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Certificate of Cash Deposit

Post by alwinreyes on Wed Oct 08, 2008 10:46 am

Per Manual of Procedures for the Procurement of Goods and Services, Volume 2, the rationale of requiring bidders to submit Cash Deposit Certificate is to "establish their liquidity, their capacity to absorb the additional obligations in connection with the contract to be bid and to finance its implementation/completion." In this regard, requiring the bidders (specifically the winning bidder) not to withdraw their deposits within a specified period defeats the purpose. I believe the cash deposit should be available to the winning bidder upon its receipt of Notice To Proceed so that it will have funds to start the implementation of the project. The cash deposit is not a security that the Procuring Entity may run after should the supplier fail to perform its obligations under the contract; a Performance Security is required for this purpose.

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Certificate of Cash Deposit

Post by RDV @ GP3i on Mon Oct 13, 2008 12:42 pm

Hi, alwinreyes:

I agree with your post, to wit: "I believe the cash deposit should be available to the winning bidder upon its receipt of Notice To Proceed so that it will have funds to start the implementation of the project. The cash deposit is not a security that the Procuring Entity may run after should the supplier fail to perform its obligations under the contract; a Performance Security is required for this purpose."

If you will notice, the Sample Form for the Certificate of Cash Deposit contains that commitment by the bidder "not to withdraw the amount...within one hundred twenty (120) days from issuance of (the) certificate." I think the rationale behind the commitment of 120 days not withdraw the amount is consistent with the bid validity period of 120 calendar days (Sec. 28 of IRR-A of RA 9184). In other words, the commitment is within the period of the validity of his bid only. Once the contract is awarded to him as a winning bidder and a Notice to Proceed is issued or received, he can already withdraw the amount, particularly if he needs the money to perform or implement the contract.

Considering also that it is a Sample Form (only), I think it would be better to add the phrase "until the Notice to Proceed is issued to the winning bidder," or something to that effect, before the period (.) on the 2nd para.

It would also be advisable to make the certification project-specific to prevent the certification from being used by a bidder more than once.

RDV

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re: CASH DEPOSIT CERTIFICATE

Post by engrjhez® on Mon Dec 15, 2008 10:20 pm

to: alwinreyes

As a banker, how would you comment on the contractor's/supplier's plea on the difficulty on securing the CDC's specific to the project name? Does CDC's violate or enforce Bank Secrecy Law?

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Cash Deposit Certificate vs Bank Secrecy Law

Post by RDV @ GP3i on Thu Dec 18, 2008 3:29 pm

I think, the issuance of CDC would not be a violation of the
Bank Secrecy Law since it is the depositor himself who will
be issued the certificate which he may submit as part of his
eligibility document/technical proposal.

Ultimately, when the procuring entity, thru the BAC or TWG,
verifies/validates with the depository bank, during post-qualification
(assuming the same bidder is later declared the LCB/HRB,
it would only be on the authenticity of the CDC itself and not
on the actual deposit of the bidder himself.

My 2-cent worth (of deposit.)

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revised Certificate of Cash Deposit

Post by riddler on Thu Jun 11, 2009 2:39 pm

Name of Bank
Address of the Bank
Telephone and Fax Numbers of the Bank
Website Address of the Bank
E-mail Address of the Bank




CERTIFICATE OF CASH DEPOSIT

This is to certify that (Name of the Bidder) , (the “Depositor”) has on deposit with this bank the sum of (Amount of Cash Deposit available) under (Account Number) .
Depositor commits not to withdraw the amount of (Amount set by the procuring entity which should not be less than 10% of Approved Budget for Contract) (P ) within One Hundred Twenty Days (120) days from issuance of this certificate.



This certification is being issued upon the request of our client for whatever purpose it may serve. (or Name of the Procuring Entity and Name of the Project)

Done this ______ day of ______ in __________.


Name and Signature of Representative of the Bank
Name and Signature of Depositor
Position



THE ABOVE MENTIONED ARE REVISED FORMS OF THE CASH DEPOSIT CERTIFICATE was APPROVED BY THE GPPB.
a) Would the forms violate the BANK Secrecy Law? Since the actual deposit of the Bidder including the Bank Account Numbers shall be revealed.

Aren't we forcing the Bidder in an uncomfortable position?

b) Most Bank Manager were uncomfortable with the wordings. Can the Procuring Entity Revised the wordings like, Deleting the Actual Cash Deposit and Account Numbers?

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Re: Certificate of Cash Deposit

Post by engrjhez® on Thu Jun 11, 2009 3:52 pm

ruel t. wrote:
x x x
a) Would the forms violate the BANK Secrecy Law? Since the actual deposit of the Bidder including the Bank Account Numbers shall be revealed.

Aren't we forcing the Bidder in an uncomfortable position?
Let's see this back on a very old topic here.
ruel t. wrote:
b) Most Bank Manager were uncomfortable with the wordings. Can the Procuring Entity Revised the wordings like, Deleting the Actual Cash Deposit and Account Numbers?
Why not delete the cash deposit certificate form the requirements? Very Happy

Click here for that debated issue.

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Re: Certificate of Cash Deposit

Post by riddler on Thu Jun 11, 2009 4:06 pm

yup! i read it. Considering the many arguments thereto, does this Revised Cash Deposit Certificate form still enforced?

When can the GPPB "open" the downloadables forms?

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