Vetting contractors

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by Karol Ilagan
Philippine Center for Investigative Journalism

THE GOVERNMENT awards a contractor-bidder a contract if its bid amount has been evaluated and found to be the “lowest calculated bid.” The bid will be subjected next to post-qualification, which involves verifying if it has complied with the requirements listed below. Complying with these prerequisites makes the bid “responsive.” A bidder is declared the winner once its bid is deemed “responsive” and the “lowest calculated” one.

Composition

A Filipino citizen/sole proprietor, or;
A corporation with at least 75 percent outstanding capital stock that belongs to Filipino citizens, or;
A partnership of with at least 75 percent interest that belongs to Filipino citizens, or;
A joint venture with at least 75 percent Filipino ownership or interest, or;
A cooperative of which at least 75 percent of the interest belongs to Filipino citizens.

License and registration

Valid license and registration issued by the Philippine Contractors Accreditation Board (PCAB) to engage or act as a contractor for the type of contract subject of the bidding; and

Mayor’s permit issued by the city or municipality where the bidder’s principal place of business is located.

Competence and Capacity

Experience of having completed, within a period of 10 years from the date of submission and receipt of bids, at least one contract that is similar to the contract to be bidded out, and whose value, adjusted to current prices using the Philippine Statistics Authority’s consumer price indices, must be at least 50 percent of the Approved Budget for the Contract (ABC) to be bid;

Note: Contractors under Small A and Small B categories without similar experience on the contract to be bid may be allowed to bid if the cost of such contract is not more than 50 percent of the Allowable Range of Contract Cost of their registration based on the guidelines as prescribed by PCAB.

The competence and experience of the bidder’s key personnel to be assigned to the project comply with the requirements of the bid documents for the project;

Availability, commitment, capacities, and operating conditions of equipment units to be owned/leased/under purchase by the bidder for use in the contract under bidding;

No record of any of the following in ongoing government and private contracts of the bidder:

  • Reported negative slippage of at least 15 percent, or;
  • Substandard quality of work as per contract plans and specifications, or;
  • Unsatisfactory performance of the contractor’s obligations as per contract terms and conditions, at the time of inspection, the deficiencies were not due to the contractor’s fault or negligence.

Bidder’s Constructors Performance Evaluation Summary (CPES) and/or certificate of completion and owner’s acceptance of the contract was at least satisfactory;

Authenticity of the bid security and its sufficiency as to type, amount, form and wording, and validity period;

Net Financial Contracting Capacity (NFCC) is at least equal to the ABC or the Credit Line Certificate in favor of the prospective bidder if awarded the contract is at least 10 percent of the ABC.

Note: The NFCC is computed thus: NFCC = [(Current assets minus current liabilities) multiplied by (K)] minus the value of all outstanding works or projects under ongoing contracts, including awarded contracts yet to be started.

Where:

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

Blacklisting

Bidder is not blacklisted.

Note: Blacklisted contractors are barred from participating in all government procurement opportunities according to the Blacklisting Order issued by procuring entities. Blacklisted contractors are likewise deemed automatically delisted after the period stated in the corresponding Blacklisting Order, unless the blacklisting agency requests the Government Procurement Policy Board (GPPB) not to delist them.

Relatives in government

Compliance by the bidder with the “no relationship” provision in Section 47 of the Revised Implementing Rules and Regulations of Republic Act No. 9184, i.e., that the bidder is not related by consanguinity or affinity up to the third civil degree to the:

  • Head of the Procuring Entity;
  • Members of the Bids and Awards Committee (BAC);
  • Members of the Technical Working Group of the BAC;
  • Members of the BAC Secretariat;
  • Head of the Project Management Office;
  • Head of the end-user unit; and
  • Project consultants.

References:

Revised Implementing Rules and Regulations of Republic Act No. 9184 or the Government Procurement Reform Act

Manual of Procedures for the Procurement of Infrastructure Projects

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