Procurement of Infrastructure Projects KST

STANDARD BIDDING
PROCEDURE FOR
INFRASTRUCTURE
PROJECTS
PUBLIC PROCUREMENT SPECIALIST
CERTIFICATION COURSE
INTERMEDIATE LEVEL
SESSION LEARNING OBJECTIVE
By the end of the Session, the participants

will be able to describe:
• The activities under the various stages of the

procurement process for infrastructure projects
through competitive bidding,
2
I. Definition of Terms
II. General Rules and Considerations
III. Standard Bidding Procedure for

Infrastructure Projects
IV. Design and Build Scheme
V. Contract Implementation
Considerations
VI. Implementation by Administration

DEFINITION OF TERMS
DEFINITION OF TERMS
What are considered Infrastructure Projects?

C
These include the construction, improvement, rehabilitation,
demolition, repair, restoration or maintenance of roads and
bridges, railways, airports, seaports, communication facilities,
civil works components of information technology projects,
irrigation, flood control and drainage, water supply, sanitation,
sewerage and solid waste management systems, shore
protection, energy/power and electrification facilities, national
buildings, school buildings, hospital buildings, and other related
construction projects of the government. The term “Infrastructure
Projects” shall have the same meaning as “civil works” or
“works.” (Sec. 5(u), IRR of RA 9184)
Government Procurement Policy Board – Technical Support Office

How is procurement categorized in case
of procurement projects with different
components, such as lease of facilities,
hardware and software, or installation of
reflective pavement markings?
[T]he Procuring Entity (PE), guided by the relevant provisions of
R.A. No. 9184 and its IRR, has the responsibility to determine the
nature of procurement, i.e., goods, infrastructure projects or
consulting services, based on the identified primary purpose
of the contracts.
As regards the Bidding Documents for Mixed Procurement,

Section 17.2 of the 2016 Revised IRR of R.A. No. 9184 provides
that the PE shall specify in the Bidding Documents the
requirements, criteria and other conditions of the bidding
procedures and of the ensuing contract as applicable to each
component of the project.
NPM No. 110-2016
Government Procurement Policy Board – Technical Support Office 7

GENERAL RULES AND
CONSIDERATIONS
GENERAL MODE OF PROCUREMENT
Default Method
Competitive Bidding
(Sec. 10, IRR of R.A. No. 9184)
Exception
Alternative Methods of Procurement

(Sec. 48 to 54, IRR of R.A. No. 9184)
What is Competitive Bidding?
▪ Competitive or Public Bidding is a method of

procurement that is open to any interested and qualified
party. It is preferred over other methods of procurement.
▪ A PE should, therefore, see to it that its procurement

program allows enough time to conduct such Public
Bidding.

What is Competitive Bidding?
It is a method of procurement which is open to
participation by any interested party and which consists
of the following processes:
1. advertisement
2. pre-bid conference,
3. eligibility screening of prospective bidders,
4. receipt and opening of bids,
5. evaluation of bids,
6. post-qualification, and
7. award of contract.
(Sec. 5(h), IRR of RA 9184)
COMPETITIVE BIDDING
Garcia vs. Burgos (291 SCRA 546)
“By its nature and characteristics, a competitive public

bidding aims to protect public interest by giving the
public the best possible advantages through open
competition”
COA vs. RTC-NCRJR (GR NO. 85285, 7/7/89)
“Purpose is to avoid/preclude suspicion of favoritism and

anomalies in the execution of public contracts.”

PROCUREMENT BY PHASES
▪ Phasing of construction projects is allowed so long

that each contractual phase covers a complete
stand-alone infrastructure facility which is safe,
strong, and functional to the end-user.
▪ Provided, that all the phases shall be procured

through public bidding without circumventing any rules
and requirements provided by RA No. 9184 and its
IRR, specifically on splitting of contracts. (Annex “A”
No. 4 of the 2016 IRR of RA 9184)

THE PROCUREMENT PARADIGM
2 3
Assess Procure
▪ Review feasibility/ ▪ Post/Advertise opportunity

market studies ▪ Open and evaluate bids
▪ Consolidate into APP ▪ Post-qualify
▪ Decide procurement ▪ Award and enter into
method contract
▪ Approve APP
▪ Determine readiness
1 ▪ Cost-benefit analysis ▪ Oversee 4

Identify ▪ Feasibility study implementation
Implement
▪ Market study ▪ Inspect and accept
▪ PPMP deliveries
▪ Release payment
NEEDS SATISFACTION

REQUIREMENTS PRIOR TO
COMMENCEMENT OF PROCUREMENT
🗹 Scope of Work/ Technical
🗹 Plans/Drawings 🗹 Bill of Quantities
Specifications
The DPWH Standard

Specifications for Public List of the specific
Works and Highways items of the Work
(“Blue Book”) shall be the Graphic
and their
main basis for the standards representation of
corresponding
and codes to be met by the the Works
goods and materials unit prices, lump
required
to be furnished and work sums, and/or
performed or tested for the provisional sums
Contract.
These shall likewise form part of the Bidding Documents

🗹 Plans/Drawings

🗹 Plans/Drawings

🗹 Bill of Quantities
Plans/Drawings

Detailed Engineering:
❑ Detailed engineering investigations, surveys and designs
❑ In case of projects with pending acquisition of right-of-way
site or location, the procurement process may commence,
but no award of contract shall be made until:
an authority or permit to enter is issued by the property
owner; or
a notarized deed of sale or deed of donation is executed in
favor of the government; or
a writ of possession is issued by a court of competent
jurisdiction
Exemption: In case of Design and Build Scheme

INVITATION TO OBSERVERS
At least 3 Observers from 1) COA, 2) Duly recognized

private group in the sector or discipline of the particular
type of procurement involved, and 3) NGO shall be invited
by the BAC at least 5 calendar days before the date of the
following procurement activity:
Preliminary examination
Eligibility checking
of bids
Shortlisting
Bid Evaluation
(For Consulting Services)
Pre-Bid Conference Post-Qualification

What if the PE wants to undertake
the procurement project but does
not have proficiency or capability?
1 Under Section 7.3.3 of the 2016 revised IRR of R.A.
No. 9184, where the PE does not have the proficiency
or capability to undertake a particular procurement, as
determined by the HoPE concerned, it may outsource
the procurement tasks by requesting other GoP
agencies to undertake such procurement for them,
through the execution of a memorandum of agreement
containing specific arrangements, stipulations and
covenants, in accordance with government budgeting,
accounting and auditing rules.
NPM No. 134-2017
22
2 Engaging private procurement agents to directly
undertake the procurement for them, subject to the
guidelines to be issued by the GPPB
Sec. 7.3.3(b), IRR, No. RA 9184
3 Recruiting or engaging consultants to assist them

directly and/or train their staff in the management of the
procurement function
Sec. 7.3.3(c), IRR, No. RA 9184

WHO ARE ELIGIBLE TO PARTICIPATE
Duly licensed Filipino citizens/sole proprietorships
Partnerships with at least 60% Filipino interest or ownership
Corporations with at least 60% Filipino interest or ownership
Cooperatives duly organized under the laws of the Philippines
Joint Ventures with at least 60% Filipino interest or ownership
Foreign bidders when provided under any Treaty or International

or Executive Agreement

FOREIGN EQUITY REQUIREMENT IN
GOVERNMENT PROCUREMENT
Executive Order No. 65, s. 2018
Promulgated the 11th Foreign Investment Negative List (FINL) which provides
for limitation on investment by foreign entities in specific business and/or industry
Intended to ease restrictions on foreign participation in certain investment
areas or activities by increasing the threshold of how much foreign entities may
own from 25% to 40%
Amendment on Foreign Equity Requirement
Partnerships duly organized under the laws of the Philippines and which at
least 60% [from 75%] of the interest belongs to citizens of the Philippines
Corporations duly organized under the laws of the Philippines, and of which at
least 60% of the outstanding capital stock belongs to citizens of the
Philippines
For persons/entities forming themselves into a joint venture, Filipino ownership
or interest of the joint venture concerned shall be at least 60%
JVs with less than 60% Filipino ownership or interest

may be allowed to participate if:
❑ The structures to be built require the application of

techniques and/or technologies which are not
adequately possessed by a person/entity meeting the
60% Filipino ownership requirement
Provided further that Filipino ownership or

interest shall not be less than 25%

GOCCs may be eligible to participate only if they can

establish that:
❑ They are legally and financially autonomous;
❑ They operate under commercial law; and
❑ They are not attached agencies of the PE

USE OF DIGITAL SIGNATURE
Objective
To hasten the process of securing physical signatures of
procurement officers who may not always be available to affix
their signatures & to avoid pending of procurement documents
due to physical absence of the signatories
GPPB Resolution No. 16-2019

Allows use of digital signature in 1) all GPPB issuances and 2)
all procurement-related documents

USE OF DIGITAL SIGNATURE
You may contact the Cybersecurity Bureau or the Digital

Certificate Division of the DICT for any technical concerns
with the registration or use of the digital signature.
8-920-0101
STANDARD BIDDING
PROCEDURES FOR
INFRASTRUCTURE PROJECTS
STANDARD BIDDING PROCEDURE FOR
INFRASTRUCTURE PROJECTS
Pre-
Advertisement Pre-Bid
Procurement
Conference
Conference
Opening of
Opening of 2nd
Submission of 1st Envelope (Eligibility
Envelope (Financial
Bids & Technical
Proposal)
Requirements)
Bid Evaluation Award of

Post-qualification
& Ranking Contract

GPPB RESOLUTION NO. 24-2018
Use of Videoconferencing, Webcasting & Similar

Technology
Objective
To prevent delays and failures of bidding due to postponement of
Bids and Awards Committee (BAC) meetings attributed to lack of
quorum
Procurement Activities that may be conducted
electronically
👨👩 Pre-Procurement Conference
Bid Opening
All other procurement activities/meetings that may or
may not require quorum of BAC Members

Use of Videoconferencing, Webcasting & Similar

Technology
👨👩 For purposes of determining a quorum, a member of the BAC
(including Chairperson and Vice-Chairperson) may be present either
in person or face-to-face through videoconferencing, webcasting
or similar technology for PEs with such technology
👨👩 Meetings of the BAC may be conducted electronically for PEs with

videoconferencing, webcasting or similar technology
👨👩 Decisions made of at least a majority of the BAC members present,
either in person or face-to-face through videoconferencing, webcasting
or similar technology, or a combination thereof, shall be considered
valid and binding

PRE-PROCUREMENT CONFERENCE
Purpose
Determine the readiness of the procurement, such as:
🗹 Description and scope of the contract
🗹 Approved Budget for the Contract (ABC)
🗹 Contract duration
🗹 Whether project is in accordance with the PPMP and APP
🗹 Availability of appropriations
🗹 Completeness and correctness of the Bidding Documents
🗹 Completion of the detailed engineering according to the prescribed
standards in the case of Infrastructure Projects
🗹 Availability of right-of-way site or location, and the possession of affected
properties
🗹 Review and adopt the procurement schedule
🗹 Reiterate and emphasize the importance of confidentiality
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PRE-PROCUREMENT CONFERENCE
Timeline Condition 👪 Participants
❑ Conducted ❑ Mandatory for ❑ BAC
prior to projects with ❑ BAC
advertisement ABC above Secretariat
or posting of PhP5,000,000. ❑ TWG
the Invitation to 00 ❑ Consultants for
Bid the subject
procurement
project, if any
❑ End-user unit
❑ Other Officials
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REFERENCE TO BRAND NAMES
Sec. 18 of RA 9184 and its IRR

❑ The prohibition applies to the procurement of goods, and
goods component of Infrastructure Projects and Consulting
Services.
❑ Specifications should be based on relevant characteristics,

functionality and performance requirements, except for
items or parts that are compatible with the existing fleet or
equipment of the same make and brand, and to maintain
the performance, functionality and useful life of the
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Measures to Maximize Pre-Bid Conference

BAC shall have a proactive role during the Pre-Bid Conference by:
Initiating discussions on the requirements of the project
Discussing the common reasons of bidders’ disqualification and

ways to prevent occurrence of such reasons
Issuance of Supplemental/Bid Bulletin at its own initiative or in

response to requests for clarifications
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Measures to Maximize Pre-Bid Conference

BAC shall have a proactive role during the Pre-Bid Conference by:
Provision of alternative documents to the Eligibility Requirements
Relaxing the eligibility requirements for foreign consultants
Separate eligibility requirements for individual consultants
Less stringent rules in sealing and marking of bids

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ADVERTISEMENT/POSTING OF THE INVITATION TO BID
Purpose
To signal the start of the bidding process and invite

interested bidders to participate in the procurement activity,
through the following:
❑ Advertisement of the Invitation of Bid (IB) in newspaper;

and
❑ Posting of Bid Opportunity, including complete Bidding
Documents in required websites and at conspicuous
places
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Advertisement Posting
At least once in one (1) Posted continuously for 7
newspaper of general calendar days for projects with
nationwide circulation, ABC of equal to or less than
which has been regularly PhP15,000,000.00, in the
published for at least two following:
PhilGEPS;
(2) years before
Website of the PE, if any;
advertisement date for
Website of IFI, if applicable;
projects with ABC of and
more than At any conspicuous place in
PhP15,000,000.00 the premises
Post ofAwthe PE.
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15M and
Medium Above 15M
Below
• Newspaper of General
Nationwide Circulation ✔ 🗶
• PhilGEPS website ✔ ✔
• PE’s website, if available ✔ ✔
• Conspicuous Place ✔ ✔
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Contents of the Invitation to Bid

1. The name and location of the contract to be bid, the
project background and other relevant information,
including a brief description of the type, size, major items
and other relevant features
2. The name of the project, identification and number of lots
or items, as well as basis of evaluation
3. General statement on the criteria for the eligibility check
4. The date, time and place of the deadline for the
submission and receipt of bids, and the opening of bids
5. ABC for the project, lot, or item to be bid
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Contents of the Invitation to Bid (Cont.)

6. The source of funding
7. Period of the availability of the Bid docs, the place the Bid
Docs may be secured, the website, and , the price of the
Bid Documents
8. The contract duration or delivery schedule
9. The name, address, telephone number, facsimile number,
email and website addresses of the PE and the designated
contact person
10. Other relevant information
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Advertisement of bid opportunities in a newspaper
shall no longer be required two (2) years after the
effectivity of the 2016 Revised IRR of RA No. 9184 or
from October 28, 2018 onwards
However:
PEs that cannot post its opportunities in the PhilGEPS for

justifiable reasons shall continue to publish its advertisements in
a newspaper of general nationwide circulation
Posting shall be for a continuous period of 7 calendar days

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ISSUANCE OF BIDDING DOCUMENTS
▪ The Bidding Documents shall be available from the time the

Invitation to Bid is first advertised/posted until the
deadline for the submission and receipt of bids.
▪ The BAC shall issue the Bidding Documents upon payment of

the applicable cost thereof, if any, to the collecting/disbursing
officer of the PE concerned.
▪ Prospective bidders may download the Bidding Documents

from the specified said websites; provided that, bidders shall
pay the fee for the Bidding Documents upon submission of
theirAdvert
Bids. Pre- Receip
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BIDDING DOCUMENTS FEE
❑ PEs may charge fees for the acquisition of Bidding
Documents based on the following rates:
APPROVED BUDGET FOR THE MAXIMUM COST OF BIDDING
CONTRACT DOCUMENTS IN PHP
500, 000 and below 500.00
More than 500, 000 up to 1 Million 1,000.00
More than 1 Million up to 5 Million 5,000.00
More than 50 Million to 500 Million 50,000.00
More than 500 Million 75,000.00
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PRE-BID CONFERENCE
Purpose
❑ To discuss, clarify and explain, among other things, the

eligibility requirements and the technical and financial
components of the contract to be bid including questions
and clarifications raised by the prospective bidders before
and during the Pre-Bid Conference
❑ It is open to prospective bidders, but attendance shall not

be mandatory
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PRE-BID CONFERENCE
Timeline Condition
❑ Held at least 12 cd before deadline
❑ Mandatory for
for bid submission but not earlier
projects with
than 7 cd from the PhilGEPS
ABC of
posting of the IB or Bidding
Documents PhP1,000,000.
❑ May be held at least 30 cd before 00 or more
deadline for bid submission,
considering the following:
Method, nature, and complexity of
contract
International participation is more
advantageous
Advert Pre- Receip
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PRE-BID CONFERENCE
▪ For contracts less than PhP1M, pre-bid conferences may be
conducted at the discretion of the BAC.
▪ Subject to the approval of the BAC, a pre-bid conference may

also be conducted upon written request of any prospective
bidder.
• The minutes of the pre-bid conference shall be recorded and

prepared not later than five (5) calendar days after the pre-
bid conference, and shall be made available to prospective
bidders not later than five (5) days upon written request.
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Can attendance to the Pre-Bid
Conference be restricted to
bidders who only acquired bid
documents?
Under Section 22.3 of the 2016 IRR of RA 9184, the “Pre-Bid
Conference is open to prospective bidders”. This is in contrast to
the same Section under the 2009 IRR of RA 9184 where it
provides that “at the option of the Procuring Entity, only those
who have purchased the Bidding Documents shall be allowed to
participate in the pre-bid conference and raise or submit written
queries or clarifications.”
With the removal of this option in the 2016 IRR of RA 9184, all
prospective bidders are now given the opportunity to attend
the pre-bid conference and raise questions or clarifications
regardless whether they purchased the bidding documents
or not.
NPM No. 060-2017

SUPPLEMENTAL/BID BULLETINS
Purpose
Issued by the BAC, duly signed by BAC

Chairperson, to:
❑ Answer requests for clarification or interpretation
❑ Clarify or modify any provision of Bidding Docs

SUPPLEMENTAL/BID BULLETINS
Timeline Conditions
❑ Must be issued at ❑ Must be posted in PhilGEPS

least 7 cd before and PE’s website, and at a
deadline for bid conspicuous place within the
submission premises of the PE
❑ Meanwhile, queries ❑ Bidders who have submitted
should be submitted bids before issuance of
to the BAC 10 cd Supplemental/Bid Bulletin
before deadline for must be informed in writing
bid submission and allowed to modify or
withdraw their bids
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RECEIPT AND OPENING OF BIDS
Bids should be submitted to the BAC on the date, time, and
place specified in the IB, through the bidder’s duly authorized
representative in a Two-Envelope System:
Eligibility Documents Technical Requirements Financial Documents
1st Envelope 2nd Envelope

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RECEIPT AND OPENING OF BIDS
Date of submission should not be later than the following
periods from the last day of posting of the IB:
ABC (in PhP) PERIOD (in CD)
50,000,000.00 and Below 50
Above 50,000,000.00 65
Bids submitted after the deadline shall not be accepted
The BAC Secretariat shall notify in writing all bidders whose

bids it has received through its PhilGEPS-registered physical
address or official e-mail address within 7 cd from the date of
the bid opening
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RECEIPT OF BIDS
❑ Original copy of bid form shall be typed or written in ink

and shall be signed by the bidder or its duly authorized
representative
❑ Unsealed or unmarked bid envelopes shall be rejected.
❑ However, bid envelopes that are not properly sealed and

marked, as required in the Bidding Documents, shall be
accepted, provided that the bidder or its duly authorized
representative shall acknowledge such condition of the bid as
submitted.
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MODIFICATION OF BIDS
❑ A bidder may modify its bid, provided that this is done
before the deadline for the submission and receipt
of bids.
❑ Where a bidder modifies its bid, it shall not be allowed
to retrieve its original bid, but shall only be allowed to
send another bid equally sealed, properly identified,
marked as a “modification.”
❑ Bid modifications received after deadline shall not be
considered and shall be returned to the bidder
unopened.
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WITHDRAWAL OF BIDS
❑ A bidder may, through a letter, withdraw its bid

before the deadline for the receipt of bids.
Withdrawal of bids after the applicable deadline shall be
subject to appropriate sanctions.
❑ A bidder that withdraws its bids shall not be permitted

to submit another bid, directly or indirectly, for the
same contract.
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RE-SCHEDULING OF BID OPENING
❑ In case the bids cannot be opened as scheduled due to

justifiable reasons (i.e lack of quorum, cancellation of
office work due to bad weather), the BAC shall take
custody of the bids submitted and reschedule the
opening of bids on the next working day or at the
soonest possible time through the issuance of a
Notice of Postponement to be posted in the
PhilGEPS website and the website of the PE
(Sec. 29, 2016 IRR of RA 9184)

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OPENING AND PRELIMINARY
EXAMINATION OF BIDS
The BAC shall open the bids in public immediately after the
deadline for the submission and receipt of bids
Opening of Opening of
1st Envelope Ranking
2nd Envelope
Checking presence
▪ Only 2nd Envelopes of bidders
or absence of Only bidders
whose 1st Envelope was rated
submitted whose both 1st
“Passed” will be opened
documents against a and 2nd envelopes
▪ Bids with missing, incomplete
checklist of required were rated
or patently insufficient, and/or
documents using a “Passed” will be
bid price exceeding the ABC
non-discretionary ranked
shall be rated “Failed”
“pass/fail” criterion
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Should PE immediately return the
second bid envelope unopened to the
bidder if its bid has been declared failed
for neglecting to submit all required
documents in its first bid envelope?
The BAC should return the bid enveloped for a bidder whose bid has
been finally declared failed despite the deletion of the sentence "[i]n
case one or more of the above required documents in the first
envelope of a particular bid is missing..., the BAC shall rate the bid
concerned as "failed" and immediately return to the bidder
concerned its second bid envelope unopened" in Section 30.1 of the
IRR.
As a matter of prudence, however, it is recommended that the

BAC retain the bid documents of a failed bid in the event that
said decision is being contested by the bidder. In this manner,
the integrity of the bid is protected in case the BAC reverses itself (or
the HoPE riles in favor of the bidder, in case a protest is filed) and
the procuring entity is duty bound to open the second bid envelope.
NPM No. 011-2010
OPENING AND EVALUATION OF 1ST
ENVELOPE
Eligibility Requirements Technical Requirements
1. Legal Documents 1. Bid Security

2. Technical Documents 2. Project Requirements
3. Financial Documents 3. Omnibus Sworn
Statement
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ELIGIBILITY REQUIREMENTS
Legal Technical Financial

🗹 PhilGEPS Certificate 🗹 Statement of 🗹 Net
Class “A”
of Registration and all ongoing Financial

Membership (Also contracts Contracting
represents AFS and 🗹 Statement of Capacity
PCAB License in SLCC (NFCC)
addition to Legal 🗹 PCAB
documents under License (For
Sec. 23.1(a)) Joint
Venture)
Class “B” 🗹 In case of JV, JV Agreement entered into by the parties

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Submission of PhilGEPS Certificate of Registration and
Membership in lieu of the Class “A” Eligibility Documents
All bidders shall upload and maintain in PhilGEPS a current and updated file
of the following Class “A” eligibility documents under Sections 23.1(a) and
24.1(a):
1. Registration Certificate;
2. Mayor’s/Business Permit or its Equivalent Document;
3. Tax Clearance;
4. Philippine Contractors Accreditation Board (PCAB) license and
registration; and
5. Audited Financial Statements (AFS).
(Sec. 8.5.2, 2016 IRR of RA No. 9184)
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Submission of PhilGEPS Certificate of Registration and

Membership in lieu of the Class “A” Eligibility Documents
For foreign bidders participating in the procurement by a

Philippine Foreign Service Office or Post, they shall submit their
eligibility documents under Section 23.1, 2016 IRR of R.A. No.
9184. Provided, that the winning bidder shall register with
the PhilGEPS in accordance with Sec. 37.1.4 of the 2016 IRR
of R.A. No. 9184.
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GPPB Circular 07-2017, dated 31 July 2017
The implementation of the mandatory submission of PhilGEPS

Certificate of Registration and Membership under Platinum
category for Competitive Bidding, Limited Source Bidding
and Two-Failed Bidding has been until revoked by the
GPPB. For procurement projects advertised and/or posted
starting 2 September 2017, bidders may still submit their Class
“A” Eligibility Documents under Section 23.1(a).
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CLASS “A” ELIGIBILITY
DOCUMENTS
UNDER
Legal
SECTION 23.1(a)
Technical Financial
🗹 DTI/SEC/CDA 🗹 Statement of all 🗹 AFS
Class “A”
Registration ongoing contracts 🗹 NFCC

🗹 Mayor’s/Business 🗹 Statement of
Permit or equivalent SLCC
document for 🗹 PCAB License
Exclusive Economic or Special PCAB
Zones or Areas for JV, and
🗹 Tax Clearance Registration
Class “B” 🗹 In case of JV, JV Agreement entered into by the parties

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ELIGIBILITY REQUIREMENTS (CLASS “A”)
MAYOR’S/BUSINESS PERMIT
❑ The Mayor’s/Business Permit allows an entity to legally perform
the requirements and obligations of the project and the resultant
contract.
❑ Recently expired Mayor’s/Business permit shall be accepted

together with the official receipt as proof that the bidder has
applied for renewal within the period prescribed by the concerned
LGU.
❑ However, the renewed permit shall be submitted as a post-

qualification requirement in accordance with Sec. 34.2 of the 2016
IRR of R.A. No.Pre-
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PCAB LICENSE
❑ A valid PCAB License or Special PCAB License for JV,

and Registration for the type and cost of the contract to be
bid, should be valid at the time of the deadline for the
submission and opening of bids.
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Non-Acceptability of Temporary PCAB License
Background
Section 23.1(a)(vi) of the 2016 Revised IRR of RA No. 9184 requires
submission of PCAB License or Special PCAB License in case of Joint
Ventures as part of the eligibility requirements
Objective
Address volume of queries received by GPPB-TSO clarifying the
acceptability of Temporary PCAB License as an eligibility requirement
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PCAB License
License issued by the Philippine Contractors Accreditation Board
allowing an entity to engage in business as a contractor
Turn-around time for its issuance is twenty (20) calendar days
✋Temporary PCAB License

Refers to the document issued by PCAB to a contractor who has filed for
renewal of PCAB License before the 30th day of June but have not yet
been processed due to high volume of applicants
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General Consideration
Bidders shall submit a valid PCAB License for the following procurement projects:
Infrastructure Projects, either procured through competitive

bidding or alternative methods of procurement.
Goods or Consulting Services with civil works component,
either procured through competitive bidding or alternative
methods of procurement.
Temporary PCAB License shall not be accepted as an eligibility or documentary

requirement in lieu of a valid PCAB license
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TAX CLEARANCE
❑ Submission of BIR receipt for renewal of Tax Clearance

will not suffice in lieu of a valid Tax Clearance Requirement
since substitution is not allowed under Section 34.2 of the IRR
of R.A. No. 9184.
❑ Submission of Provisionary Tax Clearance issued by the

BIR for bidding purposes is not an acceptable form of Tax
Clearance. (GPPB Resolution No. 01-2014)
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STATEMENT OF ONGOING AND COMPLETED

CONTRACTS
❑ Statement of the prospective bidder of all ongoing

government and private contracts, including contracts
awarded but not yet started, if any, whether similar or not
similar in nature and complexity to the contract to be bid.
(Sec. 23.1(a)(iv), IRR of R.A. No. 9184)
❑ The statement shall include all information required in the

Philippine Bidding Documents prescribed by GPPB
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SINGLE LARGEST COMPLETED CONTRACTS (SLCC)
❑ The SLCC completed should be similar to the contract to

be bid, or has the same major categories of work
❑ The SLCC’s value should be at least 50% of the ABC to be

bid upon adjustment to current prices using the PSA
consumer price indices
❑ In case of contracts with the private sector, an equivalent

document shall be submitted.
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❑ The statement of the Bidder’s SLCC shall be supported by:

1. The Project Owner’s Certificate of Final Acceptance
issued by the Owner other than the Contractor; or
2. The Constructors Performance Evaluation System
(CPES) Final Rating, which must be at least satisfactory.
❑ Contractors under Small A and Small B categories without

similar experience on the contract may participate if the cost
of the contract to be bid is not more than the Allowable
Range of Contract Cost (ARCC) of their registration
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PCAB ALLOWABLE RANGE OF CONTRACT COST
Category Allowable Range of Contract Cost

(in Million Pesos)
Small A Up to 0.5
Small B Up to 15
Medium A Up to 100
Medium B Up to 200
Large A Up to 300
Large B Less than or above 300
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❑ Under 2009 IRR: The prospective bidder must have an

experience to having completed, within 10 years from the
date of submission and receipt of bids, at least one contract
similar to the one to be bid out.
❑ Under 2016 Revised IRR: The requisite 10 year period has

now been removed. The similar completed projects may
now be those older than 10 years. (GPPB Resolution 11-
2012)
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STATEMENTS OF SLCC AND ONGOING
AND COMPLETED CONTRACTS
Column 1 Column 2 Column 3 Column 4 Column 5 Column 6
Name of Date of Contract Owner’s Nature of Contractor’s role*
the the duration name and work and percentage
contract contract address of participation
Column 7 Column 8 Column 9 Column 10 Column 11

Total Date of Date of % of planned Value of
contract completion or completion or and actual outstanding
value at estimated estimated accomplishment works**
award completion time completion time** s**
*whether sole contractor, subcontractor, or partner in a JV
**if applicable
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NET FINANCIAL CONTRACTING CAPACITY
❑ The NFCC value should be at least equal to the ABC to be

bid
❑ The NFCC’s K factor shall be fixed at 15, regardless of

contract duration
NFCC = [(Current assets minus current liabilities) (15)] minus

the value of all outstanding or uncompleted portions of the
projects under ongoing contracts, including awarded contracts
yet to be started, coinciding with the contract to be bid.
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NET FINANCIAL CONTRACTING CAPACITY
❑ The values of the domestic bidder’s current assets and

current liabilities shall be based on the latest AFS
submitted to the BIR.
❑ For purposes of computing the foreign bidder’s NFCC, the

value of the current assets and current liabilities shall be
based on their AFS prepared in accordance with international
financial reporting standards.
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Can a new business avail of the
track record of an existing
enterprise, owned by the one and
the same person?
[T]he track record gained by the owner of a sole proprietorship
may be used by another enterprise of the same nature
established and registered by the same owner. The rationale
for this is that the business experience gained redounds, not to
the sole proprietorships that has no juridical personality, but to
the owner of the business itself.
xxx
[I]t is our considered view that a newly registered sole
proprietorship may use the experience of another sole
proprietorship with the same business owned by the same
individual. Incidentally, if one of the sole proprietorship is
blacklisted, such blacklisting will extend to all sole proprietorships
owned by the same individual.
NPM No. 037-2011

Will the experience/track record of
a sole proprietorship, which has put
all its assets, personnel and
resources to corporation, be
carried over to said corporation?
[I]t is settled that a corporation is invested by law with a personality separate and
distinct from those of the persons composing it as well as from that of any other
legal entity to which it may be related. Thus, a corporation should be treated
as a separate entity from its owners, stockholders and other business
entities.
A sole proprietorship does not possess a juridical personality separate

and distinct from the personality of the owner of the enterprise. The law
merely recognizes the existence of a sole proprietorship as a form of business
organization conducted for profit by a single individual and requires its proprietor
or owner to secure licenses and permits, register its business name, and pay
taxes to the national government.
Given the established difference between a sole proprietorship and a

corporation, it is clear that these entities are entirely distinct and separate
entities. Thus, experience/track record of a sole proprietorship in this case
cannot be carried over to the corporation.
NPM No. 031-2013
ELIGIBILITY REQUIREMENTS “CLASS B”
REQUIREMENTS FOR JOINT VENTURES
Joint
🗹 Valid Joint Venture Agreement
All Partners Any of the Partners

🗹 Legal Eligibility Documents 🗹 Technical Eligibility
(or PhilGEPS Certificates of Documents
Registration under Platinum 🗹 Financial Eligibility
membership category) Documents
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ELIGIBILITY REQUIREMENTS FOR FOREIGN
BIDDERS
In the case of foreign bidders, appropriate equivalent
documents issued by the country of the foreign bidder under
Class “A” Documents shall be submitted, provided that:
The documents are in English, or
If the documents submitted are in a foreign language other than

English, it must be accompanied by a translation of documents in
English by any of the following:
relevant foreign government agency;
the foreign government agency authorized to translate
documents, or
a registered translator in the foreign bidder’s country.
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ELIGIBILITY REQUIREMENTS FOR FOREIGN
BIDDERS
Document submitted by foreign bidders shall be authenticated by
the appropriate Philippine foreign service establishment/post
or the equivalent office having jurisdiction over the foreign
bidder’s affairs in the Philippines.
Only upon actual determination and confirmation of this

equivalence through post qualification by the BAC may it be
categorically resolved that the foreign documents submitted are
acceptable substitutes of the required eligibility documents
pursuant to Section 23.2 of the IRR
NPM No. 42-2013
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ELIGIBILITY REQUIREMENTS FOR
FOREIGN BIDDERS
Background: The Apostille Convention
The Philippines has acceded to the Hague Convention of 5 October 1961
Abolishing the Requirement of Legalisation for Foreign Public Documents or The
Apostille Convention which aims to simplify the procedures in the use of foreign
public documents
Effective 14 May 2019, the Philippine foreign service establishment or post will
now authenticate documents through an Apostille and these documents are
strictly for the use of public documents abroad
Objective
The authentication of documents under the Apostille Convention shortens the
process for authenticating documents of foreign bidders who intent to participate
in government procurement in the Philippines.
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ELIGIBILITY REQUIREMENTS FOR
FOREIGN BIDDERS
New Provision
❑ However, for Contracting Parties to the Apostille Convention, the
documents shall be authenticated through an apostille by the
Competent Authority, except for countries identified by the
Department of Foreign Affairs (DFA) that will still require legalization
(red ribbon) by the relevant Embassy or Consulate.
❑ A Contracting Party refers to a State that has joined the Apostille

Convention, whether or not the Convention has entered into force for
that State.
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TECHNICAL REQUIREMENTS
BID SECURITY
Purpose Conditions
To guarantee that the ❑ Only 1 form of Bid Security is required to be
successful bidder submitted
shall, within ten (10) ❑ Bidders have the option to choose their
calendar days from preferred form of bid security
receipt of the notice of ❑ Bank-issued securities must be issued by a
award, enter into universal or commercial bank
However, in LGUs biddings, securities may be
contract with the PE issued by banks certified by BSP as
and furnish the authorized to issue said instruments
performance security ❑ Surety Bonds must be accompanied by
required certification from Insurance Commission
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BID SECURITY
Form of Bid Security Amount
a) Cash or cashier’s/manager’s
check
2% of ABC
b) Bank guarantee/draft or
Irrevocable LC
c) Surety bond callable upon
5% of ABC
demand
d) Bid Securing Declaration No percentage required
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BID SECURING DECLARATION

What is It? Penalties
A document/undertaking signed by the ❑ Penalty of automatic
bidder committing to pay the blacklisting for two (2)
corresponding fine and be years in all government
suspended for a period of time from procurement activities;
being qualified to participate in any and
government activity in the event of ❑ Payment of fine to be
violation of any of the conditions stated calculated in
therein, using the prescribed form issue accordance to the rules
by GPPB set specified in the
(GPPB Resolution No. 03-2012) GPPB Resolution
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PROJECT REQUIREMENTS
Must contain the following:
🗹 Organizational chart for the contract to be bid
🗹 List of contractor’s personnel (e.g., Project Manager, Project

Engineers, Materials Engineers, and Foremen), to be assigned to the
contract to be bid, with their complete qualification and experience
data; and
🗹 List of contractor’s major equipment units, which are owned, leased,
and/or under purchase agreements, supported by proof of ownership
or certification of availability of equipment from the equipment
lessor/vendor
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OMNIBUS SWORN STATEMENT
New Form containing the following, pursuant to Sec. 25.3, 2016

IRR of R.A. No. 9184
❖ Non-inclusion in blacklist ❖ Responsibilities of bidders
❖ Authenticity of documents ❖ Labor laws and standards
❖ Verification authority ❖ Non-payment (directly or
❖ Signatory’s authority indirectly) any commission,
amount, fee, or any form of
❖ Disclosure of relations consideration in relation to any
procurement project or activity
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CONTENTS OF 2ND ENVELOPE
1. Financial Bid Form, including bid prices

and bill of quantities, as well as applicable
price schedules
2. Other documents required in the bidding
documents
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OPENING OF 2ND ENVELOPE
❑ The BAC shall open the second envelope of each

remaining eligible bidder within the same day.
❑ In case one or more of the requirements in the second

envelope of a particular bid is missing, incomplete or
patently insufficient, and/or if the submitted total bid
price exceeds the ABC, the BAC shall rate the bid
concerned as “failed.” Otherwise, the BAC shall rate it as
“passed” and shall immediately be considered for
evaluation and comparison.
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FINANCIAL BID FORM
CONTENTS
1. Bill of Quantities
2. Detailed Estimate
3. Cash Flow by quarter
4. Other requirements
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Can PEs impose additional eligibility
documents other than those required
under Sections 23.1, 24.1, and 25.1 of
the revised IRR of RA No. 9184?
PEs are proscribed from requiring additional requirements. The list
of minimum eligibility requirements under the revised IRR of RA No.
9184 has been streamlined/simplified, such that only those requirements
enumerated in Sections 23.1, 24.1, and 25.1 of the IRR are necessary
for purposes of determining bidders' eligibility.
-xxx-
[T]he PE may require additional documents not as additional eligibility

documents, but as additional documents pursuant to the Bidding
Documents in relation to the financial component of the bid,
Section 25.2, or Section 34.2 of the revised IRR of RA 9184
NPM No. 142-2015

DETAILED EVALUATION OF BIDS
Purpose Method Timeline
To determine the A non-discretionary Should be
Lowest Calculated criterion shall be used, completed
Bid (LCB) by: which shall include within 7
❑ Establishing consideration of: calendar
correct ❑ Completeness of bids; days from
calculated prices and the deadline
of bids; and ❑ Minor arithmetical for receipt
❑ Ranking corrections of proposals
calculated total Results shall be
bid prices from contained in the Abstract
lowest to highest of Bids
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CEILING FOR BID PRICES

❑ The ABC under bidding shall be the upper limit or
ceiling for acceptable bid prices. If a bid price, as
evaluated and calculated, is higher than the ABC
under bidding, the bidder submitting the same shall be
automatically disqualified.
❑ No lower limit or floor on the amount of the award.
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❑ The estimated budget for the cost components of an
infrastructure project is used by PEs in determining the
appropriate and reasonable amount of the ABC.
❑ On the other hand, the ABC, as the upper limit or ceiling for
bid prices, is used by the bidder in submitting a responsive bid.
Accordingly, bids that are within the ABC, even if the price
offered for a particular component exceeds the identified
estimated cost for such component, can be considered for
award if proven to be the lowest calculated and responsive bid
among all other bids.
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For Foreign-funded Procurement, the ABC shall be applied as
ceiling provided that:
❑ Bidding documents are obtainable free of charge on a freely
accessible website;
❑ The procuring entity has procedures in place- that ABC is
based on recent estimates made by the Engineer or the
responsible unit of the procuring entity and based on adequate
detailed engineering and reflect the quality, supervision and
risk and inflationary factors, as well as the prevailing market
price;
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For Foreign-funded Procurement, the ABC shall be applied as
ceiling provided that (Cont.):
❑ The PE has trained estimators on estimating prices and
analyzing bid variance;
❑ The agency has established a system to monitor and report
bid prices relative to ABC and Engineers estimate.
❑ The PE has established monitoring and evaluation system for
contract implementation to provide feedback on actual total
costs of works.
❑ Conditions may be waived
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NO CONTACT RULE
Prohibition on communication w/ bidders from bid
evaluation until award of contract
❑ The “no contact” rule applies only to those whose bids

are being evaluated by the BAC after passing the
preliminary examination until the issuance of Notice of
Award.
❑ No communication should be made by bidders until a

decision to award a contract is made by the BAC.
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Unless the Instructions to Bidders (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
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In case of discrepancies:
Bid Price in Figures VS Bid Price in Words
VS
Unit Price for the Item
Total Price Per Item
x Quantity
Actual sum of prices of

Stated Total Price VS
component items
Unit Cost in the Detailed Unit Cost in the Bill of

VS
Estimate Quantities
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POST-QUALIFICATION
Purpose Method Timeline

To determine whether A non- Should be
the LCB complies with discretionary completed in not
and is responsive to pass/ fail more than 12
all requirements and criterion shall be calendar days
conditions as specified used to “Verify, from the
in the Bidding Validate and determination of
Documents, to be Ascertain” all the LCB (may be
declared the Lowest statements and extended to 45
Calculated and documents cd as approved
Responsive Bid submitted by the by the HoPE)
(LCRB) LCB
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POST-QUALIFICATION
LEGAL REQUIREMENTS
1. Legal documents under eligibility envelope
2. Licenses, certificates, permits and agreements
1. The bidder and its key personnel‘s competence and experience
2. Verification of availability and commitment, and/or inspection and
testing for the required capacities and operating conditions, of
equipment units to be owned/leased/under purchase by the bidder
for use in the contract under bidding
3. Ascertainment of the authenticity and sufficiency of the bid
security as to type, amount, form wording and
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POST-QUALIFICATION
FINANCIAL REQUIREMENTS
1. Bid price proposal

2. NFCC computation to ensure that the bidder can
sustain the operating cash flow of the transaction
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POST-QUALIFICATION
The BAC shall check performance of the bidders in its ongoing
contracts:
Negative slippage of at least 15% in any one project or a negative
slippage of at least 10% in each of 2 or more contracts;
Failure of the contractor to commence repair works on ongoing

contracts in accordance with Section 34.3
Failure of the contractor to commence repair works on contracts

with pending certificates of acceptance in accordance with Sec. 34.3
Substandard quality of work or unsatisfactory performance at the

time of inspection
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POST-QUALIFICATION
❑ The BAC will notify the Bidder with the LCB that it was
determined as such
❑ Within 5 calendar days from receipt of Notice, the LCB

should submit the following:
1. Latest Income and Business Tax Returns;
2. Other appropriate Licenses and permits required
by law and stated in the Bidding Documents; and
3. PhilGEPS Certificate under Platinum membership,
if applicable.
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Submission of SEC Certificate of

Registration of Foreign Bidders
Background
In view of the volume of queries from various PEs as to which period of
the procurement timeline when foreign bidders are required to submit
their SEC Certificate of Registration, the GPPB-TSO reviewed provisions
of the IRR of RA No. 9184 on the submission of SEC Certificate of
Registration during
a. Post-Qualification (for foreign suppliers and contractors); and
b. Issuance of Notice of Award (for foreign consulting firms)
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Amendment
Section 37.1.4 (a)(iii) of the IRR of RA 9184
Within ten (10) calendar days from receipt by the winning bidder of the
Notice of Award, the following documents shall be submitted before the
contract may be awarded:
i. xxx
ii. xxx
iii. The SEC Certificate of Registration of the foreign
corporation/consulting firm and/or the authority or license from the
appropriate government agency or professional regulatory body of the
foreign professionals engaging in the practice of regulated professions
and allied professions, where applicable.
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POST-QUALIFICATION
PARTIES INVOLVED IN THE CONDUCT OF POST-

QUALIFICATION
1. BAC;
2. TWG;
3. BAC Secretariat; and
4. The contractor, ranked starting from bidder with the
LCB.
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POST-QUALIFICATION
HOW IS POST-QUALIFICATION CONDUCTED
1 The BAC/TWG verifies, validates, and ascertains the

genuineness, validity and accuracy of the legal, technical
and financial documents submitted by the bidder with the LCB,
using the non-discretionary criteria.
❑ In verifying the information contained in such documents, the
TWG may make inquiries with appropriate government
agencies and examine the original documents kept in the
bidder’s place of business. The use of other means for
verification and validation of such documents may be resorted to
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POST-QUALIFICATION
2
The BAC/TWG inquires about the bidder’s performance in
relation with other contracts/transactions as indicated in
its eligibility statement (statements of all ongoing or
completed contracts).
3 If the TWG conducts post-qualification, it prepares a Post-

Qualification Report to be submitted to the BAC.
❑ The Report shall contain, among others, the activities
undertaken with regard to the Post-qualification process,
including feedback from inquiries conducted
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POST-QUALIFICATION
4 The BAC reviews the Post-qualification Report submitted by

the TWG.
5 The BAC determines whether the bidder with the LCB

passes all the criteria for post qualification.
6 If the LCB passes the post-qualification, the BAC declares it

as the LCRB.
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POST-QUALIFICATION
7 After the BAC has determined the LCRB, the

Secretariat, with the assistance of the TWG, if
necessary, prepares the BAC Resolution declaring the
LCRB, and recommend to the HoPE the award of
contract to the said bidder.
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POST-QUALIFICATION
❑ Failure to submit any of the post-qualification

requirements on time, or a finding against the
veracity thereof, shall disqualify the bidder for award
❑ In case of post-disqualification of the LCB, the BAC

shall be given the same fresh period to conduct the
post-qualification of the next LCB, and so on until the
LCRB, is determined for award.
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POST-QUALIFICATION
What happens if a bidder is found to have been

included in any government blacklist of contractors?
❑ A bidder that has been blacklisted by any government

agency or instrumentality will be disqualified by the
BAC from further participating in the bidding process.
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POST-QUALIFICATION
What happens if a bidder or its employees is related

within the third civil degree of consanguinity to the
Head of the Procuring Entity or any of officials of
employees of the Procuring Entity with direct access
to information that substantially affect the results of
the bidding?
❑ Such a bidder will be disqualified by the BAC.
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POST-QUALIFICATION
What happens if a bidder is found to have committed an
act that constitutes fraud or misrepresentation or to have
colluded with others for the purpose of influencing the
outcome of the Bidding?
❑ Disqualification,
❑ Forfeiture of the Bid Security,
❑ Upon conviction, imprisonment of not less than six (6) and one (1)
day and not more than fifteen (15) years, (Sec. 65.2, 2016 IRR
of RA 9184); and
❑ Imposition of administrative penalties of suspension for one (1)
year from participation in government procurement for the first
offense, and suspension for two (2) years for the second offense.
Pre-
(Sec. 69.1, 2016
Advert Pre- IRR of RA 9184)
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POST-QUALIFICATION
What happens if the bidder with the LCB fails Post-
Qualification?
❑ The BAC shall immediately notify the said bidder in writing of

its post-disqualification and the grounds thereof.
❑ The post-disqualified bidder shall have three (3) calendar
days from receipt of the said notification to request from the
BAC, if it so wishes, a reconsideration of this decision.
❑ The BAC shall evaluate the request and shall issue its final
determination of the said request within seven (7) calendar
days from receipt thereof. (Sec. 55.1, 2016 IRR of RA 9184)
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POST-QUALIFICATION
What happens if all qualified bidders fail Post-qualification?
❑ The BAC should declare a failure of bidding.
❑ The BAC shall issue a Resolution declaring a failure of
bidding.
❑ The BAC then conduct a mandatory review and evaluation of
the terms, conditions, and specifications in the Bidding
Documents, including its cost estimates.
❑ The BAC shall conduct a re-bidding, in the process
formulating a new IB and posting and publishing this as
required. (Sec. 35, 2016 IRR of RA 9184)
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POST-QUALIFICATION
What happens if all qualified bidders fail Post-qualification?
❑ All bidders that have initially responded to the IB in the first bidding
shall be allowed to submit new bids. (Sec. 35.4, 2016 IRR of RA
9184)
❑ It may be necessary to reduce the scope of the project.
❑ Should a second failure of bidding occur and the Procuring Entity
so decides to revise the ABC, the Procuring Entity should conduct
another public bidding with re-advertisement and/or posting.
❑ Alternatively, the PE may enter into a negotiated procurement.
(Sec. 35.5, 2016 IRR of RA 9184)
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DPWH Secretary Datumanong, et al. Vs. Malaga
G.R. No. 204906, June 5, 2017
Facts:
❑ Respondent Malaga, a private contractor and the lowest bidder for two
concreting projects of the DPWH, particularly:
a) Mandurriao-San Miguel Road, Bgry. Hibao-an Section in Iloilo City; and
b) Manduriao-San Miguel Road, Guzman-Jesena Section in Iloilo City.
❑ After publication but before opening of the bids, the road condition of the
Mandurriao-San Miguel Road in Brgy. Hibao-an was severely deteriorated
because of typhoon and monsoon season. The DPWH Region VI Director
indorsed to the DPWH Secretary the request of the District Engineer that the
said road be implemented by administration.
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G.R. No. 204906, June 5, 2017
Facts (Cont.):
❑ Since no response was forthcoming from the DPWH Secretary,
DPWH RO VI proceeded to open the bids as scheduled
❑ Thereafter, the Secretary approved the request, but only with
respect to the Mandurriao-San Miguel Road, Barangay Hibao-an
Section, which will be undertaken through administration. The BAC
conducted the post-qualification of respondent’s firm, but only for the
Mandurriao-San Miguel Road, Guzman-Jesena Section Project. The
respondent was declared post-qualified for the project, and the same
was awarded to her.
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G.R. No. 204906, June 5, 2017
Facts (Cont.):
❑ Respondent was informed that Hibao-an Section Project may not be

awarded to her in view of the Secretary’s approval. Respondent
replied with formal written demands that the project be awarded to
her under pain of civil action and claim for damages.
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G.R. No. 204906, June 5, 2017
Issue:
❑ Whether or not the CA erred in granting the respondents appeal
because respondent failed to allege any actionable wrong that would
entitle her to the damages claimed.
Ruling:
❑ Before a government project is awarded to the lowest calculate bidder,
his bid must undergo a mandatory post-qualification procedure whereby
the “Procuring Entity verifies, validates, and ascertain all statements
made and documents submitted by the bidder with the lowest
calculated or highest rated bid using a non-discretionary criteria as
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stated in the bidding
Advert Pre- documents.”
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G.R. No. 204906, June 5, 2017
Ruling (Cont.):
❑ Since respondent’s lowest calculated bid for the subject
project did not undergo the required post-qualification
process, then she cannot claim that the project was awarded
to her. And if the project was never awarded to her, then she
has no right to undertake the same. If she has no right to the
project, then she cannot demand indemnity for lost profits or
actual damages suffered in the event of failure to carry out the
same. Without formal award of the project in her favor, such
demand
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would
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be premature
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❑ The BAC shall recommend award of contract to the

Lowest Calculated and Responsive Bid (LCRB) at
submitted price or calculated price, whichever is lower.
❑ The BAC shall notify all other bidders, in writing, of its

recommendation to HOPE of award of contract to LCRB
within three (3) calendar days from the issuance of the
resolution recommending award
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❑ The HoPE shall have, at most, 15 calendar days to

decide whether or not to approve or disapprove the
recommendation of the BAC to award the contract. If
approved, the Notice of Award (NOA) shall be issued by
the HoPE to the LCRB.
❑ The BAC Secretariat shall post the NOA in the

PhilGEPS, PE’s websites and in any conspicuous place
within 3 calendar days from its issuance.
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❑ Award of contract is subject to the following conditions
within 10 calendar days from issuance of NOA:
🗹 If joint venture, submission of JVA
🗹 In the case of procurement by a Philippine Foreign
Office or Post, PhilGEPS Registration Number
🗹 If foreign-funded and stated in treaty, international or
executive agreement, PCAB License
🗹 Posting of Performance Security
🗹 Signing of Contract upon compliance with all
documentary requirements
🗹 If required, approvals by higher authority
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What happens if the bidder being considered for

award does not accept the award?
❑ If the bidder refuses to accept the award within the bid
validity period, the BAC shall forfeit the bid security of
the bidder and shall initiate the blacklisting
proceedings in accordance with the Uniform
Guidelines for Blacklisting (GPPB Resolution No. 09-
2004).
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What happens if the bidder being considered for
award does not accept the award?
❑ Refusal to accept an award, without just cause or for the
purpose of forcing the PE to award the contract to another
bidder, if proven, is meted with a penalty of imprisonment of
not less than six (6) years and one (1) day by not more than
fifteen (15) years. (Sec. 65.3.4, 2016 IRR of RA 9184)
❑ Additional penalties of suspension for one (1) year from
participation in government procurement for the first
offense, and suspension for two (2) years for the second
offense shall also be imposed on the bidder. (Sec. 69.1, 2016
IRR of RA 9184)
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POSTING OF PERFORMANCE SECURITY
Purpose Effects of Failure to Post
To guarantee ❑ Ground for disqualification

performance of ❑ Next-ranked LCB shall
obligation by the undertake post-
LCRB in such form qualification
and amount specified ❑ Bid security shall be
in the Bidding forfeited without prejudice
Documents to the imposition of
sanctions
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POSTING OF PERFORMANCE SECURITY
Form of Performance Security Amount

a) Cash or cashier’s/manager’s check
issued by Universal of Commercial Bank* Not less than
10% of the
b) Bank draft/guarantee or Irrevocable LC Contract Price
issued by Universal of Commercial Bank*
c) Surety bond callable upon demand Not less than
certified by the Insurance Commission as 30% of the
authorized to issue such security Contract Price
*For biddings conducted by LGUs, these may be issued by other banks certified by
the BSP as authorized to issue such financial instrument
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CONTRACT SIGNING
❑ When required, the approving higher authority or his duly

authorized representative shall be given a maximum of 20
calendar days from receipt to approve or disapprove the
contract.
❑ In the case of GOCCs, the concerned board or its duly

authorized representative shall be given a maximum of 30
calendar days from receipt to approve or disapprove the
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ISSUANCE OF NOTICE TO PROCEED (NTP)
❑ The PE shall issue the NTP together with a copy/ies of the approved
contract to the successful bidder within 7 calendar days from the
date of approval of the contract by the appropriate government
approving authority.
❑ All notices called for by the terms of the contract shall be effective
only at the time of receipt thereof by the successful bidder.
❑ The BAC Secretariat shall post the NTP and the approved contract
in the PhilGEPS and PE’s websites within 15 calendar days from
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the issuance
Advert of the
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POSTING OF WARRANTY SECURITY
Purpose Type of Structural Defects Warranty

and Failures Period
To guarantee that the
Permanent Structures(Types 4
contractor shall perform his and 5; Ex. steel, iron, 15 years
responsibilities and shall concrete)
answer for an liability arising Semi-Permanent structures
due to: (Types 1,2 and 3; Ex. roads,
❑ improper construction concrete river control, 5 years
❑ use of inferior drainage, irrigation lined
canals)
quality/standard
❑ any violation of the contract Other structures (Ex. wooden
2 years
plans and specifications bridges, spring developments)
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POSTING OF WARRANTY SECURITY
Form of Warranty Security Amount

a) Cash or cashier’s/manager’s check Not less than 5% of
issued by Universal of Commercial Bank* the Contract Price
b) Bank draft/guarantee or Irrevocable LC Not less than 10% of
issued by Universal of Commercial Bank* the Contract Price
c) Surety bond callable upon demand
Not less than 30% of
certified by the Insurance Commission as
the Contract Price
authorized to issue such security
*For biddings conducted by LGUs, these may be issued by other banks certified by
the BSP as authorized to issue such financial instrument
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Sargasso Construction & Development Corp. v. Philippine

Ports Authority
G.R. No. 170530, July 5, 2010
Facts:
❑ Plaintiff joint venture was awarded the construction of Pier 2
and the rock causeway for the port of La Union, after a public
bidding conducted by the defendant PPA. Adjacent to Pier 2 is
an area of P4,280 square meters intended for the reclamation
project as part of the overall port development plan.
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Ports Authority
G.R. No. 170530, July 5, 2010
Facts (Cont.):
❑ Plaintiff offered to undertake the reclamation project, as an extra
work to its existing construction of R.C. Pier 2 and Rock Causeway
for a price of P36,294,857.03. Defendant replied to plaintiff in a letter
as follows:
"Your proposal to undertake the project at a total cost of
P36,294,857.03 is not acceptable to PPA. If you can reduce your
offer to P30,794,230.89 we may consider favorably award of the
project in your favor, subject to the approval of higher
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authority.”
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Ports Authority
G.R. No. 170530, July 5, 2010
Facts (Cont.):
❑ Subsequently, a Notice of Award (NOA) signed by PPA General
Manager was sent to plaintiff for the Reclamation Contract and
instructing it to "enter into and execute the contract agreement with
this Office." The award of the negotiated contract as supplemental
project in favor of plaintiff was intended "to save on the
mobilization/demobilization costs and some items as provided for in
the original contract." Hence, the contract proposal for the
reclamation project was presented to the PPA Board of Directors.
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Ports Authority
G.R. No. 170530, July 5, 2010
Facts (Cont.):
❑ Plaintiff filed a complaint for PPA’s unjustified refusal to comply with
its undertaking, which delays the implementation of the NOA. PPA
contended that the alleged NOA has already been properly revoked
when the Supplemental Agreement which should have implemented
the award was denied approval by the Board of Directors. The Board
of Directors denied approval of the Supplemental Agreement for lack
of legal basis to award the supplemental contract through
negotiation.
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Ports Authority
G.R. No. 170530, July 5, 2010
Facts (Cont.):
❑ Petitioner contends that the existence of "NOA of Contract and Contractor’s
Conforme thereto," resulting from its negotiation with respondent, proves that a
contract has already been perfected, and that the other documents enumerated
under the amended IRR of P.D. 1594 are mere physical representations of the
parties’ meeting of the minds; that the "Approval of Award by Approving
Authority" is only a "supporting document," and not an evidence of perfection of
contract, and which merely "facilitates the approval of the contract;" that PPA is
bound by the acts of its general manager in issuing the Notice of Award under
the doctrine of apparent authority; and that the doctrine of estoppel, being an
equitable doctrine, cannot be invoked to perpetuate an injustice against
petitioner.
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Ports Authority
G.R. No. 170530, July 5, 2010
Issue:
❑ Whether or not a contract has been perfected for the
reclamation project between the parties which, in turn,
depends on whether or not the general manager of PPA
is vested with authority to enter into a contract for and on
behalf of PPA.
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Ports Authority
G.R. No. 170530, July 5, 2010
Ruling:
❑ A government or public contract has been defined as a
contract entered into by state officers acting on behalf of the
state, and in which the entire people of the state are directly
interested. It relates wholly to matter of public concern, and
affects private rights only so far as the statute confers such
rights when its provisions are carried out by the officer to
whom it is confided to perform.
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Ports Authority
G.R. No. 170530, July 5, 2010
Ruling (Cont.):
❑ A government contract is essentially similar to a private
contract contemplated under the Civil Code. The legal
requisites are the same; Otherwise, there is no government
contract to speak of.
❑ On the matter of entering into negotiated contracts by GOCC,
the provisions of existing laws are clear in requiring the
governing board’s approval thereof.
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Ports Authority
G.R. No. 170530, July 5, 2010
Ruling (Cont.):
❑ The authority to negotiate contract for projects under the exceptional cases
shall be subject to prior approval by heads of agencies within their
limits of approving authority
❑ The contracting officer functions as agent of the government for the purpose
of making the contract. There arise a principal-agent relationship between
the Government and the contracting official. The latter possesses
only actual agency authority. This is to say that his contracting power exists,
where it exists at all, only because and by virtue of a law, or by authority of
law, creating and conferring it. And it is well settled that he may make only
such contractsPre-
Advert
as he is so authorized to make.
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Ports Authority
G.R. No. 170530, July 5, 2010
Ruling (Cont.):
❑ The acts of such agents in entering into agreements or contracts
beyond the scope of their actual authority do not bind or obligate the
Government. The moment this happens, the principal-agent
relationship between the Government and the contracting officer
ceases to exist
❑ All signatories in a contract should be clothed with authority to
bind the parties they represent. Unless respondent’s Board validly
authorizes its general manager, the latter cannot bind respondent
PPAAdvert
to a contract.
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Ports Authority
G.R. No. 170530, July 5, 2010
Ruling (Cont.):
❑ Petitioner failed to present competent evidence to prove that the
respondent’s general manager possessed such actual authority
delegated either by the Board of Directors, or by statutory
provision. Without such actual authority, there could be no real consent,
much less a perfected contract, to speak of.
❑ Contracts to which the government is a party are generally subject to
the same laws and regulations which govern the validity and sufficiency
of contracts between private individuals. A government contract is
perfected only upon approval by a competent authority, where
Pre- such approvalPre-
Advert is required.
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IN EMPHASIS, THE STEPS IN AWARDING OF A
CONTRACT:
1 The BAC Secretariat

recommending award.
drafts the BAC Resolution
2 The BAC Secretariat consolidates all the documents and/or

records of the proceedings of the BAC with regard to the
procurement at hand, and attaches the same to the BAC
Resolution.
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CONTRACT:
3 To facilitate the approval of the award by the HoPE, the BAC

shall submit:
a) Resolution of the BAC recommending award
b) Abstract of Bids
c) Duly approved POW or Cost Estimates
d) Other pertinent documents required by existing laws,
rules, and/or the procuring entity concerned
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CONTRACT:
4 The BAC approves and signs its resolution recommending

award, and transmits the same to the Head of the Procuring
Entity
5 The HoPE, or his/her duly authorized representative, acts on

the recommendation for award within fifteen (15) calendar
days from the date of determination and declaration by the
BAC of the LCRB/SCRB.
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CONTRACT:
6 In case of a disapproval of the recommendation of award, the

HoPE shall state the reason(s) for disapproval and instruct the
BAC on the subsequent steps to be adopted.
A request for reconsideration may be filed by the bidder with the
HoPE within three (3) calendar days from receipt of the notice
of disapproval. The HoPE shall resolve with finality the request
for reconsideration within seven (7) calendar days from the
filing thereof and furnish the bidder a copy of the resolution
immediately from its promulgation.
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CONTRACT:
7 In case of approval of the recommendation, the HoPE,

through the procurement unit/office, issues the Notice of
Award (NOA) to the bidder with the LCRB.
8 Contract award shall be made within the bid validity period.
9 The BAC, through the Secretariat shall post within three (3)
calendar days from its issuance, the NOA in the PHILGEPS,
the website of the PE, if any, and any conspicuous place in the
premises
Advert
of the
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CONTRACT:
10 The bidder with the LCRB accepts the NOA
11 The winning
requirements:
bidder
a) PCAB License, if applicable

submits all the documentary
b) Performance Security and enter into contract with the

procuring entity within 10 cd from receipt of the NOA
c) Shall enter into contract within the same 10 day period
provided that all documentary requirements are complied with
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CONTRACT:
12 The winning bidder submits all the documentary requirements,

PCAB License, if applicable, including the performance
security, and signs the contract.
13 The procurement unit/office transmits the contract and its

attachments to the Budget Office (for issuance of OS) and the
Chief Accountant (for issuance of the CAF).
14 Pre-
Procureme
The procurement unit/office transmits the contract documents
to the appropriate signing authority for signature
Advert
isemen
t and
Pre-
Bid
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CONTRACT:
15 After signing, if the contract needs the approval of a higher

authority – such as, for bureaus, the Department Secretary,
when required – the procurement unit/office transmits the
contract and related documents to the approving authority
or his authorized representative for approval.
16 The approving authority or his authorized representative

acts on the contract within twenty (20) calendar days, or
thirty (30) calendar days for GOCCs and GFIs, from receipt
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CONTRACT:
17 If higher approval is required (e.g. approval of the Office of

the President), or a review by another government body is
necessary (e.g. NEDA or DOJ review), the HoPE transmits
the contract documents to the appropriate approving
authority or reviewing body. The periods indicated above
for approval of contracts still apply, except if the approving
authority is the Office of the President.
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CONTRACT:
18 The HoPE or his/her duly authorized representative - issues

the NTP together with a copy of the approved contract to
the successful bidder within three (7) calendar days from
the date of the approval of the contract.
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WHAT FORMS PART THE CONTRACT

1) The Contract Agreement;
2) Conditions of Contract;
3) Drawings/Plans, if applicable;
4) Specifications, if applicable;
5) Invitation to Bid;
6) Bidding Documents;
7) Winning bidder’s bid, including the Eligibility
requirements, Technical and Financial Proposals, and
all other documents/statements submitted;
8) Performance Security;
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WHAT FORMS PART THE CONTRACT

9) Notice of Award of Contract; and
10) Other contract documents that may be required by
existing laws and/or the procuring entity concerned
in the Bidding Documents, such as the construction
schedule and S-curve, manpower schedule,
construction methods, equipment utilization
schedule, construction safety and health program
approved by the Department of Labor and
Employment, and PERT/CPM for infrastructure
projects.Pre-
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FAILURE OF BIDDING
GROUNDS FOR DECLARATION OF FAILURE OF BIDDING BY

THE BAC UNDER SECTION 35
No bids received
Bids received but no one was eligible
All bids failed to post qualify
Refusal of the post-qualified bidder to accept award

without justifiable cause

FAILURE OF BIDDING
IN CASE OF FAILURE OF PROCUREMENT
Mandatory review shall be conducted by BAC
Terms, conditions, specifications shall be revised and/or

ABC shall be adjusted, subject to required approvals,
based on the results of the review
Re-bid the procurement project with re-advertisement

and/or posting

RESERVATION CLAUSE
The HoPE reserves

Grounds Under Section 41:
the right to:
❑ Reject any and all ❑ Prima facie evidence of collusion;

bids; ❑ BAC is found to have failed in
❑ Declare a failure following the prescribed bidding
of bidding; or procedures;
❑ Not award the ❑ For justifiable reasons, the award of
contract. contract will not redound to the
benefit of the Government:
Physical and economic conditions
have significantly changed;
Project is no longer necessary
Source of funds for the project has
been withdrawn/reduced.

PERIOD TO COMPLETE PROCUREMENT PROCESS
PROCUREMENT PROCESS
From Opening of Bids to Award of Contract shall
NOT EXCEED 3 MONTHS
G.R. No. 212381, 22 April 2015

In the case of Jacomille v. Abaya, et al., the petitioner contends
that the public respondents failed to comply with the periods
provided by law, specifically the 3-month period from the opening
of the bids up to the award of the contract under Section 38 of RA
9184. The Supreme Court held that “[t]he different periods
provided by RA 9184 within which certain stages of the
procurement process must be completed is not merely directory
but mandatory.”
Thus, it concluded that such irregularity rendered the procurement
process null and void.
DESIGN AND BUILD SCHEME
DESIGN-BUILD SCHEME
LEGAL BASIS
Sec. 17.6, 2016 IRR of RA 9184
❑ No bidding shall be made unless Detailed Engineering is
done - exception for Design-Build schemes
Annex “G”, 2016 IRR of RA 9184

❑ Guidelines for the Procurement and Implementation of
Contracts for Design and Build Infrastructure Projects
Annex “A”, 2016 IRR of RA 9184

❑ Detailed Engineering for the Procurement of
Infrastructure Projects

DESIGN-BUILD SCHEME
DEFINITION
Design-Build (DB)
❑ The PE awards a single contract for the architectural/

engineering design and construction to a single firm,
partnership, corporation, joint venture or consortium.

DESIGN-BUILD SCHEME
ADVANTAGES
1. Single
❑ As both design and construction are with the contractor, there
is a single point of responsibility for quality, cost and schedule
adherence. Precludes buck-passing/finger-pointing.
2. Quality
❑ The larger responsibility in DB is motivation for innovation and
high quality of facility to be provided. Once PE’s performance
reqts are defined, designer-builder is responsible for
producing results. Designer-builder warrants to PE that design
docs are complete and free from error. (In traditional scheme,
PE warrants to contractor that design docs are complete and
free from error – thus, restrictive contract language.)

DESIGN-BUILD SCHEME
ADVANTAGES
3. Time Savings
❑ Because design and construction overlap, total design
and construction time is significantly reduced.
Translates to cost savings and early use of facility.
4. Reduced Administrative Burden

❑ PE does not need to spend much time and money seeing
to it that work is done by contractor per design docs
prepared by designer, and in coordinating/arbitrating
separate design and construction contracts.

DESIGN-BUILD SCHEME
ADVANTAGES
5. Firm Costs
❑ Since contractor responsible for design is
simultaneously estimating construction costs, and can
accurately conceptualize the completed project at early
stage, and is required to submit fixed lump sum bid
prices, guaranteed const. costs are known sooner.
Precludes variation orders and cost overruns due to
faulty design.
6. Less prone to collusion

❑ This is because bidders will have their own designs.

DESIGN-BUILD SCHEME
DISADVANTAGES
1) Contractors are given too much discretion in determining the
project cost and there is difficulty in predicting its final cost until
actual start of construction. This can, however, be addressed
by prescribing that the bid/contract price should not exceed
ABC and that the contract price is a fixed lump sum amount.
1) Considering that integration of design and construction of the
project is dependent on the contractor, there may be cases
when the end-result may not be exactly in accordance with what
PE has required. These cases can, however be avoided if PE
adequately defines the output or performance
specs/parameters, and carefully reviews the submitted designs
vs. its performance specs/parameters.

DESIGN-BUILD SCHEME
APPLICABILITY
1) Flagship, priority and fast track projects that need to be

completed under a tight schedule, as included in Medium
Term Public Investment Program (MTPIP) and Regional
Development Investment Program (RDIP).
1) Infra projects requiring advanced engineering or

construction technologies or whose intellectual property
rights belong to private companies.

DESIGN-BUILD SCHEME
APPLICABILITY
3) Infra where design, equipment, plant and construction

can be provided exclusively by a company or
manufacturer’s know-how is important in construction.
3) Small projects with approved drawings or standard

designs where innovation in design/construction will
lower costs and raise quality.
Note: DB projects must be in APP and subject to prior

approval of HoPE.

DESIGN-BUILD SCHEME
EXPERIENCE IN DESIGN-BUILD SCHEME

❑ DB increasingly used in Europe (50% of non-
residential projects), Japan (70% of non-residential
projects), and USA.
❑ DB used in RP for EDSA-Buendia flyover (1991), Laurel-

Buhangin-Dacudao interchange in Davao City (1993), and
Cagayan de Oro Convention Center (2000)

DESIGN-BUILD SCHEME
REQUIRED PRELIMINARY DESIGN AND

CONSTRUCTION STUDIES
▪ Project Description
▪ Conceptual Design
▪ Performance Specifications and Parameters
▪ Preliminary Survey and Mapping
▪ Preliminary Investigations
▪ Utility Locations
▪ Approved Budget for the Contract
▪ Proposed Design and Construction Schedule
▪ Minimum Requirements for Construction Safety and Health
Program
▪ Bidding Documents, including ITB and Conditions of Contract

DESIGN-BUILD SCHEME
DETAILED-ENGINEERING (DE) REQUIREMENTS

❑ Upon award, contractor shall prepare all necessary DE surveys
and designs per Annex “A” of IRR (except BDs and ABC).
❑ PE shall include in the contract docs all necessary schedules

for submission and approval of DE designs and details of
construction methods.
❑ PE shall review, order rectification, approve or disapprove – for

implementation only – the submitted DE plans with these
schedules.
❑ DB contractor is solely responsible for integrity of DE design

and performance of the structure irrespective of PE approval.

DESIGN-BUILD SCHEME
❑ Compliance with Sections 23 and 24 of IRR of RA 9184.
❑ Prospective bidder shall submit all the required Class “A”

and Class “B” documents for infrastructure projects and
the following:
Statements of all on-going, completed, awarded but not
yet started design/design and build related contracts, CV
of key staff, partners or principal officers.
Valid licenses from PRC for design professionals in
accordance with Section 24.1(a)(iv) (Technical Docs) of
IRR.

DESIGN-BUILD SCHEME
CONTENT OF DESIGN-BUILD BIDS (1ST ENVELOPE)

Technical Proposal
❑ Contains all the required documents for infra projects
under Section 25.2(b) of the 2016 Revised IRR of RA
9184 and the following additional documents:
Preliminary Conceptual Design Plans in accordance with
the degree of details specified by PE.
Design and construction methods.
List of design and construction personnel to be assigned
to the contract, with their qualification and experience
data.
Value engineering analysis of design and construction
method.
DESIGN-BUILD SCHEME
BID EVALUATION
First-Step Procedure:
❑ Review of preliminary conceptual designs and track record
submitted by contractor as indicated in BDs using non-
discretionary “pass/fail” criteria:
Adherence of preliminary design plans to the required
performance specifications and parameters and degree of
details.
Approach/methodology for DE, design and construction,
with emphasis on clarity, feasibility, innovativeness and
comprehensiveness of plan approach, and quality of
interpretation of project problems, risks, and suggested
solutions.

DESIGN-BUILD SCHEME
BID EVALUATION
First-Step Procedure:
❑ Review of preliminary conceptual designs and track record
submitted by contractor as indicated in BDs using non-
discretionary “pass/fail” criteria (Cont.):
Quality of personnel to be assigned to the project, which
covers suitability of key staff to perform assignments and
gen. qualifications and competence including education
and training of the key staff.
❑ For complex/unique projects, PE may require oral

presentation within 15 calendar days after submission of
technical proposals.

DESIGN-BUILD SCHEME
BID EVALUATION
Second-Step Procedure:
❑ Only those bids that passed the above criteria shall be

subjected to the second step of evaluation.
❑ BAC shall open the financial proposal of each “passed”

bidder and evaluate it using non-discretionary criteria –
including arithmetical corrections for computational errors -
as stated in the BDs, and thus determine the correct total
calculated bid prices.

DESIGN-BUILD SCHEME
BID EVALUATION
Second-Step Procedure (Cont.):
❑ BAC shall disqualify any total calculated bid price which

exceeds ABC.
❑ Total calculated bid prices (not exceeding ABC) shall be

ranked, in ascending order, from lowest to highest.
❑ The bid with the lowest total calculated bid price shall be
identified as the LCB.

DESIGN-BUILD SCHEME
POST-QUALIFICATION AND AWARD

❑ LCB shall be subject to post-qualification per Sec. 34 of the
2016 Revised IRR of RA 9184 to determine its
responsiveness to the eligibility and bid requirements.
❑ If post-qualified, LCB shall be considered LCRB, and BAC

adopts a resolution recommending award to bidder with
LCRB.
❑ The HoPE shall approve BAC resolution within seven (7)

calendar days.
❑ The HoPE shall award the contract per Sec. 37 of the 2016
Revised IRR of RA 9184 .

DESIGN-BUILD SCHEME
SCOPE OF THE CONTRACT

Main Obligations of Contractor
❑ Undertake DE for structure in accordance with the min.

performance specs prescribed by PE, and submit the
design to PE for approval.
❑ Undertake construction per design submitted to and
approved by PE.
❑ Provide warranty on integrity of design and performance
of the completed structure over its lifetime.

DESIGN-BUILD SCHEME
SCOPE OF THE CONTRACT
Contract Terms and Conditions
❑ PBDs or customized PE SBDs, including Form of

Contract, shall be used, with appropriate
modifications to incorporate pertinent provisions of
FIDIC (OR International Federation of Consulting
Engineers) Conditions of Contract for Plant and
Design-Build.

DESIGN-BUILD SCHEME
CONTRACT IMPLEMENTATION
❑ No works shall commence unless contractor has

submitted required documents, and PE has given
approval.
❑ Contractor is responsible to obtain info on risks and

contingencies, and submit all docs specified by PE
in the contract documents.

DESIGN-BUILD SCHEME
❑ Contractor shall submit detailed program of work within 14
calendar days of NTP
Order and timing of each stage
Periods for review of outputs
Timing for inspections and tests
Design and construction methods
Names of personnel for each stage
List of equipment
Quality control system
❑ Contractor shall, at its cost, rectify its errors, or implement

change orders due to design errors and non-conformance with
PE’s performance specs.

DESIGN-BUILD SCHEME
❑ If contractor suffers delay or costs due to

changes/errors in PE’s performance specs, it may
be entitled to time extension or payment of costs.
❑ Defects liability period is 1 year after completion,

and contractor is liable for design and structural
defects/failure per Sec. 62.2.2 of IRR.

CONSIDERATIONS
CONTRACT IMPLEMENTATION MILESTONES

1) Effectivity of the contract;
2) Contractor’s performance of his contractual
obligations;
3) PE’s performance of its contractual obligations, as
specified in the contract;
4) Final acceptance or project sign-off;
5) All other related activities; and
6) Payment by the PE.

ADVANCE PAYMENT
❑ Requirements:
Written request of the contractor
Submission of:
a) an irrevocable standby letter of credit of
equivalent value from a commercial bank;
b) bank guarantee; or
c) surety bond
❑ Amount not to exceed 15% of the contract price

Amount shall be repaid by the contractor

🏰 🔨 Alternative Payment Scheme for Infrastructure Projects
Objective
Allows to reflect an alternative payment scheme in

the implementation of infrastructure projects in
order to provide PEs and contractors flexibility in
the issuance/acceptance of progress payments

Amendment
Section 5.1 of Annex “E” of the IRR of RA No. 9184
Alternatively, the PE may require in the Bidding Documents that

statement of work accomplished or progress billing and the
corresponding request for progress payment may only be
submitted upon actual completion of the infrastructure
project or a specific portion, segment or phase thereof
The first progress payment may be paid by the Procuring Entity

to the Contractor, provided that at least twenty percent (20%) of
the work has been accomplished as certified by the Procuring
Entity’s Representative, unless otherwise provided in the SCC

Amendment
Section 5.1 of Annex “E” of the IRR of RA No. 9184
PEs shall require contractor to submit monthly statements of the

estimated value of the work executed less the cumulative amount
certified previously, except when a different payment scheme
is adopted under GCC Clause 40.4, in which case, the
statement may only be submitted in accordance with the
schedule prescribed by the Procuring Entity.

PROGRESS PAYMENTS
❑ Payments made by the PE to the contractor for
portions of the work done.
❑ Contractor may submit a statement of works
accomplished (progress billing)
❑ Request for progress payment for the work
accomplished in amounts the contractor considers
itself to be entitled to.
❑ Subject to 15% deduction, or the amount applicable,
which was a percentage of the total contract used as
advance payment.

RETENTION MONEY
❑ Purpose: To cover uncorrected defects after each
progress billing.
❑ PE shall retain an amount of the progress billing
equivalent to 10% of the total amount due to the
contractor
❑ Until 50% of the value of works has been completed.
❑ Retention shall not be imposed if:
work is satisfactorily done
work is on schedule.

RETENTION MONEY
Substitute for Retention Money:
❑ Request from the contractor

❑ Through a irrevocable letter of credit , bank
guarantee or surety bond callable on demand.
❑ Valid for a duration to be determined by the PE.

Will the Retention Fee, as contemplated in
the Contract Implementation Guidelines
for the Procurement of Infrastructure
Projects, is superseded by the Warranty
Security provided under Section 62.2.3.3
of the 2016 Revised IRR of RA 9184?
The “final acceptance of the works by the PE” which marks the
period when the retention money may be released, also marks the
commencement of the warranty period contemplated in Section
62.2.3 of the 2016 revised IRR of RA 9184.
It is important to note, however, that retention money is intended

to cover “uncorrected discovered defects and third party
liabilities” prior to the issuance of the final acceptance while
warranty security intends to cover “structural defects and
failures” after the issuance of the PE of the final acceptance and
will be valid for a certain period, depending on the type of structure.
Thus, the warranty security does not supersede the retention money,
as the two serve different purposes.
NPM No. 120-2017

RETENTION MONEY
Rivera v. People of the Philippines
G.R. No. 156577, 156587 and 156749 December 3, 2014
Facts:
❑ Procurement officials entered into a negotiated contract with PAL Boat
Industry for the construction of 7 Floating Clinics for the delivery of health
care services, which were not operational and with blatant defects despite
payment. The following are the irregularities:
a) Entering into negotiated contract without waiting for approval of the
project’s plans and specifications by the Maritime Industry Authority
(MARINA) and approving payments;
b) Approving the commencement of the project without determining the
contractor’s financial capacity to undertake the same and despite lack
of approval of the project’s plans and specifications by MARINA and
also approving payments to the contractor;

RETENTION MONEY
Facts (Cont.):
c) Failing to monitor, supervise and inspect the project in
accordance with approved plans and specifications in order
to safeguard the interest of the government, thereby causing
undue injury to the government in the total amount
of P630,000.00 and giving unwarranted benefits to PAL
Boat Industry in the discharge of their official functions.
Issue: Whether or not the conviction of the petitioners for the

crime of violating Section 3(e) of R.A. NO. 3019 is proper.

RETENTION MONEY
Ruling:
The accused gave unwarranted benefits to PAL Boat

through manifest partiality
❑ There are two ways by which a public official violates Section
3(e) of R.A. No. 3019 in the performance of his functions,
namely: (1) by causing undue injury to any party,
including the Government; or (2) by giving any private
party any unwarranted benefit, advantage or preference.
The accused may be charged under either mode or both.

RETENTION MONEY

Ruling (Cont.):
❑ The Court rules that the petitioners gave unwarranted

benefits to PAL Boat and its manager, as follows:
a) The pre-qualification of the supplier;
b) PAL Boat was not financially and technically capable of
undertaking the floating clinics project; and
c) They also failed to follow the proper procedure and
documentations in awarding a negotiated contract.

RETENTION MONEY
Ruling (Cont.):
These unwarranted benefits were due to the manifest

partiality exhibited by the accused in numerous instances:
First, unreasonably entering into a negotiated contract with PAL
Boat.
❑ P.D. No. 1594 and its IRR are clear to the effect that
infrastructure projects are awarded in the order of priority as
follows: First, by public bidding and second by a negotiated
contract. Resort to negotiated contract, however, is permitted
only after a failure of public bidding.

RETENTION MONEY

Ruling (Cont.):
❑ In this case, there was no failure of bidding. Rather, there

was an aborted bidding. They never conducted the public
bidding. So there can never be a failure of bidding when
there is no public bidding to begin with.
❑ Engineering documents led to the improper monitoring of the

project.

RETENTION MONEY
Ruling (Cont.):
❑ The justification of one of the accused is that PAL Boat was the
only registered naval architect and marine engineer. It was raised
that it would be futile to conduct public bidding if PAL Boat was the
only qualified participant. As correctly held by the
Sandiganbayan, he should have instead published a region-
wide invitation to bid. And even assuming that Palanas was
the only naval architect and marine engineer in Region VIII or
in the whole Visayas Region, a public bidding must still be
conducted. It was only after conducting the required public
bidding that it could be fully verified that PAL Boat was the
only qualified bidder, especially with regard to its financial and
technical competence
RETENTION MONEY
Ruling (Cont.):
Second, accused pre-qualified PAL Boat despite its financial

inability to undertake the project, and inspite of his knowledge
that PAL Boat had more liabilities than capital. The purpose of
pre-qualification in any public bidding is to determine, at the
earliest opportunity, the ability of the bidder to undertake the
project.
Third, the submission of insufficient detailed engineering
documents led to the improper monitoring of the project.

RETENTION MONEY

Ruling (Cont.):
The accused caused undue injury to the Government
through their manifest partiality
❑ The retention money and taxes should have been retained

by the petitioners in every progress payment. Regrettably,
the petitioners chose not to impose retention money and
taxes against PAL Boat, to the detriment of the government.

RETENTION MONEY

Ruling (Cont.):
Arias v. Sandiganbayan is not applicable in the present
case
❑ Accused invokes the Arias doctrine which states that "[a]ll
heads of offices have to rely to a reasonable extent on their
subordinates and on the good faith of those who prepare
bids, purchase supplies, or enter into negotiations." He
contends that he merely relied on the vouchers and reports
prepared by his subordinates and released the payments in
good faith.

RETENTION MONEY
SECTION 3(e) OF RA 3019

❑ The Arias doctrine is not an absolute rule. This ruling
cannot be applied to exculpate the petitioners in view of
the peculiar circumstances in this case which should have
prompted them, as heads of offices, to exercise a higher
degree of circumspection and, necessarily, go beyond
what their subordinates had prepared.
❑ Unlike in Arias, however, there exists in the present case
an exceptional circumstance which should have prodded
petitioner, if he were out to protect the interest of the
municipality he swore to serve, to be curious and go
beyond what his subordinates prepared or recommended.

RETENTION MONEY
SECTION 3(e) OF RA 3019

❑ Accused should have placed himself on guard when
the documents and vouchers given to him by his
subordinates did not indicate the retention money
required by P.D. No. 1594. Moreover, when he
personally inspected the construction site of PAL Boat,
he should have noticed the financial weakness of the
contractor and the defective works. Deplorably,
accused kept mum and chose to continue causing
undue injury to the government. No other
conclusion can be inferred other than his manifest
partiality towards PAL Boat.

LIQUIDATED DAMAGES
❑ Fails to perform obligations within specified schedule
❑ 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 reach 10% of the contract
amount, PE may rescind the contract

How is "unperformed works"
interpreted relative to the
computation of Liquidated
Damages to be imposed against
defaulting contractors?
[I]n computing LD, unperformed portions of the work shall
be based on that portion which the contractor refuses or
fails to satisfactorily complete within the specified contract
time, plus any time extension duly granted, regardless of the
progress of work accomplished after the expiration of
contract time.
NPM No. 072-2015

Can liquidated damages be
deducted from progress
billings?
Under the GCC Clause 9 of the 5th Edition of the PBDs for the
Procurement of Infrastructure Projects, Liquidated Damages shall be
paid by the Contractor in the following manner:
9.1 The Contractor shall pay liquidated damages to the Procuring
Entity for each day that the Completion Date is later than the Intended
Completion Date. The applicable liquidated damages is at least one-
tenth (1/10) of a percent of the cost of unperformed portion for every day
of delay. The Procuring Entity may deduct liquidated damages from
payments due to the Contractor. . . .
As can be gleaned from the foregoing, liquidated damages can be
deducted from payments due to the Contractor, which include
progress payments and final payment, for each day that the
Completion Date is later than the Intended Completion date.
NPM No. 001-2018
Can liquidated damages be
imposed after the
expiry/completion date but before
the termination of the contract or
only after the target completion
date?
….liquidated damages can still be imposed after the
expiry/completion date or after the target completion date so long as
there contractor refuses or fails to satisfactorily complete the work
within the specified contract time, plus any time extension duly
granted, of at least one-tenth (1/10) of a percent of the cost of
unperformed portion for every day of delay or each day that the
Completion Date is later than the Intended Completion date. As
already explained, it may be deducted from payments due to the
Contractor.
The provision that “additional liquidated damages shall not

apply” shall be applicable only when the Procuring Entity has
already terminated the contract because of fundamental breach
of Contract by the Contractor.
NPM No. 001-2018

PRICE ESCALATION:
Sample Computation
REINFORCING STEEL BARS
K19 = 0.15 + 0.06 (Li/Lo) + 0.67 (Ri/Ro) + 0.04 (Fi/Fo)
+ 0.08 (Ei/Eo)
where K19 ~ fluctuation factor for reinforcing steel

bars
L ~ labor index
R ~ reinforcing steel bars wholesale price
index
F ~ automotive fuel price index
E ~ equipment price index
i ~ month under consideration
o ~ month of bid opening
227
FACTS
❑ Project Name: Manila School Building

❑ Construction Site: Manila (NCR)
❑ Date of Publication of IB: 10 January 2011
❑ Date of Bid Opening: 24 January 2011
❑ Date of Issuance of NTP: 1 February 2011
❑ Date of Project Completion: 1 October 2011
Requirement: Compute for K 19 (Reinforcing Steel)
228
MEAN OF K19 COMPONENTS FOR
30-MONTH PERIOD (AUG. 08 TO JAN. 11)
K19 Component Formula for Mean Mean

∑L from Aug08 to Jan11
Labor (L) 287.13
30
∑R from Aug08 to Jan11

Reinforcing Steel (R) 212.30
30
∑F from Aug08 to Jan11

Automotive Fuel (F) 263.87
30
∑E from Aug08 to Jan11

Equipment (E) 114.55
30
229
STANDARD DEVIATION
where:
σ = standard deviation
n = number of data in months (in this case 30)
x = value of each datum
μ = mean or average of data values
i = month of each datum (from month 1 to 30)
230
TWO STANDARD DEVIATION + MEAN
2 STDEV
STDEV (from + Mean
K19 Component 2 STDEV
Aug08-Jan11) (2σ+μ)
Labor (L) 9.46 18.93 406.06
Reinforcing Steel (R) 6.36 12.72 225.02
Automotive Fuel (F) 36.77 73.55 337.42
Equipment (E) 0.11 0.23 114.78
231
K19 THRESHOLD
K19 Threshold = 0.15 + 0.06 (2σ+μ)L + 0.67 (2σ+μ)R

+ 0.04 (2σ+μ)F + 0.08 (2σ+μ)E
= 0.15 + 0.06 (406.06) + 0.67 (225.02)
+ 0.04 (337.42) + 0.08 (114/78)
= 197.95
232
AVERAGE VALUE OF PRICE INDEX
K19 Component Average Value
Labor (L) 404
Reinforcing Steel (R) 261.53
Automotive Fuel (F) 325.67
Equipment (E) 114.6
233
AVERAGE VALUE OF WORK ITEM
K19 Ave. = 0.15 + 0.06 (Ave. Value)L + 0.67 (Ave. Value)R

+ 0.04 (Ave. Value)F + 0.08 (Ave. Value)E
= 0.15 + 0.06 (404) + 0.67 (261.53)
+ 0.04 (325.67) + 0.08 (114.6)
= 221.812
234
DETERMINATION IF PRICE ESCALATION
SHOULD BE GRANTED
K19 Average (221.81) > K19 Threshold (197.95).
Therefore, price escalation may be granted.
235
IMPLEMENTATION BY
ADMINISTRATION
BY ADMINISTRATION
LEGAL BASIS
Appendix “1”, 2016 Revised IRR of RA 9184
❑ Revised Guidelines for the Implementation of

Infrastructure Projects By Administration

BY ADMINISTRATION
DEFINITION
An infrastructure project is carried out under the

administration and supervision of the concerned
agency through its own personnel.

BY ADMINISTRATION
CONDITIONS AND REQUIREMENTS

❑ Shall be included in the approved APP
❑ The implementing agency must:
have a track record of having completed, or
supervised a project, by administration or by
contract, similar to and with a cost of at least fifty
percent (50%) of the project at hand, and
have its own the tools and construction
equipment to be used or have access to such tools
and equipment owned by other government
agencies.

BY ADMINISTRATION

❑ The criteria for evaluating the track record and
capability of implementing agencies shall be in
accordance with the guidelines to be issued by the
Department of Public Works and Highways in
consultation with the leagues enumerated under the
Local Government Code.

BY ADMINISTRATION

❑ Any project costing PhP20,000,000.00 or less
❑ Project costing over PhP20,000,000.00 in the following
cases:
emergency arising from natural calamities or where immediate
action is necessary to prevent imminent loss of life or property;
to comply with government commitments, as certified by the
concerned government authority;
failure to award a contract after competitive bidding for a valid
cause;
termination or rescission of contract;
areas with critical peace and order problems as certified by the
Local Peace and Order Council;

BY ADMINISTRATION

❑ For projects costing PhP20,000,000.00 up to
PhP50,000,000.00, prior authority shall be obtained
from the Secretary of DPWH
❑ For projects costing more than PhP50,000,000.00,

prior authority from the President of the Philippines,
upon the favorable recommendation of the Secretary
of DPWH

BY ADMINISTRATION

❑ No contractor shall be used by the PE, directly or
indirectly for works undertaken by administration.
❑ Procurement of tools and construction equipment

shall be subject to the rules on public bidding
❑ For projects funded by the National Government and

implemented by the LGU, the latter shall be required
to post the necessary warranty security.

BY ADMINISTRATION

❑ The manual labor component may be:
undertaken in-house (workers are employees or

personnel occupying regular plantilla positions);
by job-order contracts governed by relevant
Commission on Audit (COA) and/or Civil Service
Commission (CSC) rules; or
through the pakyaw contracting system.

BY ADMINISTRATION
“PAKYAW” CONTRACTING SYSTEM
❑ Pakyaw labor shall be drawn from the vicinity of the
project, or
❑ Pakyaw labor groups belong to various Barangay
Associations contiguous to the project site.
❑ Unskilled labor should be drawn from the Barangay where
the project is located;
❑ Semi-skilled labor shall be recruited within the
municipality, preferably within the Barangay;
❑ Skilled labor shall be recruited within the province but
preferably within the Barangay/Municipality.
BY ADMINISTRATION

❑ The formation of Pakyaw Groups should actively involve
the Barangay leaders and the community.
❑ A Project Facilitator (PF) shall be appointed by the

implementing agency to:
assist in the organization of the Pakyaw Groups and

in the preparation of the Pakyaw Contracts;
convene community meetings, with the assistance of
the Barangay Chairperson to inform the community of
the project and of organizing Pakyaw groups

BY ADMINISTRATION

❑ A Project Facilitator (PF) shall be appointed by the
implementing agency to (Cont.):
cause the registration of all unemployed or

underemployed members of the community who are
interested to join Pakyaw Groups
ensure that at least three Pakyaw Groups are
organized for the competitive selection.
determine the number of members per Pakyaw Group
with regard to the objective of providing work to as
many laborers as possible

BY ADMINISTRATION

❑ Where there is competition, the pakyaw labor
contract shall be awarded through competitive
selection with at least three (3) Pakyaw Groups
participating.
❑ There is a competition when the number of laborers

who registered during the community meeting is
more than what is reasonably needed for the lump
sum work required.

BY ADMINISTRATION
❑ The competitive selection shall be done on a “per-

output” basis.
❑ The winner(s) shall be determined based on what

group(s) deliver the desired output at the lowest rate,
either per item of output or per lump sum work, within
the required period.

BY ADMINISTRATION

❑ Group Leader shall be elected from among the members
of the group who shall be the signatory to the Pakyaw
Contract and any other documents
❑ He may be replaced at any time by the group through an

election for that purpose, after due notice to the Project
Facilitator and the Barangay Chairperson.
❑ Any such replacement shall not invalidate any previous

Pakyaw Contract.

BY ADMINISTRATION

❑ In no case may Pakyaw Groups be regular or licensed
contractors or organized by and/or under the
management of a regular or licensed contractor.
❑ Laborers supplied by job-contractors/labor-only

contractors are likewise disqualified to become members
of the Pakyaw groups
❑ Shall not exceed Five Hundred Thousand Pesos

(PhP500,000.00) per pakyaw group.

BY ADMINISTRATION
PCAB LICENSE REQUIREMENT
❑ The engagement of Pakyaw labor is not governed by the
rules on public bidding under the IRR of RA No. 9184.
❑ The eligibility documents, such as PCAB license, for
competitive public bidding under Section 23.1 of the 2016
IRR of RA 9184 are not required to be submitted in
Pakyaw Contracting System. In fact, Section 4.7 of the
Revised Guidelines for the Implementation of
Infrastructure Projects by Administration provides that in
no case may Pakyaw groups be regular or licensed
contractors or organized by and/or under the
management of a regular or licensed contractor.

Contact us:
THANK YOU!
Unit 2504 Raffles Corporate Center, F. Ortigas Road, Ortigas
Center, Pasig City, Philippines 1605
TeleFax: (632)7900-6741 to 44
Email address: training@gppb.gov.ph

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STANDARD BIDDING

By the end of the Session, the participants

• The activities under the various stages of the

II. General Rules and Considerations

III. Standard Bidding Procedure for

IV. Design and Build Scheme

VI. Implementation by Administration

What are considered Infrastructure Projects?

Government Procurement Policy Board – Technical Support Office

As regards the Bidding Documents for Mixed Procurement,

Government Procurement Policy Board – Technical Support Office 7

Alternative Methods of Procurement

What is Competitive Bidding?

▪ Competitive or Public Bidding is a method of

▪ A PE should, therefore, see to it that its procurement

Government Procurement Policy Board – Technical Support Office

Garcia vs. Burgos (291 SCRA 546)

“By its nature and characteristics, a competitive public

COA vs. RTC-NCRJR (GR NO. 85285, 7/7/89)

“Purpose is to avoid/preclude suspicion of favoritism and

Government Procurement Policy Board – Technical Support Office 12

▪ Phasing of construction projects is allowed so long

▪ Provided, that all the phases shall be procured

Government Procurement Policy Board – Technical Support Office

▪ Review feasibility/ ▪ Post/Advertise opportunity

1 ▪ Cost-benefit analysis ▪ Oversee 4

Government Procurement Policy Board – Technical Support Office

The DPWH Standard

These shall likewise form part of the Bidding Documents

Government Procurement Policy Board – Technical Support Office 16

Government Procurement Policy Board – Technical Support Office 17

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At least 3 Observers from 1) COA, 2) Duly recognized

Pre-Bid Conference Post-Qualification

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3 Recruiting or engaging consultants to assist them

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Duly licensed Filipino citizens/sole proprietorships

Partnerships with at least 60% Filipino interest or ownership

Corporations with at least 60% Filipino interest or ownership

Cooperatives duly organized under the laws of the Philippines

Joint Ventures with at least 60% Filipino interest or ownership

Foreign bidders when provided under any Treaty or International

Government Procurement Policy Board – Technical Support Office

JVs with less than 60% Filipino ownership or interest

❑ The structures to be built require the application of

Provided further that Filipino ownership or

Government Procurement Policy Board – Technical Support Office

GOCCs may be eligible to participate only if they can

❑ They are legally and financially autonomous;

❑ They operate under commercial law; and

❑ They are not attached agencies of the PE

Government Procurement Policy Board – Technical Support Office

GPPB Resolution No. 16-2019

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You may contact the Cybersecurity Bureau or the Digital

Bid Evaluation Award of

Government Procurement Policy Board – Technical Support Office

Use of Videoconferencing, Webcasting & Similar

Government Procurement Policy Board – Technical Support Office

Use of Videoconferencing, Webcasting & Similar

👨👩 Meetings of the BAC may be conducted electronically for PEs with