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Bid Security in combination................

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Bid Security in combination................

Post by slayer on Wed Mar 25, 2009 7:55 pm

Hi to all

A bidder submitted a bid security in a form of Managers Check, but its below in the required amount, but it has a cash on it that complete his bid?

is it allowed by law? a combination of cash and managers check? if yes, what in percent should it fall? 1%, 1.5% ,2.5%?

thanks and more power to all

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Re: Bid Security in combination................

Post by engrjhez® on Wed Mar 25, 2009 9:20 pm

Let us see Section 27.2...

The Bid Security shall be in an amount at least equal to, and not lower than, a percentage of the approved budget for the contract to be bid, as advertised by the concerned procuring entity, in any of the following forms:
a) Cash, certified check, cashier’s check/manager’s check, bank draft/guarantee confirmed by a reputable local bank or in the case of a foreign bidder, bonded by a foreign bank;
b) x x x
c) x x x
d) Any combination thereof... x x x

Since the (d) expressly allowed combinations of bid securities, your question is answered under the minimum 1% criteria. Should there be a different combination (under different category), the higher of the requirements shall govern. Very Happy
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Re: Bid Security in combination

Post by mealigan on Thu Mar 26, 2009 12:43 am

Based from the GPM VOl. 2 (IRR-A Section 27.2)
FORM OF BID SECURITY MINIMUM AMOUNT
a. Cash, certified check, cashier’s check/manager’s check, bank draft; 1% of ABC or
b. Irrevocable letter of credit .... 1% of ABC or
c. Bank guarantee ... 1 ˝% of ABC or
d. Surety bond ... 2 ˝% of ABC or
e. Any combination of the foregoing forms; The total amount shall not be less than 2 ˝ % of the ABC
f. Foreign government guarantee ... 100% of ABC

We have a similar case posed this morning from one of the agencies here in Bicol re: combination of different forms of bid securities provided it has been submitted as part of the tech'l requirements and not after the insufficiency in bid security has been found.

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Re: Bid Security in combination................

Post by engrjhez® on Thu Mar 26, 2009 9:46 am

mealigan wrote:
e. Any combination of the foregoing forms; The total amount shall not be less than 2 ˝ % of the ABC
I stand corrected with my last statement immediately before mealigan stating the "lowest of the combined forms... shall govern". I was looking on the Handbook on Philippine Government Procurement (and looking at it most of the time) and never have returned to the details of such combinations [Never encountered such under my term Laughing ]. Moreover, I was assuming that the IRR(A) speaks more categorically than the Procurement Manuals. Now, after checking the Procurement Manual for LGU's, I saw the same statement as (e), and will contest no more. Very Happy

Now here's a question:
Based on the case presented, and to the wordings of (e), do we mean the combination of forms regardless of the bracket? Looking in the scenario, both CASH and MANAGER'S CHECK fall under the same FORM. I would like to confirm (for everyone's benefit) that this prejudice is correct. And that the 1% minimum may be appropriately imposed. Very Happy
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Re: Bid Security in combination................

Post by RDV @ GP3i on Thu Mar 26, 2009 10:54 am

slayer wrote:A bidder submitted a bid security in a form of Managers Check, but its below in the required amount, but it has a cash on it that complete his bid?

is it allowed by law? a combination of cash and managers check? if yes, what in percent should it fall? 1%, 1.5% ,2.5%?

We should assume that the particular bidder did not just insert the cash in his technical envelope after the bid opening when he found out that the Manager's Check he submitted is insufficient. Because, if he/she did, it should not be allowed. Automatically, disqualification of that bidder should be the action to be taken by the BAC.

For me, engrjhez, may have a point in considering that a combination of manager's check and cash should still be not less than 1% of the ABC, considering that they are grouped under one form which calls for a minimum 1% of the ABC, provided they are among the forms of bid security allowed by the procuring entity in the bidding documents.

But this problem should already be solved if the proposed revision of the provision of Sec. 27.2 in the draft IRR is finally adopted. A straight minimum percentage of 2% of the ABC will required no matter what form or combination of forms of bid security is submitted by a bidder.
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