Bidding Procedures for the procurement of Goods and Infrastructure Projects

1. Bidding Procedures for the procurement of Goods and Infrastructure Projects

2. General purpose: Determine readiness of procurement and criteria • Conducted prior to advertisement/posting of the ITB/REI • Mandatory – above Php. 2 M (Goods) - above Php. 5 M (Infra) • Attended by the ff: a) BAC d) BAC Secretariat b) TWG e) End-user unit/Other officials c) Consultants Pre-Procurement Conference

3. Bidding Process Advertise/ Post Invitation to Bid Distribution of Bid Docs Pre-Bid Conference Bid Submission Opening of Technical Proposal (incl. eligibility docs) Opening of Financial Proposal Contract Award Bid Evaluation Post-qualification 3 months

4. IAEB to Invitation to Bid (goods and infra) or Request for Expression of Interest (consulting) Includes posting in the website prescribed by the foreign government/foreign or international financing institution, for foreign-funded procurement Posting at PE’s internet service provider’s website not necessary Posting requirements for alternative methods of procurement was transferred to Sec. 54.2 Advertisement/Posting of the invitation to bid 4

5. Advertisement/Posting of the invitation to bid

6. Distribution of Bid Docs • Distribution of Bidding Documents • Deleted provisions on the bidder’s responsibilities under Sec. 17.7 & transferred to PBDs • Period for the availability of bidding documents • Goods & infra projects IB’s date of advertisement - bid submission • 4th Edition of Standard Bidding Documents • approved by the GPPB through Res. No. 06-2010, dated 17 December 2010 • Mandatorily to be use last 21 February 2011.

7. Distribution of Bid Docs • Distribution of Bidding Documents • Post at the PE’s website and at the PhilGEPS from the time the ITB/REI is advertised. • Prospective bidders may download the bidding documents • Pay the bid fee upon bid submission • Cost for the sale of bidding shall be in a reasonable amount to recover the cost of its preparation and development.

8. Forum where the PE’s representatives & the bidders discuss the different aspects of the project • Mandatory – ABC 1M or more; Discretionary – ABC less than 1M • Statements made during the conference should be included in the Supplemental/Bid Bulletin in order to be considered as modifications to the terms of the bid docs • Held at least 12 cd before deadline for bid submission. May be extended to at least 30 cd considering: • Method, nature, and complexity of contract • International participation is more advantageous • At the option of procuring entity, only bidders who purchased bid documents are allowed to attend or ask questions Pre-Bid Conference

9. Request for clarifications must be submitted at least 10 cd before bid submission Supplemental/Bid Bulletins must be issued at least 7 cd before bid submission to answer requests for clarification/interpretation, and upon BAC’s initiative to clarify/modify any bid docs’ provision Posted in PhilGEPS and PE’s website Supplemental Bid Bulletin shall be duly signed by the BAC Chairperson Bidders who have submitted bids before issuance of Supplemental/Bid Bulletin have to be informed in writing and allowed to modify/withdraw their bids. Supplemental Bid Bulletin

10. Goods and Infra: • Two-Envelope System • 1st Envelope - Eligibility Req. & Technical Component • 2nd Envelope – Financial Component • Submitted to the BAC on the date, time, and place specified in the Invitation to Bid. • Bids submitted after the deadline should not be accepted Opening & Evaluation of bids

11. Date of submission should not be later than the following period from the last day of posting of the Invitation to Bid Documentary requirements trimmed down Opening And Evaluation Of Bids

12. A bidder may modify or withdraw its bid provided this is done before the deadline for the submission and receipt of bids Bid modifications received after the deadline shall not be considered and shall be returned to the bidder unopened. Withdrawal of bids after the applicable deadline shall be subject to appropriate sanctions Opening & Evaluation of Bids

13. Contents of the 1st Envelope (Technical Component) • Eligibility requirements • Bid security • Goods - Technical specifications - production/delivery schedule; - manpower requirements; and/or, - after-sales service/parts Infra - Project Requirements - Organizational chart; - List of contractor’s personnel; and; - List of contractor’s equipment units) Opening & Evaluation of Bids

14. Contents of the 1st Envelope (Technical Component) 4. Omnibus sworn statement • Non-inclusion in blacklist • Authenticity of documents • Verification authority • Signatory’s authority • Disclosure of relations • Responsibilities of bidders • Labor laws and standards Opening & Evaluation of Bids

15. Reduced to 5-6 documents Others to be submitted during – Post-qualification Prior to Award of Contract Eligibility Requirements

16. Eligibility requirements 16

17. Class “B” Eligibility Documents • If Joint Venture - • JVA or sworn statements by each partner that they will enter into and abide by provisions of the JVA if awarded the contract • Each JV partner shall submit the legal eligibility docs. • Submission of the technical and financial eligibility docs. by any of the JV partners constitutes compliance • Failure to enter into a JV in the event of contract award shall be a ground for bid security forfeiture. Eligibility Requirements

18. Legal Eligibility Criteria – Goods (Sec. 23) General rule: 60% Filipino Foreign bidders eligible allowed – If stated in treaty or international or executive agreement National of a country offering reciprocity rights to Filipinos Goods not available from local suppliers To prevent situations that defeat competition or restrain trade Eligibility Criteria 18

19. Legal Eligibility Criteria - Infra (Sec. 23) General rule: 75% Filipino (LOI 630) Foreign contractors allowed if stated in treaty or international or executive agreement If joint venture, less than 75% is allowed if Structures to be built require techniques not possessed by 75% Filipinos Not less than 25% Filipino Eligibility Criteria 19

20. Technical Eligibility Criteria – Goods (Sec. 23) Eligibility Criteria 20

21. Technical Eligibility Criteria - Infra (Sec. 23) Track Record: Single Largest Contract Retain at 50% But w/in 10 yrs from bid submission Contractors under Small A and B categories w/out similar experience on the contract may bid if the contract cost is not more than 50% of the ARCC of their registration. PCAB License (RA 4566) to engage or act as a contractor Satisfactory CPES Rating and/or certificate of completion and owner’s acceptance Contract shall be considered “similar” if it has the same major categories of work Eligibility Criteria 21

22. Financial Eligibility Criteria – Goods and Infra (Sec. 23) NFCC at least equal to ABC CLC at least equal to 10% of ABC Issued by Universal or Commercial Bank For LGUs: other banks certified by BSP as authorized to issued said CLC Option to submit cash deposit certificate deleted Eligibility Criteria 22

23. Contents of the 2nd Envelope (Financial Component) • Financial Bid Form (includes bid prices and bill of quantities, as well as applicable price schedules) • In case of Goods, Certification from the DTI, SEC, or CDA, if claiming preference as Domestic Bidder or Domestic Entity • Other documents required in the bidding documents Opening & Evaluation of Bids

24. Deleted certified check and foreign government guarantee from acceptable forms In general, bank issued securities must be issued by a universal/commercial bank However, in biddings conducted by LGUs, securities may be issued by banks certified by BSP as authorized to issue said instruments Surety Bonds must be accompanied by certification from Insurance Commission that issuer is authorized to issue such security Bidder has option to choose among acceptable forms of security Procuring entity may not limit options available to bidders Bid & Performance Security

25. Bid & Performance Security

26. No contact rule • BAC, thru Secretariat, may request for clarification of bid as long as it is in writing • Determine the LCB by • Establishing correct calculated prices of bids; and • Ranking calculated total bid prices from lowest to highest • A non-discretionary criteria shall be used, which shall include consideration of: • completeness of bids; and • minor arithmetical corrections • 7 cd from the deadline for receipt of proposals. • In the case of infra. Proj. costing 50M and below – 5 cd Detailed Evaluation of Bids

27. In case of discrepancies, the ff. shall prevail: • words over figures • unit prices over total prices • bill of quantities over detailed estimate • Unless the ITB specifically allows partial bids, those not providing all required items shall be considered non-responsive • Placing no price is considered as non-responsive • Specifying a “0” or “-” means it is offered for free Detailed Evaluation of Bids

28. Verify, validate and ascertain the following: • Legal Requirements • licenses and agreements • legal documents under eligibility envelope • Technical Requirements • sufficiency of the bid security as to type, amount, form wording and validity period • Financial Requirements • bid price proposal • NFCC computation • credit line or cash deposit certificate, to ensure that bidder can sustain the operating cash flow transaction • Completed in 7 cd. But, may be extended by the HOPE to not more than 30 cd Post-qualification

29. 3 days from notice of LCB, submit the ff: Tax clearance Latest income and business tax returns Certificate of PhilGEPS registration Other appropriate licenses & permits required by law & stated in the Bid Docs. Post-qualification 29

30. Disclosure of Relations (Sec. 47) • Relatives within the 3rd civil degree of the following shall be disqualified: • Head of the procuring entity • Members of the BAC, Secretariat and TWG • Head of the end-user unit/PMO • Project consultants Disclosure of Relations

31. Contract shall be awarded to the bidder with the LCRB or SCRB at its submitted price or total calculated bid price, whichever is lower • Notice of Award (NOA) is issued by the HOPE • NGAs and LGUs – 7 cd • NOA conditioned on the following: • If joint venture, submission of JVA • If foreign-funded and stated in treaty, international or executive agreement, PCAB License • Posting of Performance Security • Signing of Contract (within 10 cd) • If required, approvals by higher authority • 3 mos. - procurement process from opening of bids up to award of contract or a shorter period Issuance of Notice of Award

32. NOA posted within 3 cd from its issuance in the following: a) PhilGEPS website; b) PE’s website; and c) Conspicuous places Issuance of Notice of Award 32

33. Contract Signing (Sec. 37.2) Within 10 cd from receipt of NOA Mandatory submission of other contract documents that may be required by existing laws and/or the PE (infra): Construction schedule and S-curve; Manpower schedule; Construction methods; Equipment utilization schedule; Construction safety and health program approved by DOLE; and, PERT/CPM Contract Signing 33

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

35. Failure of Bidding • BAC shall declare a failure of bidding when • No bids are received • All bidders are declared ineligible • All bids fail to comply with the bid requirements or fail post-qualification • LCRB/HRRB refuses, without justifiable cause, to accept award of contract and no award is made • Mandatory review after each failed bidding. Based on findings • Revise terms, conditions, specifications • Adjust ABC, subject to required approvals • Rebid, with re-advertisement/posting

36. Procurement Timelines Procurement of goods and infra projects 36

37. Timelines for the Procurement of Goods (Annex C) – Latest Allowable Time Procurement Timelines

38. Timelines for the Procurement of Infrastructure Projects with an ABC of Php. 50 Million and below (Annex C) – Latest Allowable Time Procurement Timelines

39. Timelines for the Procurement of Goods and Infrastructure Projects (Annex C) – Earliest Possible Time Procurement Timelines

40. Contract Implementation Procurement of goods and infra projects 40

41. Warranty Security (Goods)

42. Warranty Security (infra)

43. Warranty Security (infra) • Warranty Security – Infra (Sec. 62) • Warranty period vs. Warranty security period • Warranty security period reduced to 1 year from issuance of the Certificate of Final Acceptance • Liability per stage • From project construction to final acceptance • From project completion to final acceptance • From final acceptance to warranty security period

44. Defect / liability Period PRECON Period IMPLEMENTATION Period WARRANTY Period BID Security PERFORMANCE Security WARRANTY Security PLAN / BUDGET START COMPLETE ACCEPT End of W S END 1 yr 1 yr • CARI • Payments • - Advance • - Progress • - Final • - Retention money PROJECT CYCLE / MILESTONES

45. GOODS : • Supplier Fails to perform obligations within specified schedule, inclusive of duly granted time extensions • Imposed for every day of delay until performance and acceptance • PE need not prove it incurred actual damages • Amount is 1/10 of 1% of the cost of the unperformed portion for every day of delay • If sum of liquidated damages reaches 10% of the contract amount, PE shall automatically rescind the contract and impose appropriate sanctions over and above the liquidated damages LIQUIDATED DAMAGES

46. General Rule: • Made only after President’s prior approval and shall not exceed 15% of the contract price Exceptions: • Single advance payment not to exceed 50% of the contract price for the ff. services: • Hotel and restaurant services • Use of conference/seminar and exhibit areas • Lease of office space Advance Payment (Goods)

47. Exceptions: (Cont.) • Advance payment not to exceed 15% allowed to address contingencies arising from natural or man-made calamities in areas where “state of calamity” has been declared • 15% of the contract price shall be paid within 60 days from signing of contract and upon submission of a claim and a irrevocable standby letter of credit (Memorandum Order No. 15 dated May, 2011) Advance Payment (Goods)

48. Requirements: • Written request from the contractor • Submission of an irrevocable standby letter of credit of equivalent value from a commercial bank, bank guarantee, or surety bond • Amount not to exceed 15% of the contract price subject to recoupment every progress billing Advance Payment (Infra)

49. Progress payments subject to 10% retention money Conditions Deducted until 50% of the works has been completed If after 50%, work is satisfactory and on schedule, no additional retention is made, otherwise 10% shall be imposed Total retention is due for release upon issuance of a certificate of final acceptance Progress Payment (Infra)

50. Allowed as long as stated in bid docs Bid docs shall identify portions of the contract which may be subcontracted which shall not exceed the maximum percentage limitations Goods – no limit Infra – 50% Subcontracting shall not relieve the principal from any liability or obligation Sub-contracting