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Bid Security & Performance Bond

Philippine Government Procurement :: General Concerns :: Forum's Mitt

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Bid Security & Performance Bond

Post by bogkalabog on Fri Nov 19, 2010 11:41 am

We have posted our invitation to bid for the supply of Potable Bulk Water. The contract duration is ten years. However, we have stated in our BIDDOCS that the Bid Security will be based on the computed "annual" ABC and Performance Bond based on the annual price of the contract. Is there a violation here?

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Re: Bid Security & Performance Bond

Post by bogkalabog on Fri Nov 19, 2010 3:59 pm

in addition, are we allowed to enter into an agreement for a period of ten years?

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Re: Bid Security & Performance Bond

Post by Niwram on Fri Nov 19, 2010 4:29 pm

The Bid Security and Performance bond as provided by RA 9184 shall be computed based on the total ABC of the contract.. therefore said security and bond shall be based not in the annual ABC for the ten year contract but in the whole ABC of the ten year contract.
Additionally, In my opinion, you enter into a ten year contract for the supply of portable bulk water. like in the case of Metro Iloilo water district.

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Re: Bid Security & Performance Bond

Post by bogkalabog on Fri Nov 19, 2010 4:52 pm

Niwram wrote:The Bid Security and Performance bond as provided by RA 9184 shall be computed based on the total ABC of the contract.. therefore said security and bond shall be based not in the annual ABC for the ten year contract but in the whole ABC of the ten year contract.
Additionally, In my opinion, you enter into a ten year contract for the supply of portable bulk water. like in the case of Metro Iloilo water district.


OK granting that we based it on the total of the ten year contract, are we allowed to enter contract for ten years? We are familiar with multi-year contracts for janitorial and security services, but this is a different "thing" (read: bulk water)?

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Re: Bid Security & Performance Bond

Post by Niwram on Fri Nov 19, 2010 4:59 pm

yeah I know that's is why i am telling you that your plan is the same as the Metro Iloilo Water District wherein they procure Portable Bulk Water Supply.. for your legal basis you may call the GPPB.

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Re: Bid Security & Performance Bond

Post by engrjhez® on Sat Nov 20, 2010 6:19 pm

bogkalabog wrote:in addition, are we allowed to enter into an agreement for a period of ten years?


Before entering into multi-year contracts (under GAA), you must secure a Multi-year Obligation Authority (MYOA) from the DBM. Please refer to this link.

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Re: Bid Security & Performance Bond

Post by bogkalabog on Mon Nov 22, 2010 11:12 am

engrjhez® wrote:
bogkalabog wrote:in addition, are we allowed to enter into an agreement for a period of ten years?


Before entering into multi-year contracts (under GAA), you must secure a Multi-year Obligation Authority (MYOA) from the DBM. Please refer to this link.


sir, are GOCCs like water districts covered by this MYOA? because based from what i read, it only covers NGAs.

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Re: Bid Security & Performance Bond

Post by engrjhez® on Mon Nov 22, 2010 11:18 am

bogkalabog wrote:
engrjhez® wrote:
bogkalabog wrote:in addition, are we allowed to enter into an agreement for a period of ten years?


Before entering into multi-year contracts (under GAA), you must secure a Multi-year Obligation Authority (MYOA) from the DBM. Please refer to this link.


sir, are GOCCs like water districts covered by this MYOA? because based from what i read, it only covers NGAs.


In that case, may I quote GPPB NPM No.22-2008:
R.A. 9184 and its IRR-A are silent on the issue of multi-year contracts. Nonetheless, for guidance purposes, we would like your good office to take note of the DBM Circular Letter No. 2004-12 dated 27 October 2004 which prescribes the guidelines and procedures for the implementation of multi-year contracts.

Further, we would like to direct the attention of the agency concerned to the corporate charter or legislative franchise, if any, for purposes of determining whether entering into multi-year contracts is among the powers granted to the governing board. Otherwise, such act may be declared ultra vires, at a later time.


It will now depend on the corporate powers granted by the constitution to your agency. Smile

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Re: Bid Security & Performance Bond

Post by bogkalabog on Tue Nov 23, 2010 8:11 am

thank you sir, your inputs were very informative. thanks also to sir Niwram!!

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Re: Bid Security & Performance Bond

Post by Jovinal on Fri Feb 24, 2012 9:32 pm

How about the f multi-year contracts in the LGU Eng. JHEZ ?

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Re: Bid Security & Performance Bond

Post by engrjhez® on Sat Feb 25, 2012 12:39 pm

Jovinal wrote:How about the f multi-year contracts in the LGU Eng. JHEZ ?

The GPPB opinion cited above may be used as reference also as LGU's have corporate powers too under the Local Government Code, that is with the approval of the Sanggunian.

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Re: Bid Security & Performance Bond

Post by Jovinal on Sun Feb 26, 2012 10:11 am

Thank You Engr. JHEZ

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