Procurement Manual for LGUs - Infrastructure Projects

7/28/2019 Procurement Manual for LGUs - Infrastructure Projects

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Manual of Procedures for the Procurement of Infrastructure Projectsfor Local Government Units

TABLE OF CONTENTS

ABBREVIATIONS AND ACRONYMS ............................ VII. INTRODUCTION...................................................2 II. PREPARING FOR THE PROCUREMENT OFINFRASTRUCTURE PROJECTS......................................4PROCUREMENT PLANNING..........................................5

1. DETAILED ENGINEERING......................................................... 52. TECHNICAL SPECIFICATIONS ................................................... 73. THE APPROVED BUDGET FOR THE CONTRACT(ABC) .................. 8

3.1. Factors to be Considered in Determining the ABC...........................................8PREPARING THE BIDDING DOCUMENTS .....................9

1. BIDDING DOCUMENTS ............................................................ 92. CONTENTS OF BIDDING DOCUMENTS ....................................... 104. TIMELINE FOR THE PREPARATION OF THE BIDDING DOCUMENTS .... 105. PROCEDURE FOR THE PREPARATION OF THE BIDDING

DOCUMENTS ...................................................................... 106. VARIOUS TYPES AND SIZES OF CONTRACTS THAT MAY BE

PROVIDED IN THE BIDDING DOCUMENTS .................................. 11CONDUCT OF THE PRE-PROCUREMENTCONFERENCE ............................................................12

1. PRE-PROCUREMENT CONFERENCE............................................ 122. PRE-PROCUREMENT CONFERENCE AS A LEGAL REQUIREMENT......... 123. TIME FORPRE-PROCUREMENT CONFERENCE .............................. 134. PARTICIPANTS IN A PRE-PROCUREMENT CONFERENCE ................. 135. OBJECTIVES OF A PRE-PROCUREMENT CONFERENCE .................... 13

III. PROCEDURAL STEPS FOR THE PROCUREMENTOF INFRASTRUCTURE PROJECTS ..............................16COMPETITIVE BIDDING............................................16

1.

ADVERTISE AND

POST AN

IAEB

(STEP

1) ................................ 17

1.1. Advertisement and Posting of IAEB as a Legal Requirement .......................... 171.2. Advertisement of IAEB in a Newspaper of General Nationwide Circulation ....... 171.3. Internet Posting of IAEB ........................................................................... 181.4. Posting in Conspicuous Place ..................................................................... 181.5. Contents of IAEB ..................................................................................... 181.6. Procedure for Advertisement and Posting of IAEB......................................... 19


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2. ACCEPT LOIS,ISSUE ELIGIBILITY DOCUMENTS, AND CONDUCTELIGIBILITY CHECK (STEP 2) ................................................ 202.1. Submission of Letters of Intent and Applications for Eligibility........................ 202.2. Lone Submission of Letter of Intent............................................................ 202.3. No Submission of Letter of Intent...............................................................202.4. Eligibility Check ....................................................................................... 212.5. Eligible Bidders in the Procurement of Infrastructure Projects ........................ 212.6. Minimum Eligibility Requirements that must be submitted in the

Eligibility Envelope................................................................................... 232.7. Submission of the Eligibility Envelope ......................................................... 262.8. What happens if only one bidder submits its eligibility and bid

envelopes?.............................................................................................. 262.9. Participants in the Receipt and Opening of the Eligibility Envelopes ................ 262.10.Procedure for Receipt and Opening of Eligibility Envelopes ............................ 272.11.What happens if only one prospective bidder passes eligibility check?............. 282.12.Procedure in case of Request of Reconsideration and Protest......................... 282.13.Procedure in case no Prospective Bidder is found to be Eligible ...................... 29

3. ISSUE THE BIDDING DOCUMENTS (STEP 3)............................... 293.1. Availability and Issuance of the Bidding Documents ...................................293.2. Rules for Sale of Bidding Documents ..........................................................29

4. CALL A PRE-BID CONFERENCE AND, IF NECESSARY, ISSUESUPPLEMENTAL/BID BULLETINS (STEP 4) ............................... 314.1. Pre-Bid Conference .................................................................................. 314.2. Pre-Bid Conference as a Legal Requirement ................................................ 324.3. Participants in the Pre-Bid Conference ........................................................ 324.4. Procedure for the Pre-Bid Conference ......................................................... 334.5. Supplemental/Bid Bulletin......................................................................... 33

5. RECEIVE AND OPEN THE TECHNICAL AND FINANCIAL ENVELOPES(STEP 5) .......................................................................... 345.1. Definition of Bid .................................................................................... 345.2. Contents of the Technical Proposal............................................................. 345.3. Contents of the Financial Proposal.............................................................. 365.4. When the Bids are to be Submitted............................................................ 365.5. Lone Submission of Bid............................................................................. 365.6. No Submission of Bids .............................................................................. 375.7. Procedures in the Receipt, Opening and Preliminary Examination of Bids ........ 375.8. Rule on Modification and Withdrawal of Bids................................................ 385.9. Bid Security ............................................................................................395.10.Request for Reconsideration...................................................................... 41

6. EVALUATE THE BIDS (STEP 6) ............................................... 416.1. Purpose of Bid Evaluation ......................................................................... 416.2. Timeline for Bid Evaluation........................................................................ 416.3. Participants in the Bid Evaluation Process ................................................... 426.4. Procedure for Bid Evaluation ..................................................................... 426.5. Procedure in case No Bid Complies with all Bid Requirements........................ 44

7. POST-QUALIFY (STEP 7) ...................................................... 447.1. Nature and Purpose of Post-qualification..................................................... 44


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7.2. Timeline for the conduct of Post-qualification............................................... 447.3. Procedure for Post-qualification ................................................................. 457.4. Procedure if the Bidder with the LCB Fails Post-qualification .......................... 477.5. Procedure if all Bidders fail Post-qualification............................................... 47

8. AWARD THE CONTRACT (STEP 8) ........................................... 478.1. Rule on Contract Award ............................................................................ 478.2. Timeline for Contract Award ...................................................................... 488.3. Procedure for Award of Contract ................................................................ 488.4. Legal Effects of Refusal of the Bidder to Accept Award..................................488.5. Performance Security ............................................................................... 49

9. HAVE THE CONTRACT SIGNED AND APPROVED AND ISSUE THENOTICE TO PROCEED (STEP 9) .............................................. 519.1. Contract Signing and Approval...................................................................519.2. Documents that Form Part of the Contract .................................................. 519.3. Procedure in Contract Signing and Approval ................................................529.4. Issuance of the Notice to Proceed .............................................................. 529.5. Effectivity of Contract............................................................................... 539.6. Effect of Failure of the LCRB or the SCRB to Post the Performance

Security and/or Sign the Contract within the Prescribed Period...................... 5310. RESERVATION CLAUSE.......................................................... 53

10.1.Exercise of the Reservation Clause............................................................. 54THE ALTERNATIVE METHODS FOR THEPROCUREMENT OF INFRASTRUCTURE PROJECTS......57

1. NEGOTIATED PROCUREMENT .................................................. 581.1. Definition................................................................................................ 581.2. Conditions for Negotiated Procurement....................................................... 581.3. Bona fide Contractors Qualified for Negotiations .......................................... 591.4. Procedure for Negotiated Procurement ....................................................... 591.5. Bid and Performance Securities ................................................................. 61

IV. CONTRACT IMPLEMENTATION FOR THEPROCUREMENT OF INFRASTRUCTURE PROJECTS......63

1. LEGAL REFERENCE............................................................... 631.1. Coverage of Contract Implementation ........................................................ 631.2. Subcontracting ........................................................................................ 631.3. Inspection and Tests ................................................................................ 641.4. Dayworks................................................................................................ 641.5. The Use of Accredited Testing Laboratories ................................................. 651.6. Evaluation of Contractors Performance....................................................... 651.7. Measurement of Works............................................................................. 661.8. Impact of the Infrastructure Project on Traffic and Adjoining Properties .......... 661.9. Responsibilities of the contractor as far as the project site is concerned.......... 671.10.Turn-over of excess, used, unused and/or reusable materials........................ 67

2. CONTRACT PRICE AND PAYMENT............................................. 672.1. Legal Reference....................................................................................... 672.2. Fixed Contract Prices................................................................................ 67


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2.3. Denominations of Contract Price ................................................................ 682.4. Method and Conditions of Payment ............................................................ 682.5. Advance Payment .................................................................................... 692.6. Progress Payment .................................................................................... 692.7. Retention Money...................................................................................... 692.8. Final Payment ......................................................................................... 70

3. VARIATION ORDERS ............................................................ 703.1. Legal Reference....................................................................................... 703.2. Definition of Variation Order ................................................................... 703.3. Conditions for the Issuance of a Variation Order .......................................... 713.4. Limitation in the Amount of Variation Order ................................................ 713.5. Price Adjustments due to a Variation .......................................................... 723.6. Parties involved in the issuance of a Variation Order..................................... 723.7. Procedure in the Issuance of a Variation Order ............................................ 72

4. SUSPENSION OF WORK ........................................................ 734.1. Legal Reference....................................................................................... 734.2. Grounds for the Suspension of Work by the LGU.......................................... 734.3. Grounds for the Suspension of Work by the Contractor................................. 744.4. Suspension of Work may be Considered in the Extension of Time................... 744.5. Price Adjustment as a Result of work suspensions........................................ 754.6. Resumption of Work................................................................................. 754.7. Parties involved in the issuance of a Suspension Order ................................. 754.8. Procedure in the Issuance of Suspension Order ........................................... 75

5. CONTRACT TIME EXTENSION.................................................. 755.1. Legal Reference....................................................................................... 755.2. Conditions for Contract Extension .............................................................. 765.3. Procedure in Handling a Request for Extension ............................................ 77

6. DELAYS IN WORK COMPLETION AND LIQUIDATED DAMAGES ......... 776.1.

Legal Reference....................................................................................... 77

6.2. Period for Completion of Work ................................................................... 776.3. Liquidated Damages................................................................................. 78

7. CONTRACT TERMINATION FOR DEFAULT, UNLAWFUL ACTS,INSOLVENCY ORCONVENIENCE............................................... 797.1. Legal Reference....................................................................................... 797.2. Termination of Contract for Default ............................................................ 797.3. Termination of Contract for Unlawful Acts ................................................... 807.4. Termination of Contract by Reason of Insolvency ......................................... 807.5. Termination of Contract at the Instance of the Contractor............................. 807.6. Termination of Contract for Convenience .................................................... 81

8. CONTRACT COMPLETION ....................................................... 818.1. Legal Reference....................................................................................... 818.2. Preliminary Inspection upon Contract Completion ........................................ 81

9. WARRANTY........................................................................ 819.1. Legal Reference....................................................................................... 819.2. Purpose of Warranty ................................................................................ 829.3. Defects Liability Period ............................................................................. 82


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9.4. Forms of Warranty Security....................................................................... 829.5. Warranty Period....................................................................................... 839.6. Accountable Parties in case of Defects/Failures during the Warranty

Period .................................................................................................... 83V. ANNEXES ...........................................................85ANNEX A...................................................................86ANNEX B ...................................................................94


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ABBREVIATIONS AND ACRONYMS

ABC Approved Budget for the Contract

ABM Agency Budget Matrix

AFP Armed Forces of the Philippines

APP Annual Procurement Plan

ARCC Allowable Range for Contract Cost

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

CARI Contractors All-Risk Insurance

CDA Cooperatives Development Authority

COA Commission on Audit

CPES Contractors Performance Evaluation System

CSC Civil Service Commission

DBM Department of Budget and Management

DPWH Department of Public Works and Highways

DOST Department of Science and Technology

DTI Department of Trade and Industry

EFPS Electronic Filing and Payment System

E.O. Executive Order

FAP Foreign Assisted Project

GAA General Appropriations Act

GCC General Conditions of Contract

GFI Government Financial Institution

GOCC Government-owned and/or controlled corporation

GPPB Government Procurement Policy Board

GPPB-TSO GPPB Technical Support Office

GPRA Government Procurement Reform Act


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IAEB Invitation to Apply for Eligibility and to Bid

IFI International Financing Institution

IRR Implementing Rules and Regulations

IRR-A Implementing Rules and Regulations Part A of R.A. 9184

ISO International Standards Organization

ITB Instructions to Bidders

IUs Implementing Units

JVA Joint Venture Agreement

LCB Lowest Calculated Bid

LCE Local Chief Executive

LCRB Lowest Calculated Responsive Bid (this shall have the same meaning asLowest Evaluated and Responsive Bid [LERB] for IFIs)

LGU Local Government Unit

LOI Letter of Intent

NEDA National Economic and Development Authority

NFCC Net Financial Contracting Capacity

NGA National Government Agency

NSO National Statistics Office

NTP Notice to Proceed

ObR Obligational Request

PAG-ASA Philippine Atmospheric, Geophysical and Astronomical Services Administration

PERT/CPM Project Evaluation Review Technique/ Critical Path Method

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

R.A. Republic Act

R.A. 9184 Republic Act No. 9184, otherwise known as the Government ProcurementReform Act

SARO Special Allotment Release Order


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SBDs Standard Bidding Documents

SCC Special Conditions of Contract

SCRB Single Calculated and Responsive Bid

SEC Securities and Exchange Commission

SOW Scope of Work

SPA Special Power of Attorney

SUCs State Universities and Colleges

TWG Technical Working Group


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Manual of Procedures for the Procurement of Infrastructure Projects

I. IntroductionScope of Volume 3

This Manual seeks to provide the procurement officials of the various LGUs with clear, concise,and accurate information on the public procurement of infrastructure projects, bydiscussing the steps that need to be taken to effect such procurement in the mannerprescribed by R.A. 9184, otherwise known as the Government Procurement Reform Act, andits IRR-A. It also discusses important procurement issues that may confront local governmentofficials and personnel in all stages of infrastructure project procurement, from thepreparation of bid documents, to the actual bidding activity, monitoring of contractimplementation and the final payment to the contractor.

This Manual is the simplified and customized version of Volume III of the Generic ProcurementManual, which focuses on public procurement of infrastructure projects.

Infrastructure projects are undertakings to construct, improve, rehabilitate, demolish,repair, restore, or maintain roads and bridges, railways, airports, seaports, communicationfacilities, civil works components of information technology projects. It also encompassessuch infrastructures such 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 otherrelated construction projects of the government. Under R.A. 9184 and its IRR-A, the terminfrastructure projects has the same meaning as and is used interchangeably with the termcivil works. (IRR-A Section 5 [n])


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II. Preparing for the Procurement of InfrastructureProjects

This Section mainly focuses on preparing for the procurement of infrastructure projects ofLGUs. The reader of this section should also refer to Volume I of this Manual which has

detailed discussions on Procurement Planning as a general concern for all kinds of governmentprocurement.

Preparing for procurement basically involves three (3) activities:

Procurement Planning

Procurement planning entails ensuring that detailed engineering investigations are conducted,plans for procurement are linked to budgets, preparing the PPMP and consolidating all PPMPsinto the APP. Formulating the PPMP involves identifying the procurement projectrequirements, writing the technical specifications, determining the ABC, identifying theschedule of milestone activities, and determining the method of procurement.

Preparation of the Bidding Documents

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

Pre-procurement Conference

The pre-procurement conference is the forum where all officials of the LGU involved in theproject meet to discuss all aspects of the said project to determine the readiness of the LGUto undertake the procurement. The conference focuses on the technical specifications, theABC, the appropriateness and applicability of the recommended method of procurement, andthe availability of pertinent budget releases, among others.


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Procurement Planning

The purpose of procurement planning is for the LGU to schedule its procurement activities inadvance, consistent with its approved budget and its target date of implementation.

For infrastructure projects, the APP shall consider the appropriate timing/phasing of related

project activities such as engineering design and acquisition of ROW to reduce/lower projectcosts, among others.

Planning of the procurement of infrastructure projects shall be in accordance with theprinciples of government procurement as provided for under Section 3, Volume I of thisManual.

1. Detailed EngineeringNo bidding and award of contract shall be made unless the detailed engineeringinvestigations, surveys and designs including the acquisition of the ROW for the project havebeen sufficiently carried out. These investigations must then be duly approved in accordancewith the standards and specifications prescribed by the LCE concerned or his duly authorized

representative, and in accordance with the provisions of Annex A of IRR-A. The onlyexception to this are design and build schemes wherein bidders are allowed to submit detailedengineering designs as part of their bids.1(IRR-A Section 17.6) Prior to the conduct of thedetailed engineering investigations, surveys and designs, the implementing office should drawa feasibility or preliminary engineering study to establish the technical viability of the projectand its conformance to land use and zoning guidelines prescribed by existing laws.

The findings contained in the feasibility study, if undertaken for the project, should beexamined. If, in the course of this exercise, it is found that changes would be desirable in thedesign standards of principal features, as proposed, specific recommendations for suchchanges should be supported by detailed justifications, including their effects on the cost,and, if necessary, the economic justification.

After the acceptance and approval of the feasibility study, the detailed engineeringinvestigations shall be conducted.

A schedule of detailed engineering activities shall include the following:

x Surveyx Site Investigationx Soils and Foundation Investigationx ConstructionMaterials Investigationx Preparation of Design Plans and Design Analysisx Preparation of TechnicalSpecificationsx Preparation of Quantity and Cost Estimatesx Preparation of Program of Work

1 See Annex A on the Guidelines for the Procurement and Implementation of Contracts for Design and BuildInfrastructure Projects.


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x Preparation of Proposed Construction Schedule [and estimated Cash Flow for projectswith Schedule over six (6) Months]

x Preparation of Site or Right-of-Way Plans including Schedule of Acquisitionx Preparation of Utility Relocation Planx Preparation and Submission of Design Reportx Environmental Impact Statement for critical project or project in a critical area, as

defined by the DENR

x Preparation of minimum requirements for a Construction Safety and Health Programfor the project being considered

x Preparation of Bidding Documents

Furthermore, work under detailed engineering shall include, but not necessarily be limited to,the following:

1. Design Standards Design standards shall be in accordance with appropriatestandards and accepted detailed engineering practiceadopted by the LGU concerned.Design standards for structures shall take into account, among other things, theseismicity of the area to determine the optimum safety of structures and to minimizepossible earthquake damage.

2. Field Surveys and Investigations Necessary field surveys and investigations whichmay include aerial, hydrographic, topographic, hydrologic, sub-surface, monumentingand other surveys shall be carried out in accordance with the design guidelines,criteria and standards adopted by the LGU concerned. All survey and investigationworks shall be prepared in a manner satisfactory to carry out accurate design andproduction of plans.

3. Contract Plans The following plans shall be prepared for each construction contractin accordance with guidelines and standards adopted by the LGU concerned,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 LCE.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 ormethods of construction, measurement and payment under each contract, which arenot covered by standard construction and material specifications adopted by the LGUconcerned.

6. Unit Prices These shall be prepared for each contract using costs based onreasonable approved current prices as projected over the proposed constructionperiod, divided into local and foreign exchange costs, as the case may be.


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7. Approved Budget for the Contract The ABC to be bid shall be prepared by official(s)duly designated by the LCE concerned or by his duly authorized official. It shall beapproved by the LCE or his duly designated official.

Since the contracts are fixed-price contracts, the ABC to be bid must provide for theprojected movements in construction costs over the construction period. It thus hasto consider the projected inflation and foreign exchange rates as issued by the DBCCor other authorized agencies (NSO, BSP, others), as well as the cost of money. Itmust also show the local and foreign currency requirements, as the case may be.

The ABC to be bid must also specify for each major work item, such as earthwork,roadwork, and massive concreting. It must also specify the components forequipment rentals, fuel, labor, materials and overhead, including the cost of theapproved construction safety and health program and security premiums, taxes,profit, cost of money, inflation, contingencies, etc.

For infrastructure contract packages projects, the ABC shall cover the individual costcomponents 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 orLGU guidelines. (IRR-A Section 7.1)

8. Bidding documents as provided for in IRR-A.In the preparation of the Bidding Documents, the LGU must estimate the actualnumber of working days required to complete the project through a PERT/CPManalysis of the project activities and corrected for holidays and weekends. Theagency must also estimate the number of rainy/unworkable days consideredunfavorable for the prosecution of the works at the site. These considerations mustbe indicated in the bidding documents, incorporated in the corrected actual number ofworking days determined above, and made the basis of the total contract time. Theestimated number of rainy/unworkable days considered unfavorable for theprosecution of the works at the site shall be made known before the date of biddingthrough the ITB for the purpose of guiding both the government and winningcontractors in the request for an approval of time extensions. Without the estimatednumber of rainy/unworkable days established before the bidding date and known toall participating bidders, the contract time is presumed to have excluded theunfavorable conditions. The number of rainy/unworkable days may be taken from therecords of PAGASA.

Likewise, the bidding documents should specify the type of project and thecorresponding warranty period required by the LGU.

9. Program of Work - The program of work must include, among other things, estimatesof the work, items, quantities and costs and a PERT/CPM network of the projectactivities. The program of work must cover at least a usable portion of the project andno 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 orordinary conditions. However, under emergency or extraordinary cases involving majorcalamities and disasters, as declared by the President of the Philippines or the LocalSanggunian, where time is of the essence to save lives and properties and restore damaged

infrastructures, detailed engineering works shall be conducted in accordance with theguidelines and procedures, as prescribed by the head of the appropriate infrastructure agencyand approved by the Infrastructure Committee of the NEDA Board, to enable quick responseto said cases, while maintaining the safety and integrity of the structure.

2. Technical SpecificationsThe following are considered in setting the standards and technical specifications:


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1. Standards and technical specifications quoted in bidding documents should promote thebroadest possible competition, while assuring the critical performance or otherrequirements for the works under procurement;

2. As far as possible, the LGU should specify internationally accepted standards such asthose issued by the International Standards Organization with which the equipment ormaterials or workmanship should comply, except that where such international standardsare unavailable or are inappropriate, national standards may be specified; and

3. In all cases, the bidding documents should state that equipment, material or workmanshipmeeting other standards which promise at least substantial equivalent, should also beaccepted.

3. The Approved Budget for the Contract (ABC)The ABC is the budget for the contract duly approved by the LCE, based on the annual orsupplemental budget approved by the Sanggunian.

The ABC may be equal to or less than the appropriation for the project/activity contained inthe approved annual/supplemental budget.2 and will be the ceiling of bid prices that shall besubmitted by prospective bidders. (R.A. 9184 Section 31) It is also the amount of referencein computing the amount of bid security and performance security that shall be posted by the

bidder.

3.1. Factors to be Considered in Determining the ABCIn determining the ABC, the end-user unit, with the assistance of the TWG (whennecessary), may consider the different components, namely:

1. The cost or market price of the product or service itself;2. Incidental expenses like taxes, training costs if necessary, and cost of inspection;3. The cost of money, to account for LGUs usually buying on credit terms;4. Inflationary factor, since the planning phase is usually done one year ahead of the

actual procurement date; and

5. The cost for securing all types and forms of securities other than cash. (e.g.premiums for surety bond, bank fees and other charges to be incurred by thebidder in obtaining bid, performance and warranty securities)

If the project or contract has a foreign component, it is also best to include a currencyvaluation adjustment factor, in order to hedge against any foreign exchange ratefluctuations between the planning phase and the actual procurement date. Todetermine the factor to be used, the PMO or end-user unit may request for guidancefrom the BSP, or refer to BSP forecasts, if available.

If the sum of the different cost components is lower than the appropriation for theprocurement, then the ABC should be equal to the sum of the cost components. If theresulting 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 notexceed the appropriation.

2 For FAPs, reference to the standard bidding documents for the project should be made to determine the applicability ofthe ABC.


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The PBDs issued by the GPPB are for the mandatory use of LGUs. Hence, the use of old formswhich are precursors of the PBDs should no longer be used in their procurement activities.3

2. Contents of Bidding DocumentsThe PBDs should contain the following:

a. IAEB;b. Eligibility Documentsc. Eligibility Data Sheetd. ITB;e. BDS;f. GCC;g. SCC;h. SOWi. Drawings

j. Bill of Quantities; andk. Forms and Qualification Information;

The specifications and other terms in the bidding documents reflect only the minimumrequirements or specifications required so that the bidder may be properly guided in clear andunambiguous terms on specific needs of the LGU in its procurement of infrastructure projects.A bidder can always submit a superior offer than that specified in the bidding documents. Hisbid, however, should not be given any premium or bonus during bid evaluation. (IRR-ASection 17.4) This rule is based on the nature of the procedure used to evaluate thetechnical proposals a pass/fail method - such that the presence or absence of the

technical requirements is the sole basis for determining technical compliance. After havingestablished compliance with the technical specifications, the next factor to consider wouldthen be the price or financial bid.

4. Timeline for the Preparation of the Bidding DocumentsThe bidding documents must be prepared in time for presentation at the pre-procurementconference. These documents must be finalized before the advertisement and/or posting ofthe IAEB.

5. Procedure for the Preparation of the Bidding DocumentsThe bidding documents are prepared following the PBDs and must contain the followinginformation:

1. ABC and source of funds;

3 These PBDs were issued in Two Editions; the first was approved by the GPPB on August 20, 2004 through Resolution13-2004 and the second, that includes material revisions, was approved by the GPPB on May 26, 2005 throughResolution 10-2005. The mandatory use of the PBDs Edition II was required among all government agencies on July 1,2005.


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2. Date, time and place of the pre-bid conference (where applicable), submission of bidsand opening of bids;

3. Eligibility requirements;4. ITB, including criteria for eligibility, bid evaluation and post-qualification, submission of

bids, and opening of bids;

5. SOW;6. Form of Bid, Price Form, and Bill of Quantities;7. Delivery Time or Completion Schedule;8. Form, amount and validity period of Bid Security;9. Form and amount of Performance Security and Warranty; and10.Form of Contract, GCC and SCC.

The LGU may require additional documentary requirements or specifications, where applicableand necessary for prospective bidders to prepare their respective bids. The biddingdocuments, as amended, shall subsequently form an integral part of the contract. (IRR-ASection 17.3) Bidding documents may only be modified upon issuance of Supplemental/BidBulletins.

6. Various Types and Sizes of Contracts that may beprovided in the Bidding Documents

The bidding documents should clearly state the type of contract to be entered into andcontain the proposed contract provisions appropriate therefor. The most common types ofcontracts provide for payments on the basis of a lump sum, unit price, or combinationsthereof.4

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 awardedfor the supply and/or installation of different items of equipment and plant (plant refersto 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 beinvited under alternative contract options that would attract the interest of both small andlarge firms, which could be allowed, at their option, to bid for individual contracts (slices)or for a group of similar contracts (package). All bids and combinations of bids should bereceived by the same deadline and opened and evaluated simultaneously so as todetermine the bid or combination of bids offering the lowest calculated cost to the LGU.

3. In certain cases, the LGU may require a turnkey contract under which the design and

engineering, the supply and installation of equipment, and the construction of a completefacility or works are provided under one (1) contract. Alternatively, the LGU may remainresponsible for the design and engineering, and invite bids for a single responsibilitycontract for the supply and installation of all goods and works required for the project

4 Reimbursable cost contracts are acceptable to IFIs only in exceptional circumstances such as conditions of high risk orwhere costs cannot be determined in advanced with sufficient accuracy. Such contracts should include appropriateincentives to limit costs.


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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.

Conduct of the Pre-Procurement Conference

1. Pre-procurement ConferenceThe pre-procurement conference is the forum called by the BAC where all officials involved inthe procurement meet and discuss all aspects of a specific procurement activity. It isconducted prior to the advertisement or issuance of the IAEB, preferably at least seven (7)days, to give the technical staff sufficient time to incorporate the necessary changes,amendments or revisions thereto. The following, among others, are the different aspects ofprocurement discussed during the pre-procurement conference:

1. SOW;2. ABC;3. Applicability and appropriateness of the recommended method of procurement and the

related milestones;

4. Bidding documents, and5. Availability of the pertinent budget release for the project.

2. Pre-procurement Conference as a Legal RequirementFor projects involving an ABC amounting to more than Five Million Pesos (P 5,000,000.00), apre-procurement conference is conducted to determine the readiness of the LGU to procureinfrastructure projects in terms of the legal, technical and financial requirements. Morespecifically, it ensures that the procurement will proceed in accordance with the PPMP andAPP, confirms the availability of appropriations and programmed budget for the contract, andreviews all relevant documents in relation to their adherence to the law. (IRR-A Section 20)

Amount of ABC Pre-procurement Conference

More than Five Million Pesos(P5,000,000.00)

Mandatory

Five Million Pesos (P5,000,000.00) andbelow

Optional

Even when the ABC of the infrastructure project amounts to P 5,000,000.00 and below, theBAC is encouraged to conduct a pre-procurement conference if the circumstances, like thecomplexity of the technical specifications, warrant the holding of such a conference before theLGU proceeds with the procurement.

BAC Members may be held administratively liable for failure to hold a Pre-procurementconference in contracts where it is required by law.

If the BAC members fail to conduct the required Pre-procurement Conference for theprocurement of infrastructure projects with an ABC of more amounting to more than FiveMillion Pesos (P 5,000,000.00), they may be held administratively liable for neglect of dutyunder the Civil Service Rules (Presidential Decree 807) without prejudice to other civil andcriminal liabilities under applicable laws. (See discussions on administrative liabilities andsanctions in Section 7 of Volume 1 of the Manual)


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3. Time for Pre-procurement ConferenceThe pre-procurement conference must be conducted prior to the advertisement or issuance ofthe IAEB. (IRR-A Section 20.1)

Practical Tip

LGUs should hold the pre-procurement conference at least seven (7) calendar days prior topublication or issuance of the IAEB to give the technical staff sufficient time to incorporatethe necessary changes, amendments or revisions thereto.

4. Participants in a Pre-procurement ConferenceThe participants in the pre-procurement conference are:

1. The BAC;2.

The BAC Secretariat;

3. Representatives of end-user unit/s;4. The members of the TWG/s and consultants hired by the LGU who prepared the technical

specifications, scope of work, bidding documents and the draft advertisement, as the casemay be, for the procurement at hand; and

5. Other officials concerned, as may be required.

5. Objectives of a Pre-procurement ConferenceA pre-procurement conference should: (IRR-A Section 20.1)

1. Ensure that the procurement is in accordance with the PPMP and 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);

It is not required that there should already be an ObR as a pre-condition

before an LGU may conduct public bidding for the procurement ofinfrastructure projects. The ObR, however, should be issued before awardof the contract.

4. Determine the state of readiness of the procurement at hand by checking, among othersthe following:

a. The availability of the ROW;b. The detailed engineering investigations, surveys and designs;c. The ownership of affected properties; andd. Adherence of the bidding documents, technical plans, specifications, and scope of

work to relevant general procurement guidelines.


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

6. Review, modify and agree on the criteria for the evaluation of bids, and ensure that thesaid 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 theevaluation 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 ingetting the correct calculated price;

7. Clarify that the specifications and other terms in the bidding documents are minimumrequirements and that the bidder may submit an offer which provides for superiorspecifications, better terms and conditions to the government at no extra cost, withoutany bonus, credit or premium in the bid evaluation. For example, the bidding documentsshall emphasize that the bidder shall provide information on the minimum equipmentrequired for the project with the corresponding engine numbers, chassis numbersand/or serial numbers. Additionally, the bidding documents shall clearly state theminimum required experiences of the bidders personnel, such as project managers,project engineers, material engineers and foreman; and

8. Reiterate and emphasize the no contact rule during the bid evaluation process, and theapplicable sanctions andpenalties, as well as agree on measures to ensure compliancewith the foregoing;

9. Ensure that the requirements to be procured are in accordance with the ABC;10.Finalize and approve the IAEB.


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III. Procedural Steps for the Procurement ofInfrastructure Projects

Competitive Bidding

Competitive Bidding as a General Mode of Procurement

Competitive or Public Bidding is a method of procurement that is open to any interested andqualified party. All procurement should be done through Public Bidding except in caseswherein the LGU is allowed to resort to alternative methods of procurement as provided inRule XVI of the IRR-A. (IRR-A Section 10)

The process of Competitive Bidding treats bidders equitably and provides fair grounds forcompetition among themselves, thereby ensuring that no single bidder significantly influencesthe outcome of the bidding. Competition among proponents will urge them to offer morebeneficial terms to the government. Hence, the alternative methods of procurement mustonly be resorted to when competitive bidding is not a feasible option, in accordance with theconditions laid down in R.A. 9184.

Competitive Bidding involves the following processes:

x Advertisement/Posting of IAEBx Submission of LOIx Receipt of Eligibility Documentsx Eligibility checkx Issuance and Availability of Bid Documentsx Pre-bid Conferencex Submission, Opening and Examination of Bidsx Evaluation of Bidsx Post-qualification, andx Award of contract.

LGUs should have a well-planned procurement program so that they will have sufficient timeto conduct Public Bidding and procure the required infrastructure project for its operationspromptly within a reasonable time.


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1. Advertise and Post an IAEB (Step 1)1.1. Advertisement and Posting of IAEB as a LegalRequirement

The IAEB serves as the notice to the public and all interested parties of theprocurement and bidding opportunities of the LGU. The advertisement and theposting of the IAEB ensure widest possible dissemination of the procurementopportunity and, hence, increase the number of prospective bidders and intensifycompetition among them. Intensified competition, in turn, will ensure that the LGUwill get the best possible proposals, as to quality and cost, for the infrastructureproject sought to be procured.

The IAEB for procurements or projects shall be advertised and/or posted dependingon the value of its ABC, as follows:

Procurement of InfrastructureProjects with an ABC of More than

Five Million Pesos

Procurement of Infrastructure withan ABC of Five Million Pesos and

below

1. Newspaper Advertisement IAEBshall be advertised at least once in one(1) newspaper of general nationwidecirculation which has been regularlypublished for at least two (2) yearsbefore the date of issue of theadvertisement

2. Internet Posting IAEB shall beposted continuously in the website ofthe LGU concerned, if available, thewebsite of the LGUs service provider, if

any, and the G-EPS for seven (7)calendar days starting on date ofadvertisement.

3. Posting in Conspicuous Place -IAEB shall be posted at any conspicuousplace reserved for this purpose in thepremises of the LGU concerned for seven(7) calendar days, as certified by thehead of the BAC Secretariat. (IRR-ASection 21.2.1)5

1. Internet Posting IAEB shall beposted continuously in the website ofthe LGU concerned, if available, thewebsite of the LGUs service provider, ifany, and the G-EPS for seven (7)calendar days .

2. Posting in Conspicuous Place IAEB shall be posted at any conspicuousplace reserved for this purpose in thepremises of the LGU concerned for seven(7) calendar days, as certified by the

head of the BAC Secretariat.

1.2. Advertisement of IAEB in a Newspaper of GeneralNationwide CirculationFor procurement of infrastructure projects with ABC of more than Five Million Pesos (P5,000,000.00), the LGU is required to advertise its IAEB at least once in a newspaperof general nationwide circulation (IRR-A Section 21.2.1 [a]). It is not required that

5As amended by GPPB Resolution 014-2006, dated 20 July 2006, published in the Philippine Star on 09 September2006.


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the advertisement should be in a newspaper with the widest distribution andreadership. As long as the IAEB is advertised in a published newspaper which hasnational distribution for general readership, such is sufficient compliance with the law.

1.3. Internet Posting of IAEBNote that continuous posting in the internet is required in three specific websites:

1. Website of the LGU concerned;2. Website of the LGUs e-procurement service provider; and3. PhilGEPS.If all of these websites are existing, then the IAEB should be posted in all of them. Ifnot, then posting in the PhilGEPS will suffice.

In case the LGU lacks internet connection, it may post its IAEB through internet cafsin its locality or it may arrange to use the facilities of other LGUs or nationalgovernment offices, such as the DBM Regional Office.

1.4. Posting in Conspicuous PlaceThe LGU should have a specific prominent and public place reserved for posting ofIAEB (e.g. bulletin board in the provincial capitol or city, or municipal hall). Though nolonger required, the LGU may continue its old practice under the local GovernmentCode (Section 363) of posting the call for bids (now the IAEB) in at least three (3)publicly accessible and conspicuous places and sending by mail or otherwise toprospective bidders in the locality. This will ensure the widest publicity of theprocurement activity and encourage more participants in the bidding process.

Failure to post the IAEB in the PhilGEPS will hold the accountable officials liable fordereliction of duty.

EO 662 Series of 2007, as amended by EO 662-A, reiterates that all NGAs, GOCCS,GFIs SUCs, and LGUs, shall post all their procurement opportunities, results thereof,

and other related information in the PhilGEPS bulletin board, as provided underSection 8.2.1. of the IRR-A.

EO 662 expressly provides that non-compliance with posting obligations shall renderthe accountable officials liable for dereliction of duty and conduct grossly prejudicial tothe best interest of the service, without prejudice to other charges, whetheradministrative, civil or criminal, that may be filed under appropriate laws andregulations.

1.5. Contents of IAEB6The IAEB must be in accordance with the form prescribed by the GPPB in the PBDsand should contain the following: (IRR-A Section 21.1)

1. The name and location of the contract to be bid;2. The project background and other relevant information regarding the proposed

contract works, including a brief description of the type, size, major items, andother important or relevant features of the works;

6 Please refer to the Philippine Bidding Documents (PBDS) issued by the GPPB for the prescribed standard form.


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3. A general statement on the criteria to be used by the LGU for:a. The eligibility check/screening;b. The preliminary examination and detailed evaluation of bids; andc. Post-qualification;

4. The date, time and place of the deadline for:a. The submission and receipt of the Letter of Intent (LOI) together with the

application for eligibility;

b. The submission and receipt of the eligibility requirements;c. Notification of results of eligibility check/screening;d. The pre-bid conference if any;e. The submission and receipt of bids; andf. The opening of bids;

5. The ABC;6. The source of funding;7. The period of availability of the bidding documents, the place where the bidding

documents may be secured and, where applicable, the price of the biddingdocuments;

8. The contract duration;9. The name, address, telephone number, facsimile number, e-mail and website

addresses of the concerned LGU, as well as its designated contact person;

10.The Reservation Clause, which is normally located at the bottom of the notice;and

11.Such other necessary information deemed relevant by the LGU.

1.6. Procedure for Advertisement and Posting of IAEBThe following steps are followed in the advertising and posting of IAEBs:7

1. For public bidding of contracts with an ABC costing more than Five Million Pesos (P5,000,000.00)

2. The BAC Secretariat prepares the draft IAEB for review/approval of the BAC.3. The BAC approves the contents of the IAEB during the pre-procurement

conference.

4. The BAC Secretariat posts the IAEB in any conspicuous place reserved for thispurpose in the premises of the LGU for seven (7) calendar days; and this fact willbe certified to by the head of the Secretariat.

7 FAPs may have additional publication requirements. For this reason, reference should be made to the appropriatestandard bidding documents for the project.


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5. The BAC Secretariat advertises the IAEB in a newspaper of general nationwidecirculation for the duration required, as prescribed above. For priority programsand projects funded out of the annual GAA, which are intended forimplementation within the province, the IAEB may also be advertised in a localnewspaper for the same duration as above.

6. The BAC Secretariat, through its member who is authorized to transact with thePhilGEPS, posts the IAEB in the following websites: the PhilGEPS, that of theLGU, and the LGUs e-procurement service provider, if any, for seven (7) calendar

days.

7. For public bidding of contracts with an ABC costing Five Million Pesos (P5,000,000.00) and below, and for alternative methods of procurement (Pleaserefer to Section 3, Part 2, for the discussion on Alternative Methods ofProcurement):

8. The BAC Secretariat prepares the draft IAEB for review/approval of the BAC.9. The BAC approves the contents of the IAEB.10.The BAC Secretariat performs steps (c) and (e) in Item No. 1 above.

2.

Accept LOIs, Issue Eligibility Documents, and ConductEligibility Check (Step 2)

2.1. Submission of Letters of Intent and Applicationsfor Eligibility

Prospective bidders should submit their written LOIs and Applications for Eligibility tothe BAC and have these received not later than seven (7) calendar days after the lastday of the period for advertising and/or posting of the IAEB. (IRR-A Section 21.3.1)Upon receipt of these documents, the BAC must immediately give the prospectivebidders the list of eligibility requirements, and inform them in writing of the date,time, and venue for the submission of such requirements.

Once the PhilGEPS is fully established, prospective bidders may also submittheir LOIs and applications for eligibility electronically to the LGU throughthe PhilGEPS, likewise within the deadline set for the submission of thewritten form of the documents.

2.2. Lone Submission of Letter of IntentEven if only one prospective bidder submits an LOI, the bidding process continues. Ifit is later declared eligible and its bid is found to be responsive to the biddingrequirements, its bid will be declared as a SCRB, and considered for contract award.(IRR-A Section 36)

2.3. No Submission of Letter of IntentIf no prospective bidder submits a Letter of Intent, the BAC should declare the biddinga failure, by way of a BAC Resolution. In such a case, the BAC shall issue aResolution declaring a failure of bidding. The BAC then conducts a study on thepossible reasons for the absence of interested bidders. Should it be found that someof the terms and conditions of the contemplated procurement, as stated in the IAEB,need to be modified or adjusted, the LGU may do so, provided that a re-bidding isconducted.


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2.4. Eligibility CheckEligibility Check is a procedure used to determine if a prospective bidder is eligible toparticipate in the bidding at hand. In the eligibility check, the BAC shall use non-discretionary pass/fail criteria. In other words, the absence, incompleteness orinsufficiency of a document shall render a prospective bidder ineligible to bid for theparticular procurement.8(IRR-A Section 23.2) Thus,a prospective bidder is eligibleto bid for a particular project if it complies with the eligibility requirements prescribedfor the competitive bidding within such period as may have been prescribed by theLGU.

2.5. Eligible Bidders in the Procurement ofInfrastructure Projects9

The following persons/entities, with legal personality and capacity to undertake thecontract, shall be allowed to participate in the bidding: (IRR-A Section 23.11.2.1)

1. Legal Personality/Nationality/Filipino Ownership:a. Duly licensed Filipino citizens/sole proprietorships;b. 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 thePhilippines;

c. Corporations duly organized under the laws of the Philippines and of which atleast seventy five (75%) of the outstanding capital stock belongs to citizens ofthe Philippines;

d. 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 responsibleor liable for a particular contract, provided that:10

i. In accordance with Letter of Instructions No. 630, Filipino ownership orinterest in the joint venture concerned shall be at least seventy-fivepercent (75%); and

ii. Each member of the joint venture shall submit the required eligibilitydocuments (IRR-A Section 23.6 (2)).11 The require eligibility documentsthat must be submitted by each member of the joint venture refer to thelegal documents. The LGU before entering into a contract with a jointventure must be assured that all the members of the latter have theneeded legal personality to do business in the Philippines. Thus, all themembers of the joint venture should submit the required legal documents.However, since compliance with the eligibility technical and financialdocuments is treated collectively, a joint venture will be considered

8 Generally, FAPs do not utilize the eligibility check system of the GOP, unless so required by the pertinent IFI/bilaterallending agency. Moreover, pre-qualification may be utilized for large or complex works or in any other circumstances inwhich 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.9 For FAPs, reference should be made to the appropriate standard bidding documents for the project to determine theappropriate qualification requirements of a bidder.10 For FAPs, any firm may bid independently or in joint venture confirming joint and several liability, either with domesticfirms and/or with foreign firms, but the IFIs generally do not accept conditions of bidding which require mandatory jointventures or other forms of mandatory association between firms.11 As amended by Memorandum Order No. 176, dated 27 June 2005, published in the Official Gazette on 29 August2005.


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eligible if any of its members comply with a technical or financialdocuments.12

e. Cooperatives duly registered with Cooperative Development Authority.

Are Cooperatives Exempted from Eligibility Check?

No. The exemption granted to cooperatives by R.A. 6938 is limited to pre-qualification. Under R.A. 9184 the concept of pre-qualification has been replacedby a procedure known as the simple eligibility check, which is a different procedureand utilizes an objective and non-discretionary pass or fail criteria in the examinationof the eligibility documents submitted by the bidder. Hence, since there is no morepre-qualification in competitive bidding under the GPRA, cooperatives as prospectivebidders are now required to undergo simple eligibility check.13

2. Capacity to Undertake the Contract:All these entities must have:

a. A license by the PCAB, in accordance with the provisions of R.A. 4566. (IRR-A Section 23.11.2.2)

b. The experience of having satisfactorily completed a single contract similar tothat to be bid, and the value of which, when adjusted to current prices usingthe National Statistics Office (NSO) consumer price indices available at thePhilGEPS website, is at least fifty percent (50%) of the ABC of the contract tobe bid: Provided, however, that in the case of a contractor under a Small Aand Small B categories without similar experience on the contract to be bid,he may be allowed to be bid if the cost of such contract is not more than fiftypercent (50%) of the Allowable Ranges Contract Cost (ARCC) of hisresignation. (IRR-A Section 23.11.2.3)

a. The Allowable Range of Contract Cost (ARCC) per PCAB registration ofcontractor is based on the guidelines prescribed by PCAB.

c. A Constructors Performance Evaluation System (CPES) rating that issatisfactory and/or a certificate of completion and owners acceptance of thecontract. (IRR-A Section 23.11.2.4) The CPES is a rating system,approved by the NEDA Infrastructure Committee, to evaluate the pastperformance of the contractors.

d. A certificate of commitment from a licensed bank to extend to him/it a creditline if awarded the contract to be bid, which commitment should bespecific to the contract to be bid; or a hold-out on deposit certificateissued by a licensed bank, which shall also be specific to the contractto be bid, both of which must be in an amount not lower than that set by theLGU in the bidding documents, which shall be at least equal to ten percent(10%) of the ABC of the contract to be bid; or a Net Financial ContractingCapacity (NFCC) at least equal to the ABC, calculated as follows: (IRR-A

Section 23.11.2.5)

NFCC = [(Current assets minus current liabilities) multiplied by (K)] minus thevalue of all outstanding works or projects under ongoing contracts, includingawarded contracts yet to be started.

12 GPPB NPM No. 02-2207, January 12, 2007; GPPB NPM No. 44-2007, August 13, 2007.13 GPPB NPM No. 040-2004, March 29, 2004.


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Where:

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

Example Given:Current Assets = P 3,000,000.00Current Liabilities = P 500,000.00

Value of Outstanding Works = P 4,000,000.00Contract Duration = 1 year

NFCC = [(P3,000,000 P500,000) x 10] P4,000,000

= P 25,000,000 P 4,000,000= P 21,000,000.00

2.6. Minimum Eligibility Requirements that must besubmitted in the Eligibility Envelope

The eligibility of a prospective bidder is determined based on its submission to theBAC of the following documents: (IRR-A Section 23.6)

1. Class A Documentsa. Legal Documents

i. DTI business name registration in the case of Single Proprietorships; orSEC registration certificate, in the case of Partnerships or Corporations;

ii. Valid and current Mayors permit/municipal license to operate a business;

Submission of the bidders mayors permit from its principalplace of business is enough compliance with this eligibilityrequirement.

iii. BIR Registration Certificate, which contains the Taxpayers IdentificationNumber;

iv. Statement of the prospective bidder that it is not blacklisted or barredfrom bidding by the government or any of its agencies, offices,corporations or LGUs, and that it is not included in the ConsolidatedBlacklisting Report, once this is issued by the GPPB;

v. Tax Clearance Certificate issued by the BIR Main Office and Income orBusiness Tax Returns filed through the EFPS (E.O. 398, s. 2005), ifapplicable;

vi.

Other appropriate licenses as may be required by the LGU concerned;

vii. Certificate of PhilGEPS Registration;b. Technical Documents

i. Statement of the prospective bidder of all its ongoing and completedgovernment and private contracts within the period specified in the IAEB,including contracts awarded but not yet started, if any. This statementmust include the following information for each of the contracts:


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i.1. Whether the contract is ongoing, completed or awarded but notyet started within the relevant period;

i.2. The name and location of the contract;i.3. The date of the award of the contract;i.4. The contract duration;i.5. The owners name and address;i.6. The nature of work;i.7. The contractors role (whether sole contractor, sub-contractor, or

partner in a joint venture);i.8. The total contract value at award;i.9. The date of completion or estimated completion time;i.10. The total contract value at completion, if applicable;i.11. The percentages of planned and actual accomplishments, if

applicable;i.12. The value of outstanding works, if applicable;i.13. Supporting notices of award and/or notices to proceed issued by

the owners;i.14. Supporting CPES rating sheets, and/or certificate of completion

and owners acceptance, if applicable; andi.15. Whether the contract is similar or not in nature and complexity

with the contract to be bid.

ii. Valid PCAB license and registration for the type and cost of contract to bebid;

In the case of joint ventures, the license and registration mustbe those of the joint venture, not any of its members.

iii. A statement on the:iii.1. Availability of key personnel, such as project managers, project

engineers, materials engineers and foremen, that may be used forconstruction contracts; and

iii.2. Availability of equipment that it owns, has under lease, and/or hasunder purchase agreements, that may be used for constructioncontracts, provided that ownership of equipment is not a requisitefor eligibility;

c. Financial Documentsi. The prospective bidders audited financial statements, stamped received

by the BIR or its duly accredited and authorized institutions, for theimmediately preceding calendar year, showing, among others, theprospective bidders total and current assets and liabilities; and

ii. Proof of the prospective bidders capacity to absorb the additionalobligations in connection with the contract to be bid and to finance itsimplementation/completion:

ii.1. The prospective bidders computation of its NFCC which shall be inaccordance with Section 23.11.2.5 of the IRR-A; or

ii.2. A certificate of commitment specific to the contract at hand,issued by a licensed bank to extend to it a credit line if awardedthe contract to be bid, which shall be at least equal to ten percent(10%) of the ABC; or

ii.3. A cash deposit certificate certifying a hold out on cash depositsissued by a licensed bank, which shall also be specific to the


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contract to be bid, in an amount not lower than that set by theLGU in the Bidding Documents, which shall be at least equal to tenpercent (10%) of the ABC.

Practical Tip

LGUs may maintain a registry of contractors

To facilitate eligibility check, the BAC may maintain a file of Class A documentssubmitted by contractors. When such file is required by the LGU, a contractor whowishes to participate in a public bidding for infrastructure projects should maintainthis 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 documentswill be issued a certification by the BAC to that effect, which certification may besubmitted to the LGU concerned in lieu of the foregoing Class A documents. (IRR-A Section 23.6.1)

1. Class B Documentsa. Valid JVA, if the prospective bidder is a joint venture, with the agreement

containing a statement on who the joint venture/association has constitutedand appointed as the lawful attorney-in-fact to sign the contract, if awardedthe project, and on who among the members is the lead representative of the

joint venture; and

All members of the joint venture should comply with all the legaleligibility requirements, but compliance by one of the joint venturemembers with the technical and financial requirements will suffice.

b. Letter authorizing the BAC or his duly authorized representative/s to verifyany or all of the documents submitted for the eligibility check.

2. Other Eligibility DocumentsA notarized certification, under oath, by the bidder or its duly authorizedrepresentative, that each of the documents submitted in satisfaction of theeligibility requirements is an authentic and original copy, or a true and faithfulreproduction or copy of the original, complete, and that all statements andinformation provided therein are true and correct. (IRR-A Section 23.8)

The BAC may require that the bidders authorized representative to initial everypage of the documents it submits as originals. The purpose of this exercise is toensure that the documents reviewed by the BAC are authentic, and to protect theBAC from any insinuation of tampering with the said documents.

Are foreign bidders allowed to participate in procurement ofinfrastructure projects?

Foreign entities are allowed to participate in the procurement of infrastructure projects,provided, that the structures to be built require the application of techniques and/ortechnologies that are not adequately possessed by a person/entity meeting the requirementof seventy-five percent (75%) Filipino-ownership, as determined by the LGU. These foreignentities have to form a joint venture with a Filipino entity; provided, that the Filipino


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ownership or interest should not be less than twenty-five percent (25%). The Filipinoownership 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). (IRR-A section23.11.2.1 [d])

Foreign contractors, when allowed to bid under the circumstances mentioned in Section23.11.2 of IRR-A, must submit the same eligibility requirements as domestic entities.However, the legal documents and the audited financial statements under the Class Adocuments may be substituted by the appropriate equivalent documents issued by the

country of the foreign contractor. (IRR-A Section 23.7) These documents must be dulyacknowledged and authenticated by the Philippine consulate located in that country.14

2.7. Submission of the Eligibility EnvelopeProspective bidders must submit their eligibility requirements in a sealed envelope orany such appropriate container to the BAC on or before the deadline specified in theIAEB. Eligibility requirements submitted after the deadline should not be accepted bythe BAC. The envelope or container must be marked in the following manner:

Eligibility Envelope of ______ (name of Bidder) Public Bidding for ______ (name ofthe contract to be bid). These envelopes or containers will be opened before thedates of the pre-bid conference and bid opening to determine eligibility of prospective

bidders.

A prospective bidder which had submitted Class A documents in written form to theregistry of such documents maintained by the BAC of the LGU and had kept suchdocuments current and updated can submit:

1. A certification from the BAC of the LGU that it has a complete set of updatedClass A documents on file with the BAC,

2. Its Class B documents, and3. Its certification under oath that each of the documents submitted in satisfaction of

the eligibility requirements is an authentic and original copy or a true and faithfulreproduction or copy of the original, complete and that all statements andinformation provided therein are true and correct.

2.8. What happens if only one bidder submits itseligibility and bid envelopes?

Even if only one prospective bidder submits its eligibility and bid envelopes, thebidding process continues. If the bidder is declared eligible and its bid is found to beresponsive to the bidding requirements, its bid will be declared as a Single CalculatedResponsive Bid and considered for contract award. (IRR-A Section 36)

2.9. Participants in the Receipt and Opening of theEligibility Envelopes

The following parties participate in the eligibility check/screening:

13 Under FAPs, to foster competition, IFIs permit firms and individuals from eligible countries to offer goods, works, andservices. Any conditions for participation should be limited to those that are essential to ensure the firms capability tofulfill the contract in question. In connection with any contract to be financed in whole or in part from an IFI loan, theIFI generally does not permit a local government unit to deny pre- or post-qualification to a firm for reasons unrelated toits capability and resources to successfully perform the contract; nor does it permit a local government unit to disqualifyany bidder for such reasons. Consequently, Procuring Entities should carry out due diligence on the technical andfinancial qualifications of bidders to be assured of their capabilities in relation to the specific contract.


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1. The BAC;2. The TWG;3. The Secretariat;4. The prospective bidders; and5. The observers.

2.10. Procedure for Receipt and Opening of EligibilityEnvelopes

1. Upon receiving an eligibility envelope, the BAC Secretariat must stamp aneligibility envelope as RECEIVED, indicating thereon the date and time ofreceipt, and have the stamp countersigned by an authorized representative of thebidder. It then accomplishes in triplicate a pre-numbered receipt indicating thename of the prospective bidder and the date and time when the eligibilityenvelope was received. It then attaches one triplicate copy of the receipt on theeligibility envelope, gives the other triplicate copy to the prospective bidder, andkeeps the original copy for records purposes.

2. The BAC shall open in public the Eligibility envelopes on the date specified in theIAEB. (IRR-A Section 23.1) The BAC shall read in public the contents of theEligibility envelopes, and shall examine each prospective bidders eligibilityrequirements or statements. It shall record the presence or absence of eligibilitydocuments in a checklist.

3. The BAC shall declare prospective bidders as either eligible or ineligible, basedon the findings in Item 1 above, and inform them accordingly. The Eligibilityenvelopes shall likewise be marked as such, and these markings shall becountersigned by the BAC chairperson or his duly designated authority. (IRR-ASection 23.2) The BAC shall prepare a pro-forma Notice of Eligibility and a Noticeof Ineligibility which will be duly accomplished by the BAC Secretariat and signedby the BAC members present during the Eligibility Check/Screening. In case aprospective bidder is declared ineligible, the Notice of Ineligibility shall state the

reason for such ineligibility. The Notice will be received officially by the biddersauthorized representative.

4. The BAC shall inquire from ineligible bidders whether or not they intend to file arequest for reconsideration; if they signify their intention to do so, the BACshall keep the Eligibility envelopes containing the eligibility requirements and re-seal the same in the presence of all the participants. These shall be deposited inthe Bid Box or any other secured place or location. In fact, with or without anyindication on the part of the prospective bidder of its intention to file a request forreconsideration, it would be advisable for the BAC to hold on to the Eligibilityenvelopes containing the eligibility requirements, duly re-sealed and deposited,until the expiration of the period for filing a request for reconsideration, to ensurethe integrity of these documents; unless if the said prospective bidder waives itsright to file a request for reconsideration.

Despite its previous finding of eligibility, the LGU may, at any stage of theprocurement process, review a prospective bidders qualifications.

Notwithstanding the eligibility of a prospective bidder, the LGU concerned reservesthe right to review its qualifications at any stage of the procurement process if it hasreasonable grounds to believe that a misrepresentation has been made by the saidprospective bidder, or that there has been a change in the prospective bidderscapability to undertake the project from the time it submitted its eligibility


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requirements.

Should such review uncover any misrepresentation made in the eligibilityrequirements, statements or documents, or any changes in the situation of theprospective bidder which will affect the capability of the bidder to undertake theproject so that it fails the preset eligibility criteria, the LGU shall consider the saidprospective bidder as ineligible and shall disqualify it from submitting a bid or fromobtaining an award or contract. (IRR-A Section 23.4) A prospective bidder foundguilty of false information faces imprisonment of not less than six (6) years and one

(1) day but not more than 15 years. (IRR-A Section 65.3)

2.11. What happens if only one prospective bidderpasses eligibility check?

Even if only one prospective bidder passes the eligibility check, the bidding processcontinues. Again, if the eligible bidder submits a bid that is found to be responsive tothe bidding requirements, its bid shall be declared as an SCRB and considered forcontract award. (IRR-A Section 36)

2.12.

Procedure in case of Request of Reconsiderationand Protest

A prospective bidder thatwas absent during theEligibility Check and wasfound ineligible has three(3) calendar days fromreceipt of the Notice ofIneligibility, within whichto file a written request forreconsideration before theBAC. If the prospectivebidder was present duringEligibility Check and was

duly notified (a verbalnotification will suffice inthis case) of itsineligibility, it also hasthree (3) calendar daysupon such notice withinwhich to file a writtenrequest forreconsideration. Seven(7) calendar days after itreceives a letterrequesting forreconsideration, the BACshould resolve suchrequest. In the meantime,

it will hold on to the Eligibility envelopes of the prospective bidder until the request forreconsideration is resolved. In so doing, it can request the prospective bidder toclarify its eligibility documents, if necessary. (IRR-A Section 23.3) The BAC mayreturn the eligibility envelope if the prospective bidder is declared ineligible andexpressly waives his right to file a request for reconsideration. Such waiver shall bemade in writing, to be executed by the authorized representative of the ineligiblebidder.

Note that the purpose of request/motion for reconsideration is to clarify the eligibilitydocuments or proposals it submitted and provide the BAC with justifications and

Contents of a Verified Position Paper

The verified position paper shall contain the followinginformation:

1. The name of bidder;2. The office address of the bidder;3. The name of project/contract;4. The implementing office/agency or procuring entity;5. A brief statement of facts;6. The issue to be resolved; and7. Such other matters and information pertinent and

relevant to the proper resolution of the protest.

The position paper is verified by an affidavit that theaffiant has read and understood the contents thereofand that the allegations therein are true and correct ofhis personal knowledge or based on authentic records.An unverified position paper shall be consideredunsigned, produces no legal effect, and results to theoutright dismissal of the protest. (IRR-A Section55.2)


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arguments why the documents or proposals submitted by the prospectivebidder/bidder should not be considered as failed based on the non-discretionarypass/fail criteria. It does not in anyway provide an opportunity for the prospectivebidder/bidder to complete its insufficient documents and requirements.

If its request for reconsideration is denied, the ineligible bidder may pr

Procurement Manual for LGUs - Infrastructure Projects

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