PD 1594

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AND ITS
IMPLEMENTING RULES
AND REGULATIONS

3/18/12
 Presidential
Decree No.1594
Prescribing Policies,
Guidelines,
Rules and Regulations
for
Government Contract

3/18/12
I. DETAILED ENGINEERING

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 No bidding and/or
award of contract for a
construction project shall
be made unless the
detailed engineering
investigations, surveys
and designs for the project
have been sufficiently
carried out and
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approved.
 DETAILED
ENGINEERING
ACTIVITIES
 Survey
 Site Investigation
 Soil and Foundation
Investigation
 Construction Materials
Investigations
 Preparation of Design Plans
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
Preparation of Quantity and
Cost Estimates
Preparation of Program of
Work
Preparation of Proposed
Construction Schedule (and
Estimated Cash Flow for
projects with schedule over 6
months)
Preparation of Site or Right-of-
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Preparation of Utility Relocation
Plan
Preparationand Submission of
Design Report
Environmental Impact
Statement for Critical Projects
Preparation of Bid/Tender
Documents
Preparation of Minimum
Requirements
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for a Construction
Works under DETAILED
ENGINEERING
Design standards
Field Surveys and
Investigation
Contract Plans
q Site Development Plan
q Plans and profile sheet
q Typical sections and details
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 q
Drainage details where
applicable
q Structural plans at appropriate
scales indicating all details
necessary in order that the
complete structure can be set
out and constructed
q Other details which may be
required
Quantities
Special Provisions
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 Bid/Tender Documents
§
Instruction to Bidders
§ General Conditions
§ Addenda
§ Itemized Bill of Quantities
§ Day Work Schedule
§ Form of Bid Security
§ Performance Security
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Bidding Documents
R.A 9184
Approved Budget for the
Contract;
Instructions to Bidders,
including criteria for eligibility,
bid evaluation and post-
qualification, as well as the
date, time and place of the pre-
bid Conference (where
applicable), submission of bids
and opening
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of bids;
Plans and Technical
Specifications;
Form of Bid, Price Form, and List
of Goods or Bill of Quantities;
Delivery Time or Completion
Schedule;
Form and Amount of Bid
Security;
Form and Amount of
Performance Security and
Warranty; and,
Form of Contract, and General
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 § Contract Plans and Specifications
§ Draft Contract including price
escalation clause
§ All other information required for
local and international bidding
procedures
 Program of Work
§ Estimates of the work items
§ Quantities and costs
§ PERT/CPM (Programme Evaluation
Review Technique/ Critical Path
Method) 3/18/12
network of the project
 II. INSTRUCTION TO
BIDDERS

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Who may allow to bid?
§ Filipino
- Citizens (Single Proprietorship)
- Partnership or corporation duly
organized under the laws of the
Philippines, and at least 75% of
the capital stock of which belongs
to Filipino citizens
§ Contractors forming
themselves into a joint
venture 3/18/12
Organizations of the BAC
Bid and Award Committee
(BAC) or Designated
Procurement Unit
Functions
1. Conduct of Eligibility Screening
2. Bidding
3. Evaluation of the Bids
4. Post-qualification
5. Recommending
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BAC Composition
Chairman

- at least third ranking of

the office
Executive Officer and
Secretary
- Legal Officer of the office
- Administrative Officer of
the agency(when
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does not
Member (regular)
- Technical member
Member (provisional)
- At least two, with
experience in the type of
contract to be bid and in
project management

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Members from the private
sector
- On qualified representative
from constructors’ association
recognized by CIAP
(Construction Industry
Authority of the Philippines)
- One qualified
representative from any of
the ff. organizations:
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1.) End – User group or non –
governmental
organizations
2.) Project-related
Professional associations
(accredited by Professional
Regulation Commission or
Supreme Court)
(They are non-voting members)

Observers
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 Procurement Process for
Government Infrastructure
Contracts

Eligibility Pre-bid
Screening Conference
(For Prospective (For Eligible
Bidders) Bidders)

Award of the Post- Bidding

Contract qualification Process
(For the lowest (For the (Choosing the
calculated chosen lowest lowest
responsive bid) calculated bid) possible Bid)

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 INVITATION TO PRE-
QUALIFY
((( (ADVERTISMENT)
For locally and Foreign funded
CONTRACTS
1.) Newspaper (General
Circulation)
Contracts costing more than 5
million – Advertisement shall be
made at least 3 times within
reasonable period
Contracts costing
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5 million and
2. ) The same
advertisement shall be
posted in the website of the
office concerned.
3.) Invitation may also be
advertised through
televisions and radio
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 ISSUANCE OF
QUALIFICATION
STATEMENT/ FORMS
Notice for Pre-qualifications/
Eligibility Screening
a.) Name and location of project
b.) Project background and
other relevant information
regarding the proposed work
c.) Approved budget for the
Contract to be bid and source
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funding
d.) Criteria to be used by the
office in:
- Prequalification or Eligibility
Screening of the contractors
- Evaluation of Bids
- Post-qualification of the
lowest calculated bid
e.) Cost and Place of issuance of
Eligibility Forms and Bid/Tender
documents 3/18/12
f.) Date, time and place of:
- Submission of
accomplished ELIGIBILTY
forms
- Pre-bid conference
- Submission of bids
- Opening of bids

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Eligibility Screening
Pre-qualification or Eligibility Statement To
be submitted by Contractors
Legal Documents
1.) Contractors valid PCAB
license for
the type and cost of the
contract to
be bid
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3.) Letter Authorizing the Head
of the
Office or his duly authorized
representatives to verify any
or all of the documents submitted
for Eligibility Screening
4.) Statement that his firm is not
included in the “Blacklist” of
Contractors issued by the
Construction Industry Authority of
the Philippines
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Technical Documents
1.) A statement of all
government and private
construction contracts,
completed in at least the last 3
years
2.) A statement of all ongoing
government and private
construction contracts awarded
but not yet started
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3.) A statement that the
contractor has key
personnel that may be used
for construction contracts

4.) A statement that the

contractor owns equipment
that may be used for
construction contracts
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Financial Documents
1) Audited financial statements
for at least the past 3
calendar years
2) Contractor’s net financial
contracting capacity

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 Issuance of Plans,, Specifications,,
Proposal Book Forms and Draft
Contract
(For Eligible Bidder)
ESTIMATED PROJECT Issuance of
Plans,Specifications,Proposal
COST Book Forms and Draft
( in Peso) Contract
Up to 5 Million 15 days before bidding
Above 5 Million – 25 30 days before bidding
Million
Above 25 Million – 50 45 days before bidding
million
Above 50 Million – 100 60 days before bidding
Million
Above 100 Million 90 days before bidding
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 Bid Security
Original copy of the bid shall be
accompanied by a bid security,
payable to the procuring entity
concerned as a guarantee that the
successful bidder shall, within 30
calendar days or less, from receipt
of the notice of award, enter into
contract with the procuring entity
and furnish the performance security
allows a longer period.
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 Bid VALIDITY
Bids and bid securities shall
be valid for a reasonable period as
determined by the Head of the
Procuring Entity concerned, which
shall be indicated in the Bidding
Documents, but in no case shall
the period exceed one hundred
twenty (120) calendar days from
the date of the opening of bids.

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 Submission,, Opening
and Abstracting of
Bids/Tender
Bids in the prescribed bid form
including its annexes shall be
submitted in two (2) sealed
envelopes with the name of the
CONTRACT to be bid and the name
of the BIDDER in capital letters
addressed to BAC of the office
concerned. They shall be marked by
the bidder “DO NOT OPEN BEFORE
(date and time of opening of bids)”.
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FIRST ENVELOPE
• Technical Proposal
• Compliance (Pass or Fail)

SECOND ENVELOPE
 Price proposal

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First Envelope
v Authority of the signing
official
v Construction Schedule
and S-curve
v Construction Methods
v Organizational Chart for
the contract to be bid
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v List of Contractor’s
Personnel with their
complete qualification and
experience data
v Personpower schedule
v List of Contractor’s
Equipment
Units intended for use
exclusively
in the 3/18/12
contract to be bid
v Equipment Utilization
Schedule
v Certificate of site
inspection
v Bid Security
v Certification that the
detailed Estimates,
Cash flow by quarter and
Payments Schedule are in
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v Commitment from the
contractor’s bank to extend to
him a credit line if awarded
the contract to be bid
v Construction Safety and
Health Program
v Other non- discretionary
criteria

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Second
Envelope
v Bid Prices in the Bill of
Quantities
v Detailed Estimates
v Cash flow by Quarter and
Payments Schedule

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q Bid shall be received on or
before designated time and
date for eligible considerations.
Bids may be withdrawn in
writing 5 working days before
the deadline of submission of
bids.
q Bids with submitted bid prices
that are higher than the
approved budget for the
contract under bidding shall be
rejected outright
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 After all the bids have been
received and opened, the
corresponding Abstract of Bids
shall be prepared. It includes:
- Name of the project and its
location
- Time, date and place of
bidding
- Name of the bidders and
their
corresponding bids, the
amount3/18/12
of security and name
Determination of the Lowest
Calculated Responsive Bid

Lowest Calculated Responsive

Bid
- is the bid with the lowest price
as calculated and which complies
with all the requirements
- it is determined in two step:
1.) Detailed Bid Evaluation
2.) Post-qualification
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Detailed Bid Evaluation
The BAC shall, within 7 days,
conduct a
detailed evaluation of all bids.
Non-Discretionary Criteria:
1. Bid Security
2. Completeness of Bid
3. Major Deviations
4. Corrections
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for errors,
discounts and other
 The BAC of concerned
government
offices should complete the
evaluation
of bids not later than 30
calendar days
from the date of the opening of
the
bids 3/18/12
 Post-qualification
(Contractor with the Lowest Calculated
Bid)
This verifies and ascertain
whether the bidder with the
lowest calculated bid complies
or is responsive to all the
requirements of the contract

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1. Legal Requirements
2. Technical
Requirements
v The contractor’s stated
experience must be verified
and validated by the BAC to
be relevant
v The experience of the
contractor's key personnel
must be 3/18/12
verified by the BAC
v The equipment units
listed by the contractor
must be verified by the
BAC
v The BAC shall check the
performance of the
contractor in his ongoing
government and private
contracts3/18/12
Financial Requirements
BAC must be verified the ff:
v The contractor’s stated net
working capital
v The value of all outstanding or
unfinished works under
ongoing contracts yet to be
started
v The contractor’s net financial
contracting capacity
v The credit
3/18/12 line commitment
 If the bidder passes all of
the above criteria, he shall be
considered post- qualified. If the
bidder fails any of the above
criteria, he shall be post-
disqualified.

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AWARDING OF CONTRAC
If the BAC finds that the
contractor with the lowest
calculated total bid prices
passes the post-qualification
criteria, the office shall award
the contract to him.

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 AWARDING OF CONTRAC
If, however, the BAC finds that
contractor with the lowest calculated
bid fails the post-qualification criteria,
the office shall immediately notify
him in writing that he is post-
disqualified, and the BAC, within 7
calendar days complete the same
post-qualification process on the
second contractor with the second
lowest calculated bid.
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 AWARDING OF CONTRAC
If the decision is to award the
contract, the Notice of Award shall
be issued normally within 7
calendar days from the date the
decision to award is made.

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 The successful bidder or his
duly authorized representative
shall execute the contract with
the office concerned normally 15
calendar days from the receipt
of the Notice of Award

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 The Government reserves
the right to reject any or all bids
and to declare a failure of
bidding, or not to award the
contract if there is, among
others evidence of collusion
among contractors and other
parties resulting in no
competition
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Documents Comprising
the Contract
1. Contract Agreement
2. Conditions of the contract
3. Drawings/Plans
4. Specifications
5. Invitation to Bid
6. Instruction to Bidders
7. Addenda
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8. Bid Form
9. Performance Statements
10. Credit Line issued by an
authorized bank in an
amount equal to the average
operating expenses of the
project for 2months of 10% of
the total project cost
11. Notice of Award of Contract
12. Other contract documents
may be required
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Supporting Documents
q Duly Approved Program of Work and Cost
Estimates
q Certificate of Availability Of Funds
q Approved Budget for the Contract
q Abstract of Bids
q Resolution of the BAC or the BAC
recommending award
q Approval of Award by Approving Authority
q Other pertinent documents as may be
reasonably 3/18/12
required by the existing laws
Approval of Contract
The approving authority for the
contract or his duly authorized
representative shall be given a
maximum of fifteen (15)
calendar days from receipt thereof
to approve or disapprove it.

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 Approval of Contract
For contracts requiring the
approval by the Office of the
President, the same should
normally be approved/disapproved
within 30 calendar days from the
date that request for approval of
such contracts shall have been
received by the Office of the
President.
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 Issuance of Notice to Proceed

The concerned government

office should issue the Notice to
Proceed (NTP) to successful bidder
not later than 15 calendar days
from the date of approval of the
contract by the authorized
government official. The Effectivity
date for the NTP shall be
specified by the agency
concerned.
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 III. CONTRACT
IMPLEMENTATION

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 Advance payment

The Government shall

make an advance payment
to the contractor in an
amount equal to fifteen
percent (15%) of the total
contract price.

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 Contract completion
Once the project reaches an
accomplishment of 95% of the
total contract amount, the
government may create an
inspectorate team to make
preliminary inspection and submit
a punch-list to the contractor in
preparation of the final turnover of
the project.

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Punch-list
§ Remaining works
§ Work deficiencies for
necessary corrections
§ Specific time to fully complete
the project, considering the
approved remaining contract
time as of the date of contract
suspension
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Suspension of work

1. The Government shall

have the authority to
suspend work wholly
or partly due to any
fortuitous events
(force majeure).

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Suspension of work
2. The contractor shall have the
right to suspend work operation
on any or all projects along the
critical path of activities after
15 calendar days from date of
receipt of written notice from
the contractor to the district
engineer/regional
director/consultant, due to the
following:3/18/12
1. Existence of right-of-way
problems
2. Requisite construction plans
are not issued to the contractor
3. Peace and order conditions
4. Government failure to deliver
government-furnished
materials and equipment as
stipulated in the contract
5. Delay in the payment of
contractor’s
3/18/12 claim for progress
EXTENSION OF CONTRACT
TIME
The Government shall
determine the amount of
extension that a contractor is
fairly entitled to, provided
that the Government is not
bound to take into account
any claim for an extension of
time
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EXTENSION OF CONTRACT
TIME
No extension of contract time
shall be
granted to the contractor due
to:
q Ordinary unfavorable weather
conditions
q Inexcusable failure or negligence
of the contractor to provide the
required equipment, supplies or
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materials
IV. EVALUATION OF
CONTRACTORS
PERFORMANCE

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 Subject and Scope
All contractors undertaking
projects with the government
shall have their performance
evaluated by offices concerned.
This evaluation shall be done
during construction and upon
completion of each government
project.
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Evaluation Guidelines
All offices concerned are
mandated to adopt the CPES
Implementing Guidelines as
approved by the NEDA Infracom.

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 Implementation
Mechanism for CPES
Each agency shall establish a
CPES Implementing Unit (IU) which
shall be responsible for CPES
guidelines implementation, including
but not limited to the supervision of
performance evaluators accredited
by the CIAP.

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 Submission of
Evaluation Results
All offices concerned
shall submit the results of
their performance
evaluation to the CIAP
within one week after the
conduct of final evaluation
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 Utilization of
Evaluation Results
The CIAP shall consolidate
all of the evaluation results
received and shall disseminate
the same to all offices
concerned.

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Such data shall be used
in:
q Pre-qualification and
blacklisting of construction
firms
q Adopting measure to further
improve performance of
contractors in the prosecution
of government projects
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 SALAMAT!!!

3/18/12