatives who are present during the bid opening, shall initial every page of the original copies of all bids received and opened. (Sections 29 of IRR-A)

9. BAC members and the Observers (if they concur with the proceedings) shall also sign the "Abstract of Bids as Read" after the Preliminary Examination of Bids (Form IP-38).

10. BAC Secretariat shall record the proceedings using an electronic tape recorder, or a video recorder. The minutes of the bid opening should be prepared within three (3) calendar days after the bid opening date, so that copies thereof could immediately be sent to the BAC members, Observers, Bidders and other interested parties. Copies of the minutes shall also be made available to the public upon written request and payment of a specified fee to recover cost of materials (Form IP-39).

Withdrawal of Bids

A bidder may, through a Letter of Withdrawal, withdraw its bid, before the deadline for the receipt of bids. A bidder may also express its intention not to participate in the bidding through a letter which should reach and be stamped received by the BAC before the deadline for the receipt of bids. A bidder that withdraws its bid shall not be permitted to submit another bid, directly or indirectly, for the same contract. Moreover, an eligible bidder that withdraws its bid without any justifiable cause shall be subject to the administrative sanctions provided in Section 69.1 of the IRR-A.

A bidder that withdraws its bid prior to the deadline for submission of bids, for a justifiable cause, does not forfeit its bid security.

If a bidder withdraws its bid after the deadline for the submission of bids, its bid security shall be forfeited.

Failure to Comply with the Technical and Financial Requirements of the Bid

An eligible bidder that has failed to comply with any of the Technical or Financial requirements of the Bid will be rated as "failed" by the BAC and disqualified from participating therein. Similar to the case of ineligible bidders, it may file a written request for reconsideration within seven (7) calendar days from the receipt of notice of its failure. (Section 30.3 of IRR-A) HEDSIc

Allowable Extent of Subcontract Work

A contractor may engage general subcontractors in the areas of manual and semi-skilled labor or construction materials, provided that the contractor undertakes not less than fifty percent (50%) of the value of the contracted works. Moreover, unless otherwise provided by the contract, it cannot subcontract any part of the works without the prior consent of the CIR/RD. However, this does not relieve the contractor of any liability or obligation under the contract. It will be responsible for any act, default or negligence of any of its subcontractor, agent, servant or workman, as fully as if the same was its own act, default or negligence, or those of its agents, servants or workmen. 8

Schedule for Notification of Subcontracting Arrangements

All subcontracting arrangements should be disclosed at the time of bidding, and subcontractors shall be identified in the bidding documents submitted by the eligible bidder. Subcontractors should also pass the eligibility check for the portions of the contract that they will undertake.

Step 6 Bid Evaluation

Purpose of Bid Evaluation

Bid evaluation is to determine the LCB by: (Section 32.1 of IRR-A)

1. Establishing the correct calculated prices of the bids, through a detailed evaluation of the financial component of the bids; and

2. Ranking of the total bid prices as so calculated from the lowest to the highest. The bid with the lowest price shall be identified as the LCB. THIECD

Timeline for Bid Evaluation

The entire evaluation process for the bids must be completed in not more than seven (7) calendar days from the deadline for receipt of proposals. However, for projects costing P50 million and below, the entire evaluation process should be completed in not more than five (5) calendar days from the deadline for receipt of proposals. (Section 32.3 of IRR-A, as amended by GPPB Resolution No. 014-2006) It is advisable that the BAC exert best efforts to complete the Bid Evaluation even before the lapse of the afore-mentioned periods as this will expedite the procurement process.

Participants in Bid Evaluation

1. BAC;

2. TWG; and

3. BAC Secretariat.

Methodology: Steps in the Bid Evaluation Process 9

1. After the preliminary examination of bids, the BAC, through the TWG, shall immediately conduct a detailed evaluation of all bids rated "passed," using a non-discretionary criteria, as stated in the IAEB and the ITB, which shall include a consideration of the following: (Section 32.4.1 of IRR-A)

a. The bid must be complete. Unless the ITB specifically allow partial bids, bids not addressing or providing all of the required items in the bidding documents including, where applicable, bill of quantities, shall be automatically disqualified. In this regard, where a required item is provided, but no price is indicated, the same shall be considered as non-responsive, but specifying a "0" (zero) for the said item would mean that it is being offered for free to the Government.

b. Minor arithmetical corrections to consider computational errors, omissions and discounts, if allowed in the bidding documents, to enable proper comparison of all eligible bids. Any adjustment shall be calculated in monetary terms to determine the calculated prices. (Section 32.4.1 [b] of IRR-A) For evaluation purposes, in allowed instances, the bid must be converted into Philippine currency based on the exchange rate prevailing on the day of the bid opening. (Section 61.1 of IRR-A) The BSP reference rate prevailing on the date of the bid opening shall be used.

c. In the evaluation of bids, all bids shall be evaluated on an equal footing to ensure fair and competitive bid evaluation. For this purpose, all bidders shall be required to include the cost of all taxes, such as, but not limited to, value added tax (VAT),income tax, local taxes, and other fiscal levies and duties which shall be itemized in the bid form and reflected in the detailed estimates. Such bids, including said taxes, shall be the basis for bid evaluation and comparison. (Sections 32.4.2 of IRR-A)

d. In case of discrepancies between: (a) bid prices in figures and in words, the latter shall prevail; (b) total prices and unit prices, the latter shall prevail; (c) unit cost in the detailed estimate and unit cost in the bill of quantities, the latter shall prevail. (Sections 32.4.3 of IRR-A) The corrected per item cost for all items shall be the basis for the corrected grand total cost.

2. Based on the detailed evaluation of bids, those that comply with the above-mentioned requirements shall be ranked in the ascending order of their total calculated bid prices, as evaluated and corrected for computational errors, discounts and other modifications, to identify the LCB. Total calculated bid prices, as evaluated and corrected for computational errors, discounts and other modifications, which exceed the ABC shall be disqualified. (Sections 32.4.4 of IRR-A)

3. After all bids have been received, opened, examined, evaluated and ranked, the BAC shall prepare the corresponding Abstract of Bids (SF-INFR-59).All members of the BAC shall sign the Abstract of Bids and attach thereto all the bids with their corresponding Bid Securities and the minutes or proceedings of the bidding. (Section 32.5 of IRR-A) The Observers shall also sign the Abstract of Bids if, in their independent observation, the bidding activity conducted by the BAC followed the correct procedure indicated under R.A. 9184 and its IRR-A. The Abstract of Bids shall contain the following: cASIED

a. Name of the contract and its location, if applicable;

b. Time, date and place of bid opening; and

c. Names of bidders and their corresponding calculated bid prices arranged from lowest to highest, the amount of Bid Security and the name of the issuing entity.

4. The TWG, with the assistance of the BAC Secretariat, when directed by the BAC, should prepare the Evaluation Report (SF-INFR-60),containing the details of the evaluation conducted, preferably within three (3) calendar days from the date the evaluation was concluded.

"The BAC and the TWG shall not entertain clarifications from Bidders, neither shall they initiate communication with the Bidders, during the bid evaluation stage. There are two reasons for this rule:

1. There is no need for clarifications of technical issues since the evaluation is focused on arithmetical computations which are determined from the face of the bid itself; and

2. Communications with the Bidders might lead to possible collusion or the Bidder might try to influence the outcome of the bidding process.

If a bidder does not accept the arithmetical corrections done by the BAC on its bid, the BAC must disqualify the bid and forfeit the bid security of the bidder".For clarification if this will be deleted

If no Bid Complies with all Bid Requirements

If no bid complies with all bid requirements, the BAC should declare a failure of bidding. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding.

Step 7 Post-qualification

Post-qualification

It is the process of verifying, validating and ascertaining all the statements made and documents submitted by the bidder with the LCB, which includes ascertaining the said bidder's compliance with the legal, financial and technical requirements of the bid. IEHTaA

If its eligibility documents had been validated and verified, and its compliance with the legal, financial, and technical requirements of the bid had been ascertained, the bidder must be declared the bidder with the "Lowest Calculated Responsive Bid" (LCRB).10(Section 34.1 of IRR-A)

Post-qualification Requirements

Post-qualification involves the BAC verifying, validating and ascertaining that the bidder satisfies the following requirements: (Section 34.2 of IRR-A)

1. Legal Requirements. The post-qualification process under this criterion involves the verification, validation and ascertaining of the contractor's claim that it is not included in any government "blacklist," as well as all the licenses, permits and other documents it submitted, including the following;

a. PCAB license;

b. SEC registration certificate or the DTI business name registration, whichever applies;

c. Mayor's permit;

d. BIR Certification, which contains the TIN;

e. Authority of signatory; and

f. Affidavit of compliance with the Disclosure Provision.

The bidder's status with regard to "blacklisting" may be verified by checking the Consolidated Blacklisting Report issued by the GPPB, or the "blacklist" of any government agency.

2. Technical Requirements. Post-qualification under this criterion means that the BAC would have to verify, validate and ascertain the veracity of the documents submitted by a contractor to prove compliance of the infrastructure project it offered with the requirements of the contract and bidding documents. This involves the following processes:

a. Verification of the bidder's stated competence and experience, as well as the competence and experience of its key personnel to be assigned to the project, to ensure that these meet the minimum requirements;

b. Verification of availability and commitment, and/or inspection and testing, of equipment units to be owned or leased by the bidder, as well as checking the performance of the bidder in its ongoing government and private contracts, e.g.,examination of the Construction Schedule, Construction Methods, Equipment Units and Equipment Utilization Schedule, List of projects that are on-going, completed and to be started, CPES rating sheets; Statement on similar projects to ensure that these meet the minimum requirements; STcADa

c. Verification if any of the bidder's on-going contracts shows:

• A reported negative slippage of at least fifteen percent (15%);or

• Substandard quality of work as per contract plans and specifications; or

• Unsatisfactory performance of his obligations as per contract terms and conditions, at the time of inspection; or

• That there are overlaps in the proposed utilization of the minimum required equipment with those equipment in the on-going works of the contractor; or

• That the minimum required experience of the bidder's key personnel were not met;

All of which will be grounds for disqualification if found by the BAC to be due to the bidder's fault or negligence.

d. Ascertainment of the sufficiency of the Bid Security as to type, amount, form and wording, and validity period. EHIcaT

3. Financial Requirements. Under this criterion, the BAC ought to verify, validate and ascertain the bid price proposal of the bidder and, whenever applicable, the required bank commitment to provide a credit line to the bidder in the amount specified and over the period stipulated. It also means verifying, validating and ascertaining the bidder's stated net worth and liquid assets, net working capital, the value of all outstanding or unfinished works under ongoing contracts, and the bidder's NFCC, as recalculated considering developments in the bidders' other projects, whenever applicable. This is done to ensure that the bidder can sustain the operating cash flow of the transaction. This process involves:

a. Examination of the Bill of Quantities, Detailed Estimates and Cash Flow;

b. Ascertaining of the sufficiency of the Bid Security as to type, amount, form and wording, and validity period;

c. Ascertaining of the NFCC, credit line, or cash deposit; and

d. Examination of the BIR-audited financial statement. ADCSEa

Timeline for the Conduct of Post-qualification

The post-qualification process must be conducted and completed within seven (7) calendar days from the determination of the LCB. However, in exceptional cases, the CIR/RD may extend the post-qualification period, but in no case shall the extension exceed aggregate period of thirty (30) calendar days. (Section 34.1 of IRR-A)

Participants in the Conduct of Post-qualification

1. BAC;

2. TWG; and

3. BAC Secretariat.

Methodology: Steps in the Conduct of Post-qualification AaCEDS

1. BAC through the TWG verifies, validates, and ascertains the genuineness, validity and accuracy of the legal, technical and financial documents submitted by the bidder with the LCB, using the non-discretionary criteria described above.

In verifying the information contained in such documents, the TWG may make inquiries with appropriate government agencies and examine the original documents kept in the bidder's place of business. The use of other means for verification and validation of such documents may be resorted to by the TWG, such as the Internet and other research methods that yield the same results.

2. BAC, through TWG, inquires about the bidder's performance in relation with other contracts/transactions as indicated in its eligibility statement (statement of on-going, completed or awarded contracts).

3. If the TWG conducts post-qualification, TWG prepares a Post-qualification Report to be submitted to the BAC (SF-INFR-61).The Report shall contain, among others, the activities undertaken with regard to the Post-qualification process, including feedback from inquiries conducted.

4. BAC reviews the Post-qualification Report submitted by the TWG.

5. BAC determines whether the bidder with the LCB passes all the criteria for post-qualification.

6. If the LCB passes the post-qualification, the BAC declares it as the LCRB.

7. After the BAC has determined the LCRB, the BAC Secretariat, with the assistance of the TWG, if necessary, prepares the BAC Resolution (SF-INFR-64) declaring the LCRB and the corresponding Notice to the said bidder informing it of its post-qualification (SF-INFR-62).

Grounds for the Disqualification of Bidders

1. A bidder that has been blacklisted by any government agency or instrumentality will be disqualified by the BAC from further participating in the bidding process.

2. A bidder or its employees is related within the third civil degree of consanguinity to the CIR/RD with direct access to information that my substantially affect the result of the bidding.

3. A bidder is found to have committed an act that constitutes fraud or misrepresentation or to have colluded with others for the purpose of influencing the outcome of the Bidding.

Such bidder will be disqualified by the BAC, its bid security forfeited and, upon conviction, it will suffer the penalty of imprisonment of not less than six (6) and one (1) day and not more than fifteen (15) years, (Section 65.2 of IRR-A) and likewise suffer the administrative penalties of suspension for one (1) year from participation in government procurement for the first offense, and suspension for two (2) years for the second offense. (Section 69.1 of IRR-A) cCSDaI

If the Bidder with the LCB Fails Post-qualification

If the bidder with the LCB fails to pass post-qualification, the BAC shall immediately notify the said bidder in writing of its post-disqualification (SF-INFR-63) and the grounds for it. The post-disqualified bidder shall have three (3) calendar days from receipt of the said notification to request from the BAC, if it so wishes, a reconsideration of this decision. The BAC shall evaluate the request for reconsideration, if any, using the same non-discretionary criteria, and shall issue its final determination of the said request within seven (7) calendar days from receipt thereof. (Section 34.4 of IRR-A) Similar to the cases of bidders deemed to be ineligible and whose bids are rated "failed," the bidder with the LCB who fails to pass post-qualification may likewise file a protest with the corresponding fee in case the BAC denies its request for reconsideration. HCTEDa

Immediately after the BAC has notified the first bidder of its post-disqualification, and notwithstanding any pending request for reconsideration thereof, the BAC shall initiate and complete the same post-qualification process on the bidder with the second LCB. If the second bidder passes the post-qualification, and provided that the request for reconsideration of the first bidder has been denied, the BAC shall declare the second bidder as the bidder with the LCRB. The CIR/RD shall then award the contract to it. (Section 34.5 of IRR-A)

If the second bidder, however, fails the post-qualification, the procedure for post-qualification shall be repeated for the bidder with the next LCB, and so on until the LCRB, is determined for award. (Section 34.7 of IRR-A)

If all Qualified Bidders Fail Post-qualification

If no bidder passes post-qualification, the BAC should declare a failure of bidding. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding. SHCaEA

Reservation Clause

The Reservation Clause declares that the BIR reserves the right to reject any and all bids, to declare a failure of bidding, or not to award the contract. (Section 41 of IRR-A)

The CIR/RD should be prudent in the use of the Reservation Clause because once abused in rejecting any and all bids with manifest preference to any bidder who is closely related to him in accordance with Section 47 of IRR-A, or if it is proven that he exerted undue influence or undue pressure on any member of the BAC or any officer or employee of the BIR to take such action, and the same favors or tends to favor a particular bidder, he shall be meted with the penalties provided in Section 65 of IRR-A. HECaTD

Rights to Reject Bids, Declare a Failure of Bidding, or not Award the Contract in any of the following situations (Section 41.1 of IRR-A):

1. If there is prima facie evidence of collusion between BIR officials or employees, or between the BAC/TWG and any of the bidders, or between or among the bidders themselves, or between a bidder and a third party, including any act which restricts, suppresses or nullifies or tends to restrict, suppress or nullify competition;

2. If the BAC is found to have failed in following the prescribed bidding procedures, for which the applicable sanctions shall be applied to the erring officers, as provided in Section 65 of IRR-A; or

3. For any justifiable and reasonable ground where the award of the contract will not redound to the benefit of the government as follows:

a. If the physical and economic conditions have significantly changed so as to render the project no longer economically, financially or technically feasible as determined by the CIR/RD;

b. If the project is no longer necessary as determined by the CIR/RD; and

c. If the source of funds for the project has been withheld or reduced through no fault of the BIR.

If the CIR/RD abuses his power to reject any and all bids, as provided by the Reservation Clause, with manifest preference to any bidder who is closely related to him in accordance with IRR-A Section 47, or if it is proven that he exerted undue influence or undue pressure on any member of the BAC or any officer or employee of the BIR to take such action, and the same favors or tends to favor a particular bidder, he shall be meted with the penalties provided in Section 65.1.5 of IRR-A. caSEAH

Declaration of Failure of Bidding

In case of failure of bidding, the BAC shall issue a resolution declaring the same. The BAC then reviews the terms and conditions stated in the IAEB. If warranted, it changes any of the terms and conditions, including the quantities or specifications, provided that the ABC is left unchanged. It must, thereafter, conduct a re-bidding, in the process formulating a new IAEB and posting and publishing this as required. (Section 35 of IRR-A) All bidders that have initially responded to the IAEB in the first bidding shall be allowed to submit new bids.

If the original estimate is found to be inadequate on reassessment to meet the objectives of the project, it is may be necessary to reduce the scope of the project.

Should a second failure of bidding occur, the BIR may conduct another public bidding or enter into negotiated procurement. The conduct of another public bidding is warranted if revision is made to the ABC. In such case, the BIR should comply with the requirements of re-advertisement and/or posting. On the other hand, negotiated procurement is resorted to if there are no changes to the ABC, and the terms, conditions and specifications of the project. DaTEIc

Step 8 Contract Award

Rule on Contract Award

The contract shall be awarded to the bidder with the LCRB at its submitted bid price or its calculated bid price, whichever is lower. (Section 37.1 of IRR-A)

The BAC shall issue a Resolution recommending to the CIR/RD award of the contract to the bidder with the LCRB at its submitted bid price or its calculated bid price, whichever is lower.

Prior to the expiration of the period of bid validity, the BIR should notify the successful bidder in writing that its bid has been accepted, through a Notice of Award (SF-INFR-65) received personally or sent by registered mail or electronically. It is important that, in case the Notice of Award is not received personally, its receipt must be confirmed in writing within two (2) days by the successful bidder and submitted personally or sent by registered mail or electronically to the BIR (this particular instruction must be included in the ITB so that the bidder may be guided accordingly). HECaTD

The NOA does not give effect to the contract.

Timeline for Contract Award

The CIR/RD or his duly authorized representatives shall approve or disapprove the recommendation of award within seven (7) calendar days from the date of determination and declaration by the BAC of the LCRB, or four (4) calendar days in case of projects with an ABC of P50 million and below. (Section 37.2 of IRR-A as amended by GPPB Resolution No. 014-2006)

The NOA shall be given to the bidder with the LCRB immediately after approval of the recommendation. Simultaneously, a copy of the Notification of Bidding Results (SF-INFR-66) shall be furnished to all losing bidders, and posted in the BIR website (www.bir.gov.ph) and in the PhilGEPS.

Contract award must be made within the bid validity period as specified in the bidding documents, with the period lasting for a maximum of one hundred twenty (120) calendar days from the date of bid opening. (Section 37.2.2 of IRR-A) If award cannot be made within the said period, the bid validity period should be extended. STcEaI

Participants in the Award of Contract

1. CIR/RD;

2. DCIRs/ACIRs;

3. BAC;

4. FAS/Procurement Division (NO) or Administrative Division/Finance Division (RR);

5. Project Proponent/end-user;

6. BAC Secretariat; and

7. Bidder who submitted the LCRB/SCRB (for conforme).

Methodology: Steps in the Contract Award

1. BAC Secretariat collates all the documents and/or records of the proceedings of the BAC with regard to the procurement at hand, and attaches the same to the BAC Resolution.

2. BAC Secretariat drafts the BAC Resolution recommending award.

3. BAC approves and signs the Resolution recommending award, and transmits the same to the CIR/RD or his duly authorized representative.

4. CIR/RD or his duly authorized representative acts on the recommendation for award within seven (7) calendar days for projects amounting to more than P50M and four (4) calendar days for projects amounting to P50M or less, from the date of determination and declaration by the BAC of the LCRB/SCRB.

5. In case of approval of the recommendation of award, the CIR/RD or his duly authorized representative through the BAC Secretariat, issues the Notice of Award to the bidder with the LCRB/SCRB, while the BAC accordingly notifies the losing bidders. In case of a disapproval of the recommendation of award, the CIR/RD or his duly authorized representative shall state the reason(s) for disapproval and instruct the BAC on the subsequent steps to be adopted. AHcDEI

6. The bidder with the LCRB/SCRB accepts the NOA.

If the Bidder Being Considered for Award Does not Accept the NOA

If the bidder refuses to accept the award within the bid validity period, the BAC shall forfeit the bid security of the bidder and shall initiate the blacklisting proceedings in accordance with the Uniform Guidelines for Blacklisting (GPPB Resolution No. 09-2004). It then initiates and completes the post-qualification of the bidder with the second lowest calculated bid. If found qualified, the said bidder shall be awarded the contract. This procedure is repeated until the LCRB is determined. Should all eligible bidders fail post-qualification, the BAC must declare a failure of bidding. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this Manual on the declaration of failure of bidding.

Refusal to accept an award, without just cause or for the purpose of forcing the BIR to award the contract to another bidder, if proven, is meted with a penalty of imprisonment of not less than six (6) years and one (1) day but not more than fifteen (15) years. (Section 65.3.4 of IRR-A) Additional penalties of suspension for one (1) year from participation in government procurement for the first offense, and suspension for two (2) years for the second offense shall also be imposed on the bidder. (Section 69.1 of IRR-A)

Performance Security

It is a guarantee that the winning bidder will faithfully perform its obligations under the contract prepared in accordance with the bidding documents. (Section 39.1 of IRR-A) It must be posted in favor of the BIR, and will be forfeited in the latter's favor in the event it is established that the winning bidder is in default in any of its obligations under the contract. (Section 39.2 of IRR-A)

Schedule for Posting of Performance Security by the Bidder with the LCRB

Within a maximum period of ten (10) calendar days from the receipt of the NOA, and in all cases, upon signing of the contract, the successful bidder should furnish the BIR with the performance security in accordance with the Conditions of Contract, and in the form prescribed in the Bidding Documents. (Section 39.1 of IRR-A) The performance security forms part of the contract. (Section 37.2.3 of IRR-A) cISDHE

Forms of Performance Security and the Corresponding Amounts Required

The performance security must be in any of the following forms with the corresponding required amounts: 11

Form of Performance Security	Maximum Amount in % of the
		Total Contract Price
1.	Cash, certified check, cashier's	Five Percent (5%)
	check/manager's check, bank
	draft or irrevocable letter of credit
2.	Bank Guarantee confirmed by a	Ten Percent (10%)
	reputable local bank or in the case
	of a foreign bidder, bonded by a
	foreign bank;
3.	Surety Bond callable upon	Thirty Percent (30%)
	demand issued by a reputable
	surety or insurance company;

To monitor the issuance of bidding documents, the BAC through the BAC Secretariat shall account for the number of copies sold to prospective bidders and distributed to all concerned by recording such in an official logbook. The BAC Secretariat may choose a numbering or labeling system that is appropriate for the BIR.

Forms of Performance Security to be submitted by the winning bidder

The BIR must specify in the bidding documents the preferred forms of performance security and the respective amounts thereof. The winning bidder must choose which among the preferred forms it shall submit.

For projects with Multi-Year Obligation Authority (MYOA) approved by the DBM, the performance security shall be computed based on the whole duration of the project. However, the BIR has the option to pro-rate the performance security based on the contract period and shall be renewed every year thereafter.

Changes in the Amount of Performance Security in Case of Amendments in the Contract Price

The winning bidder shall post an additional performance security following the schedule above to cover any cumulative increase of more than ten percent (10%) over the original value of the contract as a result of amendments to order. (Section 1.4 Annex "D" of IRR-A, as amended by Section 1.4 M.O. 176, s. 2005) The percentages in the schedule above must be applied to increases in the original value of the contract. The winning bidder must also cause the extension of the validity of the performance security to cover approved contract time extensions. TICDSc

If the contract value is reduced because part of the goods or services under the contract had already been delivered or completed, and accepted by the government, the BIR shall allow a proportional reduction in the original performance security. However, this proportional reduction in the value of the performance security is allowed only when the contract allows for partial deliveries or performance. Moreover, the reductions must be more than ten percent (10%),and the aggregate of such reductions must not be more than fifty percent (50%) of the original performance security. (Section 39.6 of IRR-A)

Parties Involved in the Posting of the Performance Security

a) Bidder with the LCRB;

b) BIR; and

c) Issuer of the security, e.g.,the banking/financial institution or the insurance company.

Methodology: Steps in the Posting of Performance Security aETAHD

1. The bidder with the LCRB posts a performance security by complying with the following conditions:

a. The performance security must be executed in the form prescribed by the BIR in the ITB; and

b. The performance security must at least be co-terminus with the period of completion of the contract.

2. The Procurement Division/Administrative Division accepts the performance security and indicates such posting and acceptance by attaching the appropriate form to the contract.

Schedule for Release of Performance Security

The performance security shall cover the period from the time of the signing of the contract until the final acceptance of the project by the government wherein the warranty period as prescribed in Sec. 62.2.2 of the IRR-A of RA 9184 shall have commenced. For this reason, the coverage of the performance security shall include the defects liability period of one (1) year and shall be due for release only after the Certificate of Acceptance is issued by the BIR. (GPPB Resolution No. 012-2005) cCAaHD

Step 9 Contract Signing and Approval

Timelines for Entering into a Contract

The winning bidder and the BIR must enter into a contract immediately after the former has submitted the performance security and all other documentary requirements within the period specified in the IRR-A. The parties and their respective witnesses must sign the contract within ten (10) calendar days from receipt by the winning bidder of the NOA. (Section 37.3 of IRR-A as amended by OP MO No. 176)

The Chief of the Accounting Division at the NO or the Chief of the Disbursement Section, Finance Division at the RR shall sign as a witness to the contract pursuant to COA Circular No. 79-122.

The CIR/RD or his duly authorized representative is encouraged to sign within the same day as the signing of the bidder as there are penalties against delaying, without justifiable cause, the award of the contract. (Section 65.1 of IRR-A) Moreover, it would be best for both parties to sign/execute the contract together — provided that all contract documents and requirements are complete — so that both may personally appear before a Notary Public.

Section 38.2 of IRR-A is designed to remove the cause for delay in the contract signing. This provision mandate that if no action is taken by the CIR/RD or his duly authorized representative within the period specified in Section 37.4 of IRR-A, the contract shall be deemed approved. Provided, however, that where further approval by the Office of the President of the Philippines is required, the contract shall not be deemed approved and until the OP gives actual approval to the contract concerned. DTSIEc

Timelines for Contract Approval by Higher Authorities

When, after contract signing, further approval of higher authorities is required, the approving authority for the contract, or his duly authorized representative, shall be given a maximum of fifteen (15) calendar days for contracts amounting to more than P50M and five (5) calendar days for contracts amounting to P50M and below, from receipt thereof, together with all documentary requirements to perfect the said contract, to approve or disapprove it. (Section 37.3 of IRR-A as amended by GPPB Resolution No. 014-2006) aTcIAS

Timelines for Issuance of NTP

The NTP (SF-INFR-72) must be issued together with a copy or copies of the approved contract to the successful bidder within three (3) calendar days for contracts amounting to more than P50M and two (2) calendar days for contracts amounting to P50M and below, from the date of approval of the contract by the appropriate government approving authority. (Section 37.5 of IRR-A as amended by GPPB Resolution No. 014-2006)

Contract Effectivity

Unless otherwise specified in the contract, a contract is effective upon receipt of the NTP. If an effectivity date is provided in the NTP, all notices called for by the terms of the approved contract shall be effective only from such effectivity date, but such effectivity date should not be later than seven (7) calendar days from the issuance of the NTP. (IRR-A Section 37.5 as amended by GPPB Resolution No. 014-2006)

Participants to Contract Signing and Approval and Issuance of the NTP

1. CIR/RD;

2. DCIRs/ACIR;

3. ACIR FAS/Procurement Division or Administrative Division/Finance Division (RR);

4. ACIR Legal service (NO)/Chief Legal Division (RR)

5. Project Proponent/end-user;

6. Witnesses;

7. Winning Bidder; and

8. Higher Authority, if necessary.

Contract Documents should include the following:

1. Contract Agreement;

2. Bid form including all the documents/statements contained in the winning bidder's two bidding envelopes, as annexes;

3. Schedule of Requirements;

4. Technical Specifications and the Bidder's Technical Proposal, including Drawing Plans and PERT/CPM approved by BIR;

5. IAEB;

6. General Conditions of the Contract;

7. Special Conditions of the Contract;

8. Performance Security;

9. NOA and winning bidder's "Conforme" thereto;

10. Addenda and/or Supplemental/Bid Bulletins, if any;

11. TOR with Annexes, if any; and

12. Other contract documents that may be required by existing laws and/or the BIR. IcaEDC

Methodology: Steps in Contract Preparation, Signing and Approval

1. Procurement Division/Administrative Division prepares the draft contract together with the documentary requirement mentioned above;

2. Procurement Division/Administrative Division transmits the draft contract and its attachment to the Legal Service/Legal Division for review and comment;

3. Legal Service/Legal Division returns the draft contract and its attachment to the Procurement Division/Administrative Division for finalization;

4. Procurement Division/Administrative Division prepares the final contract for signature by the winning bidder;

5. Procurement Division/Administrative Division prepares and transmits the ObR, together with the final contract as signed by the winning bidder, to the CIR/RD or his duly authorized representative for signature of ObR;

6. Procurement Division/Administrative Division transmits the ObR and the final contract to the Budget Division/Finance Division for the certification availability of allotment;

7. Accounting Division/Finance Division issues Certificate of Availability of Fund (CAF) and signs as witness to the contract pursuant to COA Circular No. 79-122;

8. Procurement Division/Administrative Division transmits the contract documents to the CIR/RD or his duly authorized representative for signature, together with the following documents: ADTCaI

a. Duly approved program of work and cost estimates or the PPMP;

b. ObR;

c. CAF;

d. Abstract of Bids;

e. Resolution of the BAC recommending Award;

f. Approval of award by appropriate government approving authority; and

g. Other pertinent documents that may be required by existing laws and/or the BIR. CIHTac

9. CIR/RD or his duly authorized representative acts on the contract;

10. If higher approval is required (e.g., approval of the Office of the President),or a review by another government body is necessary (e.g., NEDA or DOJ review),the CIR transmits the contract documents to the appropriate approving authority or reviewing body. The periods indicated above for approval of contracts still apply, except if the approving authority is the Office of the President;

11. Procurement Division/Administrative Division prepares and transmits NTP to CIR/RD or his duly representative for signature;

12. Procurement Division/Administrative Division issues the NTP to the winning bidder.

Rules Governing the Review and Approval of Government Contracts

Executive Order 423, s. 2005, prescribes the rules and regulations on the review and approval of government contracts. Essentially, E.O. 423 provides that, except for government contracts required by law to be acted upon and/or approved by the President, the CIR shall have full authority to give final approval and/or enter into all government contracts of his respective government agency, awarded through public bidding, regardless of amount. Provided, that the CIR certifies under oath that the contract has been entered into in faithful compliance with all applicable laws and regulations. The CIR may also delegate in writing this full authority to give final approval and/or enter into government contracts awarded through public bidding as circumstances may warrant (i.e., to decentralization of procurement in a government agency),subject to such limitations as he may impose. For procurement undertaken through any of the alternative methods allowed by law, where the government contract involves an amount less than P500 Million, except where action or approval of the President is required, the CIR shall have full authority to give final approval and/or enter into such contract, provided that the Department Secretary concerned certifies under oath that the contract has been entered into in faithful compliance with all applicable laws and regulations. He may delegate in writing this authority, as circumstances may warrant (i.e., to decentralize procurement),subject to such limitations as he may impose. cAaTED

Where the CIR has made a determination that a Government contract, including Government contracts required by law to be acted upon and/or approved by the President, involving an amount of at least P500 Million falls under any of the exceptions from public bidding allowed by law, the CIR shall, before proceeding with the alternative methods of procurement provided by law and applicable rules and regulations, obtain the following requirements:

1. An opinion from the GPPB that said Government contract falls within the exceptions from public bidding; and

2. Approval from the Director-General of NEDA to proceed with a specific alternative method of procurement under the exceptional cases provided by law and applicable rules and regulations.

Except for Government contracts required by law to be acted upon and/or approved by the President, the CIR, after obtaining the foregoing requirements, shall have full contracts of their his respective agency, entered into through alternative methods of procurement allowed by law. Provided, that the head of the procurement entity certifies under oath that the contract has been entered into in faithful compliance with all applicable laws and regulations.

If the Bidder with the LCRB or SCRB Refuses or is Unable, Through its Own Fault, to Post the Performance Security and Sign the Contract Within the Prescribed Period

1. Its bid security is forfeited;

2. It is disqualified from further participating in the bidding at hand;

3. Upon conviction, the relevant officers or individuals will suffer the penalty of imprisonment of not less than six (6) and one (1) day and not more than fifteen (15) years; and

4. Upon determination of administrative liability, it will suffer the administrative penalties of suspension for one (1) year from participation in government procurement for the first offense, and suspension for two (2) years for the second offense. This is without prejudice to the blacklisting proceedings that may be undertaken in accordance with the Uniform Guidelines for Blacklisting (GPPB Resolution No. 09-2004).

For its part, the BAC must initiate and complete the post-qualification of the bidder with second LCB. This procedure must be repeated until the LCRB is determined for award. If no bidder passes post-qualification, the BAC declares the bidding a failure and conducts a re-bidding with re-posting and re-advertisement. Should there be another failure of bidding after the conduct of the re-bidding, the BIR may enter into a negotiated procurement. (Section 40.2 of IRR-A) cITaCS

If, on the other hand, the bidder that fails to post the performance security and sign the contract happens to be one with the SCRB, the BAC must declare the bidding a failure. It then conducts a re-bidding with re-posting and re-advertisement. Should there be another failure of bidding after the conduct of the re-bidding, the BIR may enter into a negotiated procurement (Section 40.3 of IRR-A)

If the failure of the bidder with the LCRB or SCRB to sign the contract within the prescribed period is not due to its fault, the sanctions mentioned above shall not be imposed. (Section 40.1 of IRR-A)

SECTION 4. Procedures for the Procurement of Infrastructure Projects Through Alternative Methods. —

The Alternative Methods for the Procurement of Infrastructure Projects

Rules on the Use of Alternative Methods of Procurement

Generally, procurement should be through competitive bidding. In preparing the APP, the BIR must ensure that there is sufficient time to undertake public bidding. However, the law allows the use of alternative methods of procurement in some exceptional instances, provided: HTIEaS

1. There is prior approval of the Head of the BIR on the use of alternative methods of procurement, as recommended by the BAC; and

2. The conditions required by law for the use of alternative methods are present.

In resorting to any of the alternative methods of procurement, the BIR must ensure that the method chosen promotes economy and efficiency, and that the most advantageous price for the government is obtained.

For the procurement of infrastructure projects, negotiated procurement is the only alternative method of procurement that may be used.

Negotiated Procurement

It is a method of procurement whereby the BIR directly negotiates a contract with a legally, technically and financially capable contractor. (Section 53 of IRR-A)

Conditions for Negotiated Procurement

Negotiated procurement must be resorted to only if:

1. There has been a second failure of public bidding as provided in Section 35 of IRR-A;

2. There exists imminent danger to life or property during a state of calamity, or when time is of the essence arising from actual or man-made calamities or other causes where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities.

Under these conditions, in the case of infrastructure projects, the BIR has the option to undertake the project through negotiated procurement or by administration (which may include pakyaw labor contracts in accordance with P.D. 950), or, in high security risk areas, through the Armed Forces of the Philippines (AFP);

3. The project is adjacent or contiguous to an on-going infrastructure project, provided, however, that the: cAHIaE

a. Original contract is the result of a competitive bidding;

b. Subject contract to be negotiated has a scope of work that is similar or related to that of the original contract;

c. Contractor uses the same prices or lower unit prices as in the original contract less mobilization cost;

d. Amount involved does not exceed the amount of the ongoing project;

e. Work is within his contracting capacity (Technical: work experience, personnel and equipment, Financial: NFCC, credit line),considering his outstanding works in the ongoing contract and other ongoing awarded contracts; and cTCEIS

f. Contractor has no slippage in its on-going contracts.

In such instances, negotiations for the procurement must be commenced before the expiry of the original contract. (Section 53 [d] of IRR-A) This negotiated contract can only be undertaken once for a particular ongoing infrastructure project.

The prospective bidder should issue a statement that it is not "blacklisted" or barred from bidding by the government or any of its agencies, offices, corporations or LGUs, and that it is not included in the Consolidated Blacklisting Report issued by the GPPB, once released in accordance with the guidelines to be issued by the GPPB.

There is no difference between the terms "adjacent" and "contiguous". Under Section 54.2 (f) of IRR-A, both terms must be considered synonymous and must mean that the projects referred to are in actual physical contract with each other.

4. A contract has been rescinded or terminated for causes provided for in the contract and existing laws, and the BIR decides to take over, because immediate action is necessary to prevent damage to, or loss of, life or property, or to restore vital public services, infrastructure facilities and other public utilities; or

5. Where the procurement amounts to Fifty Thousand Pesos (P50,000.00) and below, provided that the procurement does not result in splitting of contracts. (GPPB Resolution No. 04-2006)

In GPPB Resolution 013-2005, dated August 5, 2005 as amended by GPPB Resolution No. 018-2006 dated December 6,2006, unless otherwise provided by law, in cases of Items 1 and 2 above, in order for the BIR may consider undertaking the project concerned by administration or through force account: CHcTIA

Conditions and Requirements for the use of "By Administration"

1. Projects undertaken by Administration shall be included in the approved Annual Procurement Plan (APP) of the BIR. If the original mode of procurement recommended in the APP was Public Bidding but cannot be ultimately pursued, or the project to be undertaken by administration has not been previously included, the BAC, through a resolution shall justify and recommend the change in the mode of procurement or the updating of the APP to be approved by the CIR/RD.

2. To undertake projects by administration, the implementing agency must:

a. have a track record of having completed, or supervised a project, by administration or by contract, similar to and with a cost of at least fifty percent (50%) of the project at hand, and

b. own the tools and construction equipment to be used or have access to such tools and equipment owned by other government agencies.

The criteria for evaluating the track record and capability of implementing agencies shall be in accordance with the guidelines to be issued by the Department of Public Works and Highways in consultation with the leagues enumerated under the Local Government Code. AIDTHC

3. Any project costing Five Million (P5,000,000) or less may be undertaken by administration or force account by the implementing agency concerned. A project costing over Five Million (P5,000,000) may be undertaken by the agency concerned only in the following cases:

a. emergency arising from natural calamities or where immediate action is necessary to prevent imminent loss of life or property;

b. to comply with government commitments, as certified by the concerned government authority;

c. failure to award a contract after competitive bidding for a valid cause;

d. termination or rescission of contract;

e. areas with critical peace and order problems as certified by the Local Peace and Order Council;

PROVIDED, that prior authority shall be obtained from the Secretary of Public Works and Highways, if the project cost is Five Million (P5,000,000) up to Twenty Million (P20,000,000),or from the President of the Philippines, upon the favorable recommendation of the Secretary of Public Works and Highways, if the project cost is more than Twenty Million (P20,000,000).3.4 No contractor shall be used by the BIR, directly or indirectly for works undertaken by administration. ESTDcC

4. Procurement of tools and construction equipment shall be subject to the rules on public bidding.

5. For projects funded by the National Government and implemented by a Local Government Unit, the latter shall be required to post the necessary warranty security in accordance with Section 62 of RA 9184 and its IRR-A.

6. The manual labor component of projects undertaken by administration may be undertaken in-house by the implementing agency concerned, by job-order or through the pakyaw contracting system. In-house labor is undertaken if the workers are employees or personnel occupying regular plantilla positions in the implementing agency. Job-order contracts shall be governed by relevant Commission on Audit (COA) and/or Civil Service Commission (CSC) rules. CTDAaE

Pakyaw Contracting System

1. Pakyaw labor shall be drawn from the vicinity of the project, or Pakyaw labor groups belong to various Barangay Associations contiguous to the project site. Unskilled labor should be drawn from the Barangay where the project is located; semi-skilled labor shall be recruited within the municipality, preferably within the Barangay; skilled labor shall be recruited within the province but preferably within the Barangay/Municipality.

2. The formation of Pakyaw Groups should actively involve the Barangay leaders and the community. A Project Facilitator (PF) shall be appointed by the implementing agency to assist in the organization of the Pakyaw Groups and in the preparation of the Pakyaw Contracts. The PF shall, for purposes of informing the community of the project and of organizing pakyaw groups, shall convene community meetings, with the assistance of the Barangay Chairperson/s. The PF shall cause the registration of all unemployed or underemployed members of the community who are interested to join Pakyaw groups being formed for the project.

3. The Pakyaw workers should be formed into groups of workers based on the lump sum works. In case of competitive selection, pakyaw groups which were not selected for a particular lump sum work may choose to compete for other works requiring pakyaw groups.

4. Where there is competition for the award of Pakyaw works, the pakyaw labor contract shall be awarded through competitive selection with at least three (3) Pakyaw Groups participating. There is deemed to be a competition for the award of pakyaw contracts when the number of laborers who registered during the community meeting is more than what is reasonably needed for the lump sum work required under the project. The competitive selection shall be done on a "per-output" basis. And the winner(s) shall be determined based on what group(s) undertake(s) to deliver the desired output at the lowest rate, either per item of output or per lump sum work, within the required period.

5. For purposes of Item 4.4 hereof, the number of members per group shall be determined by the Project Facilitator to ensure that at least three Pakyaw Groups are organized for the competitive selection. The determination by the Project Facilitator of the number of members per Pakyaw Group shall be exercised with regard to the objective of providing work to as many laborers as possible.

6. A Group Leader shall be elected from among the members of the group who shall be the signatory to the Pakyaw Contract and any other documents pertaining to the work on behalf of the Pakyaw Group. He may be replaced at any time by the group through an election for that purpose, after due notice to the Project Facilitator and the Barangay Chairperson. Any such replacement shall not invalidate any previous Pakyaw Contract. TCHcAE 

7. In no case may Pakyaw Groups be regular or licensed contractors or organized by and/or under the management of a regular or licensed contractor. Laborers supplied by job-contractors/labor-only contractors are likewise disqualified to become members of the Pakyaw groups when the job-contracting/labor-only contracting is specifically carried out for the purpose.

8. The amount of a pakyaw labor contract per project shall not exceed Five Hundred Thousand Pesos (P500,000.00) per pakyaw group.

Contractors to be Invited for Negotiations

The BIR can invite for negotiations only bona fide contractors that:

1. Are licensed with the PCAB, whose eligibility documents are on file with the BIR or the DPWH Contractors' Registry, as the case may be; and

2. Have been classified under the type of contract/project where the subject contract falls are eligible to be invited for negotiation.

Other contractors not previously deemed eligible may also apply for eligibility. (Section 54.2 [c] of IRR-A) Eligible contractors other than those invited may also submit an LOI, which shall be considered by the BIR. AcHSEa

BIR must maintain a registry of contractors, suppliers and consultants as basis for drawing up the short list and/or selecting the contractors for negotiations.

Eligible contractor/s for the project under consideration shall be furnished copies of the instructions to bidders, plans, specifications, proposal book form, and other tender documents for their use in submitting their bids and other information called for in the format. The contractors shall submit, simultaneously with their bid, the bid security as stipulated above. Negotiation may be made in ascending order starting from the lowest complying offerer. (Section 54.2 [c] of IRR-A)

Participants in Negotiated Procurement

1. CIR/RD;

2. BAC;

3. TWG;

4. BAC Secretariat;

5. Project Proponent/end-user;

6. Technical experts/consultants, if necessary;

7. Observers; and

8. Accredited or Registered Contractors.

Methodology: Steps in the Conduct of Negotiated Procurement

1. BAC conducts a pre-procurement conference to confirm the existence of the condition required by law for negotiated procurement;

2. If the original mode of procurement recommended in the APP was competitive bidding, the BAC recommends the change in the mode of procurement to negotiated through a resolution to be approved by the CIR/RD; EIAScH

3. BAC, through the Secretariat, posts for information purposes the IAEB in:

a. BIR website (www.bir.gov.ph);

b. PhilGEPS; and

c. Any conspicuous place in the premises of the BIR NO/RR.

The posting shall be done for a maximum period of seven (7) calendar days prior to opening of the proposal. The BIR, however, may waive the period for posting in cases when:

a. There is imminent danger to life and property;

b. Time is of the essence arising from actual or man-made calamities or other causes, where immediate action is necessary to prevent damage to, or loss of, life or property; or

c. To restore vital public services, infrastructure facilities and other public utilities. STaCcA

At any rate, the award must be posted in the aforementioned websites. (Section 54.2 [d] of IRR-A)

4. BAC, through the BAC Secretariat, issues invitations to at least three (3) contractors to submit proposals within the period of posting. (Section 54.2 [b] of IRR-A) The procedures for the conduct of competitive or public bidding should be observed. However, the minimum period for each bidding procedure may be reduced. Bona fide contractors licensed with the CIAP whose eligibility documents are on file with the BIR or the DPWH Contractor's Registry, as the case may be, and who are classified under the type of contract/project where the subject contract falls are eligible to be invited for negotiation, provided that other contractors not previously deemed eligible may also apply for eligibility. For this reason, the BIR must maintain a registry of contractors as basis for drawing up the short list and/or selecting the contractors. (Section 54.2 [c] of IRR-A) acCITS

If the procurement is being negotiated as a result of a terminated or rescinded contract being taken over because immediate action is necessary to prevent damage to, or loss of, life or property, or to restore vital public services, infrastructure facilities and other public utilities (Section 53 [c] of IRR-A), then the contract may be negotiated starting with the second lowest calculated bidder for the project under consideration at the bidder's original bid price. If negotiation fails, then negotiation shall be done with the third lowest calculated bidder at his original price. If the negotiation fails again, the BIR shall draw a list of at least three(3) contractors in good standing which will be invited to submit bids and negotiate with the bidder who submitted the lowest calculated bid or highest rated bid, whichever is applicable. If the offer of the bidder who submitted the lowest calculated bid or highest rated bid, whichever is applicable, is not responsive to the original specifications and ABC, negotiation shall be made in ascending order starting from the lowest offer. The bidder whose bid is found to be responsive to the original specifications and ABC shall be considered for award. In all cases, the award of contract shall be posted at the PhilGEPS website, BIR website (www.bir.gov.ph) and in conspicuous place within the premises of the BIR. (Section 54.2 [e] of IRR-A as amended by M.O. 213) TCDHIc

The negotiation may be made with a previous contractor of good standing of the BIR, or a contractor of good standing situated within the vicinity where the calamity or emergency occurred. The award of contract shall be posted at the PhilGEPS website, BIR website (www.bir.gov.ph) and in conspicuous place within the premises of the BIR. (Section 53 (a) of IRR-A as amended by M.O. 213)

5. The contractors submit their proposals in sealed envelopes. The steps in the submission of bids outlined in Competitive Bidding shall be followed.

6. The BAC, with the assistance of the TWG, evaluates the proposal of the prospective contractors. The BAC shall issue a resolution recommending to the CIR/RD of the award of the contract to the LCRB for approval.

7. The Procurement Division/Administrative Division prepares the contract for approval of the CIR/RD or his duly authorized representative, and serves the same to the winning consultant.

Performance security is required for purchase made through Negotiated Procurement.

SECTION 5. Guidelines on Contract Implementation for Infrastructure Projects. —

Contract Implementation for Infrastructure Projects

Contract implementation covers the following milestones:

1. Effectivity of the contract;

2. Contractor's performance of his contractual obligations;

3. BIR's performance of its contractual obligations, as specified in the contract;

4. Inspection and final acceptance or project sign-off;

5. All other related activities; and

6. Payment by the BIR.

The project proponent/end-user should determine the period of contract implementation during the procurement planning stage, and include it in the PPMP. In determining the contract implementation period, it must ensure that the contractor is given ample time to undertake any preparatory activity/ies necessary for it to comply with the conditions of the contract. CTHDcE

Contract Effectivity

A contract becomes effective either on the date of the receipt by the winning bidder of the NTP, otherwise, on the effectivity date provided in the NTP. (Section 37.5 of IRR-A)

BIR's Responsibilities

Whenever the implementation of the infrastructure project requires that the contractor obtain permits, approvals, and import and other licenses from national or local government agencies, the BIR may, if so requested by the contractor, assist the latter in complying with such requirements in a timely and expeditious manner. However, the contractor shall bear the costs of such permits and/or licenses. On the other hand, the BIR shall pay all costs involved in the performance of its responsibilities, in accordance with the contract.

Subcontracting

Generally, a contractor may be allowed to subcontract a portion of the contract or project. However, the contractor should not be allowed to subcontract a material or significant portion of the contract or project, which portion must not exceed fifty percent (50%) of the total project cost. The bidding documents must specify what are considered as significant/material component/s of the project. Moreover, except if otherwise provided by the contract, it should not subcontract any part of the works without the prior consent of the CIR/RD or his duly authorized representative. However, this consent shall not relieve the contractor of any liability or obligation under the contract. The contractor will be responsible for the acts, defaults and neglects of any subcontractor, his agents, servants or workmen as fully as if these were its own acts, defaults or neglects, or those of its agents, servants or workmen. CIaHDc

All subcontracting arrangements must be disclosed at the time of bidding, and subcontractors must be identified in the bid submitted by the bidder. For them to be allowed to do so, subcontractors should also pass the eligibility check for the portions of the contract that they will undertake.

Inspection and Tests

All materials, plant/s and workmanship shall be of the kind described in the contract and in accordance with the BIR's engineer's instructions. To ensure that this, indeed, is the case, these materials, plant/s and workmanship will be subjected, from time to time, to such tests as the BIR's engineer may require. These tests must be at the place of manufacture, fabrication or preparation, or on site or at such other place/s as may be specified in the contract, or at all or any of such places.

The BIR's engineer, and any person authorized by him, must, at all reasonable times, have access to the site and to all workshops and places where materials or plant are being manufactured, fabricated or prepared for the works. The contractor, for its part, shall afford every facility for, and every assistance in, obtaining the right to such access.

The BIR's engineer shall be entitled, during manufacture, fabrication or preparation of materials to be used in the project, to inspect and test these materials and the plant or plants where these materials are being manufactured, fabricated, and/or prepared. If the materials are being manufactured, fabricated or prepared in workshops or places other than those of the contractor, the contractor must obtain permission for the BIR's engineer to carry out inspection and testing in those workshops or places. Such inspection or testing will not release the contractor from any obligation under the contract.

If, at the time and place agreed above, the materials or plant are not ready for inspection or testing, the BIR's engineer may reject these materials or the plant and must notify the contractor of such rejection immediately. He/she must also do so if, as a result of the inspection or testing, he/she determines that the materials or plant are defective or otherwise not in accordance with the contract. The notice must state the BIR's engineer's objection and the reasons for the objection. The contractor, for its part, must then promptly make good the defect or ensure that rejected materials or plant comply with the contract. If the BIR's engineer so requests, the test of rejected materials or plant shall be made or repeated under the same terms and conditions.

The BIR's engineer will, after consultation with the contractor, determine all the costs incurred in the repetition of the test or tests. These costs are recoverable from the contractor by the BIR and may be deducted from any monies due to the contractor. The BIR's engineer must notify the contractor accordingly, with a copy being furnished the BIR.

Dayworks

If applicable, as indicated in the contract, the dayworks rates in the contractor's bid shall be used for small additional amounts of work, only when the BIR's engineer has given written instructions in advance for additional work to be paid for in that way.

All works to be paid for as dayworks shall be recorded by the contractor on forms approved by the BIR's engineer. Each completed form shall be verified and signed by the BIR's engineer within two (2) days of the work being done.

The contractor shall be paid for dayworks subject to obtaining signed dayworks forms.

The Use of Accredited Testing Laboratories

To help ensure the quality of materials being used in infrastructure projects, the Bureau of Research and Standards (BRS) of the DPWH, the DOST or the DTI shall accredit the testing laboratories that can be used in government infrastructure projects. All government agencies implementing infrastructure projects must use only these laboratories. Only tests done by these laboratories shall be recognized and accepted, except for the testing of new materials to be undertaken through procedures approved by the DPWH Secretary. EaIcAS

Evaluation of Contractor's Performance

All Procuring Entities implementing government infrastructure projects must evaluate the performance of their contractors using the NEDA-Approved CPES Guidelines for the type of project being implemented. These guidelines cover all infrastructure projects awarded by the government regardless of contract amount and funding source.

CPES evaluation must be done during construction and upon completion of the project. To ensure continuous implementation of CPES, all Procuring Entities concerned are required to include in their Projects' Engineering and Administrative Overhead Cost the budget for such system's implementation pursuant to NEDA Board Resolution No. 18 (s. 2002).

For project types that do not have specific CPES Guidelines, the Procuring Entities concerned may formulate and adopt their own implementing guidelines specific to their needs, provided that the NEDA Infrastructure Committee poses no objections to their adoption, and that the said guidelines are made known to all prospective bidders.

The BIR is required to establish or designate CPES Implementing Unit which shall be responsible for the implementation of the CPES Implementing guidelines, including but not limited to, the supervision of CPEs to be accredited by the CIAP. The BIR's CPES IU shall be responsible for the following:

a) pre-screening of applications of CPEs;

b) funding for CPEs accreditation and training, including seminars; and

c) yearly evaluation of CPEs.

The CPES IU shall submit the results of its performance evaluation to the CIAP on a monthly basis or as often as necessary. It shall likewise develop and maintain a databank and disseminate the CPES reports to the concerned units/departments within the BIR and to other interested users.

Measurement of Works

The quantities set out in the Bill of Quantities are the estimated quantities for the works. They should not therefore be taken as the actual and correct quantities of the works to be executed by the contractor in fulfillment of his obligations under the contract. They can vary to up to ten percent (10%) of the contract price to account for variation orders as provided for in Annex E of the IRR-A.

The BIR's engineer must, except if otherwise stated in the Quantities of the Detailed Engineering, measure the value of the works actually in-place in accordance with the contract. This measurement will be the basis for the payment that will be made to the contractor in accordance with the Statement of Work Accomplished. The BIR's engineer must, when he/she needs to measure any part of the works, give reasonable notice to the contractor's authorized agent, who must:

1. Forthwith attend or send a qualified representative to assist the BIR's engineer in making such measurement; and

2. Supply all particulars required by the BIR's engineer.

Impact of Infrastructure Project on Traffic and Adjoining Properties

All operations necessary for the execution and completion of the works and the remedying of any defects therein must, so far as compliance with the requirements of the contract permits, be carried on so as not to interfere unnecessarily or improperly with:

1. The flow of traffic;

2. The convenience of the public; and

3. The access to, use and occupation of public or private roads and footpaths to or of properties whether in the possession of the BIR or any other person. aSIETH

The contractor shall save harmless and indemnify the BIR in all claims, proceedings, damages, costs, charges and expenses arising out of, or in relation to, any such matters insofar as the contractor is responsible for them.

Responsibilities of the Contractor as Far as the Project Site

During the execution of the works, the contractor must keep the site reasonably free from all unnecessary obstruction. It must also store or dispose of any equipment and surplus materials and clear away and remove from the site any wreckage, rubbish or temporary works that are no longer required.

Upon the issue of the Taking-Over Certificate, the contractor shall remove from that part of the site to which the certificate relates, all equipment, surplus material, rubbish and temporary works of every kind. It must leave such part of the site and works clean and in a workmanlike condition to the satisfaction of the BIR's engineer. However, it is entitled to retain until the end of the defects liability period such materials, equipment and temporary works he may need to fulfill his obligations in relation to the project.

Materials and Equipment Paid for by the BIR

Unless otherwise provided for in the contract, the contractor must turn-over to the BIR all excess, used, unused and/or reusable materials paid for in the contract such as, formworks, laboratory apparatus and equipment, vehicles, field office, safety gadgets and devices, etc. Vehicles and equipment should be in operating condition when turned over. TaDSHC

Contract Price and Payment

Price Escalation During Contract Implementation

Price escalation is generally not allowed. 12 For the given scope of work in the contract as awarded, the price must be considered as a fixed price, except under extraordinary circumstances as determined by the NEDA in accordance with the Civil Code of the Philippines, upon recommendation of the BIR, and upon prior approval of the GPPB. Any request for price escalation under extraordinary circumstances should be submitted by the concerned entity to the NEDA with the endorsement of the BIR. The burden of proving the occurrence of extraordinary circumstances that will allow for price escalation shall rest with the entity requesting for such escalation. NEDA shall only respond to such request after receiving the proof and the necessary documentation.

"Extraordinary circumstances" shall refer to events defined in the Civil Code of the Philippines, consistent with the guidelines issued by the GPPB. In particular, the Guidelines for Contract Price Escalation approved by the GPPB in Resolution 07-2004, dated July 22, 2004, provides that the term "extraordinary circumstances" shall refer to the following Articles of the Civil Code of the Philippines:

1. Article 1174,as it pertains to Ordinary Fortuitous Events or those events which ordinarily happen to which could be reasonable foreseen but are inevitable, such as, but not limited to the following: (a) typhoons; (b) thunderstorms; (c) flooding of lowly areas; and (d) vehicular accidents; provided that the following are present: SDITAC

a. The cause of the extraordinary circumstances must be independent of the will of the parties;

b. The event must be either unforeseeable or unavoidable;

c. The event must be such as to render it difficult but not impossible for the supplier to fulfill his obligation in a normal manner or within the contemplation of the parties;

d. The supplier must be free from any participation in or aggravation of the injury to the BIR; and

e. The allowance for price escalation, should an ordinary fortuitous event occur, is stipulated by the parties or the nature of the obligation requires the assumption of risk. 

2. Article 1250, as it pertains to Extraordinary Inflation or Deflation, which may refer to the decrease or increase of the purchasing power of the Philippine currency which is unusual or beyond the common fluctuation in the value of said currency, in accordance with the two (2) standard deviation rule computed in accordance with the Guidelines for Contract Price Escalation, and such decrease or increase could not have been reasonably foreseen or was manifestly beyond the contemplation of the parties at the time of the establishment of the obligation. EADSIa

3. Article 1680, as it enumerated Extraordinary Fortuitous Events or those events which do not usually happen, such as, but not limited to the following: (a) fire; (b) war; (c) pestilence; (d) unusual flood; (e) locusts; and (f) earthquake; provided that the circumstances before, during and after the event shall be taken into consideration.

Methodology: Steps in Requesting for Approval of Claims for Price Escalation

In the review and approval of a request for price escalation, the BIR should comply with the following conditions detailed in the Guidelines for Contract Price Escalation, before the same can be acted upon:

1. Request for Price Escalation. Contractor shall file a written request to the CIR/RD, through the project proponent/end-user, stating clearly therein the grounds for escalation.

2. Endorsement. The CIR/RD or his duly authorized representative shall endorse the request for price escalation to the NEDA, through its Director-General, accompanied by several documentary requirements. IScaAE

3. Two-Stage Review Process. The review process shall commence only after the NEDA has acknowledged the completeness of the request. A request for price escalation shall only be granted if it satisfies both the First Stage (Legal Parameters) and Second Stage (Technical Parameters) reviews of the NEDA.

4. Amount of Price Escalation to be Granted. The amount of escalation to be granted in the case of goods should only be the remaining amount over and above the thresholds as computed under the Second Stage review process.

5. Period and Frequency of Requests for Price Escalation. Requests for price escalation shall only be made for cost items already incurred by the contractor. No request for price escalation shall be made for prospective application. Further, price escalation shall only be granted to those items included in a specific request. Provided further, that requests for price escalation shall be made not shorter than six (6) months reckoned from the start of the contract implementation, and not shorter than six (6)-month period thereafter. For contracts wherein the duration is shorter than six (6) months, the request for contract price escalation shall be made after the completion of the contract.

6. Misrepresentation. Any misrepresentation made by the BIR or the contractor in any stage of the processing of a particular request for price escalation shall cause the automatic denial/disapproval of said claim.

7. Recommendation/Approval. The NEDA shall, upon completion of its review pursuant to the Guidelines for Contract Price Escalation, submit its recommendation to the GPPB for appropriate action. The GPPB shall then approve/act upon the request for price escalation during one of its meetings, to be attended by the CIR/RD or his duly authorized representative/s.

Denomination of Contract Prices

All contract prices must be denominated and payable in Philippine currency, and this shall be stated in the bidding documents. Should the BIR receive bids denominated in foreign currency, the same shall be converted to Philippine currency based on the exchange rate officially prescribed for similar transactions as established by the BSP on the date of the bid opening. (Section 61.1 of IRR-A)

Method of Payment for Works in the Contract

The method and conditions of payment shall be specified in the contract. Generally, payment for works can be made in two ways: unit price or lump-sum payment. Unit price payments are made based on the unit prices of specific items as applied to actual quantities accomplished according to the Statement of Work Accomplished. Lump-sum payments, on the other hand, are based on the value of actual accomplished work in proportion to total contract cost. SAHIDc

No Procuring Entity is allowed to issue a letter of credit in favor of a Philippine entity or any of the latter's foreign manufacturers or suppliers, with respect to any procurement. (Section 42.5 of IRR-A)

Manner of Payments

Any kind of payment, including advance and progress payments, must be made by the BIR as soon as possible, but in no case later than forty-five (45) days after the submission of an invoice or claim by the contractor, accompanied by documents submitted pursuant to the contract, and upon fulfillment of other obligations stipulated therein. The BIR must also ensure that all accounting and auditing requirements are met prior to payment. The BIR should commence inspection within twenty-four (24) hours after delivery.

Payments must be made in the Philippine currency. 13

Request for Advance Payment for Mobilization

A contractor may request for advance payment for mobilization. However, the payment must not exceed fifteen percent (15%) of the total contract price, and must be made in lump sum or, at the most, two (2) installments according to a schedule specified in the ITB and other relevant bidding documents. Moreover, it must be made only upon the submission by the contractor of a written request. The contractor must also submit to the BIR an irrevocable standby letter of credit from a commercial bank, a bank guarantee or a surety bond callable upon demand, issued by a surety or insurance company duly licensed by the Insurance Commission and confirmed by the BIR. This letter of credit, surety bond or bank guarantee must be equal in value to the advance payment and must be accepted by the BIR. EaISDC

Recovery of Advance Payment

The BIR must recover the advance payment by deducting from the progress payments to the contractor fifteen percent (15%) until the advance is fully liquidated within the duration of the contract, and before full payment is made to the contractor.

The contractor may reduce his standby letter of credit or guarantee/surety instrument by the amounts recovered to liquidate the advance payment.

Incentive Bonus

No incentive bonus, in whatever form or for whatever purpose, must be allowed. 14(Section 42.4 of IRR-A)

Progress Payment

The first progress payment may be paid by the BIR to the contractor after 20% of the work had been accomplished. Thereafter, payments can be made once a month, provided that the latter submits a Progress Billing or a request for payment for work accomplished. Such request for payment, including the Statement of Work Accomplished by the contractor, must be verified and approved by the government project engineer concerned. Except as otherwise stipulated in the ITB, materials and equipment delivered on the site but not completely put in place shall not be included for payment. aTEADI

The BIR has the right to deduct from the contractor's progress billing such amount as may be necessary to cover third party liabilities. It must not process any progress payment unless the discovered defects are corrected.

Retention Money

"Retention money" refers to the amount equal to ten percent (10%) of the progress payments, before deductions are made, that is withheld by the BIR to cover the uncorrected discovered defects and third party liabilities. It is collected from all progress payments until works equivalent to fifty percent (50%) of the value of works, as determined by the BIR, is accomplished. If, after fifty percent (50%) completion, the work is satisfactorily done and on schedule, no additional retention shall be made; otherwise, the ten percent (10%) retention shall continue to be imposed. aEHASI

The total "retention money" shall be due for release after the defects liability period, upon final acceptance of the works.

The contractor may request the BIR that, instead of retention money being withheld from each progress billing, it issues in favor of the government, irrevocable standby letters of credit from a commercial bank, bank guarantees or surety bonds callable on demand. These financial instruments must be of amounts equivalent to the retention money substituted for and acceptable to government. They must also be valid for a duration to be determined by the concerned implementing office/agency or BIR and will answer for the purpose for which the ten percent (10%) retention is intended. The BIR, for its part, may agree to the request, provided that the project is on schedule and is satisfactorily undertaken. 15

Final Payment

The contractor may request for the penultimate payment for the project it is implementing when ninety percent (90%) of the work has been completed.

The final payment will be made upon one hundred percent (100%) completion of the work. This payment will be reduced by whatever balance remains of the amount that is needed in order to return to the government the 15% advance payment previously made. Ten percent (10%) of the remainder will then be retained to cover for all defects that may be detected, including maintenance costs for one year after project completion. This amount will be returned to the contractor only after the one-year defects liability period. An alternative to the ten percent (10%) final retention would be for the contractor to post a guarantee bond equivalent to 10% of the contract price. SacTAC

On payments upon termination of contract

Quantum meruit means "as much as he deserves".It is an equitable doctrine, based on the concept that no one who benefits by the labor and materials of another should be unjustly enriched thereby; under these circumstances, the law implies a promise to pay a reasonable amount for the labor and materials furnished. (Black's Law Dictionary, Fifth Edition)

Recovery by quantum meruit is allowed in cases where there is no contract executed between the contractor and the BIR, or the contract entered into is null and void and where the BIR benefited from the work/services rendered.

In order to provide some safeguards in the application of quantum meruit on the recovery by the contractor, the conditions set forth in COA Resolution 86-58 dated November 15, 1986 should be strictly allowed.

Timeline for Payments

Payments must be made promptly by the BIR, but in no case later than forty-five (45) days after submission of the following documents which should be (check with GOODS): TAaHIE

A. Contractor

a) billing statement/invoice;

b) delivery receipt/s;

c) other requirements stipulated in the contract.

B. Project Proponent/end-user

a) request for inspection;

b) technical inspection report;

c) certificate of performance for services rendered;

d) certificate of operationability; and

e) other certifications as required in the contract. EICSTa

C. Inspection and Acceptance Committee

a) inspection and acceptance report

Such payment shall be subject to all accounting and auditing requirements.

Variation Orders

A Variation Order refers to any increase/decrease in quantities within the general scope of the project as bid and awarded, in any of the following aspects:

1. Introduction of new work items that are not included in the original contract; or

2. Reclassification of work items that are either due to change of plans, design or alignment to suit actual field conditions resulting in disparity between the pre-construction plans used for purposes of the bidding and the "as staked plans" or construction drawings prepared after a joint survey by the contractor and the government after award of the contract, or during actual construction. DcCIAa

A Variation Order may either be in the form of a Change Order or Extra Work Order.

A Change Order covers any increase/decrease in quantities of original work of items in the contract.

An Extra Work Order covers the introduction of new work necessary for the completion/improvement or protection of the project which are not included as items of work in the original contract. As an example, there may be subsurface or latent physical conditions at the site that differ materially from those indicated in the contract. There might also be duly unknown physical conditions at the site of an unusual nature that differ materially from those ordinarily encountered and generally recognized as inherent in the work or character provided for in the contract.

The addition/deletion of works should be within the general scope of the project as bid and awarded, and the deletion of the work should not affect the integrity and usefulness of the structure.

Issuance of Variation Order

It may be issued by the BIR at any time during contract implementation. However, the adjustment provided for in this order must be necessary to fully meet the requirements of the project. The issuance of a Variation Order, must conform to the following:

1. That there will be no short changes in the original design;

2. That it will not affect the structural integrity and usefulness of the structure; and

3. That it is covered by a CAF.

The net cumulative amount of the Variation Order should not exceed positive ten percent (+10%) of the original project cost. TSacAE

If the adjustments provided for in a Variation Order costs more than ten percent (10%) of the original project costs, these shall be the subject of another contract to be bid out if the works are separable from the original contract. However, if these adjustments are urgently necessary to complete the original scope of work, the CIR/RD or his duly authorized representative may authorize the Variation Order beyond ten percent (10%) but not more than twenty percent (20%), subject to the guidelines to be determined by the GPPB.

In case the Variation Order exceeds ten percent (10%),the BIR must ensure that appropriate sanctions are imposed on the designer, consultant or official responsible for the original detailed engineering design which failed to consider the conditions that led to the need for adjustments costing more than ten percent (10%) of the original total contract price. ESIcaC

Conditions Under Which a Contractor May Start Work Under Variation Orders and Receive Payments

Under no circumstances can a contractor proceed to commence work under any Change Order or Extra Work Order unless the CIR/RD or his duly authorized representative has approved the order.

The CIR/RD or his duly authorized representative may, subject to the issuance of the CAF, authorize the immediate start of work under any Change or Extra Work Order, subject to any or all of the following conditions:

1. In the event of any emergency where the prosecution of the work is urgent to avoid any detriment to public service, or damage to life and/or property; and/or

2. When time is of the essence, for works in the critical path based on the approved PERT/CPM;

However, the approval is valid on work done up to the point where the cumulative increase in value of work on the project which has not yet been duly fully approved does not exceed five percent (5%) of the adjusted original contract price whichever is less. Furthermore, immediately after the start of work, the corresponding Change Order or Extra Work Order must be prepared and submitted for approval in accordance with the above rules herein set. Payments for works satisfactorily accomplished on any Change Order or Extra Work Order may be made only after approval of the same by the CIR/RD or his duly authorized representative. HCDAcE

For a Change Order or Extra Work Order involving a cumulative amount exceeding five percent (5%) of the original contract, no work thereon may be commenced unless said Change Order or Extra Work Order has been approved by the CIR/RD or his duly authorized representative.

Rules Governing Price Adjustments Due to Variation

The payment to the contractor for additional work under Variation Orders, must be derived based on the following:

1. For additional/extra works duly covered by Change Orders involving work items which are exactly the same or similar to those in the original contract, the applicable unit prices of work items in the original contract shall be used.

2. For additional/extra works duly covered by Extra Works Orders involving new work items that are not in the original contract, the unit prices will be based on the direct unit costs used in the original contract (e.g., unit cost of cement, rebars, form lumber, labor rate, equipment rental, etc.).All new components of the new work item shall be fixed prices, provided the same is acceptable to both the government and the contractor. The direct unit costs of new components must also be based on the contractor's estimate as validated by the BIR, in comparison with the construction price indices issued by the NSO. The BIR must validate these prices through a documented canvass among three (3) eligible suppliers registered with the DPWH or PhilGEPS in accordance with existing rules and regulations. The direct cost of the new work item must then be combined with the mark-up factor (i.e., taxes and profit) used by the contractor in his bid to determine the unit price of the new work item. TAcSCH

The request for payment by the contractor for any extra work must be accompanied by a statement, with the approved supporting forms, giving a detailed accounting and record of amount for which he claims payment. This request for payment must be included in the contractor's statement for progress payment.

Participants in the Issuance of a Variation Order

The following parties are involved in the issuance of a Variation Order:

1. CIR/RD or his duly authorized representative

2. Project Proponent/end-user;

3. Contractor;

4. DCIR-RMG/ACIR-FAS; and

5. Procurement Division/Administrative Division.

Methodology: Steps in the Issuance of Variation Order

1. Within seven (7) calendar days after the contractor discovers that there is a need for variation order, the said contractor must communicate the same to the BIR by giving it notice of the findings. Afterwards, the contractor has twenty-eight (28) days to submit a full documentation of the variation order. Failure to provide either of such notices in the time stipulated shall constitute a waiver by the contractor for any claim.

2. If the Project proponent/end-user finds that a Change Order or Extra Work Order is justified, he/she must prepare the proposed order, accompanied with the following:

a. Notices submitted by the contractor;

b. The plans to effect the adjustments;

c. The contractor's computations as to the quantities of the additional works involved per item indicating the specific stations where such works are needed, the date of his inspections and investigations thereon, and the log book thereof; and

d. A detailed estimate of the unit cost of such items of work, together with his justifications for the need of such Change Order of Extra Work Order

The project proponent/end-user then submits the same to the CIR/RD or his duly authorized representative for evaluation.

3. Upon receipt of the proposed Change Order or Extra Work Order, CIR/RD or his duly authorized representative shall immediately instruct the technical staff to conduct an on-the-spot investigation to verify the need for the work to be prosecuted. A report of such verification shall be submitted directly to the CIR/RD or his duly authorized representative. AcHSEa

4. After being satisfied that such Change Order or Extra Work Order is justified and necessary, the technical staff shall review the estimated quantities and prices and forward the proposal with the supporting documentation to the CIR/RD or his duly authorized representative for consideration.

5. If, after review of the plans, the documents are found to be in order and cover by the CAF the CIR/RD or his duly authorized representative shall approve the same. 

6. Upon approval by the CIR/RD or his duly authorized representative, the Project Proponent/end-user shall notify the contractor to proceed with the work/delivery of items in accordance with the amendment.

7. The Procurement Division/Administrative Division shall likewise post the Variation Order in the PhilGEPS and website of the BIR (www.bir.gov.ph).

8. The contractor shall proceed with the work/delivery of items in accordance with the amended contract.

The timeframe for the processing of Variation Orders from the preparation up to the approval by the BIR should not exceed thirty (30) calendar days. EDCTIa

Suspension of Work

Conditions for the Suspension of Work by the BIR

The BIR has the authority to suspend the work wholly or partly by written order due to the following:

1. Force majeure or any fortuitous event;

2. Failure on the part of the contractor to:

a. Correct bad conditions which are unsafe for workers or for the general public;

b. Carry out valid orders given by the BIR; or

c. Perform any provisions of the contract; or

3. Adjustment of plans to suit field conditions as found necessary during construction. DaAIHC

It is suggested that the contract specify a period of seven (7) calendar days from date of receipt of the written order or notice, after which the said order may take effect and thus bind the contractor to immediately comply therewith. The order/notice may specify the period deemed necessary for its effectivity.

Conditions for the Suspension of Work by the Contractor

The contractor or its duly authorized representative has the right to suspend work operation on any or all projects/activities along the critical path of activities due to any of the following:

1. There exist right-of-away problems that prohibit the contractor from performing work in accordance with the approved construction schedule;

2. Requisite construction plans, which must be furnished by the BIR, are not issued to the contractor, in the process precluding any work called by such plans; SEDaAH

3. Peace and order conditions make it extremely dangerous, if not impossible, to work, such conditions having been certified in writing by the PNP station which has responsibility over the affected area and confirmed by the DILG Regional Director;

4. There is a failure on the part of the BIR to deliver government-furnished materials and equipment as stipulated in the contract; or

5. The payment of the contractor's claim for progress billing beyond forty-five (45) calendar days from the time the claim has been certified by the BIR's authorized representative as having been supported by complete documentation, unless there are justifiable reasons thereof which shall be communicated in writing to the contractor. SEHaDI

The contractor may suspend work fifteen (15) calendar days after the district engineer/regional director/consultant or equivalent official, as the case may be, have received a written notice of the suspension of work.

The period of work suspension may be considered in extending the contract time but only in cases when the total suspension or suspension of activities along the critical path is not due to the fault of the contractor. In such cases, the elapsed time between the effective order suspending operation and the order to resume work shall be allowed the contractor by adjusting the contract time accordingly. AICTcE

Contract Price may not be adjusted as a result of work suspension. No payment can be made to the contractor for any standby time expense during the suspension period, except when prior clearance is secured from the CIR/RD or his duly authorized representative and for justifiable reasons.

Work must be resumed either upon notice from the BIR of the lifting of the suspension order or upon the expiration of the suspension order.

Participants in the Issuance of a Suspension Order

The following parties are involved in the issuance of a Suspension Order:

1. CIR/RD or his duly authorized representative;

2. Project Proponent/end-user;

3. DCIR-RMG/ACIR-FAS;

4. Contractor; and

5. Procurement Division/Administrative Division. STcADa

Methodology: Steps in the Issuance of Suspension Order

1. The Project Proponent/end-user determines the existence of any of the grounds for suspension enumerated above.

2. The Project Proponent/end-user drafts the suspension order for the approval of the CIR/RD or his duly authorized representative.

3. The suspension order is issued to the contractor, stating the grounds thereof.

4. Prior to the expiration of the suspension order, the Project Proponent/end-user shall determine whether or not the grounds for suspension still exist.

a. If such grounds continue to exist, or if it is no longer practicable to continue with the work, it shall terminate the work subject of the order or cancel the delivery of the items subject of such suspension.

b. If, however, the grounds for suspension no longer exist, and continuation of the work is practicable, the Project Proponent/end-user, with the approval of the CIR/RD or his duly authorized representative, shall lift the suspension order and notify the contractor to proceed with the work/delivery of items in accordance with the amended contract.

Contract Time Extension

Conditions for Contract Time Extension

1. There are additional work or other special circumstances that would entitle the contractor to an extension of its contract;

2. The affected activities fall within the critical path of the PERT/CPM network;

3. The contractor shall have notified the BIR that the amount of additional work or the occurrence of the special circumstance merits the extension of its contract, and that it had done so before the expiration of the contract and within thirty (30) calendar days after the start of the additional work or of the special circumstance has arisen; and

4. The BIR, after due investigation, finds the request justified, determines the appropriate extension period, and approves the request of the contractor for a contract extension. aTEScI

If the contractor fails to notify the BIR within the time period provided for, it waives any claims to contract extension.

Special Circumstances to be Considered for Contract Time Extension:

1. Major calamities such as exceptionally destructive typhoons, floods and earthquakes, and epidemics;

2. Non-delivery on time of materials, working drawings, or written information to be furnished by the BIR;

3. Non-acquisition of permit to enter private properties within the right-of-way resulting in complete paralysis of construction activities;

4. Region-wide or nationwide shortage of construction materials, as certified by the DTI Secretary;

5. Region-wide or nationwide general labor strikes, as certified by the DOLE Secretary; and

6. Serious peace and order problems as certified by the DILG, or AFP Provincial Commander and approved by the DND Secretary.

Circumstances When the BIR can Automatically Disapprove a Request for Contract Extension

No extension of contract time will be granted if the reason given to support the request for extension was already considered in the determination of the original contract time during the conduct of detailed engineering and in the preparation of the contract documents. The contract period includes a particular number of unworkable days, to cover days when unfavorable weather conditions and special circumstances not within the control of the contractor prevent any work from being done. This number of unworkable days should be consumed first before any contract extension can be considered. For example, if the total project duration is two hundred (200) calendar days inclusive of the forty-five (45) calendar days of unfavorable weather condition, the contractor cannot claim for time extension citing unfavorable weather condition if the forty-five (45) calendar days anticipated unfavorable weather condition has not been consumed. cCAIES

Thus, no contract extension must be given to a contractor due to:

1. Ordinary unfavorable weather conditions, in that such weather conditions had already been taken into consideration and anticipated in the computation of the unworkable days; and

2. Inexcusable failure or negligence of contractor to provide the required equipment, supplies or materials.

If the reason of unfavorable weather condition will be used for the time extension, the considerations of both nationwide and region wide conditions should be looked into, using the records from PAGASA.

Methodology: Steps in the Request for Time Extension

If a contractor incurs a delay and wishes to request for an extension of the completion or construction period:

1. It must submit a written request to the Project Proponent/end-user for an extension of the completion or construction period, citing the reason/s for such delay.

2. The Project Proponent/end-user shall either approve or disapprove the request for extension.

3. If the extension is granted, the liquidated damages shall not be imposed and the contractor will be so informed in writing.

4. If, however, the request for extension is denied, the Project Proponent/end-user shall inform the contractor in writing of such denial, and ensure that the said notice or communication is received by the latter within a reasonable time from receipt of the request for extension. The BIR then imposes the liquidated damages in accordance with the provisions of the contract and the procedures outlined below Steps 2 to 3. aHTCIc

If the Contractor incurs a delay and there is no request for extension:

1. The Project Proponent/end-user shall, within a reasonable time from the first day of delay, inform the contractor that the BIR will impose the liquidated damages agreed upon by the parties.

2. Upon contract completion, the Project Proponent/end-user and the Acceptance Committee shall record the delay in the inspection documents, noting therein the amount of the liquidated damages imposable on the contractor.

The amount of liquidated damages due shall be deducted from the total amount payable to the contractor, and the same shall be reflected in the disbursement vouchers. Or, if the contract provides that the liquidated damages shall be collected from securities or warranties posted by the contractor, the Project Proponent/end-user shall so inform the official authorized to call on the securities or warranties about the delay and the corresponding liquidated damages imposable.

Delays in Work Completion and Liquidated Damages

Rule on the Applicable Period for the Completion of Work

The contractor must complete the work procured within the period prescribed by the BIR as specified in the contract.

If delays are likely to be incurred, the contractor must notify the BIR in writing, stating therein the duration and causes of the expected delay. The BIR may grant time extensions, at its discretion, if such extensions are meritorious, with or without liquidated damages. TASCDI

In all cases, the request for extension shall always be filed before the expiry of the original completion date. Maximum allowable extension shall not exceed the original construction period.

Liquidated Damages

These are damages agreed upon by the parties to a contract, to be paid in case of breach thereof. (Civil Code of the Philippines Article 2226)

Grounds for the Imposition of Liquidated Damages

When the contractor refuses or fails to satisfactorily complete the works under the contract within the specified contract duration, plus any time extension duly granted, and is thus considered in default under the contract, it will be liable for liquidated damages for the delay. The BIR need not prove that it has incurred actual damages to be entitled to liquidated damages from the contractor, and the same shall not be by way of penalty. Such amount shall be deducted from any money due or which may become due the contractor under the contract and/or from the retention money or other securities posted by the contractor, whichever is convenient to the BIR. CAScIH

Formula for Computing Liquidated Damages

The following formula will be used in determining the liquidated damages due to a BIR from a contractor:

 

TLD	=	VUUP x [(1+ OCC)n - 1] x K
VUUP	=	TCP - VCUP
Where:
TLD	=	Total Liquidated Damages, in Pesos
VUUP	=	Value of the Uncompleted and Unusable Portions of the contract work,
		as of the expiry date of the contract, in Pesos
TCP	=	Total Contract Price, in Pesos
VCUP	=	Value of the Completed and Usable Portion of the contract work, as of
		the expiry date of the contract, in Pesos
OCC	=	Prevailing Opportunity Cost of Capital for Government projects set by
		NEDA, which is currently pegged at 15%
n	=	Total number of years that the contract work is delayed after the expiry
		date of the contract
K	=	Adjustment factor to cover additional losses
	=	1 + C + (I x n)
Where:
C	=	Cost of construction supervision as a percentage, not exceeding 10%,of
		construction cost
I	=	Annual inflation rate as defined by NEDA

 

The CIR may also impose additional liquidated damages on the contractor provided such is prescribed in the ITB. ADaECI

A project or a portion thereof may be deemed usable when it starts to provide the desired benefits as certified by the targeted end-users and the concerned BIR.

In no case shall the sum of liquidated damages reach ten percent (10%) of the contract amount. If it does, the contract shall automatically be rescinded by the BIR, without prejudice to other courses of action and remedies open to it. The BIR may also take over the contract or award the same to a qualified supplier through negotiation. In addition to the liquidated damages, the erring contractor's performance security shall also be forfeited. 16

Methodology: Steps in the Imposition of Liquidated Damages

2.  n Contractor submits a written request to the Project Proponent/end-user for an extension of the delivery or performance period, citing the reason/s for such delay.

3. CIR/RD or his duly authorized representative, upon the recommendation of the Project Proponent/end-user, either approves or disapproves the request for extension. Such recommendation shall cover whether or not to impose the corresponding the liquidated damages. TAESDH

4. If the extension is granted, the liquidated damages may or may not be imposed and the contractor is informed of this in writing. The contractor is then asked to extend the validity of the performance bond, to conform to the extended period.

5. If, however, the request for extension is denied, the Procurement Division/Administrative Division informs in writing the contractor of such denial, and ensures that the said notice or communication is received by the latter within five (5) working days from receipt of denial. In this case, the BIR imposes the liquidated damages in accordance with the provisions of the contract and the procedures outlined below.

6. If the contractor incurs delay and it does not request for an extension

a. Project Proponent/end-user informs, within five (5) working days from the first day of delay, the contractor that the BIR shall impose the liquidated damages agreed upon by the parties.

b. Upon delivery, the Procurement Division/Administrative Division and the Technical Inspection and Acceptance Committee record the delay in the inspection documents, noting therein the amount of the liquidated damages imposable on the contractor.

c. Upon payment, the amount of liquidated damages due is deducted from the total amount payable to the contractor, and the same shall be reflected in the Disbursement Vouchers (DVs) otherwise, if the contract provides that the liquidated damages is to be collected from securities or warranties posted by the contractor, the Project Proponent/end-user informs the official authorized to call on the securities or warranties about the delay and the corresponding liquidated damages imposable. ASaTHc

Contract Termination for Default, Unlawful Acts or Insolvency

Conditions for Contract Termination for Default by BIR

The CIR/RD or his duly authorized representative may terminate a contract for default when any of the following conditions attend its implementation:

1. Due to the contractor's fault and while the project is on-going, it has incurred negative slippage of fifteen percent (15%) or more in accordance with P.D. 1870;

2. Due to the contractor's fault and after the contract time has expired, it has incurred a negative slippage of ten percent (10%) or more in the completion of the work; or

3. The contractor:

a. Abandons the contract works, refuses or fails to comply with a valid instruction of the BIR or fails to proceed expeditiously and without delay despite a written notice by the BIR;

b. Does not actually have on the project site the minimum essential equipment listed on the bid necessary to prosecute the works in accordance with the approved work plan and equipment deployment schedule as required for the project;

c. Does not execute the works in accordance with the contract or persistently or flagrantly neglects to carry out its obligations under the contract;

d. Neglects or refuses to remove materials or to perform a new work that has been rejected as defective or unsuitable; or

e. Sub-lets any part of the contract works without approval by the BIR.

The rescission of the contract shall be accompanied by the confiscation by the BIR of the contractor's performance security. The contractor will also be recommended for blacklisting. The contractor shall be paid on a quantum meruit basis.

Grounds for Contract Termination due to Unlawful Acts IHAcCS

The BIR may terminate the contract in case it is determined prima facie that the contractor has engaged, before or during the implementation of the contract, in unlawful deeds and behaviors relative to contract acquisition and implementation. Unlawful acts include, but are not limited to, the following:

1. Corrupt, fraudulent, collusive and coercive practices;

2. Drawing up or using forged documents;

3. Using adulterated materials, means or methods, or engaging in production contrary to rules of science or the trade; and

4. Any other act analogous to the foregoing.

The contractor shall be paid on a quantum meruit basis.

Grounds for Contract Termination due to Insolvency

The BIR should terminate the contract if the contractor is declared bankrupt or insolvent as determined with finality by a court of competent jurisdiction. In this event, termination will be without compensation to the contractor, provided that such termination will not prejudice or affect any right of action or remedy which has accrued or will accrue thereafter to the BIR and/or the contractor. DCTSEA

Conditions for Contract Termination by Contractor

The contractor may terminate its contract with the BIR if the works are completely stopped for a continuous period of at least sixty (60) calendar days through no fault of its own, due to any of the following reasons:

1. Failure of the BIR to deliver, within a reasonable time, supplies, materials, right-of-way, or other items it is obligated to furnish under the terms of the contract; or

2. The prosecution of the work is disrupted by the adverse peace and order situation, as certified by the AFP Provincial Commander and approved by the DND Secretary.

The contractor must serve a written notice to BIR of its intention to terminate the contract at least thirty (30) calendar days before its intended termination. The contract is deemed terminated if it is not resumed in thirty (30) calendar days after the receipt of such notice by the BIR. SEHDIC

In cases of termination, the BIR shall return to the contractor its performance security and unpaid claims.

Contract Termination for Convenience

The BIR, by written notice sent to the contractor, may terminate the contract, in whole or in part, at any time for its convenience. The notice of termination shall specify that the termination is for the BIR's convenience, the extent to which performance of the contractor under the contract is terminated, and the date upon which such termination becomes effective.

Conditions for Termination of Contracts for Convenience

Any of the following circumstances may constitute sufficient grounds to terminate a contract for convenience:

1. If physical and economic conditions have significantly changed so as to render the project no longer economically, financially or technically feasible, as determined by the CIR/RD or his duly authorized representative; 

2. The CIR/RD or his duly authorized representative has determined the existence of conditions that make project implementation impractical and/or unnecessary, such as, but not limited to, fortuitous event/s, changes in laws and government policies;

3. Funding for the project has been withheld or reduced by higher authorities through no fault of the BIR;

4. Failure of the BIR to acquire the necessary right-of-way; or

5. Any circumstance analogous to the foregoing.

Also see the Guidelines on Termination of Contracts approved by the GPPB in Resolution 018-2004, dated December 22, 2004.

Procedures for Contract Termination

1. Upon receipt of a written report of acts or causes which may constitute grounds for contract termination, or upon its own initiative, the Project Proponent/end-user shall verify the existence of such grounds and cause the execution of a Verified Report. CDESIA

2. The CIR/RD or his duly authorized representative shall issue a written notice to terminate the contract upon recommendation of the Project Proponent/end-user. The written notice shall include the following information: grounds for termination, extent of termination, action to be taken by the Contractor and special instructions to the Project Proponent/end-user.

3. Upon receipt of the Notice of Termination, the Contractor shall submit to the CIR/RD or his duly authorized representative a verified position paper stating why the contract should not be terminated.

4. The CIR/RD or his duly authorized representative shall decide whether or not to terminate the contract upon receipt of the verified position paper. He may create a Contract Termination Review Committee (CTRC) to assist in the discharge of his functions. All decisions recommended by the CTRC shall be subject to the approval of the CIR/RD or his duly authorized representative. The CIR/RD or his duly authorized representative shall serve a written notice to the Contractor of his decision.

5. If the BIR terminates the contract due to default, insolvency, or for cause, it may enter into a negotiated procurement pursuant to Section 53 (c) of R.A. 9184 and its IRR-A.

6. In case of contract termination by the Contractor, the Contractor must serve a written notice to the BIR at least thirty (30) calendar days prior to intended date of termination. The Contract is deemed terminated if the Notice of Termination is not acted upon by the BIR within the thirty (30)-day period.

Also see the Guidelines on Termination of Contracts approved by the GPPB in Resolution No. 018-2004, dated December 22, 2004.

Contract Completion

Once the project reaches an accomplishment level of ninety-five percent (95%) of the total contract amount, the BIR may create an inspectorate team to make preliminary inspection and submit a punch-list to the contractor in preparation for the final turnover of the project. This punch-list will contain, among others, the remaining works, work deficiencies for necessary corrections, and the specific duration/time to fully complete the project considering the approved remaining contract time. This, however, shall not prejudice the BIR's claim for liquidated damages. caSDCA

Assignment

As a general rule, the supplier may not assign the contract, or any of its rights or obligations arising from the contract, to a third party, except with the CIR/RD's prior written consent.

Assignment of contractual obligations or the contract itself may generally not be done because this will enable a non-bidder to become a party to the contract. This arrangement will make a mockery of the public bidding process, so that one who was not declared eligible to bid and did not participate in the bidding process will end up as the contract awardee, although indirectly.

Moreover, assignors will only add to the number of parties that the BIR has to deal with, thereby complicating contract implementation. This could also be a problem if litigation becomes necessary to enforce the contract.

Blacklisting

The blacklisting of suppliers must conform to the GPPB Guidelines issued for this purpose. As such, reference should be made to the Uniform Guidelines for Blacklisting of Manufacturers, Suppliers, Distributors, Contractors and Consultants, approved by the GPPB in Resolution 09-2004 dated August 20, 2004. TEcADS

Warranty

Purpose of a Warranty

A warranty is required to ensure that the contractor will correct structural defects and failures. It should be noted that a one-year period after the completion of the project, called the defects liability period, is observed until final acceptance by the BIR. At any rate, the length of the warranty period will depend on the nature of the project.

Arrangements During the Defects Liability Period

The defects liability period for infrastructure projects shall be one year from project completion up to final acceptance by the government. As such, the contractor shall assume full responsibility for the contract work from the time project construction commenced up to final acceptance by the government and shall be held responsible for any damage or destruction of the works except those occasioned by force majeure. The contractor shall be fully responsible for the safety, protection, security, and convenience of his personnel, third parties, and the public at large, as well as the works, equipment, installation and the like to be affected by his construction work. During this period, the contractor shall undertake the repair works, at his own expense, of any damage to the infrastructure projects on account of the use of materials of inferior quality within ninety (90) calendar days from the time the CIR/RD or his duly authorized representative has issued an order to undertake repair. In case of contractor's failure or refusal to comply with this mandate, the government shall undertake such repair works and shall be entitled to full reimbursement of expenses incurred therein upon demand at the cost of the contractor. (Section 62.2.1 of IRR-A) SHacCD

Any contractor who fails to comply with the preceding paragraph shall suffer perpetual disqualification from participating in any public bidding and his property or properties shall be subject to attachment or garnishment proceedings to recover the costs. All payables of government in his favor shall be offset to recover the costs. (Section 62.2.1 of IRR-A)

During the defects liability period, the contractor shall post a warranty security in the form and amount prescribed below. In turn, the government will return to the contractor its Performance Security and issue the Certificate of Completion.

As security for the above responsibilities, the contractor shall be required to put up a warranty security in the form of cash, bank guarantee, letter of credit, GSIS or surety bond callable on demand to be chosen by the BIR, in accordance with the following schedule:

Form or Warranty	Minimum Amount in %
		Total Contract Price
1.	Cash deposit, cash bond or	Five Percent (5%)
	letter of credit
2.	Bank Guarantee	Ten Percent (10%)
3.	Surety Bond	Thirty Percent (30%)

 

The warranty security shall be stated in Philippine Pesos.

A special bank guarantee should be contract specific, that is, it shall be executed for the specific purpose of covering the warranty for the subject procurement contract. CADacT

Arrangements During the Warranty Period

After final acceptance of the project by the government, the contractor shall be held responsible for structural defects and/or failure of the completed project within the following warranty periods from final acceptance, except those occasioned by force majeure and those caused by other parties: (Section 62.2.2 of IRR-A)

1. Permanent Structures: Fifteen (15) years

Buildings of types 4 (steel, iron, concrete, or masonry construction with walls, ceilings, and permanent partitions of incombustible fire resistance) and 5 (steel, iron, concrete, or masonry construction),steel and concrete bridges, flyovers, concrete aircraft movement areas, ports, dams, diversion tunnels, causeways, wharves, piers, dikes, filtration and treatment plants, sewerage systems, power plants, transmission and communication towers, railway system, and other similar structures;

2. Semi-Permanent Structures: Five (5) years

Buildings of types 1 (wooden),2 (wood with 1 hour fire resistance),and 3 (masonry and wood construction),concrete roads, asphalt roads, river control, drainage, irrigation and drainage canals, municipal ports and river landing, deep wells, rock causeway, pedestrian overpass, and other similar structures; and caIEAD

3. Other Structures: Two (2) years

Bailey and wooden bridges, shallow wells, spring developments, and other similar structures.

In effect, even after the defects liability period, the warranty security shall still be required during the above applicable periods, and shall be returned only after the lapse of the above applicable warranty period. The warranty should be the full amount for the first year, and renewable every year thereafter, but subject to a reduction every year by the amount of depreciation on a straight line basis. For example, a project with a five (5) year warranty will have on its first year of warranty the full amount, for the second year 4/5 of the full amount, for the third year 3/5 of the full amount, for the fourth year 2/5 of the full amount, and the fifth year 1/5 of the full amount. Thus, for a five-year contract worth P100 million, a warranty security in the form of a surety bond shall amount to P30 million on the first year, P24 million on the second, P18 million on the third, P12 million on the fourth, and P6 million on the last year of effectivity.

If the project is a combination of different types of structures, a schedule of warranty shall be made to cover the warranty for the different types of structures for the project.

Responsibility for Defects/Failures During the Warranty Period

In cases where structural defects and/or failures arise during the warranty period, the following persons/parties shall be held liable individually or solidarily, as the case may be: (Section 62.2.3 of IRR-A)

1. Contractor — Where structural defects and/or failures arise due to faults attributable to improper construction use of inferior quality/substandard materials, and any violation of the contract plans & specifications, the contractor shall be held liable;

2. Consultants — Where structural defects and/or failures arise due to faulty and/or inadequate design and specifications as well as construction supervision, then the consultant who prepared the design or undertook construction supervision for the project shall be held liable;

3. Project Proponent/End-user — shall be held liable in cases where the structural defects/failures are due to his/their willful intervention in altering the designs and other specifications; negligence or omission in not approving or acting on proposed changes to noted defects or deficiencies in the design and/or specifications; and the use of substandard construction materials in the project;

4. Third Parties — Third Parties shall be held liable in cases where structural defects/failures are caused by work undertaken by them such as leaking pipes, diggings/excavations, underground cables and electrical wires, underground tunnel, mining shaft and the like, in which case the applicable warranty to such structure should be levied to third parties for their construction or restoration works.

5. Users — In cases where structural defects/failures are due to abuse/misuse by the end user of the constructed facility and/or non-compliance by a user with the technical design limits and/or intended purpose of the same, then the user concerned shall be held liable.

The term "structural defects" shall mean major faults/flaws/deficiencies in one or more key structural elements of the project which may lead to structural failure of the completed elements or structure. The term "Structural Failures" is defined as an occurrence where one or more key structural elements in an infrastructure facility fails or collapses, thereby rendering the facility or part thereof incapable of withstanding the design loads, and/or endangering the safety of the users or the general public. (Section 62.2.3 of IRR-A) HSDaTC

In case of structural defects/failures occurring during the applicable warranty period provided above, the government shall undertake the necessary restoration or reconstruction works and shall be entitled to full reimbursement by the parties found to be liable, of expenses incurred therein upon demand, without prejudice to the filing of appropriate administrative, civil, and/or criminal charges against the responsible persons as well as the forfeiture of warranty securities posted in favor of the government. (Section 62.2.4 of IRR-A)

 

ANNEX A

General Procurement Procedures and Timelines for Infrastructure Projects ^*

 

ANNEX B

Sample Forms For Infrastructure Projects ^*

 

ANNEX C

GPPB Resolutions, Circulars and Memorandum ^*

General Flow Chart of Procedures for the Procurement of Infrastructure Projects

 

Footnotes

1. For FAPs, reference to the standard bidding documents for the project should be made to determine the applicability of the ABC. CAIHTE

2. Reimbursable cost contracts are acceptable to IFIs only in exceptional circumstances such as conditions of high risk or where costs cannot be determined in advanced with sufficient accuracy. Such contracts should include appropriate incentives to limit costs.

3. Generally, FAPs do not utilize the eligibility check system of the GOP, unless so required by the pertinent IFI/bilateral lending agency. Moreover, pre-qualification may be utilized for large or complex works or in any other circumstances in which the high costs of preparing detailed bids could discourage competition such as custom designed equipment, industrial plant, specialized services, some complex information and technology, and contracts to be let under turnkey, design and build, or management contracting.

4. For FAPs, reference should be made to the appropriate standard bidding documents for the project to determine the appropriate qualification requirements of a bidder.

5. For FAPs, any firm may bid independently or in joint venture confirming joint and several liability, either with domestic firms and/or with foreign firms, but the IFIs generally do not accept conditions of bidding which require mandatory joint ventures or other forms of mandatory association between firms.

6. Under FAPs, to foster competition, IFIs permit firms and individuals from eligible countries to offer goods, works, and services. Any conditions for participation should be limited to those that are essential to ensure the firm's capability to fulfill the contract in question. In connection with any contract to be financed in whole or in part from an IFI loan, the IFI generally does not permit a BIR to deny pre- or post-qualification to a firm for reasons unrelated to its capability and resources to successfully perform the contract; nor does it permit a BIR to disqualify any bidder for such reasons. Consequently, Procuring Entities should carry out due diligence on the technical and financial qualifications of bidders to be assured of their capabilities in relation to the specific contract. SEHTIc

7. The receipt, opening and preliminary examination methodology may vary for FAPs. Reference should be made to the appropriate standard bidding documents for the project.

8. For FAPs, reference should be made to the standard bidding documents of the project for limits of subcontracting.

9. For FAPs, the rules on evaluation will depend on the standard bidding documents for the project.

10. If bidders have not been pre-qualified, the BIR should determine whether the bidder whose bid has been determined to offer the lowest evaluated cost has the capability and resources to effectively carry out the contract as offered in the bid. The criteria to be met should be set out in the bidding documents, and if the bidder does not meet them, the bid should be rejected. In such an event, the BIR should make a similar determination for the next lowest evaluated bidder. But even if pre-qualification has been undertaken, it may be advisable for the BIR to still conduct a post-qualification.

11. For FAPs, reference should be made to the appropriate standard bidding documents for the project in order to determine the applicable amount and form of the performance security.

12. For FAPs, the bidding documents would have to state whether the bid prices will be fixed or whether price adjustments would be made to reflect any changes (upwards or downwards) in major cost components of the contract, such as labor, equipment, materials, and fuel. Price adjustment provisions are usually not necessary in simple contracts involving completion of works generally within twelve (12) months in the case of JBIC- or eighteen (18) months in the case of World Bank-funded projects, but should be included in contracts which extend beyond eighteen (18) months. Prices may be adjusted by the use of a prescribed formula (or formulae) which breaks down the total price into components that are adjusted by price indices specified for each component or, alternatively, on the basis of documentary evidence (including actual invoices) provided by the contractor. The use of the formula method of price adjustment is preferable to that of documentary evidence. The method to be used, the formula (if applicable),and the base date for application shall be clearly defined in the bidding documents. If the payment currency is different from the source of the input and corresponding index, a correction factor shall be applied in the formula, to avoid incorrect adjustment. cECTaD

13. For FAPs, payment of the contract price should be made in the currency or currencies in which the bid price is expressed in the bid of the successful bidder. When the bid price is required to be stated in local currency but the bidder has requested payment in foreign currencies expressed as a percentage of the bid price, the exchange rates to be used for purposes of payments should be those specified by the bidder in the bid, so as to ensure that the value of the foreign currency portions of the bid is maintained without any loss or gain. At any rate, where the price is to be paid, wholly or partly, in a currency or currencies other than the currency of the bid, the exchange risk should not be borne by the supplier or contractor and, to this end, the contract should provide that amounts payable in a currency or currencies other than that of the bid should be calculated at the rates of exchange between these currencies specified for the purpose in the bidding documents.

14. For FAPs, provision may be made for a bonus to be paid to suppliers or contractors for completion of works or delivery of goods ahead of the times specified in the contract when such earlier completion or delivery would be of benefit to the procuring entity. The option to grant incentive bonus is given by the IFIs to the procuring entity.

15. For FAPs, the usual percentage of retention is from five percent (5%) to ten percent (10%).

* Note from the Publisher: Missing item no. 1.

16. For FAPs, the applicable liquidated damages is at least 1/10 of 1% of the cost of unperformed portion for every day of delay. The maximum deduction shall be 10% of the amount of the contract, and the BIR shall rescind the contract, without prejudice to other courses of action and remedies open to it. aIAcCH

 

 

May 2007

VOLUME FOUR: BIR MANUAL OF PROCEDURES FOR THE PROCUREMENT OF CONSULTING SERVICES

TABLE OF CONTENTS

 

ABBREVIATIONS AND ACRONYMS
SECTION 1:  INTRODUCTION
	SCOPE OF VOLUME 4
		Types of Consulting Services
SECTION 2:  PREPARATIONS FOR THE PROCUREMENT OF CONSULTING SERVICES
	PREPARATIONS FOR THE PROCUREMENT OF CONSULTING SERVICES
	PROCUREMENT PLANNING
		Purpose of Procurement Planning
		Approved Budget for the Contract (ABC)
		Factors to Consider in Determining the ABC
		Computing the Cost of Consultancy
	PREPARATION OF BIDDING DOCUMENTS
		Bidding Documents
		Contents of Bidding Documents
		Other Practices that the BIR may Observe to Ensure Successful Procurement
		Participants in the Preparation of the Bidding Documents
		Timeline for Preparation of Bidding Documents
		Bid Security
		Forms of Bid Security and the Corresponding Amount
		Period of Validity of Bid Security
		Denomination of Bid Security
		Conditions for the Return of Bid Securities
	C CONDUCT OF THE PRE-PROCUREMENT CONFERENCE
		Pre-procurement Conference
		Importance of Pre-procurement Conference
		Timeline for Conduct of Pre-procurement Conference
		Participants of a Pre-procurement Conference
		Criteria for the Evaluation of Proposals
SECTION 3:  PROCEDURES FOR THE PROCUREMENT OF CONSULTING SERVICES THROUGH COMPETITIVE BIDDING
	COMPETITIVE OR PUBLIC BIDDING
	STEP 1  ADVERTISEMENT AND POSTING OF INVITATION TO APPLY
	FOR ELIGIBILITY AND TO BID (IAEB)
		Contents of IAEB
		Posting an Invitation to Apply for Eligibility and to Bid
		Methodology: Steps in the Advertisement and Posting of IAEBs
	STEP 2  ACCEPTANCE OF LOIs, ISSUANCE OF ELIGIBILITY DOCUMENTS, AND CONDUCT OF ELIGIBILITY CHECK
		Submission of Letters of Intent and Applications for Eligibility and Short listing
		Timeline for Release of Eligibility Forms
		If One Bidder Submits a Letter of Intent
		If no Prospective Bidder Submits a Letter of Intent
		Determining the Eligibility of the Prospective Bidders
		Conditions for Hiring of Consultants
		Eligibility Requirements for the Public Bidding of Consultancy Services
		Government Employee or Officer Becoming a Consultant of the BIR
		Certification that Filipino Consultants Have the Expertise and Experience
		Eligibility Check
		Instance where Conflict of Interest may Arise in Consulting Services
		Addressing the Possibility of Unfair Competitive Advantage in the Procurement of Consulting Services
		Minimum Eligibility Requirements
		Purpose of Requiring an NFCC, a Credit Line or a Certificate of a Hold-out on Cash
		Deposit that is Equal to the ABC
		Eligibility Requirement of Foreign Prospective Bidder
		Submission of Eligibility Requirements
		If Only One Bidder Submits an Eligibility Envelope
		Participants in the Receipt and Opening of Eligibility Envelopes
		Methodology: Steps in the Opening of Eligibility Envelopes
		Recourse of a Potential Bidder if Found Ineligible
		Contents of Verified Position Paper
		Resolution of Protest
		If Questions/Doubts have been Raised About the Eligibility of a Prospective Bidder
		After it had been Declared Eligible
		If Only One Prospective Bidder is Declared Eligible
		Disqualification
		If no Prospective Bidder is Declared Eligible
		If Only One Bidder Passes the Preliminary Examination of Bids
	STEP 3  SHORT LISTING OF ELIGIBLE CONSULTANTS
		Short Listing
		Purpose of Short Listing
		Methodology: Short Listing of Consultants
		Duration of Eligibility Check and Short Listing
		If no Eligible Bidder Passes Short Listing
	STEP 4  ISSUANCE OF BIDDING DOCUMENTS
		Timeline of Availability of Bidding Documents
		Cost of Bidding Documents
		Responsibilities of a Short Listed Consultant with Regard to the
		Bidding Documents
	STEP 5  CONDUCT OF PRE-BID CONFERENCE AND ISSUANCE OF SUPPLEMENTAL/BID BULLETINS
		Pre-bid Conference
		Timeline for the Conduct of Pre-bid Conference
		Participants of Pre-bid Conference
		Conduct of Participants During the Pre-Bid Conference and
		Other Stages of the Procurement Process
		Methodology: Steps in the Conduct of Pre-bid Conference
		Participants in the Issuance of the Supplemental/Bid Bulletin
		Methodology: Steps in the Issuance of Supplemental/Bid
		Bulletin
	STEP 6  SUBMISSION, RECEIPT AND OPENING OF TECHNICAL AND FINANCIAL ENVELOPES
		Bid
		Contents of the Technical Proposal
		Contents of the Financial Proposal
		Submission and Receipt of Bids
		Timeline for Submission of Bids
		If Only One Short Listed Consultant Submits Bid Envelope
		If no Short Listed Bidder Submits a Bid
		Participants in the Receipt, Opening and Preliminary
		Examination of Bids
		Methodology: Steps in the Receipt, Opening and Preliminarily
		Examination of Bids
		Withdrawal of Bids
		Failure to Comply with the Technical Requirements of the Bid
		If no Short Listed Consultant Passes the Preliminary
		Examination of Bids
	STEP 7  BID EVALUATION
		Purpose of Bid Evaluation
		Methods of Bid Evaluation
		Methodology: Steps in the Quality Based Evaluation (QBE)
		Methodology: Steps in the Quality Cost Based Evaluation (QCBE)
		Timeline for Evaluation Process
		If a Consultant Does not Accept the Arithmetical Corrections
		Done by the BAC on his Bid
		Participants in Bid Evaluation
		If no Bid Passes the Minimum Technical Rating for QCBE
		If a Bidder does not Accept the Arithmetical Corrections Done by the BAC on its Bid
		If no Bid Complies with All the Requirements
	STEP 8  NEGOTIATIONS WITH THE CONSULTANT WITH THE HIGHEST RATED BID
		Participants in Negotiations
		Coverage of Negotiations
		Timeline for Opening of Financial Proposal
		If Negotiations with the Bidder with the Highest Rated Bid Fails
		If Negotiations with All Qualified Bidders Fail
		Additional Guidelines for Negotiations
	STEP 9  POST-QUALIFICATION
		Purpose of Post-qualification
		Post-qualification Requirements
		Timeline for the Conduct of Post-qualification
		Participants in the Conduct of Post-qualification
		Methodology: Steps in the Conduct of Post-qualification
		Grounds for Disqualification of Consultants
		If the Highest Rated Bid Fails Post-qualification
		If All Qualified Bidders Fail Post-qualification
	Reservation Clause
		Right to Reject Bids, Declare Failure of Bidding or not to Award the Contract
		Declaration of Failure of Bidding
	STEP 10  CONTRACT AWARD
		Rule on Contract Award
		Timeline for Contract Award
		Participants Contract Award
		Methodology: Steps in the Awarding of Contract
		If the Bidder Being Considered for Award does not Accept the Award
		Performance Security
		Timeline for Posting of Performance Security be posted by the
		Bidder with the Highest Rated Responsive Bid/SRRB
		Forms of Performance Security and the Corresponding Amounts Required
		Changes in the Amount of the Performance Security in Case of
		Amendments in Contract Price
		Parties involved in the Posting of the Performance Security
		Methodology: Steps in the Posting of Performance Security
		Timeline for Release of Performance Security
	STEP 11  CONTRACT SIGNING AND APPROVAL
		Timeline for Entering into a Contract Between Winning Bidder and the BIR
		Timeline for Contract Approval by Higher Authorities
		Timeline for Issuance of Notice to Proceed
		Contract Effectivity
		Participants in Contract Signing and Approval and Issuance of the NTP
		Contract Documents
		Methodology: Steps in the Contract Preparation, Signing and Approval
		Rules Governing the Review and Approval of Government Contracts
		If the Bidder with the HRRB/SRRB Refuses or is Unable, through its Own Fault, to Post the Performance Security and
		Sign the Contract within the Prescribed Period
SECTION 4:  PROCEDURES FOR THE PROCUREMENT OF CONSULTING SERVICES THROUGH ALTERNATIVE
	THE ALTERNATIVE METHODS FOR THE PROCUREMENT OF CONSULTING
		Rule on the Use of Alternative Methods of Procurement
	LIMITED SOURCE BIDDING METHOD
		Conditions for Procurement through Limited Source Bidding
		Selection of Bidders
		If the Required Expertise is not Available Locally
		Participants in Procurement through Limited Source Bidding
		Methodology: Steps in the Conduct of Procurement through Limited Source Bidding
	NEGOTIATED PROCUREMENT METHOD
		Conditions for Negotiated Procurement
		Participants in Negotiated Procurement
		Methodology: Steps in the Conduct of Negotiated Procurement
SECTION 5:  GUIDELINES ON CONTRACT IMPLEMENTATION FOR CONSULTING SERVICES
		Contract Implementation Coverage
	ADVANCE PAYMENT FOR MOBILIZATION
		Recovery of Advance Payment Made to Consultant
	REPLACEMENT OF CONSULTANT AND KEY PERSONNEL
		Recourse of the BIR if the Performance of One or More Key Personnel is Unsatisfactory
	CONTRACT PRICE AND PAYMENT
		Denomination of Contract Price
		Timeline of Payments
		Scope of BIR's Right to Inspect and Test the Delivered/Performed Work
		Different Types of Consultancy Contracts Based on Payment Terms Normally Used
	ON PAYMENTS UPON TERMINATION OF CONTRACT
	LIQUIDATED DAMAGES
		Rules on the Applicable Period for the Performance of Consulting Service/s Liquidated Damages
		Grounds for the Imposition of Liquidated Damages
		Amount of Liquidated Damages that may be Imposed Upon the Supplier
		Methodology: Steps in the Imposition of Liquidated Damages
	INCENTIVE BONUS
	SUBCONTRACTING
	SUSPENSION OF WORK
		Participants in the Issuance of a Suspension Order
		Methodology: Steps in the Issuance of Suspension Order
		Conditions for Suspension of Work by Consultant
		Resumption of Work by Consultant
	CONTRACT TERMINATION FOR DEFAULT, UNLAWFUL ACTS OR INSOLVENCY
		Conditions for Terminating Contracts for Default
		Conditions for Terminating Contracts Due to Unlawful Acts
		Conditions for Terminating Contracts by Reason of Insolvency
		Conditions for Contract Termination by Consultant
	CONTRACT TERMINATION FOR CONVENIENCE
		Grounds for Terminating a Contract for Convenience
		Methodology: Steps in the Contract Termination
	WARRANTY
SECTION 6:  GENERAL PROCUREMENT ACTIVITIES AND TIMELINES FOR THE PROCUREMENT OF CONSULTING
ANNEX A:	SAMPLE FORMS FOR CONSULTING SERVICES
ANNEX B:	GPPB Resolutions, Circulars and Memorandum

 

ABBREVIATIONS AND ACRONYMS

 

ABC	Approved Budget for the Contract
APP	Annual Procurement Plan
APR	Agency Procurement Request
ARD	Assistant Regional Director of the BIR
BAC	Bids and Awards Committee
BDS	Bid Data Sheet
BIR	Bureau of Internal Revenue
BSP	Bangko Sentral ng Pilipinas
CAF	Certificate of Availability of Funds
CDA	Cooperative Development Authority
CIR	Commissioner of Internal Revenue
CQS	Selection Based on the Consultants' Qualifications
CSC	Civil Service Commission
DBM	Department of Budget and Management
DBM-PS/
PS-DBM	Department of Budget and Management-Procurement Service
DTI	Department of Trade and Industry
DV	Disbursement Voucher
E.O.	Executive Order
FAP	Foreign Assisted Project
FBS	Selection under a Fixed Budget
GAA	General Appropriations Act
GCC	General Conditions of Contract
GFI	Government Financial Institution
GOCC	Government-owned and/or -controlled corporation
GOP	Government of the Philippines
GPPB	Government Procurement Policy Board
GPPB-TSO	GPPB — Technical Support Office
GPRA	Government Procurement Reform Act (R.A. 9184)
HRB	Highest Rated Bid
HRRB	Highest Rated Responsive Bid
IAEB	Invitation to Apply for Eligibility and to Bid
IFI	International Financing Institution
IPR	Intellectual Property Rights
IRR	Implementing Rules and Regulations
IRR-A	Implementing Rules and Regulations Part A of R.A. 9184
IT	Information Technology
ITB	Instructions to Bidders
JVA	Joint Venture Agreement
LC	Letter of Credit
LCS	Least-Cost Selection
LOI	May refer to Letter of Intent or Letter of Instructions,
	depending on the manner of usage
MDS	Modified Disbursement Scheme
MO	Memorandum Order
NCA	Notice of Cash Allocation
NEDA	National Economic and Development Authority
NFCC	Net Financial Contracting Capacity
NGA	National Government Agency
NGO	Non-Government Organization
NO	National Office
NTP	Notice to Proceed
ObR	Obligation Request
P.D.	Presidential Decree
PhilGEPS/
G-EPS	Philippine Government Electronic Procurement System
PMO	Project Management Office
PPMP	Project Procurement Management Plan
PWI	Procurement Watch, Inc.
QBE	Quality-Based Evaluation Procedure
QBS	Quality-Based Selection
QCBE	Quality-Cost Based Evaluation Procedure
QCBS	Quality- and Cost- Based Selection (for IFIs)
R.A.	Republic Act
R.A. 9184	Republic Act No. 9184, otherwise known as the "Government
	Procurement Reform Act"
RD	Regional Director of the BIR
RR	Revenue Region of the BIR
RFP	Request for Proposals
SARO	Special Allotment Release Order
SBDs	Standard Bidding Documents
SCC	Special Conditions of Contract
SEC	Securities and Exchange Commission
SOW	Scope of Work
SRRB	Single Rated and Responsive Bid
SSS	Single-Source Selection
SUCs	State Universities and Colleges
SWAps	Sector Wide Approaches
TOR	Terms of Reference
TWG	Technical Working Group
UN	United Nations
UNDB	United Nations Development Business
WB	The World Bank

 

SECTION 1. Introduction. —

Scope of Volume 4

This Manual seeks to provide its users with clear, concise, and accurate information on the public procurement of consulting services, by discussing the steps that need to be taken to effect such procurement in the manner prescribed by R.A. 9184, otherwise known as the "Government Procurement Reform Act" and its IRR-A. It also discusses important issues that may confront government BIR officials/officers in all stages of procurement of consulting services, from the preparation of bid documents, to the actual conduct of the bidding activity, monitoring of contract implementation and the final payment to the consultant. DHEcCT

The PBDs on Consulting Services are harmonized to a large extent with the WB. There are, however, policies which are specific to the WB and the PBD for Consulting Services highlight these differences. The circumstances that would permit the use of the Harmonized PBDs in WB projects require that: (a) the Legal Agreement should provide for it; (b) all short listed firms are national firms; and (c) that the amount does not go beyond $200,000. For projects funded by ADB and JBIC, the respective guidelines on selection of consultants will be followed, as these IFIs have yet to harmonize with the PBDs for procurement of consulting services.

CONSULTING SERVICES are services for infrastructure projects and other types of projects or activities of the government requiring adequate external technical and professional expertise that are beyond the capability and/or capacity of the Government to undertake such as, but not limited to: (i) advisory and review services; (ii) pre-investment or feasibility studies; (iii) design; (iv) construction supervision; (v) management and related services; and (vi) other technical services or special studies. (Section 5 [i] of IRR-A)

Types of Consulting Services

Consulting services can be divided into six (6) broad categories, namely:

1. Advisory and Review Services

These services consist of the review and the provision of advice on particular projects or problems. These include planning, system and implementation design, financial, fiscal, legal and other professional services, as well as management, production, inspection, testing and quality control. They also include such services as appearances before commissions, boards or other judicial bodies to give evidence or otherwise submit professional opinions.

2. Pre-Investment or Feasibility Studies

These are the studies which normally precede decisions to go (or not to go) forward with specific projects. These studies may have as their objectives:

a. To establish investment priorities and sector policies — Studies conducted for this objective include basic resource inventories, such as, river basin surveys, transport sector surveys, and studies of alternative development patterns and of sectors on a regional or nationwide scale;

b. To determine the basic features and the feasibility of individual projects — Studies toward this objective include functional designs, project site selections, architectural and space programming and physical layout of specific projects, preliminary designs and cost estimates, and the economic, financial and environmental impact analyses required for project evaluation; or

c. To define and propose changes in governmental policies, operations and institutions necessary for the successful implementation or functioning of investment projects — Studies undertaken in pursuit of this objective include analyses of project related organizations, administrative problems, planning machinery, regulatory and marketing policies, accounting and management systems, and manpower resources and training requirements. CcADHI

3. Design

This type of service normally consists of three (3) phases:

a. Pre-Design Phase, which establishes the general size and scope of the project and its location on the site. The consulting services under this category may include preparation of preliminary architectural/engineering designs, layouts, outline specifications, preliminary cost estimates, and specific recommendations prior to actual design;

b. Basic Design Phase, which includes the preparation of detailed plans, designs, working drawings, specifications, detailed cost estimates and tender documents required for invitations of bids for construction works and equipment; and

c. Support Services During Construction, which include assistance and advice in securing bids, tabulation and analysis of bid results, and making recommendations on the award of construction contracts, and in preparing formal contract documents; preparation of supplementary drawings required to suit actual field conditions; checking detailed construction and as-built drawings, shop and erection drawings submitted by contractors; making periodic visits to check on the general progress of work and quality of materials and workmanship; observing performance tests and start-up and making report thereon; and making a final inspection and reporting of completed project.

4. Construction Supervision

Consulting services under this category include:

a. Inspection and expediting of the work;

b. Verification and checking of quantities and qualities of work accomplished by the contractor as against the approved plans, specifications, and programs of work;

c. Issuance of instructions for correcting on the work;

d. Verification and recommendation for approval of statements of work accomplished and certificate of project completed by the contractor;

e. Review and recommendation for approval of progress and final billings of the contractor; and

f. Provision of record or as-built drawings of the completed projects.

The above do not mean direction, superintendence or management of construction.

5. Management and Related Services

The services under this category, on the other hand, include:

a. Sector policy and regional development studies;

b. Planning, feasibility, market, economic, financial, technical, operations and sociological studies;

c. Project management, including procurement advisory services, impact monitoring, and post-evaluation services;

d. Production management, inventory control, and productivity improvement;

e. Marketing management and systems;

f. Information and communications technology services, including but not limited to, information systems design and development, and network design and installation; AaHDSI

g. Institutional strengthening, organization development, manpower requirements, training and technology transfer;

h. General management consultancy; and

i. Other related services.

6. Other Technical Services or Special Studies

This category may include:

a. Institution building, including organization and management studies, and business process re-engineering and development;

b. Design and execution of training programs at different levels;

c. Provision of staff to carry out certain functions and to train their replacements; and

d. Tasks relating to economic and financial studies such as those of tax structures. TAcDHS

For BIR IT projects, the Special Studies may include:

a. Preparation of operating instructions and manuals for IT facilities and training of personnel and assistance in initial operation of IT facilities;

b. Site and physical designs relative to IT infrastructure and facilities.

c. Design and program coding of IT applications/systems.

Other specialized expertise not included in the above categories and to be provided for a client in the performance of a specified task over a specified period of time may also be considered as consulting services.

Technology and knowledge transfers should be considered an important objective in the provision of consulting services. aCHcIE

SECTION 2. Preparations for the Procurement of Consulting Services. —

Preparations for the Procurement of Consulting Services

Volume I of this Manual contains an extensive discussion of Procurement Planning as a general concern for all kinds of government procurement, while this volume mainly focuses on concerns that are particular to the procurement of consulting services. As such, it is advisable for the reader to refer to the pertinent discussions in Volume I before and during the reading of this volume.

Preparation makes for higher efficiency and better efficacy. It enables the procurement officers to anticipate the onset of events and, as a consequence, better calibrate their response to them. Having a better appreciation of forthcoming events gives these officials the opportunity to test a range of possible courses of action, choose the best and most feasible of these, and identify measures to put them into action. Ultimately, it would enable them to determine the best manner by which such measures are to be implemented, ensuring that their individual and collective impacts are optimized at the least cost.

Preparing for procurement basically involves three (3) activities:

1. procurement planning;

2. preparation of bidding documents; and

3. conduct of pre-procurement conference

1. Procurement Planning

Purpose of Procurement Planning

The purpose of procurement planning is to schedule BIR's procurement activities in advance, consistent with the agency's Annual Procurement Plan. Under the planning stage, the following activities must be undertaken, among others:

• Preparation of the draft terms of reference by the end user;

• Determination of the mode of procurement;

• Type of consultant (e.g.,individual or firm, local or foreign);and

• Determination of the Approved Budget for the Contract (ABC).

Procurement planning entails ensuring that plans for procurement are linked to budgets, preparing the PPMP (SF CONS-01) and consolidating all PPMPs into the APP (BIR PF-01).Formulating the PPMP involves identifying the procurement project requirements, writing the TOR, determining the ABC, identifying the schedule of milestone activities, and determining the method of procurement. CSHEAI

The PPMP is then transformed into the bidding documents, which ought to contain all the information a prospective bidder needs to prepare its bid. Therefore, in preparing the bidding documents, one has to ensure that this accurately and comprehensively reflect the main elements of the PPMP. One also has to make sure that the documents are of the kind and form prescribed by the IRR-A and this Manual.

Approved Budget for the Contract (ABC)

Is the budget for the contract duly approved by the CIR/RD or his duly authorized representative, as provided for in the GAA and/or continuing appropriations. Thus, the ABC referred to in R.A. 9184 and its IRR-A basically refers to the proposed budget for the project approved by the CIR/RD or his duly authorized representative based on the APP as consolidated from various PPMPs. 1

Factors to Consider in Determining the ABC

In determining the ABC, the Project Proponent or end-user, with the assistance of technical expert/s, if necessary, must consider the different cost components, namely:

1. The cost or market price of the service itself;

2. The cost of money, to account for government agencies usually buying on credit terms; and

3. Inflationary factor, since the planning phase is usually done one year ahead of the actual procurement date. ACIDSc

If the sum of the different cost components is lower than the appropriation for the procurement, then the ABC should be equal to the sum of the cost components. If the resulting sum is higher than the appropriation, it is advisable to review the technical specifications and the computation of the ABC. In any case, the ABC should not exceed the appropriation.

In case of adjustment of ABC due to failure of bidding, GPPB Resolution 07-2005 provides that the ABC may be adjusted upwards only under the following conditions:

1. There has been failure of bidding for the second time due to all bids submitted exceeding the ABC or no bids have been submitted, or failure in the negotiated procurement after two failed biddings; and

2. There has been previous modification of the terms, conditions and specifications of the project based on Section 35 of the IRR-A, except when the project is indivisible, where the technical component is an integral part of the whole that cannot be reduced, and it constitutes the minimum requirement of the BIR for which there are no substitutes.

It further states that the ABC may be adjusted downwards if there is a need to reflect actual market prices and/or scope of work or suit actual field conditions of the project. Upon adjustment of ABC, the BIR must conduct re-bidding with re-advertisement/posting. Any succeeding adjustment of the ABC shall be in accordance with these guidelines.

Computing the Cost of Consultancy

The cost of consultancy shall be computed on the basis of cost to the consultant of actual services to be rendered by the consultant plus a reasonable level of management fee. The amount of management fee depends on the complexity and magnitude of the project, and other direct expenses associated to the undertakings.

1. Remuneration Costs

These are the remuneration to be paid to the consultant's staff/personnel who are directly engaged in the consulting services as per agreed manning schedule. It covers the basic rates of the staff multiplied by a billing factor of the consulting firm.

The rates or fees of consultants per expertise as disseminated by umbrella organizations of consultants can serve as guide to the BAC and Project proponent/end-user during financial negotiation. CADacT

a. Basic Rates

The basic rates represent the salaries actually being received by the professional staff from the consulting firms as certified by the consultant with a sworn statement to be submitted to the BIR. The basic rates of all individual members of the staff shall be clearly indicated in the contract. In determining the basic rates, the salary history vis a vis the industry rates may be considered as bases.

b. Billing Factor or Multiplier

The billing factor or multiplier shall be derived from the following to be supported by audited financial statements prepared by an independent auditing/accounting firm/entity and certified by the consulting firm:

i. Overhead Cost

These are incidental and general administrative and management expenses of the firm other than those directly related to the project, and are expressed in percent of the total of the basic salaries of all the personnel of the firm. These expenses may include the following:

• Executive, administrative, accounting, and legal salaries, other than identifiable salaries included in the basic man-month salaries;

• Legal and corporate expenses including licenses, professional membership fees;

• Business costs including representation allowances, advertisements, promotions;

• Provision for office, electricity, water, and similar items for working space;

• Financial and banking costs including interest expenses and handling charges;

• Building and equipment insurance; and

ii. Social Charges

These are cost items for the welfare and benefit of the consultant's staff in accordance with the policies of the consultant and of the government. Their totality expressed as a percentage of the basic rates of the consultant's personnel, these cost items may include any or a combination of the following, based on audited and sworn statement to be submitted by the consultant to the BIR:

• Bonuses;

• Vacation/sick leave and paid public holidays;

• Medical Care;

• Pension plan — retirement and/or terminal pay;

• Company insurance; and

• Other benefits as required by law.

iii. Management Fee

This is the remuneration for the professional know-how and expertise of the consultant. The amount of fees shall be fixed as a percentage of the sum of the basic salary, overhead costs and social charges. Depending on the complexity of the services rendered and other considerations, this fee ought not to exceed fifteen percent (15%) of the sum of the basic salary, overhead costs and social charges. cHITCS

The sum total of the basic salary, overhead, social charges and management fee as percentage of basic salary represents the billing factor or multiplier. The size of the multiplier may vary with the types of work, the organization and experience of the consultant, and the geographic area in which its office is located. The multiplier normally ranges from 2.0 to 3.0 for the technical personnel, and shall normally not exceed 1.8 for the administrative personnel directly hired for the project.

2. Reimbursable Costs

These include all other expenses associated with the execution of the services. These costs may be classified into:

a. Based on Agreed Fixed Rates

These are cost items which are payable at agreed unit rates to the staff and include the following, among others:

i. Housing Allowance

These cover housing costs, including those for power and water, for consultant's staff. It should not include food and laundry since these are basic necessities that the consultant has to spend for even without the project. In considering the housing allowance, the base of operation and the designated official station of duty of the consultant must be defined.

The base of operation is the location of the home office of the consultant while the designated official station of duty is the location outside of the base of operation where most of the consultant's staff will be working more often continuously during the duration of the services. IcTEAD

For local consultants, the base of operation is usually in Metro Manila, and the designated official station of duty is the project site outside Metro Manila. Sometimes, in undertaking the services, the consultant's staff is grouped into two (2), i.e.,those who are stationed at the base of operation and those stationed at the project site, depending on where they will be staying longer continuously during the duration of the services. 

Housing allowance shall be given only for long-term consultant's staff, i.e.,those who will be staying at the designated official station of duty continuously for more than one (1) month. The agency may also have the option to provide for housing facilities at the designated BIR official station of duty instead of giving housing allowance. The work and manning schedules, together with the designated base of operation and the official station of duty, shall be the basis for determining the rates of housing allowance and per diem.

ii. Per Diems

These are daily allowances given to the consultant personnel while on official trips authorized by the agency and/or explicitly required in the contract as follows:

• Outside of the base of operation for consultant staff stationed there; and

• Outside of the designated official station of duty for consultant staff stationed there, except when staying at the base of operation. Per diems shall be reckoned from a 24-hour day trip of at least 50 kilometers away from the station.

iii. For foreign consultants, miscellaneous international travel expenses such as, the cost of transportation to and from the airports, airport taxes, passports, visas, travel permits and vaccinations.

Per diem rates vary for short visits and longer stays and by location within the country. Stays in cities receive higher per diem as compared to municipalities.

b. Based on Actual Cost

These are all other reimbursable costs that must be supported with invoices and/or other supporting papers, and include the following:

i. International Travel

This covers the cost of full fare economy class air transportation, preferably through a Filipino-owned airline, by the most direct and expeditious air routes of the consultant's expatriate staff from their point of origin. An expatriate shall be allowed the cost of excess baggage up to 20 kilograms each per round trip.

ii. Domestic Travel

This covers the cost of full fare economy class air transportation and/or land transportation by the most direct and expeditious routes of the consultant's staff for official trips authorized by the agency and/or explicitly required in the contract. DcCIAa

iii. Domestic Transportation

This covers the provision of vehicles either through purchase or rental.

iv. Communication Expenses

This includes telephone, mobile, two-way radio, telegrams, Internet, parcel, freight, courier, fax and etc.

v. Cost of office/engineering supplies and cost of preparing/reproduction drawings and other documents to be submitted;

vi. Cost of field office either through rental or construction;

vii. Equipment rental and purchases whenever justifiable;

viii. Acquisition of software licenses; and

ix. Cost of other items deemed necessary for the project as certified by the agency concerned.

3. Contingency

Payments in respect of items of additional work within the general scope of services that may turn out to be necessary as the study progresses or costs that would exceed the estimates set forth may be chargeable to the contingency amounts in the respective estimates. However, these payments can be done only if such costs are approved by the agency concerned prior to its being incurred and provided, further, that they shall be used only in line with the unit rates and costs specified in the contract and in strict compliance with the project needs. Contingency amount must not exceed five percent (5%) of the amount of the contract.

The end-user must estimate the cost of consulting services through cost research in the local market. This study ought to focus on the monthly salaries paid to the consultant's staff, per diems for hotel and living expenses for staff away from normal duty station, air or land transportation, and other out-of-pocket expenses, to obtain a good basis for the budget. For contract duration of more than one (1) year, a reasonable percentage to cover inflation may be added to the estimate. DSIaAE

2. Preparation of Bidding Documents

Bidding Documents

Bidding documents are documents issued by the BIR to provide the prospective bidders all the necessary information that they need to prepare their bids. (Section 5 [f] of IRR-A) These clearly and adequately define, among others:

1. Objectives, scope and expected outputs and/or results of the proposed contract;

2. Expected contract duration;

3. Obligations, duties and/or functions of the winning bidder; and

4. Minimum eligibility requirements of bidders, such as track record to be determined by the BAC (Section 17.2 of IRR-A)

Contents of Bidding Documents

Part I

1. IAEB;

2. Eligibility Documents;

3. Eligibility Data Sheet;

4. Short Listing Criteria

5. Criteria and Rating System (Detailed Technical Evaluation Criteria);and

6. Checklist for Eligibility Requirements.

Part II

1. Letter of Invitation to Bid;

2. ITB;

3. BDS;

4. GCC;

5. SCC;

6. Technical proposals;

7. Financial proposals;

8. Terms of Reference and annexes;

9. Appendices;

10. Checklist of Envelopes 1 and 2 (Technical and Financial Proposals; and

11. Additional document requirements or specifications where applicable and necessary. The bidding documents, as amended, shall subsequently form an integral part of the contract. (Section 17.3 of IRR-A) Statements not made in writing at any stage of the bidding process shall not modify the bidding documents.

The ITB should contain all necessary information that would help consultants prepare responsive proposals, and shall bring as much transparency as possible to the selection procedure by providing information on the evaluation process and by indicating the evaluation criteria and factors and their respective weights and the minimum passing quality score. The ITB should indicate an estimate of the level of key staff inputs (in staff time) required of the consultants or the total budget.

Consultants, however, should be free to prepare their own estimates of staff time to carry out the assignment and to offer the corresponding cost in their proposals. The ITB should specify the bid validity period, which should be adequate for the evaluation of bids, decision on award, and finalization of contact negotiations.

The specifications and other terms in the bidding documents shall reflect minimum requirements. A bidder may, therefore, be allowed to submit a superior offer. However, in the evaluation of the bids, no premium or bonus must be given as a result of this superior offer. (Section 17.4 of IRR-A) This rule is based on the nature of the procedure used to evaluate the technical proposals — a "pass/fail" method — such that the presence or absence of the technical requirements is the sole basis for determining technical compliance. After having established compliance with the technical specifications, the next factor to consider would then be the price or financial bid. EcDSHT

Other Practices that the BIR may Observe to Ensure Successful Procurement

1. All prospective bidders should be provided the same information, and should be assured of equal opportunities to obtain additional information on a timely basis.

2. BIR should provide reasonable access to project sites for visits by prospective bidders.

3. For complex supply contracts, particularly for those requiring refurbishing existing equipment, a pre-bid conference may be arranged whereby potential bidders may meet with the BAC, TWG, BAC Secretariat, and Project Proponent/end-user unit to seek clarifications. Minutes of the conference may be provided to a prospective bidder only upon request and payment of the corresponding fee.

4. Supplemental/bid bulletins must be issued by the BAC in case any additional information, clarification, correction of errors, or modifications of bidding documents. It shall be the responsibility of all those who have properly secured the bidding documents to inquire and secure supplemental/bid bulletins that may be issued by the BAC. In highly exceptional cases, the deadline may be extended. cEITCA

Participants in the Preparation of the Bidding Documents

1. BAC;

2. TWG;

3. Project Proponent/end-user;

4. Technical experts/Consultants, if necessary; and

5. BAC Secretariat.

Timeline for the Preparation of Bidding Documents

The bidding documents must be prepared in time for presentation at the pre-procurement conference. After the conference, and before advertisement and/or posting of the IAEB at BIR website (www.bir.gov.ph) and PhilGEPS, it should be ascertained that these documents will be ready and available for issuance to prospective bidders on the day the IAEB is first advertised.

Various Types and Sizes of Contracts Provided in the Bidding Documents

The bidding documents should clearly state the type of contract to be entered into and contain the proposed contract provisions appropriate therefore. The most common types of contracts provide for payments on the basis of a lump sum, unit price, or combinations thereof. 2

The size and scope of individual contracts will depend on the magnitude, nature, and location of the project, for example:

1. For projects requiring a variety of goods and works, separate contracts may be awarded for the supply and/or installation of different items of equipment and plant ("plant" refers to installed equipment, as in a production facility) and for the works.

2. For a project requiring similar but separate items of equipment or works, bids may be invited under alternative contract options that would attract the interest of both small and large firms, which could be allowed, at their option, to bid for individual contracts (slices/items) or for a group of similar contracts (package).All bids and combinations of bids should be received by the same deadline and opened and evaluated simultaneously so as to determine the bid or combination of bids offering the lowest calculated cost to the BIR.

BID SECURITY

A bid security is a guarantee that the successful bidder will:

1. Not default on its offer, and

2. Enter into contract with the BIR within ten (10) calendar days, or less as indicated in the ITB, from receipt of the Notice of Award, and furnish the performance security provided for in Section 39 of RA 9184 and Section 27.1 of IRR-A. 

A bid security must be submitted with every bid. It must be operative on the date of bid opening, and payable to the BIR.

FORMS OF BID SECURITY AND THE CORRESPONDING AMOUNT

The bid security shall be in any of the following forms, with the corresponding required amount:

 

Form of Bid Security	Minimum Amount in % of the
		Approved Budget for the Contract
		(ABC) to be Bid
1.	Cash, certified check, cashier's	One percent (1%)
	check/manager's check, bank
	draft or irrevocable letter of credit;
2.	Bank Guarantee confirmed by a	One and a half percent (1.5%)
	reputable local bank or in the case
	of a foreign bidder, bonded by a
	foreign bank;    SaCDTA
3.	Surety Bond callable upon	Two and a half percent (2.5%)
	demand issued by a reputable
	surety or insurance company;
4.	Foreign government guarantee as	One Hundred percent (100%)
	provided in an executive, bilateral
	or multilateral agreement, as may
	be required by BIR.

 

For purposes of determining the amount of the bid security in biddings with lots or items, whereby a bidder submits a bid for more than one lot or item, the bid security shall be based upon the sum of the ABC for each of the lots or items for which bids are submitted.

PERIOD OF VALIDITY OF BID SECURITY

Bid security must be valid for one hundred twenty (120) calendar days from the date of the opening of bids. (Section 28 of IRR-A)

Denomination of Bid Security

The bid security must be denominated in Philippine currency (Section 27.3 of IRR-A),except that foreign bidders which are allowed to submit foreign currency denominated bids may also submit bid securities that are denominated in a freely convertible currency allowed or specified in the bidding documents.

Condition for the Return of Bid Securities

No bid securities shall be returned to bidders after the opening of bids and before contract signing, except:

• those who were failed to comply with any of the requirements to be submitted in the first bid envelope of the bid; or

• those who were post disqualified and submitted a written waiver of its right to file a motion for reconsideration and/or protest.

However, bidders who were post-disqualified must request in writing from the BIR for the refund of their bid securities. The original copy of the Official Receipt must be attached to the request for bid securities mentioned in Section 27.2 (a) of the IRR.

Without prejudice to the provisions of the law allowing forfeiture of bid securities, bid securities shall be returned only after the bidder with the HRRB has signed the contract and furnished the performance security, but in no case later than the expiration of the bid security validity period indicated in the ITB. (Section 27.4 of IRR-A as amended by GPPB Resolution No. 021-2006)

3. Conduct of the Pre-Procurement Conference

Pre-procurement Conference

This is the forum where all participants involved in the procurement meet and discuss all aspects of the transaction. These aspects include the scope of work, the ABC, the applicability and appropriateness of the recommended method of procurement and the related milestones, the draft bidding documents, and availability of the pertinent budget release for the project. aCcEHS

Importance and Purpose of Pre-procurement Conference

For all projects subject to public bidding or any of the alternative modes of procurement, a pre-procurement conference is conducted to determine the readiness of the BIR to procure consulting services in terms of the legal, technical and financial requirements of the project. More specifically, it ensures that the procurement will proceed in accordance with the PPMP and APP, confirms the availability of appropriations and programmed budget for the contract, and reviews all relevant documents in relation to their adherence to the law. (Section 20 of IRR-A)

A pre-procurement conference should: (Section 20.1 of IRR-A)

1. Ensure that the procurement is in accordance with the approved APP;

2. Determine the availability of the appropriations and programmed budget for the contract;

3. Review of the TOR;

4. Review, modify and agree on the criteria for eligibility screening, and ensure that the said criteria are fair, reasonable, and that they are of the "pass/fail" type and are written in such manner; (Section 20.1.3 of IRR-A)

5. Review, modify and agree on the criteria for short listing, including the weights for each criterion; ACcHIa

6. Determine the actual number of consultants to be included in the short list. The number shall be from three (3) to seven (7) consultants, with five (5) as the preferable number, as well as the minimum score required; (Section 24.15.2 of IRR-A)

7. Review, modify and agree on the criteria for the evaluation of proposals, and ensure that the said criteria are fair, reasonable and applicable to the procurement at hand. The pre-procurement conference should also determine whether the evaluation procedure should be quality based or quality-cost based. If the procedure will be quality-cost based, the corresponding weights for the technical and financial proposals should be agreed upon and then recommended by the BAC to the CIR/RD for approval. The weights of the financial proposal shall be from fifteen percent (15%) up to a maximum of forty percent (40%).(Section 33.5 of IRR-A).When the assignment can be accomplished in a fairly limited number of ways and/or involves repetitive or standardized approaches, it is recommended that the weight of the financial proposal be closer to forty percent (40%);

8. Finalize and approve the IAEB;

9. Reiterate and emphasize the "no contact rule" during the bid evaluation process, and the applicable sanctions and penalties, as well as agree on measures to ensure compliance with the foregoing; and

10. Ensure that the requirements are in accordance with the ABC.

Timeline for the Conduct of Pre-procurement Conference

The pre-procurement conference must be conducted prior to the advertisement or issuance of the IAEB (SF-CONS-04).(Section 20.1 of IRR-A) A reasonable time should be prescribed to allow the participants to incorporate the necessary changes, amendments or revisions thereto. HcSaAD

Participants of a Pre-procurement Conference

1. BAC;

2. BAC Secretariat;

3. Project Proponent/end-user;

4. Members of the TWG/s and technical experts/consultants hired by the BIR; and

5. Other officials concerned, as may be required.

Minutes of the Pre-Procurement conference shall be prepared by the BAC Secretariat as prescribed in SF-CONS-03.

Criteria for the Evaluation of Proposals

The technical proposals of consultants shall be evaluated based on the following criteria: (Section 33.3.4 of IRR-A)

1. Quality of personnel to be assigned to the project. This criterion covers suitability of key staff to perform the duties of the particular assignments and their general qualifications and competence, including education and training (Recommended weight: 30%-70%);

2. Experience and capability of the consultant. The consultant's experience and capability should include its record in previous engagements and the quality of its performance in similar and other projects. These also include its relationship with previous and current clients, overall current work commitments, the geographical distribution of its current/impending projects, and the level of attention it is going to give to the project in question. In rating a consultant on this criterion, the BAC ought to consider both the overall experiences of the firm and the individual experiences of the principal and key staff, including those experiences when the staff were employed by other consultants (Recommended weight: 10%-30%);and

3. Plan of approach and methodology in delivering the services required. This criterion should emphasize the clarity, feasibility, innovativeness and comprehensiveness of the plan approach, and the quality of the interpretation of project problems, risks and the suggested solutions (Recommended weight: 20%-40%).

The BAC must assign numerical weights to each of the above criteria, and these weights must be indicated in the Request for Proposals (RFP).The relative importance of the above three (3) factors will vary with the type of consulting services to be performed. In the overall rating of the proposals, the greatest weight is normally given to the qualifications of the staff to be assigned to the project. They are the most important resources for the success of the work as they are the ones analyzing the problems and proposing solutions. The above criteria can be further subdivided to appropriately consider the requirements of the project.

The weights for each criterion, which should have been determined during the pre-procurement conference, shall add up to one hundred percent (100%). TcIHDa

For complex or unique undertakings, such as those involving new concepts/technology or financial advisory services, participating short listed consultants may be required, at the option of the agency concerned, to make an oral presentation to be presented by each consultant, or its nominated Project Manager or head, in case of consultant firms, within fifteen (15) calendar days after the deadline of submission of technical proposals.

SECTION 3. Procedures for the Procurement of Consulting Services through Competitive Bidding. —

Competitive or Public Bidding

It is a method of procurement that is open to any interested and qualified party. All procurement shall be done through public bidding except as provided in Rule XVI of IRR-A (Section 10 of IRR-A).

Competitive Bidding consists of the following processes:

• Advertisement/posting of IAEB;

• Receive LOI, Application for Eligibility and Short listing;

• Eligibility check/screening of prospective bidders;

• Short listing;

• Issuance and availability of bidding documents;

• Pre-bid conference;

- request for clarification/s

- supplemental/bid bulletin

• Submission and opening of bids;

• Bid evaluation;

• Negotiation;

• Post-qualification;

• Approval of resolution/issuance of notice of award; 

• Contract preparation and signing;

• Approval of contract by Higher authority; and

• Issuance of Notice to Proceed. (Section 5 [h] of IRR-A)

The procurement process from the date of advertisement and/or first day of posting of the IAEB up to the opening of bids should not exceed sixty (60) calendar days, (Section 21.2.2 of IRR-A as amended by GPPB Resolution No. 014-2006).The opening of bids up to the award of contract should not exceed fifty-one (51) calendar days. In case the deadline for each activity falls on a non-working day (i.e.,Saturday and Sunday),legal holiday, or special non-working holiday, the deadline shall be the next working day. (Section 38.1 of IRR-A)

Step 1 Advertisement and Posting of IAEB

The IAEB serves as the notice to the public and all interested parties of the procurement and bidding opportunities of the BIR. It ensures transparency of the procurement process, widest possible dissemination to increase the number of prospective bidders and intensify competition for the procurement activity or project. Intensified competition, in turn, will ensure that the government, in general, and the BIR, in particular, will get the best possible proposals, quality-and cost-wise for the consulting services sought to be procured. The BAC is responsible for ensuring that the IAEB is advertised and posted in accordance with law. SaTAED

Contents of IAEB

1. Name of the contract to be bid, a general description of the project and other important or relevant information on the project;

2. General statement on the criteria to be used by the BIR for:

a. Eligibility check; and

b. Short listing of eligible consultants;

3. Nature of the evaluation process, that is, whether Quality-Based or Quality Cost-Based; (Section 33.3.1 of IRR-A)

4. Weights for the technical and financial proposals under the Quality Cost-Based Evaluation process; (Section 33.5 of IRR-A)

5. Number of firms to be included in the short list;

6. Date, time and place of the:

a. Deadline for the submission of the LOI, and application for eligibility and short listing;

b. Deadline for the submission and receipt of the eligibility and short listing requirements; and

c. Pre-bid conference;

7. ABC;

8. Source of funding;

9. Period of availability of the eligibility documents, the place where the eligibility documents may be secured and, where applicable, the price of the eligibility documents; HAECID

10. Contract duration;

11. Name, address, telephone number, facsimile number, and e-mail and website addresses of the BIR, as well as its designated contact person;

12. Reservation Clause, which is normally located at the bottom of the notice; and

13. Such other necessary information that are deemed relevant by the BIR.

The IAEB should provide information that enables potential bidders to decide whether to participate or not. As such, apart from the above essential items, the IAEB should also indicate any important bid evaluation criteria (e.g.,the application of a margin of preference in bid evaluation) or qualification requirement (e.g.,a requirement for a minimum level of experience in manufacturing a similar type of product for which the invitation is issued).

The deadline for the submission of bids should be no later than sixty (60) calendar days from date of advertisement and/or first day of posting of the IAEB.

Posting of the IAEB

The IAEB for projects with ABCs of more than One Million Pesos (P1 Million) and/or those with a duration of more than four (4) months must be: (Section 21.2.1 of IRR-A as amended by GPPB Resolution No. 014-2006)

1. Advertised at least once within a maximum period of seven (7) calendar days in one (1) newspaper of general nationwide circulation which has been regularly published for at least two (2) years before the date of issue of the advertisement;

2. Posted continuously on the BIR website (www.bir.gov.ph) and the PhilGEPS for seven (7) calendar days starting on date of advertisement; and SDIaHE

3. Posted at any conspicuous place reserved for this purpose in the premises of the BIR National Office and Regional Offices, as certified by the heads of their respective BAC Secretariat for seven (7) calendar days.

For projects with ABCs of One Million Pesos (P1 Million) and below and/or those with a duration of more than four (4) months or less must be posted: (Section 21.2.2 of IRR-A as amended by GPPB Resolution No. 014-2006)

1. Continuously on the BIR website (www.bir.gov.ph) and the PhilGEPS for seven (7) calendar days starting on date of advertisement; and

2. At any conspicuous place reserved for this purpose in the premises of the BIR National Office and Regional Offices, as certified by the heads of their respective BAC Secretariat for seven (7) calendar days. TAECaD

Methodology: Steps in the Advertisement and Posting of IAEBs

The BAC Secretariat:

a. Prepare the draft IAEB for review/approval of the BAC; and

b. Advertise and post the IAEB.

For alternative methods of procurement, advertisement in a newspaper may be dispensed with, provided, however, that posting shall be made at the BIR website (www.bir.gov.ph),the PhilGEPS and at any conspicuous place reserved for this purpose in the premises of the BIR NO and RR, as certified by the heads of their respective BAC Secretariat during the same period.

Step 2 Acceptance of LOIs, Issuance of Eligibility Documents, and Conduct of Eligibility Check

Submission of LOI, and Applications for Eligibility

Prospective bidders should submit their written LOIs and Applications for Eligibility (SF-CONS-05) to the BAC and have these received not later than seven (7) calendar days from last date of posting of the IAEB. Upon receipt of these documents, the BAC must give the prospective bidders the list of eligibility requirements, and inform them in writing of the date, time, and venue for the submission of such requirements. (Section 21.3 of IRR-A)

Once the PhilGEPS is fully established, prospective bidders may also submit their LOIs and Applications for Eligibility electronically to the BIR through the PhilGEPS, likewise within the deadline set for the submission of the written form of the documents.

Timeline for the Release of Eligibility Forms

The eligibility forms must be released by the BAC immediately upon its receipt of the LOIs and applications for eligibility.

If Only One Bidder Submits a Letter of Intent

Even if only one bidder submits an LOI, the bidding process continues. If it is later declared eligible and its bid is found to be responsive to the bidding requirements, its bid will be declared as a SRRB and considered for contract award. (Section 36 of IRR-A)

If No Prospective Bidder Submits a Letter of Intent

If no prospective bidder submits a Letter of Intent, the BAC shall issue a resolution declaring a failure of bidding. The BAC shall conduct a re-bidding in accordance with the provisions of this Manual on the declaration of failure of bidding.

Determining the Eligibility of the Prospective Bidders

A prospective bidder is eligible to bid for a particular project if it complies with the eligibility requirements prescribed for the competitive bidding, within the period stated in the invitation to bid. The eligibility requirements shall provide for fair and equal access to all prospective bidders.

Conditions for Hiring Consultants

Consultants may be hired if:

1. The services they would be providing is beyond the capability of the BIR to undertake, either because it does not have the expertise or it could not devote enough time to the work due to numerous other assignments; and

2. The services they would be providing and their hiring would not be inconsistent with the government's policy of not competing with the private sector. (Section 24.3 of IRR-A)

Eligibility Requirements for the Public Bidding of Consultancy Services

In order to manifest trust and confidence in and promote the development of Filipino consultancy, Filipino consultants should be hired whenever the services required for the project are within the expertise and capability of Filipino consultants. It is only when the CIR/RD determines that Filipino consultants do not have the sufficient expertise and capability to render the services required under the project may foreign consultants be hired. (Section 24.5.2 of IRR-A).Where applicable, technology and knowledge transfer to the BIR shall be required in the provision of consulting services. (Section 24.5.4 of IRR-A) The BIR may hire a joint venture composed purely of Filipino consultants or, when circumstances require the participation of foreign consultants, a joint venture composed of Filipino and foreign consultants. The preference for Filipino consultants merely reflects Article XII of the 1987 Constitution, which mandates the government to give preference to qualified Filipinos in the grant of rights, privileges and concessions covering the national economy and patrimony, including the purchase of goods, services and the hiring of consultants, contractors and other professionals. aESHDA

The above should be read in connection with E.O. 278, s. 2004, which prescribes Guidelines for Project Loan Negotiations and Packaging of Government Foreign-Assisted Infrastructure Projects. Under Section 1 thereof, as a general rule, the government should, as much as possible, fund consultancy services for government infrastructure projects with local funds and using local resources and expertise. Consultancy services shall be proposed for foreign assistance only where foreign funding is indispensable or local funds are insufficient. For this purpose, the concerned government units should provide funds in their respective investment programs for the following consultancy services:

1. Pre-investment components which include feasibility studies and related surveys and special studies;

2. Detailed engineering design and related activities (where the project is determined to be feasible);or

3. Project Management/Supervision.

Under the same Section 1 of E.O. 278, where Filipino capability is determined by appropriate authorities to be insufficient, Filipino consultants may hire or associate themselves with foreign consultants, provided that the Filipino shall be the lead consultant. It further provides that where foreign funding is indispensable, foreign consultants for the project must enter into joint venture with Filipino consultants. It should be noted, however, that this E.O. only covers consultancy services for foreign-assisted government infrastructure projects. ATDHSC

To be considered a Filipino consultant, whether as an individual, a sole proprietorship, a partnership, a corporation, or a joint venture, one must satisfy the following requirements: (Section 24.1 of IRR-A)

1. Individual

a. He/she must be a citizen of the Philippines; and

b. When the consulting services involve professions regulated by Philippine laws, he/she must be a registered professional authorized by the appropriate regulatory body to practice those professions and allied professions.

2. Sole Proprietorship

a. The owner of the sole proprietorship must be a citizen of the Philippines;

b. The sole proprietorship firm must be registered with, and authorized by, the Bureau of Domestic Trade; and

c. When the consulting services involve professions regulated by Philippine laws, the owner and key staff of the sole proprietorship must be registered professionals authorized by the appropriate regulatory body to practice those professions and allied professions.

3. Partnership

a. At least sixty percent (60%) of the partnership's interest must be owned by citizens of the Philippines;

b. The partnership firm must be registered with, and authorized to engage in the particular type of consulting service/s by, the SEC; and

c. When the consulting services involve professions regulated by Philippine laws, all the partners of the professional partnership firm and those who will actually perform the services shall be Filipino citizens and registered professionals authorized by the appropriate regulatory body to practice those professions and allied professions. SAHEIc

4. Corporation

a. At least sixty percent (60%) of the outstanding capital stock must be owned by citizens of the Philippines;

b. The corporation must be registered with and authorized by the SEC and whose primary purpose is to engage in the particular type of consulting service/s involved; and

c. When the consulting services involve the practice of professions regulated by Philippine laws, all the stockholders and directors of the corporation and those who will actually perform the services shall be Filipino citizens and registered professionals authorized by the appropriate regulatory body to practice those professions and allied professions.

5. Joint Ventures are associations among Filipino consultants and among Filipino and foreign consultants who may wish to complement their respective areas of expertise. Such an association may be for the long term or for a specific assignment. All the members of the association shall sign the contract and shall be jointly and severally liable for the entire assignment.

a. At least sixty percent (60%) of the interest must be owned by citizens of the Philippines; and

b. When the consulting services involve the practice of professions regulated by Philippine laws, all the stockholders and directors of the corporation and those who will actually perform the services shall be Filipino citizens and registered professionals authorized by the appropriate regulatory body to practice those professions and allied professions. TaDSCA

In determining the eligibility of the joint venture, the principle of "collective compliance" will be applied to its members/principals in the sense that each of the entities of the joint venture must submit all of the documents that are required to establish eligibility, although the non-compliance of one member/principal may be compensated by the compliance of another member/principal. However, in the case of incorporated/registered joint venture only one (1) set of documents is required to be submitted unless otherwise required by the BAC, e.g.,newly incorporated registered joint venture.

Consultants may associate with each other in the form of a joint venture or of a sub-consultancy agreement to complement their respective areas of expertise, strengthen the technical responsiveness of their proposals and make available bigger pools of experts, provide better approaches and methodologies, and, in some cases, to offer lower prices. Such an association may be for the long term (independent of any particular assignment) or for a specific assignment. If the BIR employs an association in the form of a joint venture, the association should appoint one of the firms to represent the association; all members of the joint venture should sign the contract and should be jointly and severally liable for the entire assignment. 3

A Foreign Consultant may be an individual, sole proprietorship, partnership, corporation or joint venture that does not meet the citizenship, ownership, interest and/or registration/authorization requirements for a Filipino consultant, but must satisfy the following minimum requirements: (Sections 24.1.2 and 24.5.3 of IRR-A)

1. The foreign consultant must be registered with the SEC and/or any agency authorized by the laws of the Philippines;

2. When the consulting services involve the practice of regulated professions, the foreign consultant must be authorized by the appropriate Philippine government professional regulatory body to engage in the practice of those professions and allied professions. It must submit any registration, license or authority before it is awarded contract; and

3. The hiring of foreign consultants should be in consonance with, or compliance of all pertinent laws and regulations of the Philippines.

Government Employee or Officer Becoming as a Consultant of the BIR

A government employee may become a consultant on a full-time or part-time basis, provided that:

1. As a full-time consultant:

a. He takes a leave of absence, whether with or without pay, subject to the following rules:

i. A leave of absence must be contingent upon the needs of the service, i.e.,it must not adversely affect agency operations, thus, the grant of vacation leave shall be at the discretion of the head of department/agency;

ii. A leave without pay shall not exceed one (1) year; and

iii. A leave without pay shall not be granted whenever an employee has leave with pay to his/her credit;

b. His being a consultant does not violate the rule against a government employee holding multiple positions; ESITcH

c. He obtains permission or authority from his head of agency as his being a consultant constitutes a limited private practice of profession; and

d. His being a consultant does not conflict or tend to conflict with his official functions and the interest of the Republic of the Philippines.

2. As a part-time consultant:

a. His being a consultant does not violate the rule against a government employee holding multiple positions;

b. He obtains permission or authority from his head of agency as his being a consultant constitutes a limited private practice of profession;

c. His being a consultant does not conflict or tend to conflict with his official functions and the interest of the Republic of the Philippines; and

d. His being a consultant does not affect the effective performance of his duty.

An employee of the BIR cannot be hired by the agency since his/her employment would create a conflict of interest. Refer to CSC Resolution 021264, dated September 27, 2002.

Certification that Filipino Consultants have the Expertise and Experience

The GPPB recognizes an umbrella organization of Filipino consultants as the representative of all Filipino consultants. It deals and consults with this organization on matters relative to the consulting industry in the country. (Section 24.6.1 of IRR-A)

The umbrella organization shall prepare and certify a list of fields wherein Filipino consultants can provide competent consulting services. As proof of the availability of Filipino expertise, it will also prepare a list of its members with expertise in specific fields. It will list its standards for competence in the field and certify that the members listed had passed such standards.

These documents shall be submitted to the GPPB and all other concerned government agencies. They will be updated at least annually, or as often as necessary. The GPPB will then post these documents in the PhilGEPS.

The above certification and list of consultant-members will guide the BAC in determining the fields where Filipino consultants are already qualified and capable, and thus would not require foreign consultants. (Section 24.6.2 of IRR-A)

All of these entities must have:

1. The experience of having completed within the period specified in the IAEB concerned, a single contract that is similar to the contract to be bid, and whose value, adjusted to current prices using the wholesale consumer price index, must be at least fifty percent (50%) of the approved budget for the contract to be bid (Section 23.11.1.2 of IRR-A);and

This is done to assure the BAC that the prospective bidder has the technical and financial capability to undertake the contract to be bid. caHIAS

A contract is similar to the contract to be bid if it involves goods or related services of the same nature and complexity as those which are the subject of the public bidding concerned; for example, if it has the same major categories of goods, such as computers and network equipment.

2. Any of the following:

An NFCC that is at least equal to the approved budget for the contract to be bid, calculated as follows:

NFCC = [(Current assets minus current liabilities) (K)] minus the value of all outstanding projects under ongoing contracts, including awarded contracts yet to be started.

Where:

K = 10 for a contract duration of one year or less, 15 for a contract duration of more than one year up to two years, and 20 for a contract duration of more than two years. cTSDAH

or

a commitment from a licensed bank to extend to it a credit line if awarded the contract to be bid — such commitment being specific to the contract to be bid;

or

a hold out on cash deposits issued by a licensed bank, which shall also be specific to the contract to be bid, and which must be in an amount not lower than that set by the BIR in the Bidding Documents, which shall be at least equal to ten percent (10%) of the ABC of the contract to be bid. 

Eligibility Check

It is a procedure to determine if a prospective bidder is eligible to participate in the bidding at hand. In determining a prospective bidder's eligibility, the BAC shall use non-discretionary "pass/fail" criteria, as stated in the IAEB and the ITB. Essentially, this means that the absence, incompleteness or insufficiency of a document shall make a prospective bidder ineligible to bid for the particular procurement. 4(Section 23.2 of IRR-A)

A prospective bidder is eligible to bid for the procurement of consulting services if it complies with the eligibility requirements prescribed for the competitive bidding, within the period stated in the invitation to bid. The eligibility requirements shall provide for fair and equal access to all prospective bidders. CTcSAE

The BIR and consultants are required to observe the highest standard of ethics during the procurement and execution of contract, bidders should not be under a declaration of ineligibility for corrupt, fraudulent, collusive and coercive practices by the government.

Instances where Conflict of Interest May Arise in Consulting Services

GOP policies require that consultants provide professional, objective and impartial advice, and at all times hold the client's interests paramount, without any consideration for future work, and that in providing advice they avoid conflicts with other assignments and their own corporate interests. Consultants should not be hired for any assignment that would be in conflict with their prior or current obligations to other clients, or that may place them in a position of being unable to carry out the assignment in the best interest of the BIR. Without limitation on the generality of the foregoing, consultants should not be hired under the circumstances set forth below:

1. Conflict between consulting activities and procurement of goods, works or services

A firm that has been engaged by the BIR to provide such goods, works or services for a project, and each of its affiliates, shall be disqualified from providing consulting services related to those goods, works or services. Conversely, a firm hired to provide consulting services for the preparation or implementation of a project, and each of its affiliates, shall 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.

2. Conflict among consulting assignments

Neither consultants (including their personnel and sub-consultants) nor any of their affiliates shall be hired for any assignment that, by its nature, may be in conflict with another assignment of the consultants. As an example, consultants hired to prepare a TOR for a project shall not be hired for the implementation of the same project.

3. Relationship with the BIR's staff

Consultants (including their personnel and sub-consultants) with business or family relationship with a member of the BIR's staff who are directly or indirectly involved in any part of the:

a. preparation of the TOR of the project;

b. selection process for the consultants; or

c. supervision of such contract;

may not be awarded a contract, unless the conflict stemming from this relationship has been resolved in a manner acceptable to the BIR throughout the selection process and the execution of the contract.

Addressing Possibility of an Unfair Competitive Advantage in the Procurement of Consulting Services

Fairness and transparency in the selection process require that consultants or their affiliates competing for a specific assignment do not derive a competitive advantage from having provided consulting services related to the assignment in question. To that end, the BIR should make available to all the short listed consultants together with the request for proposals all information to provide them equal opportunity.

Minimum Eligibility Requirements

The eligibility of a prospective bidder that is a Filipino consultant is determined based on its submission of the following documents: (Section 24.7.1 of IRR-A) (SF-CONS-08)

1. Class "A" Documents

a. Legal Documents

For Single/Sole Proprietorship

• DTI registration certificate (SF-CONS-11)

For Partnership

• DTI registration certificate;

• SEC registration certificate;

• Articles of Partnership; and

• List of Partners and Percentage of Interest duly certified by the Managing Partner; STcaDI

For Corporation

• DTI registration certificate;

• SEC registration certificate;

• Articles of Incorporation;

• By laws;

• Latest General Information Sheet (GIS) duly stamped received by SEC.

For Cooperatives

• DTI or Cooperative Development Authority (CDA) registration certificate;

• Articles of Cooperation; and

• By laws;

i. Valid and current Mayor's permit/municipal license, if applicable; (SF-CONS-12)

ii. Photocopy of Taxpayer's Identification Number (TIN);(SF-CONS-13)

iii. Sworn statement of the prospective bidder that it is not "blacklisted" or barred from bidding by the government or any of its agencies, offices, corporations or LGUs, and that it is not included in the Consolidated Blacklisting Report issued by the GPPB, once released in accordance with the guidelines to be issued by the GPPB as provided in Section 69.4 of the IRR-A (SF-CONS-14);

iv. BIR Registration Certification (BIR Form 2303) and proof of payment of current annual registration fee (BIR Form 0605);

v. Other appropriate licenses as may be required by the BIR.

vi. Tax Clearance from BIR issued by the Collection Enforcement Division, BIR National Office attesting that the taxpayer has no outstanding Final Assessment Notice and/or delinquent account. (As provided for under E.O. 398 or RR# 3-2005);

vii. Latest Annual Income Tax and Business Tax Returns (VAT or Percentage Tax) duly filed thru Electronic Filing and Payment System (eFPS) of the BIR and duly validated confirmation evidencing the tax payments made. (Filing Reference Number)

Latest Annual Income Tax Return (ITR) shall refer to the ITR for the preceding Taxable Year be it on calendar or fiscal year.

Latest Business Tax Return (BTR) refers to Valued Added Tax (VAT),and/or Percentage Tax Returns, whichever is applicable, covering six (6) months immediately prior to the submission of the Bid Proposal. Bidders filing both the VAT and Percentage Tax Returns must submit both returns.

b. Technical Documents

1. Sworn statement attached with duly accomplished BIR Revised Form based on GPPB Standard Form: SF-CONS-15a and 15b of the prospective bidder of all its ongoing and completed government and private contracts for the last three (3) years, including contracts awarded but not yet started if any. The statement shall state for each contract whether said contract is: Ongoing, Completed or Awarded, but not yet started for the last three (3) years. The statement shall include, for each contract, the following: (Section 23 of IRR of R.A. 9184) IEaHSD

i. Name and location of the contract;

ii. Date of award of the contract;

iii. Types of consulting services;

iv. Amount of contract;

v. Contract Duration; and

vi. Certificate of Satisfactory Completion Issued by the Client, in case of a completed contract.

3. ^*The types and number of equipment that the consultant owns, has under lease, and/or has under purchase agreements, if any (SF-CONS-16);

4. If it is a juridical entity, the prospective bidder's statement:

• Of the kinds and number of its ownership and key staff, partners or principal officers, as the case may be, as well as their respective curriculum vitae (SF-CONS-17);

• That, if the consulting services involve professions regulated by Philippine laws, all its owners and key staff, and those who will actually perform the service, are registered professionals authorized by the appropriate regulatory body to practice those professions and allied professions (SF-CONS-18);

• On the prospective bidder's technical competence, experience and staff capabilities (SF-CONS-19);

If the consultant is an individual, the consultant's statement:

• Of his citizenship; and (SF-CONS-20)

• When the consulting services involve professions regulated by the laws of the Philippines, he is a registered professional authorized by the appropriate regulatory body to practice those professions and allied professions.

c. Financial Documents

i. Audited financial statements, stamped "received" by the BIR or its duly accredited and authorized institutions, for the immediately preceding calendar year, showing, among others, the prospective bidder's total and current assets and liabilities; (SF-CONS-20)

ii. Prospective bidder's computation of its NFCC, or at the Bidder's option, a commitment from a licensed bank to extend to it a credit line; in the event of an award in the Bidder's favor, or at the Bidder's option a cash deposit certificate, in an amount not lower than that set by the BIR in the bidding documents, which shall be at least equal to ten percent (10%) of the approved budget for the contract to be bid;

To facilitate eligibility checking, the BAC may maintain a file of Class "A" documents submitted by consultants. When such file is required by the BIR, a consultant who wishes to participate in a public bidding for consultancy services should maintain this file current and updated at least once a year, or more frequently when needed. A consultant who maintains a current and updated file of his Class "A" documents will be issued a certification by the BAC to that effect, which certification may be submitted to the BIR in lieu of the Class "A" documents. (Section 24.7.1.1 of IRR-A and RMO No. 3-2007)

2. Class "B" Documents

a. Valid JVA, if the prospective bidder is a joint venture, with the agreement containing a statement on who the joint venture has constituted and appointed as the lawful attorney-in-fact to sign the contract, if awarded the project, and on which among the members/principals is the lead representative of the joint venture (SF-CONS-22). 

All members of the joint venture shall submit all the Class "A" eligibility documents, but for technical and financial requirements, compliance by one of the joint venture members will suffice. ESHAIC

b. Letter authorizing the BAC or its duly authorized representative/s to verify any or all of the documents submitted for the eligibility check (SF-CONS-23).

3. Other Eligibility Documents

a) Certification under oath that each of the documents submitted in satisfaction of eligibility requirements is an authentic and original copy or a true and faithful reproduction or copy of the original, complete, and that all statements and information provided therein are true and correct. (SF-CONS-24)

b) Sworn statement from the bidder denying the circumstances specified under item 2.1 (a-c),ITB of the Philippine Bidding Documents.

c) Certification from the Corporate Secretary as to the list of stockholders, number of shares owned and percentage of share holdings as of the date of the bidding.

d) Sworn statement of the bidder that it is not related to the head of the BIR by consanguinity or affinity up to the third civil degree or any of the BIR's officers and employees having direct access to information that they may substantially affect the result bidding such as, but not limited to the members of the BAC, TWG, Secretariat, proponent(s)/end user(s).

The BAC requires the bidder's authorized representative to initial all pages of the bid including attachments thereto such as brochures to ensure that the documents reviewed by the BAC are authentic, and to protect the BAC from any insinuation of tampering with the said documents.

Purpose of Requiring an NFCC, a Credit line or a Certificate of a Hold-out on Cash Deposit that is Equal to the ABC

The NFCC, a credit line and a certificate of a hold-out on cash deposit establish the bidder's liquidity, its capacity to absorb the additional obligations in connection with the contract to be bid and to finance its implementation/completion. Compliance with this eligibility requirement may be done on the alternative, such that submission of any of the three (3) is acceptable for purposes of determining a bidder's eligibility.

Eligibility Requirements of a Prospective Foreign Bidder

Foreign manufacturers, suppliers and distributors, when allowed to bid under the circumstances mentioned in Sec. 23.11.1 of IRR-A and R.A. 5183, must submit the same eligibility requirements as domestic entities. However, the legal documents and the audited financial statements under the Class "A" documents may be substituted by the appropriate equivalent documents issued by the country of the foreign manufacturer, supplier or distributor. (Section 23.7 of IRR-A) These documents must be duly acknowledged and authenticated by the Philippine consulate located in that country. CIaASH

Submission of Eligibility Requirements

Prospective bidders must submit their eligibility requirements in a sealed envelope or any such appropriate container to the BAC on or before the deadline specified in the IAEB. Eligibility requirements submitted after the deadline should not be accepted by the BAC. The envelope or container must be marked in the following manner: "Eligibility Envelope of ________________ (name of Bidder) — Public Bidding for _______________ (name of the contract to be bid)".These envelopes or containers will be opened before the dates of the pre-bid conference and bid opening to determine eligibility of prospective bidders.

If Only One Bidder Submits an Eligibility Envelope

Even if only one bidder submits its eligibility envelope, the bidding process continues. If it is declared eligible, passes short listing, and its bid is found to be responsive to the bidding requirements, its bid will be declared as a Single Rated and Responsive Bid (SRRB) and considered for contract award. (Section 36 of IRR-A)

Participants in the Receipt and Opening of the Eligibility Envelope

1. BAC;

2. TWG;

3. BAC Secretariat;

4. Project Proponent/end-user; IADCES

5. Technical consultants/experts, if necessary;

6. Prospective bidder/s; and

7. Observers.

Methodology: Steps in the Opening of Eligibility Envelope

A. Preparatory to the Bid Opening

1. BAC receives eligibility envelopes.

2. BAC Secretariat stamps "RECEIVED" the envelopes, with date and time of receipt. aSEHDA

3. BAC initials the eligibility envelope/s on the sealed portion.

B. Eligibility Check

1. BAC opens in public the eligibility envelope on the scheduled day of submission. (Section 23.1 of IRR-A)

2. BAC reads in public the contents of the eligibility envelopes, and shall examine each prospective bidder's eligibility requirements or statements.

3. BAC records the presence or absence of the required eligibility documents in a Checklist to ascertain if they are all present using non-discretionary "pass/fail" criteria.

The BAC may request the prospective bidders to identify an individual who shall act as a third party witness and countercheck the eligibility documents being examined by the BAC. This is especially important if there are no observers present during the Bid Opening.

Alternatively, the BAC may use any device (i.e.,document camera, opaque projector, etc.) that will enable all attendees to view the document being examined.

4. BAC declares prospective bidders as either "eligible" or "ineligible",based on the findings in number 3 above, and inform them accordingly.

5. BAC chairman or vice-chairman marks either "eligible" or "ineligible" the eligibility envelopes and correspondingly countersigned by him/her. (Section 23.2 of IRR-A)

6. BAC prepares a pro-forma Notice of Eligibility (SF-CONS-26) and a Notice of Ineligibility (SF-CONS-27),which will be duly accomplished by the BAC Secretariat and signed by the BAC members present during the Eligibility Check. In case a prospective bidder is declared ineligible, the Notice of Ineligibility shall state the reason for such ineligibility. CDTSEI

7. BAC sends the Notice of Eligibility or Ineligibility to the bidder/s or his/their authorized representative who shall officially receive the same. Those found ineligible have three (3) calendar days upon written notice or, if present at the time of opening of eligibility requirements, upon verbal notification, within which to file a request for reconsideration with the BAC.

8. BAC inquires from ineligible bidders who are present during the eligibility check whether or not they intend to file a request for reconsideration; if in the positive, the BAC shall keep the eligibility envelopes and re-seal the same in the presence of all the participants to be kept in a designated secured place. (Sec. 23.3 of IRR-A)

If in the negative, considering that it may decide to exercise its right to file one within the mandated seven (7) calendar day period, it would be advisable for the BAC to hold on to the Eligibility envelopes, duly re-sealed and deposited, until the expiration of the period for filing such request to ensure the integrity of these documents; unless if the said prospective bidder waives its right to file such request.

The BAC must decide on a request for reconsideration within seven (7) calendar days from receipt thereof.

Recourse of Potential Bidder if Found Ineligible

The BAC shall inform a prospective bidder if it has been found ineligible to participate in the bidding or was declared non-compliant with the technical and financial requirements. A bidder found ineligible has three (3) calendar days upon receipt of the Notice of Ineligibility/Failure, or, if present at the time of opening of eligibility requirements, upon verbal notification, within which to file a written request for reconsideration before the BAC. (Section 23.3 of IRR-A as amended by GPPB Resolution No. 014-2006) Notifications to bidders should state the grounds for their ineligibility.

The BAC should decide on the request for reconsideration (SF-CONS-29) within seven (7) calendar days from receipt thereof. In the meantime, BAC will hold on to the Eligibility, Technical and Financial envelopes of the prospective bidder until the request for reconsideration is resolved. In so doing, it can request the prospective bidder to clarify its eligibility documents, if necessary. The BAC may return the Eligibility, Technical and Financial envelopes if the prospective bidder is declared "ineligible" and expressly waives his right to file a request for reconsideration (SF-CONS-28).Such waiver shall be made in writing, to be executed by the authorized representative of the ineligible bidder. EaCSTc

If its request for reconsideration is denied, the ineligible bidder may protest the decision by a filing a verified position paper with the CIR within seven (7) calendar days from receipt of the resolution. The protest should be accompanied by the payment of a non-refundable protest fee in an amount equivalent to no less than one percent (1%) of the ABC. (Section 55.1 of IRR-A)

Contents of a Verified Position Paper

1. Name of bidder;

2. Office address of the bidder;

3. Name of project/contract;

4. BIR NO/RR;

5. A brief statement of facts;

6. Issue/s to be resolved; and

7. Such other matters and information pertinent and relevant to the proper resolution of the protest.

The position paper is verified by an affidavit that the affiant has read and understood the contents thereof and that the allegations therein are true and correct of his personal knowledge or based on authentic records. An unverified position paper shall be considered unsigned, produces no legal effect, and results to the outright dismissal of the protest. (Section 55.2 of IRR-A)

Resolution of Protests

The protests shall be resolved strictly based on records of the BAC. The CIR/RD shall resolve a protest within seven (7) calendar days from receipt thereof. Subject to the provisions of existing laws on the authority of Department Secretaries and the heads of agencies, branches, constitutional commissions or instrumentalities of the Government to approve contracts, the decisions of the CIR/RD shall be final up to the limit of his contract approving authority. (Section 56 of IRR-A)

If Questions/Doubts have been Raised About the Eligibility of a Prospective Bidder after it had been Declared as Eligible

Notwithstanding the eligibility of a prospective bidder, the BIR reserves the right to review its qualifications at any stage of the procurement process if it has reasonable grounds to believe that a misrepresentation has been made by the said prospective bidder, or that there has been a change in the prospective bidder's capability to undertake the project from the time it submitted its eligibility requirements. Should such review uncover any misrepresentation made in the eligibility requirements, statements or documents, or any changes in the situation of the prospective bidder which will affect the capability of the bidder to undertake the project so that it fails the preset eligibility criteria, the BIR shall consider the said prospective bidder as ineligible and shall disqualify it from submitting a bid or from obtaining an award or contract. (Section 24.14 of IRR-A) A prospective bidder found guilty of false information faces imprisonment of not less than six (6) years and one (1) day but not more than 15 years. (Section 65.3 of IRR-A) DaCTcA

If Only One Prospective Bidder is Declared Eligible

Even if only one bidder passes the eligibility check, the bidding process continues. Again, if the eligible bidder submits a bid that is found to be responsive to the bidding requirements, its bid shall be declared as a SRRB and considered for contract award. (Section 36 of IRR-A)

Disqualification

Disqualification is a distinct concept from ineligibility and post-disqualification. When a Bidder is disqualified, it is barred from further participating in the procurement at hand, even if, in some instances, it has initially been declared eligible. Even if a Bidder is Post-qualified, if after such Post-qualification, the BIR has found grounds for disqualification, the latter may declare such Bidder disqualified, hence, the BIR shall not award the contract to the former.

Aside from those who are not eligible to bid for the procurement of goods, a bidder that has a conflict of interest shall be disqualified to participate in the procurement at hand. A Bidder would be considered as having a conflict of interest with another bidder in any of the events described in paragraphs 1 to 3 below and a general conflict of interest in any of the circumstances set out in paragraphs 4 to 6 below:

1. If the bidder is a corporation or a partnership and it has officers, directors, controlling shareholders, partners or members in common with another bidder; or if the bidder is an individual or a sole proprietorship and he is the proprietor of another bidder, or an officer, director or a controlling shareholder of another bidder; or if the bidder is a joint venture and it or any of its members has officers, directors, controlling shareholders or members in common with another bidder, or any of its members is a bidder;

2. A bidder receives or has received any direct or indirect subsidy from another bidder;

3. A bidder has the same legal representative as any other bidder for purposes of the bidding at hand;

4. A bidder has a relationship directly or through common third parties, that puts them in a position to have access to information about or influence on the bid of another bidder, or influence the decisions of the BIR regarding the bidding process. This will include a firm or an organization that lends, or temporarily seconds, its personnel to firms or organizations which are engaged in consulting services for the preparation related to procurement for or implementation of the project, if the personnel would be involved in any capacity on the same project;

5. A bidder submits more than one bid in the bidding process. However, this does not limit the participation of subcontractors in more than one bid subject to prior approval by the BIR; or

6. A bidder who participated as a consultant in the preparation of the design or technical specifications of the goods and related services that are the subject of the bid. cCAIES

In accordance with Section 47 of IRR-A, the bidder should not be related to the CIR/RD by consanguinity or affinity up to the third civil degree or any of the BIR's officers or employees having direct access to information that may substantially affect the result of the bidding, such as, but not limited to, the members of the BAC, the members of the TWG, the BAC Secretariat, and the project proponents/end-users. This prohibition shall apply to the following persons:

1. If the bidder is an individual or a sole proprietorship, to the bidder himself;

2. If the bidder is a partnership, to all its officers and members;

3. If the bidder is a corporation, to all its officers, directors and controlling stockholders; and

4. If the bidder is a joint venture, items 1 to 3 above shall correspondingly apply to each of the members of the said joint venture, as may be appropriate.

To establish the non-existence of the above relationship, and to bind the bidders to its representation relating to the foregoing, all bids must be accompanied by a Disclosure Affidavit of the bidder to that effect. (Section 47 and Section 25.3.A.9 of IRR-A as amended by Memorandum Order 176)

A bidder may seek a reconsideration of BAC's decision declaring another bidder eligible by filing a Motion for Reconsideration (SF-CONS-29) with the BAC in accordance with the procedures set forth in Section 23.3 IRR-A.

If No Prospective Bidder is Declared Eligible

If no prospective bidder is found to be eligible, the BAC should declare the bidding a failure. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding.

If Only One Bidder Passes the Preliminary Examination of Bids

The procurement process also proceeds with the subsequent step of Bid Evaluation. Again, if the eligible bidder submits a bid that is found to be responsive to the bidding requirements, its bid shall be declared as SCRB and considered for contract award. (Section 36 of IRR-A)

Step 3 Short Listing of Eligible Consultants

Short Listing

The process of short listing determines the most qualified consultants from those that submitted eligibility documents to undertake the project. TADCSE

Purpose of Short Listing

If all eligible bidders are invited to submit proposals, the chance of a consultant being awarded the contract diminishes greatly. Considering the substantial costs incurred in preparing a proposal, this discourages a consultant from participating in the bid. The probability of being awarded the contract, in this case, becomes less commensurate to the time and money spent in formulating the proposal. A short list of, say, five (5) consultants greatly increases the chances of a consultant and thus encourages it to put in more time and effort in preparing a good proposal. In the end, government, in general, and the BIR, in particular, receive better proposals to choose from.

The BIR must consider for short listing only those consultants that:

1. Have been declared eligible by the BAC; and

2. Have had implemented completed contracts, as stated in their eligibility documents, that are similar in nature and complexity to the project, as described in the IAEB. (Section 24.15.1 of IRR-A)

Methodology: Steps in Short Listing of Eligible Consultants

In short listing the eligible consultants, the BAC, assisted by the TWG, shall: 5

1. Rate each eligible consultant based on the following criteria, among others: (Section 24.15.3 of IRR-A):

a. Applicable experience of the consultant (meaning the consulting firm) and associates in case of joint ventures (Recommended weight: 50%);

b. Qualification of principal and key staff of the consultant who may be assigned to the job vis-à-vis extent and complexity of the undertaking (Recommended weight: 30%);and

c. Current workload relative to capacity (Recommended weight: 20%).

The CIR/RD, upon the recommendation of the Project Proponent/end-user ,may propose a different weight distribution depending on the nature of the project and other related considerations, e.g.,duration, complexity, etc.,which shall be indicated in the Application for Eligibility and IAEB.

2. Rank the eligible consultants based on the average of the rates given them by its members(SF-CONS-30);

3. If the number of eligible consultants that got the minimum average rating for the short list exceeds the predetermined number of the short list of consultants, those obtaining the highest ranks shall be considered (SF-CONS-31).If the number of eligible consultants that got the minimum average rating required does not exceed the desired number of the short list, the BAC shall consider all such consultants as being short listed. (Section 24.15.2 of IRR-A) TEDAHI

4. Recommend (SF-CONS-32) the short list of consultants to the CIR/RD for consideration and approval; (Section 24.15.4 of IRR-A) and

5. If the CIR/RD approves the recommendation, inform the short listed consultants about the results of the short listing process (SF-CONS-33).If the CIR/RD disapproves the recommendation, he must inform the BAC of the reasons for the disapproval and instruct the BAC on the measures that ought to be adopted (SF-CONS-34).

Duration of Eligibility Check and Short Listing

The entire process of eligibility check and short listing must not exceed twenty-one (21) calendar days after opening the eligibility envelopes. (Section 24.15.4 of IRR-A)

A short listed association cannot disassociate from each other; otherwise, its members should be rejected. Neither can a short listed firm be allowed to associate with any other firm.

If no Eligible Bidder Passes Short Listing

If no prospective bidder is short listed, the BAC should again declare a failure of bidding. In such a case, the BAC shall issue a Resolution declaring a failure of bidding. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding.

Step 4 Issuance of Bidding Documents

Timeline for Availability of Bidding Documents

The BAC Secretariat shall make available the bidding documents to the short listed consultants from the time the IAEB is first advertised until immediately before the deadline for submission of bids upon payment of non-refundable fee. (Section 17.5 of IRR-A) The BIR must ensure that prospective short listed bidders are given ample time to examine the bidding documents and to prepare their respective bids. A maximum period of twenty (20) calendar days from the date of the advertisement and/or first day of posting of the IAEB up to opening of bids is provided by Section 21.2.2 of the IRR-A, as amended by GPPB Resolution No. 014-2006, which means that there is a maximum period of twenty (20) calendar days for which the bidding documents may be available for purchase. caHASI

The bidding documents are strictly confidential and shall not be divulged or released to any person prior to its official release. The BIR shall post an abstract or a summary of the bidding documents, containing general information about the procurement at hand, e.g.,refer to the contents of the IAEB, in the PhilGEPS website, the BIR website (www.bir.gov.ph),and the website of its electronic procurement system service provider, if any. This abstract may then be viewed even by non-registered users of the PhilGEPS or of the other websites mentioned.

Cost of Bidding Documents

The BAC must consider the cost recovery component in determining the price which short listed consultants would have to pay for the bidding documents to ensure that the same would not have an effect of discouraging competition.

The cost recovery component may include the following:

1. Direct costs, which includes:

a. Development costs, which are incurred in developing the original content of the documents, designs, plans and specifications. However, the design cost may be excluded if it is to be included in the capitalized cost of the project, or the project cost, which is to be recovered from the use of the completed project facility;

b. Reproduction costs, which are labor, supplies and equipment rental costs incurred in the reproduction of the documents; and

c. Communication costs, which include mail and fax costs, plus costs of advertising, meetings, internet/web posting, and other costs incurred for the dissemination of information about the bidding.

2. Indirect costs, such as overhead, supervision, and administrative costs, allocated to the bidding activity. This may include the costs of paying honoraria to the officers and personnel of the BIR who are entitled thereto under the law.

Responsibilities of Short Listed Consultant with Regard to Bidding Documents

A short listed consultant must be responsible for having: (Section 17.7.1 of IRR-A)

1. Taken steps to carefully examine all of the bidding documents;

2. Acknowledged all conditions, local or otherwise, affecting the implementation of the project;

3. Made an estimate of the facilities available and needed for the project to be bid, if any; and

4. Complied with his responsibility as provided for under Section 22.5.1 of IRR-A, which provides that it shall be the responsibility of all those who have properly secured the bidding documents to inquire and secure supplemental/bid bulletins that may be issued by the BAC. SEHACI

Failure to observe any of the above responsibilities shall be at the risk of the short listed consultant concerned. For this purpose, one of the contents of the technical proposal would have to be a sworn statement executed by the said consultant attesting to these responsibilities.

The BIR shall not be responsible for any erroneous interpretation or conclusions by the bidders of the data it furnished. (Section 17.7.3 of IRR-A)

Moreover, the short listed consultants are deemed to have become familiar with all existing Philippine laws, decrees, ordinances, acts and regulations that may affect the contract in any way. However, if the contract is affected by new laws, ordinances, regulations or other acts of government promulgated after the date of the bidding, a contract price adjustment shall be made or appropriate relief shall be applied on a no loss-no gain basis. (Section 17.7.4 of IRR-A)

Step 5 Conduct of Pre-Bid Conference and Issuance of Supplemental/Bid Bulletins

Pre-bid Conference

The pre-bid conference is the initial forum where the participants discuss the different aspects of the procurement at hand (SF-CONS-37).

The ground rules that will govern the procurement are discussed during the conference. In particular, the participants discuss the legal, technical and financial components of the contract to be bid. This is also an opportunity for the short listed consultants to request for clarifications about the bidding documents. However, it should be noted that any statement made at the pre-bid conference would not modify the terms of the bidding documents, unless such statement is specifically identified in writing as an amendment of the documents and issued as a supplemental/bid bulletin. (Sec. 22.4 of IRR-A)

It is important that responsible and knowledgeable officials attend the conference. The persons who actually formulated the Terms of Reference for the project should be present among those representing the BIR. Short listed consultants, on the other hand, should be encouraged to send representatives who are legally and technically knowledgeable about the requirements of the procurement at hand. It is also important that the short listed consultants be given ample time to review the bidding documents prior to the pre-bid conference.

Timeline for the Conduct of Pre-bid Conference

A pre-bid conference must be held for projects with ABCs of at least One Million Pesos (P1 Million). For projects with ABCs of less than P1 million, pre-bid conferences may or may not be held at the discretion of the BAC. The BAC may also decide to hold a pre-bid conference upon the written request of a prospective bidder. (Section 22.1 of IRR-A) cCHITA

The pre-bid conference must be held at least twelve (12) calendar days before the deadline for the submission and receipt of bids. (Section 22.2 of IRR-A) In addition to this, it is suggested that the pre-bid conference should not be held earlier than seven (7) calendar days after the last day of the advertisement/posting the IAEB. If the pre-bid conference is held less than twelve (12) calendar days before the deadline for the submission and receipt of bids, that deadline should be moved to a later date. A supplemental/bid bulletin shall be issued for this reason. Note that these periods are all within the maximum period of forty-two (42) calendar days from date of advertisement and/or first day of posting of the IAEB up to the opening of bids, as provided under Section 21.2.2 (i) of IRR-A as amended by GPPB Resolution No. 014-2006.

Participants of a Pre-bid Conference

1. BAC;

2. BAC Secretariat;

3. TWG members and technical experts/consultants, if necessary;

4. Project Proponent/end-user;

5. Short listed consultants; and

6. Observers.

The attendance of the short listed consultants shall not be mandatory.

Conduct of Participants During the Pre-Bid Conference and Other Stages of the Procurement Process

The BAC, BAC Secretariat, TWG, and other officials involved in procurement are expected to act in an impartial, courteous and professional manner in all their dealings and interactions with the bidders during all stages of the procurement. The bidders' representatives are likewise enjoined to adopt the same professional manner in their dealings with the BIR's officials and employees. Communications between the parties must, as much as possible, be made in writing, except during the pre-bid conference when verbal clarifications may be allowed — keeping in mind, however, that any statement made at the pre-bid conference would not modify the terms of the bidding documents, unless such statement is specifically identified in writing as an amendment of the documents and issued as a supplemental/bid bulletin (SF-CONS-40).

Methodology: Steps in the Conduct of Pre-bid Conference

1. The presentation by the BAC of the eligibility requirements as well as the technical and financial components of the contract to be bid, the evaluation procedure, evaluation criteria, and possible causes of failure of the bidding. AEScHa

2. The BAC shall also discuss the requirements in the ITB, the replies to the bidders' queries about the requirements, specifications and other conditions of the project, the bid evaluation of all bidders and post-qualification evaluation of the lowest calculated bidder. Emphasis should also be given to the warranty requirement of the project and the different offenses and penalties provided for in the IRR-A of R.A. 9184.

The BAC must initiate discussions on contentious issues, most especially if the participating prospective bidders have no ready questions. It is probable that there are issues that may not be apparent in the bidding documents but are known to the representatives of the BIR. If these issues are brought out and openly discussed, prospective bidders will be able to prepare responsive bids, thus avoiding situations that may give rise to a failure of bidding due to lack of bids received or failure of bids to comply with all the bid requirements.

3. The recording by the BAC Secretariat of minutes of the pre-bid conference (SF-CONS-38), and its availability to all participants not later than three (3) calendar days after the pre-bid conference. (Section 22.3 of IRR-A)

Issuance of Supplemental/Bid Bulletins

A supplemental/bid bulletin (SF-CONS-40) may be issued by the BAC upon the request of the prospective bidders or upon the initiative of BIR. Any statement made at the pre-bid conference shall not modify the terms of the bidding documents unless such statement is specifically identified in writing as amendment thereto and issued as a supplemental/bid bulletin. IDAEHT

1. Clarification or Interpretation on the Bidding Documents as Supplemental/Bid Bulletins

Clarification or interpretation (SF-CONS-39) on any part of the bidding documents may be requested by prospective bidders provided that the request is made in writing and submitted to the BAC at least ten (10) calendar days before the deadline for the submission and receipt of bids. In this case, the BAC shall issue its response by issuing a supplemental/bid bulletin, to be made available to all those who have properly secured the bidding documents at least seven (7) calendar days before the deadline for the submission and receipt of bids. (Section 22.5.1 of IRR-A)

2. Supplemental/Bid Bulletins Issued at the Initiative of the BIR

The BIR may, at its own initiative, issue supplemental/bid bulletins for purposes of clarifying or modifying any provision of the bidding documents not later than seven (7) calendar days before the deadline for the submission and receipt of bids. Any modification to the bidding documents must be identified as an "AMENDMENT".(Section 22.5.2 of IRR-A)

3. Posting of Supplemental/Bid Bulletins

The BAC shall also post the supplemental/bid bulletin on the BIR website (www.bir.gov.ph) or the website of its electronic procurement system provider, if any, and on the PhilGEPS, within seven calendar days before the deadline for the submission and receipt of bids. It will be the prospective bidders' responsibility to ask for, and secure, these bulletins; however the BAC should ensure that all prospective bidders receive the bid bulletins.

4. Notice to Bidders

Bidders who have submitted bids before a supplemental/bid bulletin is issued have to be informed in writing and allowed to modify or withdraw their respective bids before the deadline for the opening of the bids. (Section 22.5.2 of IRR-A)

Participants in the Issuance of the Supplemental/Bid Bulletin

1. BAC;

2. BAC Secretariat;

3. Project proponent/end-user;

4. TWG members; and

5. Prospective bidders.

Methodology: Steps in the Issuance of Supplemental/Bid Bulletin

If the supplemental/bid bulletin is being issued in response to a request for clarification submitted by a prospective bidder, the following steps are observed:

1. Prospective bidder submits to the BAC, through the BAC Secretariat, a written request for clarification, within the prescribed period. AIDSTE

2. BAC directs the BAC Secretariat and/or TWG to study the request for clarification.

3. BAC Secretariat and/or the TWG and/or the project proponent/end-user draft the supplemental/bid bulletin for discussion of BAC.

4. BAC approves the supplemental/bid bulletin and the BAC chairman signs it.

5. BAC Secretariat posts the supplemental/bid bulletin (SF-CONS-40) in the PhilGEPS, the BIR website (www.bir.gov.ph) or the website of its electronic procurement system provider, if any and likewise sends copies of the supplemental/bid bulletin to all prospective bidders who have properly secured or purchased the bidding documents within seven (7) calendar days prior to the date of bidding.

If the supplemental/bid bulletin is being issued upon the initiative of the BIR, the process goes as follows:

1. BAC Secretariat and/or the TWG and/or the project proponent/end-user drafts the supplemental/bid bulletin for discussion of BAC.

2. BAC approves the supplemental/bid bulletin and the BAC chairman signs it.

3. BAC Secretariat posts the supplemental/bid bulletin in the PhilGEPS, the BIR website (www.bir.gov.ph) or the website of its electronic procurement system provider, if any and likewise sends copies of the supplemental/bid bulletin to all prospective bidders who have properly secured or purchased the bidding documents, within seven (7) calendar days prior to the date of bidding.

Step 6 Submission, Receipt and Opening of Technical and Financial Envelopes

Bid

A "Bid" refers to a signed offer or proposal to undertake a contract submitted by a short listed consultant in response to, and in consonance with, the requirements stated in the bidding documents. "Bid" is also equivalent to and may be used interchangeably with "Proposal" and "Tender".A Bid has two components, the Technical Proposal/Bid, and the Financial Proposal/Bid. The Technical and Financial Bids must each be contained in separate sealed bid envelopes. HDIaST

Contents of the Technical Proposal

The Technical Proposal should contain, at the minimum, the following technical information/documents (SF-CONS-42):

1. The bid security in its required form, amount and validity period (SF-CONS-43);

2. Authority of the signatory to sign on behalf of the bidder, all documents pertaining to the bid and the contract, which must be contained in a Board Resolution if the bidder is a corporation or a cooperative, a Joint Venture Resolution if the same is a Joint Venture, a Partnership Resolution if the bidder is a Partnership, or a Special Power of Attorney (SPA) issued by the General Manager or Proprietor if the bidder is a sole proprietor (SF-CONS-45);

3. Organizational chart for the contract to be bid (SF-CONS-47);

4. List of completed and on-going projects (SF-CONS-15);

5. Approach, work plan, and schedule, provided that for architectural design, submission of architectural plans and designs shall not be required during the consultant's selection process (SF-CONS-48);

6. List of key personnel to be assigned to the contract to be bid with their curriculum vitae indicating their relevant qualification, experience data and signed written commitment to work for the project once awarded the contract (SF-CONS-49);

7. Certificate from the bidder under oath of its compliance with existing labor laws and standards (SF-CONS-50);

8. A sworn affidavit of compliance with the Disclosure Provision under Section 47 of R.A. 9184 and its IRR-A in relation to other provisions of R.A. 3019 (SF-CONS-51);

9. A sworn statement by the bidder attesting to have complied with the responsibilities enumerated under IRR-A Section 17.7.1, particularly that the bidder has taken steps to carefully examine all of the bidding documents, has acknowledged all conditions, local or otherwise, affecting the implementation of the contract, has made an estimate of the facilities available and needed for the contract to be bid, and has complied with its responsibility of inquiring and securing all supplemental/bid bulletins issued by the BAC (SF-CONS-52); and

10. Other information and/or documents specified in the bidding documents. SAcaDE

Contents of the Financial Proposal

The Financial Proposal shall contain the following financial information/documents, at the least (SF-CONS-54):

1. Remuneration cost indicating the basic salary, overhead cost, social charges, management fee and billing rate (SF-CONS-55);

2. Reimbursable cost (SF-CONS-57);and

3. Other items as may be required in the bidding documents.

The financial proposal should clearly estimate the value added tax, income tax, local taxes, duties, fees, levies and other charges, as applicable.

Submission and Receipt of Bids

The eligibility envelope must be submitted, together with the technical and financial bid envelopes, enclosed in an outer sealed envelope or any such appropriate container, to the BAC on or before the deadline specified in the IAEB. For purposes of synchronizing the time, the BAC may identify an official timepiece that will be referred to for purposes of determining timely submission. The official timepiece must be indicated in the bidding documents and announced during the pre-bid conference, to ensure that all prospective bidders are aware of this information. STcHDC

Bids should be submitted on or before the specified time and date of the deadline for its submission as stated in the IAEB. Bids submitted after the specified deadline shall not be received or accepted by the BAC.

Timeline Submission of Bids

Bids should be submitted on or before the specified time and date of the deadline for its submission. Bids submitted after the specified deadline shall not be received or accepted by the BAC. (Section 25.2 of IRR-A)

If Only One Short Listed Consultant Submits a Bid Envelope

Even if only one short listed consultant submits a bid envelope, the bidding process continues. If its bid is found to be responsive to the bidding requirements, its bid will be declared as a SRRB and considered for contract award. (Section 36 [c] of IRR-A)

If no Short Listed Bidder Submits a Bid

If no short listed bidder submits a bid, the BAC should declare the bidding a failure. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding.

Participants in the Receipt, Opening and Preliminary Examination of the Bids

1. BAC;

2. TWG;

3. BAC Secretariat;

4. Project Proponent/end users;

5. Technical Experts/Consultants, if necessary;

6. Observers; and

7. Short listed Consultants.

Methodology: Steps in the Receipt, Opening and Preliminarily Examination of Bids

1. Short listed consultants submits their bids through their respective authorized representative/s (Section 25.1 of IRR-A) in two (2) separate sealed bid envelopes, the first containing the technical component of the bid, and the second containing the financial component of the bid. The two envelopes shall be placed in an outer envelope or any container, which shall be sealed and addressed to the BAC and marked as specified in the ITB. (Section 25.1 of IRR-A)

At the minimum, the BAC shall require one (1) original and at least two (2) duplicate copies of the technical documents and financial documents. The original copy will be the one initialed by the BAC members or their authorized representatives and will be kept by the BAC Secretariat for check and balance purposes while the duplicate copies will be the one evaluated by the BAC.

2. The BAC convenes on the Bid Opening Date. The presence of the majority of the BAC members shall constitute a quorum, provided that the chairperson or the vice-chairperson is present. 

3. The BAC receives the technical and financial envelopes at the time, date and place specified in the bidding documents. Upon receipt of the envelope containing the technical and financial envelopes, the BAC shall stamp on the face of the outer envelope the date and the time of receipt thereof.

4. The BAC then proceeds with the opening and preliminary examination of bids in public, following the same procedure as the eligibility check. For each bid, the BAC opens the Technical Envelopes of short listed consultants to determine each one's compliance with the required documents for the technical component of the bid. The BAC checks the submitted documents of each bidder against a checklist of required documents to ascertain if they are all present in the technical envelope, using non-discretionary "pass/fail" criteria. (Sections 30.1 of IRR-A) The opening of bids must be done in public, following the same procedure as the eligibility check. SDHTEC

For a document, to be deemed "complete" and "sufficient",it must be complete on its face, that is, contain all the information required, and must comply with the requirements set out in the Bidding Documents.

The order of opening is as follows:

a. The letters of short listed consultants that decided not to participate;

b. The letters of short listed consultants that decided to withdraw the bids that they have submitted earlier than the deadline;

c. The letter of short listed consultants that decided to modify their bids that they have submitted earlier than the deadline, followed by the opening of their technical envelopes; and

d. The technical envelopes of short listed consultants that have submitted bids on the deadline itself. TIEHSA

5. In case one or more of the required documents is missing, incomplete, or patently insufficient, it must rate the bid concerned as "failed".Otherwise, it shall rate the said first bid envelope as "passed".

6. All members of the BAC, or their duly authorized representatives who are present during bid opening, shall initial every page of the original copies of all bids received and opened. (Section 29 of IRR-A)

7. The financial envelopes of all short listed consultants must remain sealed and secured.

8. All technical envelopes must be resealed. Those rated "passed" will be secured in preparation for the detailed technical evaluation (which normally starts the following day).Those rated "failed" will be secured for purposes of potential filing of motion for reconsideration.

9. The BAC Secretariat shall record the proceedings using an electronic tape recorder, or a video recorder. The minutes of the bid opening should be prepared within three (3) calendar days after the bid opening date, so that copies thereof could immediately be sent to the BAC members, Observers, Bidders and other interested parties. Copies of the minutes shall also be made available to the public upon written request and payment of a specified fee to recover cost of materials.

Withdrawal of Bids

A short listed consultant may, through a letter, withdraw its bid before the deadline for the receipt of bids. Withdrawal of bids after the applicable deadline must be subject to appropriate sanctions as prescribed in the IRR-A. A short listed consultant may also express its intention not to participate in the bidding through a letter which should reach and be stamped "RECEIVED" by the BAC before the deadline for the receipt of bids. A consultant that withdraws its bid shall not be permitted to submit another bid, directly or indirectly, for the same contract. (Section 26.2 of IRR-A) Moreover, a consultant that withdraws its bid without any justifiable cause therefor shall be subject to the administrative sanctions provided in Section 69.1 of the IRR-A.

A short listed consultant that withdraws its bid prior to the deadline for submission of bids, for a justifiable cause, does not forfeit its bid security.

If a short listed consultant withdraws its bid after the deadline for the submission of bids, its bid security shall be forfeited.

Failure to Comply with the Technical Requirements of the Bid

The short listed consultants that have failed to comply with any of the technical requirements of the bid will be disqualified by the BAC. Similar to ineligible bidders, it may file a written request for reconsideration within three (3) calendar days from the receipt of the communication regarding its bid's deficiency. (Section 30.3 of IRR-A) cDTHIE

In case a bidder is determined to have failed in the first envelope, which contains the Technical Proposal, and it signifies its intention to file for a request for reconsideration, the BAC must hold this bidder's second envelope unopened until the request for reconsideration has been resolved. (Section 30.3 of IRR-A)

If no Short Listed Consultant Passes the Preliminary Examination of Bids

If no short listed consultants pass the preliminary examination of bids, the BAC should declare a failure of bidding. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration on failure of bidding.

Step 7 Bid Evaluation

Purpose of Bid Evaluation

The purpose of bid evaluation is to determine the HRB. This bid shall be subject to post-qualification to validate its eligibility and its bid requirements. Once post-qualified, it is designated as the HRRB and then awarded the contract. (Section 33.1 of IRR-A) The HRB shall be determined in two (2) ways: (Section 33.2 of IRR-A)

1. The detailed evaluation of the bids of the short listed consultants using numerical ratings based on either the Quality-Based Evaluation procedure or the Quality-Cost Based Evaluation procedure; and

2. The ranking of the bidders based on the numerical ratings from the highest to the lowest.

Methods of Bid Evaluation

There are two (2) methods of evaluating bids: the QBE and QCBE procedures. QBE considers only the Technical Proposals in the ranking of consultants. QCBE, on the other hand, considers both the Technical and Financial Proposals in the ranking of consultants. The former must be applied for:

1. Complex or highly specialized assignments for which it is difficult to precisely define the TOR and the required inputs from the consultants; and

2. Where the assignment can be carried out in substantially different ways, such that the proposals are not comparable.

In other cases, the QCBE procedure shall apply.

Whatever evaluation method is applied, bids are rated numerically. This can be done in either of two ways: individual or collegial rating.

1. Individual Evaluation Process

In the individual rating process, each BAC member participating in the evaluation assigns numerical rates to a proposal, these rates range from 1 to 100, with 100 as the highest value. These rates are tabulated, and then the highest and lowest rates are disregarded. The latter step is done to remove the possibility of one BAC member unduly influencing the results of the evaluation. The average of all remaining rates is then calculated. (IRR-A Section 33.3)

The table below illustrates how the highest and lowest rates are disregarded in calculating the average rate of proposals.

 

Evaluators	Firm A	Firm B	Firm C	Firm D	Firm E
A	95	75	84	83	84
B	84	88	86	81	82
C	84	86	85	79	84
D	83	85	84	79	82
E	84	87	86	80	83
Average	84	86	85	80	83
Rank	3	1	2	5	4

 

If the highest and lowest rates were not eliminated, the example below will show that the scores of Evaluator A, which appears to be biased for Firm 1, would have unduly placed Firm 1 at an advantage. ITDHSE

 

Evaluators	Firm A	Firm B	Firm C	Firm D	Firm E
A	95	75	84	83	84
B	84	88	86	81	82
C	84	86	85	79	84
D	83	85	84	79	82
E	84	87	86	80	83
Average	86	84.2	85	80.4	83
Rank	1	3	2	5	4

 

2. Collegial Evaluation Process

Under the Collegial Evaluation process, the BAC members evaluate the proposals, deciding as a group. The rate obtained by a proposal is the consensus of the BAC members involved in the evaluation.

Methodology: Steps in the Quality Based Evaluation (QBE) 6

1. BAC evaluates the Technical Proposal based on the approved criteria. CIETDc

2. BAC ranks the consultants in descending order based upon the numerical ratings of their Technical Proposals and identifies the HRB, which should have passed the minimum technical rating. (Section 33.4.1 of IRR-A)

3. BAC submits the results of the evaluation, including the rankings and the consultant with the HRB, to the CIR/RD, who must approve or disapprove the recommendations of the BAC within two (2) calendar days after receipt of such results.

4. If CIR/RD disapproved the BAC recommendations, he shall inform the BAC of its disapproval and the reasons based only on valid, reasonable and justifiable grounds. (Section 12.1 of IRR-A)

5. If CIR/RD approved the recommendations of the BAC, the BAC furnishes all participating short listed consultants with the results of its evaluation (ranking and total scores only).The results must also be posted in the PhilGEPS and the BIR website (www.bir.gov.ph) for a period of not less than two (2) weeks, to make these results available to the GPPB and the umbrella organization of consultants. (Section 33.3.6 of IRR-A)

6. Within three (3) calendar days after approval of the CIR/RD, the BAC shall inform in writing the consultant with the HRB for the opening of its financial proposals and for contract negotiations or for clarification on issues in the Technical Proposal. (Section 33.4.2 of IRR-A)

Methodology: Steps in the Quality Cost Based Evaluation (QCBE) 7

1. BAC evaluates the Technical Proposals of all short listed consultants that submitted bids.

2. BAC ranks all the Technical Proposals, noting those that have earned ratings above the minimum requirement and those that have not. EcHIDT

3. BAC sends a formal letter to all consultants whose Technical Proposals earned ratings below the minimum required rating, informing them of their failure to qualify and returning to them their Financial Proposal unopened. 

4. BAC sends a formal letter to all consultants whose Technical Proposals earned at least the minimum required rating, informing them thereof and of the date, time, and venue of the opening of the Financial Proposals. The methodology to be used in the evaluation of the financial proposal shall be described in the ITB. cEaSHC

5. On the day, time and venue set, the BAC opens the Financial Proposals of the qualified consultants in public, and records the proposed prices of each qualified consultant. If a consultant's financial proposal exceeds the ABC, its bid shall be disqualified.

6. BAC reviews each Financial Proposal, checks for its completeness, corrects any arithmetical errors, and corrects the recorded proposed prices, if warranted.

7. BAC disqualifies a consultant if:

a. It provides for a required item but does not indicate a price for it and is thus deemed as non-compliant, except that if it specifies a "0" (zero) or a "-" (dash) for the said item, it would be deemed as having offered the item for free to the government, and

b. Its corrected price exceeds the ABC.

8. BAC computes the ratings of each Financial Proposal in the following manner:

a. The consultant with the lowest price gets 100 points.

b. The scores of the other consultants will be computed using the formula:

Sf = 100 x Fl/F

In which Sf is the financial score, Fl is the lowest Financial Proposal and F is the Financial Proposal under consideration. HEcaIC

Example:

Firm	Cost of Financial	Financial Score
	Proposal
A	P1,100,000	P1,000,000/P1,100,000 = 90.9 points
B	P1,000,000	P1,000,000/P1,000,000 = 100 points
C	P1,500,000	P1,000,000/P1,500,000 = 66.7 points
D	P1,300,000	P1,000,000/P1,300,000 = 76.9 points
E	P1,200,000	P1,000,000/P1,200,000 = 83.0 points

 

9. BAC gives corresponding weights to the Financial and Technical Proposals of the qualified consultants, the weights having been determined in the pre-bid conference and indicated in the IAEB and the bidding documents. The financial proposal may be given a weight of fifteen percent (15%) up to a maximum of forty percent (40%).

10. BAC adjusts the weight of the technical criteria such that their total weight in percentage terms, together with the weight given to the Financial Proposal, shall be equivalent to one hundred percent (100%). TaCDAH

11. BAC multiplies the average score of each qualified consultant's Technical Proposal with the percentage value allowed as weight for Technical Proposals. It also multiplies the rate earned by each consultant's Financial Proposal with the percentage value allowed as weight for Financial Proposals. It then adds the resulting products of both operations for each consultant. The sum becomes the total score for the consultant.

The formula is as follows:

S = St x T% + Sf x F%

Where:

S is the Total Score;

St is the Technical Score;

Sf is the Financial Score;

T is the weight given to the Technical Proposal; and

F is the weight given to the Financial Proposal.

Example:

Firm	Technical Proposal		Financial Proposal	Total
	Ave.	Weight		Weighted	Score		Weight		Weighted	Score
	Score				Score					Score
A	86	X	70% or 0.7	=	60.2	90.9	X	30% or 0.3	=	27.3	87.5
B	84.2	X	70% or 0.7	=	58.9	100	X	30% or 0.3	=	30	88.9
C	85	X	70% or 0.7	=	59.5	66.7	X	30% or 0.3	=	20	79.5
D	80.4	X	70% or 0.7	=	56.4	76.9	X	30% or 0.3	=	23.1	79.4
E	83	X	70% or 0.7	=	58.1	83	X	30% or 0.3	=	24.9	83

 

12. BAC ranks the consultants in descending order, with the consultant obtaining the highest total score being declared as the bidder with the HRB. (Section 33.5 of IRR-A)

13. BAC submits the results of its evaluation to the CIR/RD, identifying the consultant with the HRB, and recommending that it be authorized to negotiate with this consultant. HATEDC

14. CIR/RD approves or disapproves the recommendations of the BAC within two (2) calendar days after receiving these from the BAC.

15. If CIR/RD disapproved the recommendation, he shall state the reason(s) for the disapproval and instruct the BAC on the subsequent steps to be adopted. If the CIR/RD approves the recommendations, the BAC furnishes all participating short listed consultants with the results of its evaluation (ranking and total scores only).The results must also be posted in the PhilGEPS and the BIR website (www.bir.gov.ph) for a period of not less than two (2) weeks, to make these results available to the GPPB and the umbrella organization of consultants. (Section 33.3.6 of IRR-A)

16. Within three (3) calendar days after approval of the CIR/RD, the BAC shall inform in writing the consultant with the HRB for the opening of its financial proposals and for contract negotiations or for clarification on issues in the Technical Proposal. (Section 33.4.2 of IRR-A)

Timeline for the Evaluation Process

The entire evaluation process, from bid opening until submission of the bid evaluation results to the CIR/RD, should not exceed twenty-one (21) calendar days. (Section 33.3.3 of IRR-A)

If a Consultant Does not Accept the Arithmetical Corrections Done by the BAC on His Bid

The consultant forfeits his right to the return of the bid security and is disqualified from participating further in the bidding process.

Participants in Bid Evaluation

1. BAC;

2. TWG; and

3. BAC Secretariat.

If no Bid Passes the Minimum Technical Rating for QCBE

If no bid passes the minimum technical rating for QCBE, the BAC should declare the bidding a failure. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding. DacTEH

If a Bidder Does not Accept the Arithmetical Corrections Done by the BAC on its Bid

The BAC must disqualify the bid and forfeit the bid security of the bidder.

If no Bid Complies with all Bid Requirements

If no bid complies with all bid requirements, the BAC should declare the bidding a failure. In such a case the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding.

Step 8 Negotiation with the Consultant with the HRB

Participants in the Negotiation

1. BAC;

2. Consultants with HRB/SRB;

3. BAC Secretariat; and

4. Project Proponent/end-user.

Coverage of Negotiation

Negotiation under QBE procedure:

1. Discussion and clarification of the TOR and Scope of Services, provided that if changes in the TOR become necessary, the cost of these changes shall be within the ABC;

2. Discussion and finalization of the methodology and work program proposed by the consultant;

3. Consideration of the personnel to be assigned to the job, taking note of over-qualified personnel to be commensurate with the compensation of personnel with the appropriate qualifications, number of man-months and schedule of activities (manning schedule) (Section 33.6 of IRR-A);

4. Discussion on the services, facilities and data, if any, to be provided by BIR;

5. Discussion on the financial proposal submitted by the consultant; and

6. Provisions of the contract.

Negotiation under QBE procedure:

1. Discussion and clarification of the TOR and Scope of Services, provided that if changes in the TOR become necessary, the cost of these changes shall be within the ABC;

2. Discussion and finalization of the methodology and work program proposed by the consultant; CacISA

3. Consideration of the personnel to be assigned to the job, taking note of over-qualified personnel to be commensurate with the compensation of personnel with the appropriate qualifications, number of man-months and schedule of activities (manning schedule) (Section 33.6 of IRR-A);

4. Discussion on the services, facilities and data, if any, to be provided by BIR; and

5. Provisions of the contract.

The financial bid, including the proposed remuneration rates for staff and the reimbursable, shall not be negotiated since it has already been a factor in the selection of the consultant.

Timeline for the Opening of Financial Proposal

Under the QBE procedure, the Financial Proposal of consultant with the HRB is opened in the presence of the bidder during the negotiation stage — normally during the first day of the negotiation.

Under the QCBE procedure, the Financial Proposals of all consultants whose Technical Proposals meet the minimum technical rating shall be opened during the bid evaluation stage, which is earlier than the negotiation stage.

Except for meritorious reasons, negotiations with any one consultant shall be completed within ten (10) calendar days. (Sections 33.4.4 and 33.5 of IRR-A)

The Procurement Division/Administrative Division with the assistance of the BAC Secretariat shall finalize the draft contract after the negotiation.

If Negotiation with the Bidder with the HRB Fails

If agreement on all items discussed during negotiation is not possible between the BAC and the first-in-rank consultant, the BAC shall terminate the negotiation and invite the next ranked consultant for negotiation. The procedure for negotiation, as described above, shall be repeated until negotiation with a consultant is successfully completed. cEAaIS

If Negotiations with all Qualified Bidders Fail

If negotiations with all qualified bidders fail, the BAC should declare a failure of bidding. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding.

Additional Guidelines on Negotiations

1. Negotiations should include discussions of the TOR, the methodology, staffing, the BIR's inputs, and special conditions of the contract. The BIR should give the consultants adequate authority to discharge their responsibilities and carry out the terms of their contract.

2. The discussions should not substantially alter the original TOR or the terms of the contract, lest the quality of the final product, its cost, and the relevance of the initial evaluation be affected. TCaADS

3. Major reductions in work inputs should not be made solely to meet the budget.

4. The final TOR and the agreed methodology should be incorporated in the description of services, which should form part of the contract. 

5. The selected firm should not be allowed to substitute key staff, unless both parties agree that undue delay in the selection process makes such substitution unavoidable or that such changes are critical to meet the objectives of the assignment. If this is not the case and if it is established that key staff were included in the proposal without confirming their availability, the firm may be disqualified and the process continued with the next ranked firm. The key staff proposed for substitution should have qualifications equal to or better than the key staff initially proposed.

6. Financial negotiations should include clarification of the consultant's tax liability in the BIR's country (if any) and how this tax liability has been or would be reflected in the contract.

7. As Lump-sum Contracts payments are based on delivery of outputs (or products),the offered price should include all costs (staff time, overhead, travel, etc.).Consequently, if the selection method for a Lump-sum contract included price as a component, this price should not be negotiated.

8. In the case of Time-based Contracts, payment is based on inputs (staff time and reimbursable) and the offered price should include staff rates and an estimation of the amount of reimbursable. When the selection method includes price as a component, negotiations of staff rates should not take place, except in special circumstances, like for example, staff rates offered are much higher than typically charged rates by consultants for similar contracts. Consequently, the prohibition of negotiation does not preclude the right of the client to ask for clarifications, and, if fees are very high, to ask for change of fees.

9. Reimbursable are to be paid on actual expenses incurred at cost upon presentation of receipts and therefore are not subject to negotiations. However, if the BIR wants to define ceilings for unit prices of certain reimbursable (like travel rates),it should indicate the maximum levels of those rates in the RFP or define a per diem in the RFP.

10. If the negotiations fail to result in an acceptable contract, the BIR should terminate the negotiations and invite the next ranked firm for negotiations.

11. Once negotiations are commenced with the next ranked firm, the BIR should not reopen the earlier negotiations.

12. After negotiations are successfully completed, the BIR should promptly notify other firms on the short list that they were unsuccessful. EcDSTI

Step 9 Post-qualification

Purpose of Post-qualification

A post-qualification is conducted to determine whether or not the consultant with the HRB is responsive to all the requirements and conditions for eligibility and the bidding for the contract, as specified in the bidding documents. (Section 34.1 of IRR-A)

The eligibility check does not ascertain the validity and genuineness of the eligibility documents submitted by the bidders. Neither does it determine the veracity of the claims made by the bidders in their financial and technical proposals.

The post-qualification process, on the other hand, does.

Post-qualification Requirements

A consultant passes post-qualification if the BAC verifies, validates and ascertains that the consultant satisfies the following criteria: (Section 34.2 of IRR-A)

1. Legal Requirements. The post-qualification process under this criterion involves the verification, validation and ascertaining of the consultant's claim that it is not included in any government "blacklist",as well as all the licenses, permits and other documents it submitted, including the following:

a. DTI business name registration or SEC registration certificate;

b. Valid and current Mayor's permit/municipal license;

c. Taxpayer's Identification Number;

d. Valid Tax Clearance and Tax Returns;

e. Certificate of Compliance with labor laws; and

f. Authority of signatory.

The bidder's status with regard to "blacklisting" may be verified by checking the Consolidated Blacklisting Report issued by the GPPB, or the "blacklist of any government agency.

2. Technical Requirements. Post-qualification under this criterion means that the BAC would have to verify, validate and ascertain the veracity of the documents submitted by a consultant to prove compliance of the consulting services it offers with the requirements of the contract and bidding documents. These documents include:

a. Documents proving the bidder's stated competence and experience, and the competence and experience of the bidder's key personnel to be assigned to the project, such as:

i. A list of completed projects; and

ii. A list of key personnel to be assigned to the contract, with complete data on their qualification and experience;

b. A list of on-going projects, to check the performance of the bidder in its ongoing government and private contracts; and

c. The Bid Security, specifically on its sufficiency as to type, amount, form and wording, and validity period. CASTDI

3. Financial Requirements. Post-qualification under this criterion means that the BAC would have to verify, validate and ascertain the audited financial statements and the financial proposal.

Timeline for the Conduct of Post-qualification

The post-qualification process must be conducted and completed within seven (7) calendar days from date of determination of the HRB. (Section 34.1 of IRR-A) For consulting services, this period is reckoned from the date of successful negotiation with the consultant concerned.

Participants in the Conduct of Post-qualification

1. BAC;

2. TWG; and

3. BAC Secretariat.

Methodology: Steps in the Conduct of Post-qualification by the TWG/BAC

1. TWG verifies, validates, and ascertains the genuineness, validity and accuracy of the legal, technical and financial documents submitted by the consultant with the HRB, using the non-discretionary criteria described above.

In verifying the information contained in such documents, the TWG may make inquiries with appropriate government agencies and examine the original documents kept in the bidder's place of business. The use of other means for verification and validation of such documents may be resorted to by the TWG, such as the Internet and other research methods that yield the same results.

2. TWG inquires about the consultant's performance in relation with other contracts/transactions as indicated in its eligibility statement (statement of on-going, completed or awarded contracts).

3. If the TWG conducts post-qualification, it TWG prepares a Post-qualification Report (SF-CONS-74) to be submitted to the BAC. The Report shall contain, among others, the activities undertaken with regard to the Post-qualification process, including feedback from inquiries conducted.

4. BAC reviews the Post-qualification Report submitted by the TWG.

5. BAC determines whether the consultant with the HRB passes all the criteria for post-qualification.

6. If the HRB passes the post-qualification, the BAC declares it as the HRRB.

7. After the BAC has determined the HRRB, the Secretariat, with the assistance of the TWG, if necessary, prepares the BAC Resolution (SF-CONS-77) declaring the HRRB and the corresponding Notice (SF-CONS-75) to the said bidder informing it of its post-qualification. EDACSa

Grounds for the Disqualification of Consultants

1. A bidder that has been blacklisted by any government agency or instrumentality will be disqualified by the BAC from further participating in the bidding process.

2. A bidder or its employees is related within the third civil degree of consanguinity to the CIR/RD or any of officials of employees of the BIR with direct access to information that my substantially affect the results of the bidding.

3. A bidder is found to have committed an act that constitutes fraud or misrepresentation or to have colluded with others for the purpose of influencing the outcome of the bidding.

Such bidder will be disqualified by the BAC, its bid security forfeited and, upon conviction, it will suffer the penalty of imprisonment of not less than six (6) and one (1) day and not more than fifteen (15) years, (Section 65.2 of IRR-A) and likewise suffer the administrative penalties of suspension from participation in government procurement for the first offense, and suspension for two years on the second offense. (Section 69.1 of IRR-A)

If the HRB Fails Post-qualification

If the consultant with the HRB fails to pass post-qualification, the BAC shall immediately notify the said bidder in writing of its post-disqualification and the grounds for it (SF-CONS-76).The post-disqualified bidder shall have three (3) calendar days from receipt of the said notification to request the BAC to reconsider this decision. The BAC shall evaluate the request for reconsideration, using the same non-discretionary criteria, and shall issue its final determination of the said request within seven (7) calendar days from receipt thereof. (Section 34.4 of IRR-A)

Immediately after the BAC has notified the first bidder of its post-disqualification, and notwithstanding any pending request for reconsideration thereof, the BAC shall initiate and complete the negotiation and post-qualification process on the bidder with the second HRB. If the negotiations with the second bidder are successful, and it passes the post-qualification, and provided that the request for reconsideration of the first bidder has been denied, the second bidder shall be post-qualified as the bidder with the HRRB. The CIR/RD shall then award the contract to it. In case of the QBE procedure, the sealed financial envelopes of the unsuccessful bidders shall be returned by the BAC unopened and duly sealed only when the consultant with the HRRB has signed the contract and furnished the performance security. (Section 34.6 of IRR-A)

If the second bidder, however, fails post-qualification, the procedure for post-qualification shall be repeated for the bidder with the next HRB, and so on until the HRRB is determined for award. (Section 34.7 of IRR-A)

If all Qualified Bidders Fail Post-qualification

If no bidder passes post-qualification, the BAC should declare a failure of bidding. In such a case, the BAC shall conduct a re-bidding in accordance with the provisions of this manual on the declaration of failure of bidding.

Reservation Clause

The Reservation Clause declares that the Bureau of Internal Revenue reserves the right to reject any and all bids, to declare a failure of bidding, or not to award the contract. (Section 41 of IRR-A)

The CIR/RD should be prudent in the use of the Reservation Clause because once abused in rejecting any and all bids with manifest preference to any bidder who is closely related to him in accordance with Section 47 of IRR-A, or if it is proven that he exerted undue influence or undue pressure on any member of the BAC or any officer or employee of the BIR to take such action, and the same favors or tends to favor a particular bidder, he shall be meted with the penalties provided in Section 65 of IRR-A. aEIcHA

Right to Reject Bids, Declare a Failure of Bidding, or not to Award the Contract

The BIR may exercise the right to reject any and all bids, to declare a failure of bidding, or not to award the contract in any of the following situations (Section 41.1 of IRR-A):

1. If there is prima facie evidence of collusion between appropriate public officers or employees of the Bureau of Internal Revenue, or between the BAC and any of the bidders, or between or among the bidders themselves, or between a bidder and a third party, including any act which restricts, suppresses or nullifies or tends to restrict, suppress or nullify competition;

2. If the BAC is found to have failed in following the prescribed bidding procedures, for which the applicable sanctions shall be applied to the erring officers, as provided in Section 65 of IRR-A;

3. For any justifiable and reasonable ground where the award of the contract will not redound to the benefit of the government as follows:

a. If the physical and economic conditions have significantly changed so as to render the project no longer economically, financially or technically feasible as determined by the CIR;

b. If the project is no longer necessary as determined by the CIR; and

c. If the source of funds for the project has been withheld or reduced through no fault of the BIR.

Declaration of Failure of Bidding

In case of failure of bidding, the BAC shall issue a resolution declaring the same. The BAC then reviews the terms and conditions stated in the IAEB. If warranted, it changes any of the terms and conditions, including the quantities or specifications, provided that the ABC is left unchanged. It must, thereafter, conduct a re-bidding, in the process formulating a new IAEB and posting and publishing this as required. (Section 35 of IRR-A) All bidders that have initially responded to the IAEB in the first bidding shall be allowed to submit new bids.

If the original estimate is found to be inadequate on reassessment to meet the objectives of the project, it is may be necessary to reduce the scope of the project.

Should a second failure of bidding occur, the BIR may conduct another public bidding or enter into negotiated procurement. The conduct of another public bidding is warranted if revision is made to the ABC. In such case, the BIR should comply with the requirements of re-advertisement and/or posting. On the other hand, negotiated procurement is resorted to if there are no changes to the ABC, and the terms, conditions and specifications of the project. HCTAEc

Step 10 Contract Award

Rule on Contract Award

The award of contract shall be made to the consultant with the HRRB at its submitted bid price or its calculated bid price, whichever is lower. In the case of QBE, the award shall be based on the negotiated price or the submitted price, whichever is lower. In the case of an SRRB, as provided for in IRR-A Section 36, the bidder with the SRRB shall be awarded the contract. (Section 37.1 of IRR-A)

The BAC shall issue a Resolution recommending to the CIR award of the contract to the bidder with the HRRB.

Prior to the expiration of the period of bid validity, the BIR should notify the successful bidder in writing that its bid has been accepted, through a Notice of Award (SF-CONS-79) received personally or sent by registered mail or electronically. It is important that, in case the Notice of Award is not received personally, its receipt must be confirmed in writing within two (2) days by the successful bidder and submitted personally or sent by registered mail or electronically to the BIR (this particular instruction must be included in the ITB so that the bidder may be guided accordingly).

Timeline for Contract Award

The CIR/RD or his duly authorized representative shall approve the recommendation of award within seven (7) calendar days from the date of determination and declaration by the BAC of the HRRB. (Section 37.2 of IRR-A as amended by GPPB Resolution No. 014-2006)

The NOA (SF-CONS-79) shall be given to the bidder with the HRRB/SRRB immediately after approval of the recommendation. Simultaneously, a copy of the notification of bidding result (SF-CONS-80) shall be furnished to all losing Bidders, and posted in the PhilGEPS and the BIR website (www.bir.gov.ph). (Section 37.2.1 of IRR-A as amended by GPPB Resolution No. 014-2006)

Contract award must be made within the bid validity period as specified in the bidding documents, with the period lasting for a maximum of fifty (50) calendar days from the date of bid opening. (Section 37.2.2 of IRR-A as amended by GPPB Resolution No. 014-2006) If award cannot be made within the said period, the bid validity period shall be extended.

The NOA does not give effect to the contract.

Participants in Contract Award

1. CIR/RD;

2. DCIRs/ACIR;

3. BAC;

4. Financial and Administrative Service/Procurement Division (NO) or Administrative Division/Finance Division (RR);

5. BAC Secretariat;

6. Project Proponent/end-user; and

7. Consultant who submitted the HRRB/SRRB.

Methodology: Steps in the Awarding of a Contract

1. BAC Secretariat consolidates all the documents and/or records of the proceedings of the BAC with regard to the procurement at hand.

2. BAC Secretariat drafts the BAC Resolution recommending award.

3. BAC approves and signs the Resolution Recommending Award, and transmits the same to the CIR/RD, or his duly authorized representative.

4. CIR/RD, or duly authorized representative, acts on the recommendation for award within seven (7) calendar days from the date of determination and declaration by the BAC of the HRRB/SRRB.

5. In case of approval of the recommendation, the CIR/RD, or his duly authorized representative, through the BAC Secretariat, issues the Notice of Award (SF-CONS-79) to the bidder with the HRRB/SRRB while the BAC accordingly notifies the losing bidders. In case of a disapproval of the recommendation of award, the CIR/RD, or duly authorized representative, shall state the reason(s) for disapproval and instruct the BAC on the subsequent steps to be adopted.

6. Bidder with the HRRB/SRRB accepts the NOA.

If the Bidder Being Considered for Award Does not Accept the NOA

If the bidder refuses to accept the award within the bid validity period, the BAC shall forfeit the bid security of the bidder and shall initiate the blacklisting proceedings in accordance with the Uniform Guidelines for Blacklisting (GPPB Resolution No. 09-2004).It then initiates and completes the post-qualification of the bidder with the second highest rated bid. If found qualified, the said bidder shall be awarded the contract. This procedure is repeated until the HRRB is determined. Should all eligible bidders fail post-qualification, the BAC must declare the bidding a failure. The BAC shall conduct a re-bidding in accordance with the provisions of this Manual on the declaration of failure of bidding.

Refusal to accept the award, without just cause or for the purpose of forcing the BIR to award the contract to another bidder, if proven, is meted with a penalty of imprisonment of not less than six (6) years and one (1) day but not more than fifteen (15) years. (Section 65.3.4 of IRR-A) Additional penalties of suspension for one (1) year from participation in government procurement for the first offense, and suspension for two (2) years for the second offense shall also be imposed on the bidder. (Section 69.1 of IRR-A)

PERFORMANCE SECURITY

It is a guarantee that the winning bidder will faithfully perform its obligations under the contract prepared in accordance with the bidding documents. (Section 39.1 of IRR-A) It must be posted in favor of the BIR, and will be forfeited in the latter's favor in the event it is established that the winning bidder is in default in any of its obligations under the contract. (Section 39.2 of IRR-A)

Timeline for Posting of Performance Security by the Bidder with the HRRB/SRRB

Within a maximum period of ten (10) calendar days from the receipt of the NOA, and in all cases upon signing of the contract, the successful bidder should furnish the BIR with the performance security in accordance with the Conditions of Contract, and in the Form prescribed in the Bidding Documents. (Section 39.1 of IRR-A) The performance security forms part of the contract. (Section 37.2.3 of IRR-A)

Forms of Performance Security and the Corresponding Amounts Required

The performance security must be in any of the following forms with the corresponding required amounts: 8

 

Form of Performance Security	Maximum Amount in % of the
		Total Contract Price
1.	Cash, certified check, cashier's	Five Percent (5%)
	check/manager's check, bank
	draft or irrevocable letter of credit;
2.	Bank Guarantee confirmed by a	Ten Percent (10%)
	reputable local bank or in the case
	of a foreign bidder, bonded by a
	foreign bank;
3.	Surety Bond callable upon	Thirty Percent (30%)
	demand issued by a reputable
	surety or insurance company;
4.	Foreign government guarantee as	One Hundred percent (100%)
	provided in an executive, bilateral
	or multilateral agreement, as may
	be required by BIR.

 

To monitor the issuance of bidding documents, the BAC through the BAC Secretariat shall account for the number of copies sold to prospective bidders and distributed to all concerned by recording such in an official logbook. The BAC Secretariat may choose a numbering or labeling system that is appropriate for the BIR.

Forms of Performance Security to be submitted by the winning bidder

The BIR must specify in the bidding documents the preferred forms of performance security and the respective amounts thereof. The winning bidder must choose which among the preferred forms it shall submit.

For projects with Multi-Year Obligation Authority (MYOA) approved by the DBM, the performance security shall be computed based on the whole duration of the project. However, the BIR has the option to pro-rate the performance security based on the contract period and shall be renewed every year thereafter.

Changes in the Amount of Performance Security in Case of Amendments in the Contract Price

The winning bidder shall post an additional performance security following the schedule above to cover any cumulative increase of more than ten percent (10%) over the original value of the contract as a result of amendments to order. (Section 1.4 Annex "D" of IRR-A, as amended by Section 1.4 M.O. 176, s. 2005) The percentages in the schedule above must be applied to increases in the original value of the contract. The winning bidder must also cause the extension of the validity of the performance security to cover approved contract time extensions.

If the contract value is reduced because part of the goods or services under the contract had already been delivered or completed, and accepted by the government, the BIR shall allow a proportional reduction in the original performance security. However, this proportional reduction in the value of the performance security is allowed only when the contract allows for partial deliveries or performance. Moreover, the reductions must be more than ten percent (10%),and the aggregate of such reductions must not be more than fifty percent (50%) of the original performance security. (Section 39.6 of IRR-A)

Parties Involved in the Posting of the Performance Security

a) Bidder with the HRRB/SRRB;

b) BIR; and

c) Issuer of the security, e.g.,the banking/financial institution or the insurance company.

Methodology: Steps in the Posting of Performance Security

1. The bidder with the HRRB/SRRB posts a performance security by complying with the following conditions:

a. The performance security must be executed in the form prescribed by the BIR in the ITB; and

b. The performance security must at least be co-terminus with the period of completion of the contract.

2. The Procurement Division/Administrative Division accepts the performance security and indicates such posting and acceptance by attaching the appropriate form to the contract.

Timeline for Release of Performance Security

Subject to the conditions of the contract, the BIR may release the performance security to the winning bidder after the issuance of the Certificate of Acceptance of the final report, provided that there are no claims filed against the contract awardee or the surety company (Section 39.3 of the IRR-A). However, it must ensure that the performance security is replaced by a warranty covering the defects liability period in accordance with Section 62 of IRR-A.

Step 11 Contract Signing and Approval

Timeline for Entering into a Contract

The winning bidder and the BIR must enter into a contract immediately after the former has submitted the performance security and all other documentary requirements within the period specified in the IRR-A. The parties and their respective witnesses must sign the contract within ten (10) calendar days from receipt by the winning bidder of the NOA (Section 37.3 of IRR-A as amended by MO No. 176). AETcSa

The Chief, Accounting Division at the NO or the Chief of the Disbursement Section, Finance Division of RR shall sign as witness to the contract pursuant to COA Circular No. 79-122.

The CIR/RD or his duly authorized representative is encouraged to sign within the same day as the signing of the bidder as there are penalties against delaying, without justifiable cause, the award of the contract (Section 65.1 of IRR-A). Moreover, it would be best for both parties to sign/execute the contract together — provided that all contract documents and requirements are complete — so that both may personally appear before a Notary Public.

Section 38.2. of IRR-A is designed to remove the cause for delay in the contract signing. This provision mandates that if no action is taken by the CIR/RD or his duly authorized representative within the period specified in Section 37.4 of IRR-A, the contract concerned shall be deemed approved. Provided, however, that where further approval by the OP is required, the contract shall not be deemed approved unless and until the OP gives actual approval to the contract concerned.

Timeline for Contract Approval by Higher Authorities

When, after contract signing, further approval of higher authorities is required, the approving authority for the contract, or his duly authorized representative, shall be given a maximum of fifteen (15) calendar days from receipt thereof, together with all documentary requirements to perfect the said contract, to approve or disapprove it. (Section 37.3 of IRR-A as amended by GPPB Resolution No. 014-2006)

Timeline for Issuance of NTP

The NTP (SF-CONS-85) must be issued together with a copy of the approved contract to the successful bidder within three (3) calendar days from the date of approval of the contract by the CIR/RD or his duly authorized representative, or by higher authority, as the case may be. (Section 37.5 of IRR-A as amended by GPPB Resolution No. 014-2006)

Contract Effectivity

Unless otherwise specified in the contract, a contract is effective upon receipt of the NTP. If an effectivity date is provided in the NTP, all notices called for by the terms of the approved contract shall be effective only from such effectivity date, but such effectivity date should not be later than seven (7) calendar days from the issuance of the NTP. (Section 37 of IRR-A as amended by GPPB Resolution No. 014-2006)

Participants in Contract Signing and Approval and Issuance of the NTP

1. CIR/RD;

2. DCIRs/ACIRs;

3. ACIR FAS/Procurement Division or Administrative Division/Finance Division (RR);

4. ACIR Legal Service/Chief Legal Division (RR)

5. Project Proponent/end-user;

6. Witnesses;

7. Winning bidder; and

8. Higher Authority, if necessary.

Contract Documents should Include the Following

1. Contract Agreement;

2. Bid form including all the documents/statements contained in the winning bidder's two bidding envelopes, as annexes; SEACTH

3. Schedule of Requirements;

4. General Conditions of the Contract;

5. Special Conditions of the Contract;

6. Terms of Reference with annexes, if any;

7. Drawings/Plans, if applicable;

8. Technical Specifications and the bidder's technical proposal, if applicable;

9. IAEB;

10. Addenda and/or Supplemental/Bid Bulletins, if any;

11. Eligibility requirements, documents and/or statements;

12. NOA with winning bidder's "Conforme" thereto;

13. Performance Security; and

14. Other contract documents that may be required by existing laws and/or the BIR.

Methodology: Steps in the Contract Preparation, Signing and Approval

1. Procurement Division/Administrative Division prepares the draft contract together with the documentary requirement mentioned above;

2. Procurement Division/Administrative Division transmits the draft contract and its attachment to the Legal Service/Legal Division for review and comment;

3. Legal Service/Legal Division returns the draft contract and its attachment to the Procurement Division/Administrative Division for finalization;

4. Procurement Division/Administrative Division prepares the final contract for signature by the winning bidder;

5. Procurement Division/Administrative Division prepares and transmits the ObR, together with the final contract as signed by the winning bidder, to the CIR/RD or his duly authorized representative for signature of ObR;

6. Procurement Division/Administrative Division transmits the ObR and the final contract to the Budget Division/Finance Division for certification of availability of allotment;

7. Accounting Division/Finance Division issues Certificate of Availability of Fund (CAF) and signs as witness to the final contract pursuant to COA Circular No. 79-122;

8. Procurement Division/Administrative Division transmits the contract documents to the CIR/RD or his duly authorized representative for signature, together with the following documents:

a. Duly approved delivery schedule and cost estimates or the PPMP;

b. ObR;

c. CAF;

d. Abstract of Bids;

e. Resolution of the BAC recommending award;

f. Approval of award by appropriate government approving authority; and

g. Other pertinent documents that may be required by existing laws and/or the BIR.

9. CIR/RD or his duly authorized representative acts on the contract.

10. If higher approval is required (e.g.,approval of the Office of the President),or a review by another government body is necessary (e.g.,NEDA or DOJ review),the CIR/RD transmits the contract documents to the appropriate approving authority or reviewing body. The period indicated above for approval of contracts still apply, except if the approving authority is the Office of the President. SAcCIH

11. Procurement Division/Administrative Division prepares and transmits NTP to the CIR/RD or his duly authorized representative for signature.

12. Procurement Division/Administrative Division issues the NTP to the winning bidder.

Rules Governing the Review and Approval of Government Contracts

Executive Order 423, s. 2005, prescribes the rules and regulations on the review and approval of government contracts. Essentially, E.O. 423 provides that, except for government contracts required by law to be acted upon and/or approved by the President, the CIR/RD shall have full authority to give final approval and/or enter into all government contracts of his respective government agency, awarded through public bidding, regardless of amount. Provided, that the CIR/RD certifies under oath that the contract has been entered into in faithful compliance with all applicable laws and regulations. The CIR/RD may also delegate in writing this full authority to give final approval and/or enter into government contracts awarded through public bidding as circumstances may warrant (i.e.,to decentralization of procurement in a government agency),subject to such limitations as he may impose. For procurement undertaken through any of the alternative methods allowed by law, where the government contract involves an amount less than P500 Million, except where action or approval of the President is required, the CIR/RD shall have full authority to give final approval and/or enter into such contract, provided that the Department Secretary concerned certifies under oath that the contract has been entered into in faithful compliance with all applicable laws and regulations. He may delegate in writing this authority, as circumstances may warrant (i.e.,to decentralize procurement),subject to such limitations as he may impose. cADaIH

Where the CIR/RD has made a determination that a Government contract, including Government contracts required by law to be acted upon and/or approved by the President, involving an amount of at least P500 Million falls under any of the exceptions from public bidding allowed by law, the CIR/RD shall, before proceeding with the alternative methods of procurement provided by law and applicable rules and regulations, obtain the following requirements:

1. An opinion from the GPPB that said Government contract falls within the exceptions from public bidding; and

2. Approval from the Director-General of NEDA to proceed with a specific alternative method of procurement under the exceptional cases provided by law and applicable rules and regulations.

Except for Government contracts required by law to be acted upon and/or approved by the President, the CIR/RD, after obtaining the foregoing requirements, shall have full contracts of their his respective agency, entered into through alternative methods of procurement allowed by law. Provided, that the head of the procurement entity certifies under oath that the contract has been entered into in faithful compliance with all applicable laws and regulations.

If the Bidder with the HRRB/SRRB Refuses or is Unable, through its Own Fault, to Post the Performance Security and Sign the Contract within the Prescribed Period:

1. Its bid security is forfeited;

2. It is disqualified from further participating in the bidding at hand;

3. Upon conviction, it will suffer the penalty of imprisonment of not less than six (6) ^* and one (1) day and not more than fifteen (15) years; and

4. Upon determination of administrative liability, it will suffer the administrative penalties of suspension for one (1) year from participation in government procurement for the first offense, and suspension for two (2) years for the second offense. This is without prejudice to the blacklisting proceedings undertaken in accordance with the Uniform Guidelines for Blacklisting (GPPB Resolution 09-2004).

For its part, the BAC must initiate and complete the post-qualification of the bidder with the second HRRB. This procedure must be repeated until the HRRB is determined for award. If no bidder passes post-qualification, the BAC declares the bidding a failure and conducts a re-bidding with re-posting and re-advertisement. Should there be another failure of bidding after the conduct of the re-bidding, the BIR may enter into a negotiated procurement. (Section 40.2 of IRR-A)

If, on the other hand, the bidder that fails to post the performance security and sign the contract happens to be the SRRB, the BAC must declare the bidding a failure. It then conducts a re-bidding with re-posting and re-advertisement. Should there be another failure of bidding after the conduct of the re-bidding, the BIR may enter into a negotiated procurement. (Section 40.3 of IRR-A)

If the failure of the bidder with the HRRB or SRRB to sign the contract within the prescribed period is not due to its fault, the sanctions mentioned above shall not be imposed. (Section 40.1 of IRR-A)

SECTION 4. Procedures for the Procurement of Consulting Services through Alternative Methods. —

The Alternative Methods for the Procurement of Consulting Services

Rules on the Use of Alternative Methods of Procurement

Generally, procurement should be through public bidding. In preparing the APP, the BIR must ensure that there is sufficient time to undertake competitive or public bidding. However, the law allows the use of alternative methods of procurement in some exceptional instances, provided:

1. There is prior approval of the CIR/RD on the use of alternative methods of procurement, as recommended by the BAC; and

2. The conditions required by law for the use of alternative methods are present.

In resorting to any of the alternative methods of procurement, the BIR must ensure that the method chosen promotes economy and efficiency, and that the most advantageous price for the government is obtained. HCTAEc

For the procurement of consulting services, limited source bidding and negotiated procurement are the only alternative methods of procurement that may be used.

Limited Source Bidding

LIMITED SOURCE BIDDING, otherwise known as SELECTIVE BIDDING, is a method of procurement of consulting services, that involves the issuance of a direct invitation to bid by the BAC to a set of pre-selected consultants with known experience and proven capability to provide the services required in a particular contract. (Section 49 of IRR-A).

Condition for Procurement through Limited Source Bidding

The limited source bidding method may be used to procure highly-specialized types of consulting services, as determined by the BIR, where only a few consultants are known to be available. In these cases, resorting to the public bidding method will not likely result in any additional consultants participating in the bidding.

Selection of Bidders

The pre-selected prospective bidders shall be those appearing in a list maintained by the relevant government authority that has expertise in the type of procurement concerned, which list should have been submitted to, and maintained updated with, the GPPB. (Section 49 of IRR-A) In the absence of the aforementioned relevant government authority, the BIR has to resort to open competitive bidding in its selection of a consultant.

If the Required Expertise is not Available Locally

If Filipino consultants do not have enough expertise and capability to render the services required under the project, foreign consultants may be hired.

The umbrella organization of consultants that will be recognized by the GPPB as representative of the consulting industry in the Philippines, will prepare and certify a list of fields wherein Filipino consultants can provide competent consulting services. As proof of the availability of Filipino expertise, it will also prepare a list of its members that have expertise in a specific field. It will list its standards for competence in the field and certify that the members that it has listed have passed such standards.

The absence of these lists will indicate the lack of local expertise in an area.

Participants in Procurement through Limited Source Bidding

1. CIR/RD;

2. BAC;

3. TWG;

4. BAC Secretariat;

5. Project Proponent/end-users;

6. Technical experts/consultants;

7. Pre-selected prospective bidders; and

8. Observers.

Methodology: Steps in the Conduct of Procurement through Limited Source Bidding

1. The BAC, through the TWG and the BAC Secretariat, prepares the bidding documents, including the IAEB (indicating therein the method of procurement to be used) and the technical specifications, in accordance with the procedures laid down in the IRR-A, this Manual and the PBDs. TCDHIc

2. The BAC, through the BAC Secretariat, gets the list of pre-selected suppliers from the government authority that has expertise in the type of procurement at hand. It may also access the PhilGEPS website as a secondary source of information.

3. The BAC calls for a pre-procurement conference.

4. BAC, through the Secretariat, posts continuously for a maximum period of fourteen (7) calendar days prior to the opening of the bids for information purposes the IAEB in the:

a. PhilGEPS;

b. BIR website (www.bir.gov.ph);and

c. Any conspicuous place in the premises of the BIR NO/RR;

5. BAC Secretariat sends the IAEB to all pre-selected consultants.

6. Pre-selected consultants are expected to inform the BAC if they are interested in participating in the project or not. If interested, a pre-selected consultant will have to submit its LOI.

7. BAC issues an RFP to the consultants that have submitted the LOI. This RFP must already contain the relevant information that would enable the consultants to prepare their bids.

8. BAC conducts a pre-bid conference and requires the submission of the prospective bidders' eligibility/qualification statements for short listing purposes.

9. The short listed consultants shall submit the technical and financial bids on or before the deadline indicated in the bidding documents. The BAC then proceeds with the bid evaluation, negotiation, post-qualification, contract award, signing and approval, following the procedures for Competitive Bidding.

Bid and performance securities are required for limited source bidding.

Negotiated Procurement Method

NEGOTIATED PROCUREMENT is a method of procurement whereby the BIR directly negotiates a contract with a legally, technically and financially capable consultant. (Section 53 of IRR-A)

Conditions for Negotiated Procurement

Negotiated procurement may only be resorted to under the following instances:

1. There has been a second failure of public bidding as provided in Section 35 of IRR-A, in which case, the negotiation must be made with a consultant in good standing and with proven track record with the BIR or other government agencies;

2. There exists imminent danger to life or property during a state of calamity, or when time is of the essence arising from actual or man-made calamities or other causes where immediate action is necessary to prevent damage to or loss of life or property, or to restore vital public services, infrastructure facilities and other public utilities. caIETS

3. The project is adjacent or contiguous to another on-going consulting services project, provided, however, that the:

a. Original contract is the result of a competitive bidding;

b. Subject contract to be negotiated has a scope of work that is similar or related to that of the original contract;

c. Consultant uses the same prices or lower unit prices as in the original contract less mobilization cost;

d. Amount involved does not exceed the amount of the ongoing project; and

e. Consultant is in good standing, e.g.,not included in the Consolidated Blacklisting Report issued by the GPPB, and has satisfactorily completed similar contracts and has no slippage in its on-going contracts.

In such instances, negotiations for the procurement must be commenced before the expiry of the original contract. (Section 53 [d] of IRR-A) This negotiated contract can only be undertaken once for a particular ongoing project. 

The prospective bidder should issue a statement that it is not "blacklisted" or barred from bidding by the government or any of its agencies, offices, corporations or LGUs, and that it is not included in the Consolidated Blacklisting Report issued by the GPPB, once released in accordance with the guidelines to be issued by the GPPB.

4. Individual consultants are hired to do work that is:

a. Highly technical or proprietary; or

b. Primarily confidential or policy-determining, where trust and confidence are the primary consideration for the hiring of the consultant, provided that the term of the individual consultants shall be, at the most, six (6) months, renewable at the option of the appointing CIR/RD, but in no case shall exceed the term of the latter.

5. Where the procurement amounts to Fifty Thousand Pesos (P50,000) and below, provided that the procurement does not result in splitting of contracts. (GPPB Resolution No. 04-2006)

6. A contract has been rescinded or terminated for causes provided for in the contract and existing laws, and BIR decides to take over, because immediate action is necessary to prevent damage to, or loss of, life or property, or to restore vital public services, infrastructure facilities and other public utilities.

For projects in areas where a state of calamity exists, the BIR can negotiate with a previous consultant of good standing with it, or with a consultant of good standing situated within the vicinity where the calamity or emergency occurred. (Section 54.2 [d] of IRR-A)

For projects that are taken over, the contract may be negotiated starting with the second highest rated bidder for the project under consideration. The negotiation ought to be based on the unit prices of the original contract, and in no case be higher than the bid price of the consultant with whom negotiation is being conducted. If negotiation fails, then negotiation must be done with the third highest rated bidder. If negotiation fails again, the BIR must negotiate with a consultant in good standing and with proven track record therewith or with other government agencies. Authority to negotiate contracts for projects under these exceptional cases shall be subject to prior approval by the heads of the Procuring Entities concerned, within their respective limits of approving authority. (Section 54.2 [e] of IRR-A)

Participants in Negotiated Procurement

1. CIR/RD;

2. BAC;

3. TWG;

4. BAC Secretariat;

5. Project Proponent/end-user;

6. Technical experts, if necessary;

7. Prospective consultants; and

8. Observers.

Methodology: Steps in the Conduct of Negotiated Procurement

Except for adjacent or contiguous projects and for the hiring of individual consultants under special cases, negotiated procurement is conducted in the following manner:

1. BAC conducts a pre-procurement conference to confirm the existence of the condition required by law for negotiated procurement;

2. If the original mode of procurement recommended in the APP was competitive bidding, the BAC recommends the change in the mode of procurement to negotiated through a resolution to be approved by the CIR/RD.

3. BAC, through the Secretariat, posts for information purposes the IAEB in:

a. BIR website (www.bir.gov.ph);

b. PhilGEPS; and

c. Any conspicuous place in the premises of the BIR NO/RR.

The posting shall be done for a maximum period of seven (7) calendar days prior to opening of the proposal. The BIR, however, may waive the period for posting in cases when:

a. There is imminent danger to life and property;

b. Time is of the essence arising from actual or man-made calamities or other causes, where immediate action is necessary to prevent damage to, or loss of, life or property; or

c. To restore vital public services, infrastructure facilities and other public utilities. IcSEAH

At any rate, the award must be posted in the aforementioned websites. (Section 54.2 [d] of IRR-A)

4. BAC, through the BAC Secretariat, shall draw a list of at least three (3) consultants in good standing which will be invited to submit bids and negotiate with the bidder who submitted the lowest calculated bid or highest rated bid, whichever is applicable. If the offer of the bidder who submitted the lowest calculated bid or highest rated bid, whichever is applicable, is not responsive to the original specifications and ABC, negotiation shall be made in ascending order starting from the lowest offer. The bidder whose bid is found to be responsive to the original specifications and ABC shall be considered for award. In all cases, the award of contract shall be posted at the PhilGEPS website, BIR website (www.bir.gov.ph) and in conspicuous place within the premises of the BIR NO/RR. (Section 54.2 [e] of IRR-A as amended by M.O. 213)

The negotiation may be made with a previous consultants of good standing of the BIR, or a consultants of good standing situated within the vicinity where the calamity or emergency occurred. The award of contract shall be posted at the PhilGEPS website, BIR website (www.bir.gov.ph) and in conspicuous place within the premises of the BIR NO/RR. (Section 53 (a) of IRR-A as amended by M.O. 213)

5. The consultant submits its proposal in a sealed envelope duly marked "Received" by the BAC.

6. The BAC, with the assistance of the TWG, evaluates the proposals of the prospective consultants. The BAC shall issue a resolution recommending to the CIR/RD award of the contract to the HRRC/SRRC for approval.

7. The Procurement Division/Administrative Division prepares the contract for approval of the CIR/RD or his duly authorized representative, and serves the same to the winning consultant.

As a general rule, both bid security and performance security must be posted when the BIR resorts to negotiated procurement. However, in the case of negotiated procurement through the hiring of individual consultants or due to imminent danger to life or property or when time is of the essence or to restore vital public services or infrastructure facilities, the posting of a bid security shall not be required.

SECTION 5. Guidelines on Contract Implementation for Consulting Services. —

Contract Implementation for the Procurement of Consultancy Services

Contract Implementation Coverage

1. Effectivity of the contract;

2. Contractor's performance of its contractual obligation;

3. BIR's performance of its contractual obligation, as specified in the contract;

4. Inspection and Final acceptance or project sign-off;

5. All other related activities; and

6. Payment by the BIR.

The Project Proponent/end-user should determine the period of contract implementation during the procurement planning stage, and include it in the PPMP. In determining the contract implementation period, it must ensure that the supplier is given ample time to undertake any preparatory activity/ies necessary for it to comply with the conditions of the contract. aASEcH

Contract Effectivity

A contract becomes effective either on the date of the receipt by the winning bidder of the NTP, otherwise, on the effectivity date provided in the NTP. (Section 37.5 of IRR-A)

Advance Payment for Mobilization

The BIR may make an advance payment to the consultant in an amount that shall not exceed fifteen percent (15%) of the contract amount to cover the cost of mobilization. The advance payment shall be made only upon the submission of a written request by the consultant together with an irrevocable standby letter of credit issued by an entity acceptable to the BIR and of an amount equal to the advance payment. (Annex "F" of IRR-A)

Recovery of Advance Payment Made to the Consultant

The BIR must recover the advance payment by deducting from the progress payments to the consultant such sum as agreed during contract negotiations until the advance payment shall have been fully liquidated within the duration of the contract. (Annex "F" of IRR-A)

The consultant, for its part, may reduce his standby letter of credit or guarantee instrument by the amounts refunded in the advance payment.

Replacement of Consultant and Key Personnel

Once the contract has been awarded, no replacement shall be allowed until after fifty percent (50%) of the personnel's man months have been served, except for justifiable reasons. Violators will be fined an amount equal to the refund of the replaced personnel's basic rate, which should be at least fifty percent (50%) of the total basic rate for the duration of the engagement. (Section 33.6 of IRR-A)

Recourse of the BIR if the Performance of One or More Key Personnel is Unsatisfactory

The BIR must write the consultant for a replacement of its personnel when it finds that they have:

1. committed serious misconduct,

2. been charged with having committed a criminal act under Philippine law, or

3. rendered unsatisfactory performance.

The replacement should have equal or better qualifications but will receive remuneration not exceeding that which would have been payable to the person replaced. The consultant shall have no claim for additional costs arising out of or incidental to any removal and/or replacement of staff. DEcTCa

Contract Price and Payment

Price escalation is not allowed. For the given scope of work in the contract as awarded, the price must be considered as a fixed price. 9

Denomination of Contract Prices

All contract prices must be denominated and payable in Philippine currency, and this shall be stated in the bidding documents. Should the BIR receive bids denominated in foreign currency, the same shall be converted to Philippine currency based on the exchange rate officially prescribed for similar transactions as established by the BSP on the date of the bid opening. (Section 61.1 of IRR-A)

Timeline of Payments 10

Payments must be made promptly by the BIR, but in no case later than forty-five (45) days after submission of the following:

A. Consultant

a) billing statement/invoice;

b) compliance of deliverables;

c) other requirements stipulated in the contract.

B. Project Proponent/end-user unit 

a) request for inspection;

b) technical inspection and acceptance report;

c) certificate of performance of services rendered;

d) certificate of operationability, if necessary;

e) other certifications as required in the contract.

C. Inspection and Acceptance Committee

a) inspection and acceptance report;

Such payment shall be subject to all accounting and auditing requirements.

Payments must be made in the Philippine currency.

Scope of the BIR's Right to Inspect and Test the Delivered/Performed Work

The BIR or its representative has the right to inspect and/or to test the services rendered/performed works to confirm their conformity to the contract specifications at no extra cost to it. The bidding documents and the contract must specify what inspections and tests are required by the BIR, and where these are to be conducted. The BIR must notify the supplier in writing, in a timely manner, of the identity of any representatives retained for these purposes.

The Project Proponent/end-user must request in writing for the inspection of services rendered/performed works with the Inspection and Acceptance Committee of the BIR within twenty-four (24) hours, and the latter shall complete the conduct of inspection as soon as practicable depending on the nature of the services rendered/performed works to be inspected.

Pertinent COA regulations on technical inspection and acceptance procedures shall be considered in the conduct of such inspection and acceptance by the BIR's authorized technical inspectors.

The BIR must bear its own costs and expenses incurred in connection with its attendance at inspections, including, but not limited to, all traveling and board and lodging expenses.

The BIR may require the consultant to carry out any test and/or inspection not required by the contract but deemed necessary to verify that the characteristics and performance of services rendered/performed works comply with the technical specifications, codes and standards under the contract. However, the reasonable costs and expenses incurred by the supplier in the carrying out of such test and/or inspection will be added to the contract price. Furthermore, if such test and/or inspection impedes the progress of consultant's performance of its other obligations under the contract, due allowance will be made in respect of the delivery dates and completion dates and the other obligations so affected.

The BIR may reject any services rendered/performed works or any part thereof that fail to pass any test and/or inspection or do not conform to the specifications. The supplier should either rectify or replace such rejected services rendered/performed works or parts thereof or make alterations necessary to meet the specifications at no cost to the BIR, and shall repeat the test and/or inspection, at no cost to the BIR, upon giving a notice pursuant to the contract. ICAcTa

The consultant should agree in the contract that neither the execution of a test and/or inspection of the services rendered/performed works or any part thereof, nor the attendance by the BIR or its representative, shall release the supplier from any warranties or other obligations under the contract.

Different Types of Consultancy Contracts Based on Payment Terms Normally Used

1. Lump Sum Contract

Lump sum contracts are used mainly for assignments in which the content and the duration of the services and the required output of the consultants are clearly defined. They are widely used for simple planning and feasibility studies, environmental studies, detailed design of standard or common structures, preparation of data processing systems, and so forth. Payments are linked to outputs (deliverables),such as reports, drawings, bills of quantities, bidding documents, and software programs. Lump sum contracts are easy to administer because payments are due on clearly specified outputs. AacCIT

2. Time-Based Contract

This type of contract is appropriate when it is difficult to define the scope and the length of the services, either because the services are related to activities by others for which the completion period may vary, or because the input of the consultants required to attain the objectives of the assignment is difficult to assess. This type of contract is widely used for complex studies, supervision of construction, advisory services, and most training assignments. Payments are based on agreed hourly, daily, weekly or monthly rates for staff (who are normally named in the contract) and on reimbursable items using actual expenses and/or agreed unit prices. The rates for staff include salary, social costs, overhead, fee (or profit),and, where appropriate, special allowances. This type of contract should include a maximum amount of total payments to be made to the consultants. This ceiling amount should include a contingency allowance for unforeseen work and duration, and provision for price adjustments, where appropriate. Time-based contracts need to be closely monitored and administered by the client to ensure that the assignment is progressing satisfactorily and that payments claimed by the consultants are appropriate.

3. Retainer and/or Contingency (Success) Fee Contract

Retainer and contingency fee contracts are widely used when consultants are preparing companies for sales or mergers of firms, notably in privatization operations. The remuneration of the consultant includes a retainer and a success fee, the latter being normally expressed as a percentage of the sales price of the assets.

4. Percentage Contract

These contracts are commonly used for architectural services. They may be also used for procurement and inspection agents. Percentage contracts directly relate the fees paid to the consultant to the estimated or actual project construction cost, or the cost of the goods procured or inspected. The contracts are negotiated on the basis of market norms for the services and/or estimated staff-month costs for the services, or competitively bid. It should be borne in mind that in the case of architectural or engineering services, percentage contracts implicitly lack incentive for economic design and are hence discouraged. Therefore, the use of such a contract for architectural services is recommended only if it is based on a fixed target cost and covers precisely defined services.

5. Indefinite Delivery Contract (Price Agreement)

These contracts are used when BIR need to have "on call" specialized services to provide advice on a particular activity, the extent and timing of which cannot be defined in advance. These are commonly used to retain "advisers" for implementation of complex projects, expert adjudicators for dispute resolution panels, institutional reforms, procurement advice, technical troubleshooting, and so forth, normally for a period of a year or more. The BIR and the firm agree on the unit rates to be paid for the experts, and payments are made on the basis of the time actually used.

On payments upon termination of contract

Quantum meruit means "as much as he deserves".It is an equitable doctrine, based on the concept that no one who benefits by the labor and materials of another should be unjustly enriched thereby; under these circumstances, the law implies a promise to pay a reasonable amount for the labor and materials furnished. (Black's Law Dictionary, Fifth Edition).

Recovery by quantum meruit is allowed in cases where there is no contract executed between the supplier and BIR or the contract entered into is null and void, and where BIR benefited from the work/services rendered. CacTSI

In order to provide some safeguards in the application of quantum meruit on the recovery by the consultant, the conditions set forth in COA Resolution No. 86-58 dated November 15, 1986 should be strictly allowed.

Liquidated Damages

Rules on the Applicable Period for the Performance of Consultancy Service/s

The consultant must perform the service/s procured within the period prescribed by the BIR, as specified in the Contract.

If delays are likely to be incurred, the consultant must notify the BIR in writing within fifteen (15) days before the due date of the delivery. It must state therein the cause/s and duration of the expected delay. The BIR may grant time extensions, at its discretion, if based on meritorious grounds, with or without liquidated damages.

In all cases, the request for extension should be submitted before the lapse of the original delivery date. The maximum allowable extension shall not be longer than the initial delivery period as stated in the original contract.

Liquidated Damages

Liquidated damages are damages agreed upon by the parties to a contract, to be paid in case of breach thereof. (Art. 2226 of the Civil Code of the Philippines)

Grounds for the Imposition of Liquidated Damages

When the consultant fails to satisfactorily deliver the services under the contract within the specified delivery schedule or project implementation schedule, inclusive of duly granted time extensions, if any, the supplier shall be liable for damages for the delay and shall pay the BIR the liquidated damages, not by way of penalty, for every day of delay until such goods or services are finally delivered or performed and accepted by the BIR. The BIR need not prove that it has incurred actual damages to be entitled to liquidated damages.

Amount of Liquidated Damages that may be Imposed Upon the Supplier

The consultant must pay the BIR liquidated damages, not by way of penalty, an amount equal to one-tenth (1/10) of one percent (1%) of the cost of the delayed goods or services scheduled for delivery or performance for every day of delay. The liquidated damages will be imposed until such goods or services are finally delivered or performed and accepted by the BIR.

In no case shall the sum of liquidated damages reach ten percent (10%) of the contract amount. If it does, the contract shall automatically be rescinded by the BIR, without prejudice to other courses of action and remedies open to it. The BIR may also take over the contract or award the same to a qualified supplier through negotiation. In addition to the liquidated damages, the erring supplier's performance security shall also be forfeited.

Methodology: Steps in the Imposition of Liquidated Damages

1. Consultant submits a written request to the Project Proponent/end-user for an extension of the delivery or performance period, citing the reason/s for such delay.

2. CIR/RD or his duly authorized representative, upon the recommendation of the Project Proponent/end-user, either approves or disapproves the request for extension. Such recommendation shall cover whether or not to impose the corresponding the liquidated damages.

3. If the extension is granted, the liquidated damages may or may not be imposed and the consultant is informed of this in writing. The consultant is then asked to extend the validity of the performance bond, to conform to the extended period. DAETcC

4. If, however, the request for extension is denied, the Procurement Division/Administrative Division informs in writing the consultant of such denial, and ensures that the said notice or communication is received by the latter within five (5) working days from receipt of denial.

In this case, the BIR imposes the liquidated damages in accordance with the provisions of the contract and the procedures outlined below.

5. If the consultant incurs delay and it does not request for an extension:

a. Project Proponent/end-user demands the delivery/performance of work from consultant the day immediately following the delivery date for purposes of imposing the liquidated damages agreed upon by the parties.

b. Upon delivery, the Procurement Division/Administrative Division and the Technical Inspection and Acceptance Committee record the delay in the inspection documents, noting therein the amount of the liquidated damages imposable on the supplier.

c. Upon payment, the amount of liquidated damages due is deducted from the total amount payable to the consultant, and the same shall be reflected in the Disbursement Vouchers (DVs) otherwise, if the contract provides that the liquidated damages is to be collected from securities or warranties posted by the consultant, the Project Proponent/end-user informs the official authorized to call on the securities or warranties about the delay and the corresponding liquidated damages imposable.

Incentive Bonus

No incentive bonus, in whatever form or for whatever purpose, shall be allowed. 11(Section 42.4 of IRR-A)

Subcontracting

The consultant may subcontract work relating to the project to an extent and with such specialists and entities as may be approved in advance by the BIR, provided that it submits to the BIR for prior approval the text of any proposed subcontract and any amendments thereto which may subsequently be proposed. It is suggested that the work subcontracted should not be a material or significant portion of the project, or should not exceed twenty percent (20%) of the total project cost. Notwithstanding the approval of the subcontract, the consultant should retain full responsibility for the project and for the content of all reports required. In the event that any subcontractor is found by the BIR to be incompetent or incapable in discharging assigned duties, the BIR may request the consultant to provide a replacement, with qualifications and experience acceptable to the BIR, or to resume the performance of the work itself. TSacID

All subcontracting arrangements should be disclosed at the time of bidding, and subcontractors shall be identified in the bid submitted by the bidder. For them to be allowed to do so, subcontractors should also pass the eligibility check for the portions of the contract that they will undertake.

Suspension of Work

The BIR may, by written notice of suspension to the consultant, suspend all payments to the consultant if the consultant fails to perform any of its obligations due to its own fault or due to force majeure or other circumstances beyond the control of either party, e.g.,suspension of civil works being supervised by the consultant, under the contract, including the carrying out of the services, provided that such notice of suspension:

1. Shall specify the nature of the failure; and

2. Shall request the consultant to remedy such failure within a period not exceeding thirty (30) calendar days after receipt by the consultant of such notice of suspension. TCIHSa

Participants in the Issuance of a Suspension Order

1. CIR/RD or his duly authorized representative;

2. Project Proponent/end-user;

3. DCIR RMG/ACIR FAS;

4. Procurement Division/Administrative Division; and

5. Consultant.

Methodology: Steps in the Issuance of Suspension Order

1. Project Proponent/end-user determines the existence of any of the grounds for suspension enumerated above.

2. Project Proponent/end-user drafts the suspension order for the approval of the CIR/RD.

3. Project Proponent/end-user sends the order to the consultant.

4. Prior to the expiration of the order, Project Proponent/end-user shall determine whether or not the grounds for suspension still exist and recommends termination or lifting the order: HaIESC

a. If such grounds continue to exist, or if it is no longer practicable to continue with the work, upon the approval of the CIR/RD, it shall terminate the work subject of the order or cancel the delivery of the items subject of such suspension.

b. If, however, the grounds for suspension no longer exist, and continuation of the work is practicable, upon the approval of the CIR/RD, it shall lift the order and notify the consultant to proceed with the work/delivery of items in accordance with the amendments in the contract.

Conditions for Suspension of Work by Consultant

The consultant may, by written notice of suspension, suspend work on any or all activities affected by the following:

1. Failure on the part of the BIR to deliver government-furnished equipment, resources, reports or data as stipulated in the contract;

2. Peace and order conditions that make it extremely dangerous, if not impossible, to work, provided that the consultant secures a written certification from the Philippine National Police station that has responsibility over the affected area, as confirmed by the Department of the Interior and Local Government Regional Director, that such conditions exist; or

3. Delay in the payment of consultant's claim for progress billing beyond forty five (45) calendar days from the time the consultant's claim has been certified by the BIR as being supported by complete documentation and a notice from the consultant has been received by the BIR that such payment is overdue, unless there are justifiable reasons which shall be communicated in writing to the consultants.

Resumption of Work by Consultant

The BIR can order the resumption of work if the grounds for work suspension no longer exist and the continuation of the work is practicable.

The period when work was suspended be considered in extending the contract time but only in cases when the total suspension or the suspension of activities along the critical path is not due to the fault of the consultant. In such cases, the elapsed time between the effective order suspending operation and the order to resume work shall be considered in the adjustment/extension of contract time.

Contract Termination for Default, Unlawful Acts or Insolvency

Conditions for Terminating Contract for Default

The CIR/RD may terminate a contract for default when any of the following conditions attend its implementation:

1. Outside of force majeure, the consultant fails to deliver or perform the outputs and deliverables within the period/s specified in the contract, or within any extension thereof granted by the BIR pursuant to a request made by the consultant prior to the delay;

2. As a result of force majeure, the consultant is unable to deliver or perform a material portion of the outputs and deliverables for a period of not less than sixty (60) calendar days after the consultant's receipt of the notice from the BIR stating that the circumstance of force majeure is deemed to have ceased; or AIDTSE

3. The consultant fails to perform any other obligation under the contract.

The rescission of the contract shall be accompanied by the confiscation by the BIR of the consultant's performance security. The consultant will also be recommended for blacklisting. The consultant shall be paid on a quantum meruit basis.

Conditions for Terminating a Contract by Reason of Unlawful Acts

The BIR may terminate the contract in case it is determined prima facie that the consultant has engaged, before or during the implementation of the contract, in unlawful deeds and behaviors relative to contract acquisition and implementation. Unlawful acts include, but are not limited to, the following:

1. Corrupt, fraudulent, collusive and coercive practices;

2. Drawing up or using forged documents;

3. Using adulterated materials, means or methods, or engaging in production contrary to rules of science or the trade; and

4. Any other act analogous to the foregoing.

The consultant shall be paid on a quantum meruit basis.

Conditions for Terminating a Contract by Reason of Insolvency

The BIR should terminate the contract if the consultant is declared bankrupt or insolvent as determined with finality by a court of competent jurisdiction. In this event, termination will be without compensation to the consultant, provided that such termination will not prejudice or affect any right of action or remedy which has accrued or will accrue thereafter to the BIR and/or the consultant.

Conditions for Contract Termination by Consultant

The consultant may terminate its agreement with the BIR if the latter is in material breach of its obligations pursuant to the contract and has not remedied the same within sixty (60) calendar days following its receipt of the consultant's notice specifying such breach.

The consultant must serve a written notice to BIR of its intention to terminate the contract at least thirty (30) calendar days before its intended termination.

In cases of termination, the BIR shall return to the consultant its performance security and unpaid claims.

Contract Termination for Convenience

The BIR, by written notice sent to the consultant, may terminate the contract, in whole or in part, at any time for its convenience. The notice of termination shall specify that the termination is for the BIR's convenience, the extent to which performance of the contractor under the contract is terminated, and the date upon which such termination becomes effective.

Grounds for Terminating a Contract for Convenience

Any of the following circumstances may constitute sufficient grounds to terminate a contract for convenience:

1. If physical and economic conditions have significantly changed so as to render the project no longer economically, financially or technically feasible, as determined by the CIR/RD;

2. The CIR/RD has determined the existence of conditions that make project implementation impractical and/or unnecessary, such as, but not limited to, fortuitous event/s, changes in laws and government policies;

3. Funding for the project has been withheld or reduced by higher authorities through no fault of the BIR; or

4. Any circumstance analogous to the foregoing.

Steps to be undertaken for Contract Termination

1. The Project Proponent/end-user shall verify the existence of the grounds for termination and cause the execution of a verified report upon receipt of a written report of acts or causes which may constitute any of the grounds, or upon its own initiative.

2. The CIR/RD shall issue a written notice to terminate the contract upon recommendation of the Project Proponent/end-user. The written notice shall include the following information: grounds for termination, extent of termination, action to be taken by the Consultant and special instructions to the Project Proponent/end-user unit.

3. Upon receipt of the Notice of Termination, the Consultant shall submit to the CIR/RD a verified position paper stating why the contract should not be terminated.

4. The CIR/RD shall decide whether or not to terminate the contract upon receipt of the verified position paper. He may create a Contract Termination Review Committee (CTRC) to assist in the discharge of his functions. All decisions recommended by the CTRC shall be subject to the approval of the CIR/RD. The CIR/RD shall serve a written notice to the Consultant of his decision. AICEDc

5. If the BIR terminates the contract due to default, insolvency, or for cause, it may enter into a negotiated procurement pursuant to Section 53 (c) of R.A. 9184 and its IRR-A.

6. In case of contract termination by the Consultant, Consultant must serve a written notice to the BIR of its intention to terminate the contract. The Contract is deemed terminated if it is not resumed after the receipt of such notice by the BIR.

Guidelines on Termination of Contracts provided by GPPB Resolution No. 018-2004, dated December 22, 2004.

Warranty

A warranty is an assurance that the consultant who prepared the design or undertook construction supervision for the project shall be held liable when structural defects and/or failures arise during the applicable warranty period due to faulty and/or inadequate design and specifications as well as construction supervision. It is required of a consultant for detailed engineering design and construction supervision, but may also be incorporated as a provision of the contract for other consulting services, as mutually agreed upon by the consultant and the BIR.

SECTION 6. General Procurement Activities and Timelines for the Procurement of Consulting Services. —

ANNEX A

SAMPLE FORMS FOR CONSULTING SERVICES ^*

ANNEX B

GPPB Resolutions, Circulars and Memorandum ^*

 

GENERAL FLOW CHART OF PROCEDURES FOR THE PROCUREMENT OF CONSULTING SERVICES (QUALITY BASED EVALUATION)

 

 

PERIOD OF ACTION OF PROCUREMENT ACTIVITIES

 

 

			EARLIEST POSSIBLE TIME
Stage	Activities	Deadline	Goods	Civil Works	Consulting
					Services
1	Advertisement/posting		7 cd	7 cd	7 cd
	of IAEB
2	Letter of Intent	Within 7 cd from the	n/a	7 cd	7 cd
		last day of posting
3	Eligibility Check for civil		Refer to	1 cd	3 cd (1 cd for
	works and consulting		stage 6		eligibility, 1 cd
	services/Shortlisting for				for shortlisting
	consulting services				and 1 cd for
					notification)
	Issuance and availability	Available for at least	Refer to	7 cd	7 cd
	of bidding documents	7 cd from the date	stage 1
		of the issuance
4	Pre-bid conference	12 days before	1 cd (12 days	1 cd (12 days	1 cd (12 days
	(Note: for goods, the	the deadline of	before the	before the	before the
	pre-bid conference is	submission of	submission	submission	submission
	conducted prior to	bids	of bids)	of bids)	of bids)
	eligibility check.)
	Request for clarification	10 days before
		deadline of
		submission
	Supplemental/Bid bulletin	7 days before
		the deadline of
		submission
		of bids
6	Submission and Opening		1 cd	1 cd	1 cd
	of Bids
7	Bid Evaluation		1 cd	1 cd	1 cd + 1 cd
					for approval
					of ranking
8	Notification for Negotiation		n/a	n/a	1 cd
9	Negotiation		n/a	n/a	1 cd
10	Post Qualification		1 cd	1 cd	1 cd
11	Approval of		2 cd (1 cd	2 cd (1 cd	2 cd (1 cd
	Resolution/Issuance of		for BAC	for BAC	for BAC
	Notice of Award		Resolution	Resolution	Resolution
			and 1 cd	and 1 cd	and 1 cd
			for issuance	for issuance	for issuance
			of NOA)	of NOA)	of NOA)
12	Contract Preparation		2 cd (1 cd	2 cd (1 cd	2 cd (1 cd
	and Signing		for contract	for contract	for contract
			preparation	preparation	preparation
			and 1 cd	and 1 cd	and 1 cd
			for contract	for contract	for contract
			signing)	signing)	signing)
13	Approval of Contract		1 cd	1 cd	1 cd
	by Higher Authority
14	Issuance of Notice		1 cd	1 cd	1 cd
	to Proceed
Total Estimated Earliest Possible Time	28 cd	43 cd	48 cd

 

NOTE: The procurement process from the opening of bids up to the award of contract shall not exceed three (3) months, or a shorter period to be determined by the procuring entity concerned. All members of the BAC shall be on a "jury duty" type of assignment until the Notice of Award is issued by the head of procuring entity in order to complete the entire procurement process at the earliest possible time.

 

Footnotes

1. For FAPs, reference to the standard bidding documents for the project should be made to determine the applicability of the ABC. cSaADC

2. Reimbursable cost contracts are acceptable to IFIs only in exceptional circumstances such as conditions of high risk or where costs cannot be determined in advanced with sufficient accuracy. Such contracts should include appropriate incentives to limit costs.

3. Under IFI guidelines, the Bureau of Internal Revenue should not require consultants to form associations with any specific firm or group of firms, but may encourage association with qualified national firms.

4. Generally, FAPs do not utilize the eligibility check system of the GOP, unless so required by the pertinent IFI/bilateral lending agency.

5. As short listing methodologies may vary for specific FAPs, reference should be made to the appropriate standard bidding documents for the project.

6. The steps may vary for FAPs, and so reference should be made to the appropriate standard bidding documents for the project.

7. The steps may vary for FAPs, and so reference should be made to the appropriate standard bidding documents for the project.

8. For FAPs, reference should be made to the appropriate standard bidding documents for the project in order to determine the applicable amount and form of the performance security.

9. For FAPs, to adjust the remuneration for foreign and/or local inflation, a price adjustment provision should be included in the contract if its duration is expected to exceed eighteen (18) months. Contracts of shorter duration may include a provision for price adjustment when local or foreign inflation is expected to be high and unpredictable.

10. For FAPs, RFPs should clearly state that firms may express the price for their services, in any fully convertible currency. If the consultants wish to express the price as a sum of amounts in different foreign currencies, they may do so, provided the proposal includes no more than three (3) foreign currencies. The Bureau of Internal Revenue may require consultants to state the portion of the price representing costs in the currency of the Bureau of Internal Revenue's country. Payment under the contract should be made in the currency or currencies in which the price is expressed in the proposal. CDaSAE

11. For FAPs, any allowable incentive bonus would be provided in the standard bidding documents for the project. However, an incentive bonus is generally allowed only when it would be of benefit to the Bureau of Internal Revenue. The option to grant incentive bonus is given by the IFIs to the Bureau of Internal Revenue.

n Note from the Publisher: Copied verbatim from the official document.